Reporting about §41 of the Transit Act -- what TV and the courts may have missed

NBC5's Lisa Parker reported last week about an Illinois statute that the Chicago Transit Authority is using "to shield" it "from paying the claims of legitimate accident victims."

The statute in question is §41 of the Metropolitan Transit Act, 70 ILCS 3605/41. Parker reports that §41 "demands precise details about an incident. One mistake and 'the case shall be dismissed' and 'the person forever barred from further suing.'"

Section 41 was enacted in 1945, according to Parker's report, "to protect the Chicago Transit Authority from fraudulent lawsuits." No representative of the CTA would appear on camera for the story, but in a written statement, the CTA reminded Chicago viewers that it "'is a target for numerous claims,' and this law helps combat fraudulent ones."

Parker reports that §41 is a "strict-compliance law" that some judges apply only "reluctantly." She quotes a plaintiff's attorney, Mike Baird, as saying, "It should be changed by the legislature, but the courts are not powerless." Parker noted that advocates of "a change in the law say one word would do the trick -- from 'strict' compliance to 'substantial compliance.'"

There is just one small problem with this suggestion: The word "strict" isn't in the statute now. Here is what the statute actually says:

No civil action shall be commenced in any court against the Authority by any person for any injury to his person unless it is commenced within one year from the date that the injury was received or the cause of action accrued. Within six (6) months from the date that such an injury was received or such cause of action accrued, any person who is about to commence any civil action in any court against the Authority for damages on account of any injury to his person shall file in the office of the secretary of the Board and also in the office of the General Counsel for the Authority either by himself, his agent, or attorney, a statement, in writing, signed by himself, his agent, or attorney, giving the name of the person to whom the cause of action has accrued, the name and residence of the person injured, the date and about the hour of the accident, the place or location where the accident occurred and the name and address of the attending physician, if any. If the notice provided for by this section is not filed as provided, any such civil action commenced against the Authority shall be dismissed and the person to whom any such cause of action accrued for any personal injury shall be forever barred from further suing.

Any person who notifies the Authority that he or she was injured or has a cause of action shall be furnished a copy of Section 41 of this Act. Within 10 days after being notified in writing, the Authority shall either send a copy by certified mail to the person at his or her last known address or hand deliver a copy to the person who shall acknowledge receipt by his or her signature. When the Authority is notified later than 6 months from the date the injury occurred or the cause of action arose, the Authority is not obligated to furnish a copy of Section 41 to the person. In the event the Authority fails to furnish a copy of Section 41 as provided in this Section, any action commenced against the Authority shall not be dismissed for failure to file a written notice as provided in this Section. Compliance with this Section shall be liberally construed in favor of the person required to file a written statement.

But while the word "strict" is not used in §41, courts interpreting the statute have demanded strict compliance with the its provisions.

Curtis v. Chicago Transit Authority, 341 Ill.App.3d 573, 793 N.E.2d 83, 86 (1st Dist. 2003), illustrates how our courts have traditionally construed §41:

Where the word "shall" appears in a legislative provision, the requirements of that provision are generally interpreted as mandatory. * * * Our courts have consistently held that the section 41 notice requirement demands strict compliance and the burden of such compliance falls solely on the plaintiff. * * * Regardless of the CTA's actual knowledge of the facts pertaining to an injury, a notice missing a single element or containing an incorrect element is considered defective and requires dismissal.

In Curtis the fatal flaw was misstating the date of the accident that gave rise to the claim – by a single day. There was no question that the CTA knew about the mistake; it cited the correct date in an affirmative defense. Discovery was conducted, medical records and police reports obtained: Everyone involved in the case was ultimately quite satisfied that the accident in question took place on February 13, not February 12 as plaintiff had erroneously alleged in her §41 notice... and in her complaint.

And that's when the CTA moved to dismiss. The motion was granted, and the dismissal affirmed on appeal.

Curtis was again followed just this month in White v. Chicago Transit Authority, No. 1-05-3152 (Ill.App.1st Dist. 5/4/07).

Geneva White's case is rather distinctive among §41 cases because her case actually came to trial. A jury of her peers awarded her a verdict of $220,220. It seems safe to suppose that – but for the operation of §41 – White's case had some merit.

White was hurt on May 30, 1997, when she slipped on an oil or grease stain while departing a CTA train. On October 8 of that year, White filed a §41 notice with the CTA. In it, she identified the location of her accident as the "Railway Station at Randolph and Washington."

There was a small problem with this identification: Randolph and Washington are parallel streets; they do not intersect.

Nevertheless, the CTA did not assert the defect in the §41 notice, not right away.

In 2002, White voluntarily dismissed her original 1997 case. Under Illinois law, a case may be voluntarily dismissed and refiled within a year even though the statute of limitations had expired long since. (See, §13-217 of the Illinois Code of Civil Procedure, 735 ILCS 5/13-217.) The new opinion does not say why she took this step; it sometimes happens that a case may be voluntarily dismissed on the eve of trial because the plaintiff is still undergoing medical treatment or because the plaintiff's attorney is not yet ready to put on the case.

White refiled her complaint just before the end of 2002; the CTA asserted the defect in the §41 notice in response to the new pleading.

It will surprise no one that the opinion in the new White case does not address why the CTA did not assert this defense earlier. Nor does the opinion state exactly when her original complaint was filed, only that it was filed in 1997. I speculate that the original complaint may have been filed within six months of the May 30, 1997 accident.

Daven Curtis' complaint had been filed within about five weeks of her accident in 2000, well within the six month notice period. Before the Curtis case it was believed, at least in some circles, that filing a complaint against the CTA within six months of an accident obviated the necessity of strict compliance with §41. The Curtis court rejected that notion (793 N.E.2d at 89): "[E]ven if a defective section 41 notice may be cured by the filing of a complaint within the statutory period, the complaint must at least provide the statutorily required information, which was previously incorrect or omitted, in order to comply with the strict demands of section 41."

The plaintiff in Johnson v. Chicago Transit Authority, 366 Ill.App.3d 867, 853 N.E.2d 783, 790 (1st Dist. 2006), claimed that, in the foregoing statement, Curtis worked "a sea change in the law governing the construction of municipal notice statutes." But the Appellate Court disagreed (853 N.E.2d at 790-91 – strict compliance with §41 was "not a new rule of law in Illinois" and "Curtis did not overrule any clear past precedent").

So maybe, in 1997 when Geneva White filed her first complaint, the CTA didn't accept the idea that filing a complaint within six months of an accident obviated the necessity of filing a meticulously detailed §41 statement; maybe, in her case, the CTA simply forgot to assert its rights.

But, whatever the reason, when Geneva White nonsuited and refiled her case, the CTA had another chance to invoke §41. And this time the CTA did not miss that chance.

The motion judge assigned to the case, however, Cook County Circuit Judge Diane Larsen, felt that the argument was raised too late: She found that the CTA had waived its right to invoke §41 (slip op. at p. 2).

The CTA raised the issue again when the case was assigned for trial before Cook County Circuit Judge Sharon Johnson Coleman, and the CTA revived its §41 argument before her, but Judge Coleman wasn't willing to second guess her colleague. The Appellate Court's unanimous opinion, written by Sixth Division Presiding Justice James Fitzgerald Smith, quotes Judge Coleman as saying, "[I]f Judge Larsen's ruling was wrong which I am not going to overturn because that is not my job, if her ruling was wrong, the appellate court will take care of it." (Slip op. at p. 2)

The Appellate Court decided that Judge Larsen's ruling was wrong (slip op. at p. 3): "Plaintiff's second [refiled] complaint constituted a separate and distinct action, not a reinstatement of the first action. [Citations omitted.] Thus, although the CTA did not assert a section 41 defense in plaintiff's initial action, this did not preclude the CTA from raising it in the new action." Geneva White's $220,220 verdict was thrown out.

White's other, unsuccessful argument on appeal was that the CTA failed to send her the notice required by the second paragraph of §41. This second paragraph was added by P.A. 90-451 , effective July 1, 1998 – over a year after Geneva White's injury and seven or eight months after she first filed her suit. But White suggested that the CTA had to serve a copy of §41 in connection with White's refiled suit. The Appellate Court, however, found (slip op. at p. 4), "Because plaintiff was injured in 1997, any notice provided by her 2002 complaint occurred well outside of the six-month period specified in the Act and, thus, the CTA did not have to provide her with a copy of section 41 and no waiver resulted from its failure to do so."

We've already seen that the word "strict" is not found within §41. In fact, a very different rule of construction seems to be suggested by the very last sentence of the 1998 amendment: "Compliance with this Section shall be liberally construed in favor of the person required to file a written statement."

Most of the added-on second paragraph of §41 deals with the CTA's obligation to respond to any arguable notice of a claim received within six months of an injury by serving on the claimant a copy of §41 – making certain that the claimant has actual notice of all that is required by the statute. But this last sentence of the 1998 amendment seems to suggest that the many courts which have strictly construed §41 (at least since 1998) have gotten it wrong: It looks like this sentence mandates a liberal construction in favor of the person required to put together the §41 notice.

If this sentence only applied to the second paragraph in which it is found, it would seem superfluous. The second paragraph of §41 does not require the "person required to file a written statement" to do much... except to receive a copy of the statute. What need is there for liberal construction on this point? No, limiting this last sentence to only the second paragraph would seem to offend the familiar principle of statutory construction, "A statute should be construed so that no word or phrase is rendered superfluous or meaningless." Kraft, Inc. v. Edgar, 138 Ill.2d 178, 561 N.E.2d 656, 661 (1990).

But that's not how the Appellate Court saw it in the one and only case that so far has directly considered the applicability of the "liberal construction" provision of §41.

In Yokley v. Chicago Transit Authority, 307 Ill.App.3d 132, 717 N.E.2d 451 (1st Dist. 1999), the fatal defect cited in the §41 motion was an allegedly inaccurate address where the accident took place. Myron Yokley was trying to get off a northbound bus in July 1993, but the bus started moving before Yokley was clear. The bus ran over Yokley; despite surgery and therapy, Yokley eventually lost his leg.

His §41 notice said the accident occurred on July 15, 1993 "at or about" 8:39 pm "[a]t or near 34th and King Drive" in Chicago. But 34th Street does not intersect King Drive. The responding paramedic put 3400 S. King Drive on his report but testified at a deposition that he found Mr. Yokley just north of 35th street, in front of a shopping center, at a location that had "no exact address." Moreover, there was a question as to whether the northbound No. 4 Cottage Grove bus, on which Yokley said he was riding at the time of his accident, was even authorized to stop where Yokley was found. The CTA contended that the bus stopped on 35th Street, before turning north onto King Drive, and didn't stop again on King Drive until 33rd Place. The trial court granted the CTA's motion for summary judgment because Yokley's §41 notice did not "accurately specify the place or location where the accident occurred." (717 N.E.2d at 453-54.)

The Appellate Court affirmed – despite Yokley's protestations that his §41 notice should be liberally construed in his favor.

Rejecting this argument the court stated (717 N.E.2d at 456), "Courts do not view retroactive legislation favorably, and there is a strong presumption that new legislation will operate prospectively. [Citation omitted.] In addition, postponement of an act's effective date indicates that the amendment should have only prospective application. [Citation omitted.] Although the other provisions of section 99 of Public Act 90-451 were made effective on January 1, 1998, the provision regarding section 41 was made effective on July 1, 1998. Pub. Act 90-451, § 99 (eff. July 1, 1998). The legislature expressly postponed the effective date of the amendment to section 41; therefore, the amendment is not retroactive to the date of plaintiff's injury in 1993."

The Yokley court then goes on to state, "Even if the amendment were retroactive, the sentence that plaintiff relies on applies to initial communications from possible claimants, not to the section 41 statutory notices that these claimants might file later. The legislative history shows that the purpose of the amendment was to notify possible claimants of the six-month statute of limitations and filing requirements of section 41 so that legitimate claims would not be dismissed because the claimant was unaware of the notice requirement. 90th Ill. Gen. Assem. Senate Debates May 21, 1997, at 52. The sentence regarding liberal construction comes at the end of the new paragraph. The sentence obviously requires the CTA to liberally construe the written communications it receives from possible claimants as constituting sufficient notification that a cause of action may exist so that these potential claimants are sent a copy of the section 41 statute by the CTA. The clear import of the amendment is that the legislature did not intend that compliance with the notification elements of section 41 be liberally construed." (717 N.E.2d at 457.)

I submit, however, that this is mere dicta – and, worse, dicta that doesn't make sense: The last sentence of §41 does not mention the CTA; it specifically mentions the "person required to file a written statement." It is this person in whose favor the statute is to be liberally construed. Nevertheless, the strict construction rule is so well established in the case law that the dicta in Yokley has apparently precluded any further consideration of whether the legislature has already prescribed a contrary rule of liberal construction.

The Supreme Court has never addressed this issue. It would be interesting to see what might happen if it takes a look at White.

Lottery payout: $500,000 -- less attorney's fees and costs

Joe Curcio and his wife pulled off the Florida Turnpike for a cup of coffee at the Fort Drum Service Plaza. While they were there, they bought a $20 "Gold Rush" lottery ticket -- and it seemed they had a $500,000 winner, according to a story this morning on the Tampa Bay Fox TV station website.

(The AP story about Mr. Curcio's misfortune is also posted on Yahoo! News -- but Yahoo! News links tend to be short-lived.)

The AP reports, "The Gold Rush ticket has the numeral 1 on the top row and a numeral 1 above the $500,000 scratch-off piece, making the ticket appear to be a winner. But when Curcio had it scanned, the ticket's bar code indicated it wasn't." Instead, according to the story, Florida lottery officials now claim that the number 1 in the top row was a "misprint" -- it should have been the number 13.

Curcio has hired a lawyer. He has not yet turned over the ticket to lottery officials.

Lottery spokeswoman Jacqueline Barreiros said Curcio must turn over the ticket "for a full inspection." The AP story quotes Berreiros: "We can't say whether we will pay the jackpot or not until we go through the process," she said.

That sounds kind of ominous, doesn't it?

I venture no predictions, of course, on the success or failure of Mr. Curcio's efforts to collect on his Florida ticket. But I was curious as to what Illinois law might provide in a similar situation.

My quick research this morning led me to the Illinois Lottery Law, 20 ILCS 1605/1 et seq. Section 19 of the Lottery Law provides, in pertinent part, "Prizes for lottery games which involve the purchase of a physical lottery ticket may be claimed only by presentation of a valid winning lottery ticket that matches validation records on file with the Lottery; no claim may be honored which is based on the assertion that the ticket was lost or stolen. No lottery ticket which has been altered, mutilated, or fails to pass validation tests shall be deemed to be a winning ticket."

Indeed, if Mr. Curcio were in Illinois, and if it were determined that his ticket had been altered, he might be in a whole heap o' trouble. Section 14.2 of the Illinois Lottery Law provides, "Any person who, with intent to defraud, shall falsely make, alter, forge, utter, pass or counterfeit a lottery ticket or share issued by the State of Illinois under this Act shall be guilty of a Class 4 felony."

And how do we know what a would-be defrauder 'intended'? Section 14.2 provides further, "It shall be prima facie evidence of intent to defraud for a person to possess a lottery ticket or share issued by the State under this Act if he or she knows that ticket or share was falsely made, altered, forged, uttered, passed, or counterfeited."

(And, no, I have no idea what "uttered" means in the context of the foregoing sentence. Indeed, I suspected that I had somehow miscopied the text of the statute from Westlaw -- and I went back again just to be sure. How is a lottery ticket 'falsely uttered'?)

For our discussion, let's assume that the ticket has not been altered or forged. If it is truly a "misprint" it will not pass the Lottery's validation test -- necessary to secure a payout, according to the statute -- and in the actual case of Mr. Curcio in Florida, that seems to be what lottery officials there are suggesting.

So -- purely a guess on my part -- but if Mr. Curcio were presenting this same claim in Illinois he might not not recover against the Lottery because of the language of §19 of the Illinois Lottery Law.

But might the printer have some exposure here? And would the careless printer be found to owe a duty to an unknown ticket buyer?


What if the person who got the 'misprinted' ticket had a weak heart -- and died in the excitement?

Would a duty arise then?

This could become an interesting academic discussion -- but it probably already is a public relations nightmare for the Florida Lottery.

Assuming Mr. Curcio innocently bought a misprinted ticket, I would venture -- fearless prediction here -- that the Florida lottery officials may try and settle the matter with him for something less than the whole $500,000 prize and then go after the printer themselves. That might be a good way to recover from the negative publicity and maybe even generate a positive spin on it all.

It might even boost sales: Who knows how many misprinted tickets are out there? (But I'll bet they can find out....)

No, I wouldn't want to be the printer (or its liability insurer) this morning.

I seem to recall similar "misprint" issues involving scratch and win games offered by restaurants or soft drink companies... but I don't know how these were resolved.

Can anybody help me out on this?

Englishman spared horrible death -- and he's looking for someone to sue

You've probably read recently about the case of John Brandick, the 62 year old man from Cornwall, who was told he had pancreatic cancer.

Here's a link to the Reuters story about Mr. Brandick: Reuters reports that Brandick quit his job, gave away nearly all of his possessions and stopped paying the mortgage on his home. A year after receiving what he thought was a death sentence, Brandick received an unexpected reprieve: The deadly tumor turned out to be a "non-life-threatening inflammation of the pancreas."

But by this time, however, Brandick was left with "little more than the black suit, white shirt and red tie that he had planned to be buried in."

Brandick wants his money back. Reuters quotes him: "I'm really pleased that I've got a second chance in life... but if you haven't got no money after all this, which is my fault -- I spent it all -- they should pay something back."

Who, I wonder, is "they"?

I of course venture no prediction about the success or failure of Mr. Brandick's potential suit against the hospital that gave him the erroneous diagnosis. His chances in such an action are governed by the laws of Great Britain -- and my license does not extend beyond the boundaries of Illinois. (See disclaimer at the bottom of this page.)

I have speculated, a little, on how Mr. Brandick might fare if he were a citizen of Illinois.

What is the essence of his claim? That he is still alive?

Illinois rejected the idea of a tort of "wrongful life" in cases such as Goldberg v. Ruskin, 113 Ill.2d 482, 499 N.E.2d 406 (1986), and Siemieniec v. Lutheran General Hospital, 179 Ill.2d 80, 688 N.E.2d 130 (1987). Essentially, in "wrongful life" cases damages were sought for the costs of rearing a damaged child on the theory that, if the medical professionals had only properly advised the parents, the child would never have been born. (There might be a claim for "wrongful conception" or "wrongful pregnancy" in Illinois. See, Williams v. University of Chicago Hospitals, 179 Ill.2d 80, 688 N.E.2d 130 (1997) (parents in such a case may recover "damages for the cost of the unsuccessful [sterilization] operation, pain and suffering, any medical complications caused by the pregnancy, the costs of the child's delivery, lost wages, and loss of consortium" -- but not the costs of rearing a normal, healthy child or, as in Williams, the cost of rearing a child born with a congenital disorder.)

But we have moved far from Mr. Brandick's case. The essence of his complaint is not that he's alive... but that he acted to his detriment because of an erroneous diagnosis.

There are, as you may well imagine, all sorts of cases in Illinois involving misdiagnosis of cancer. Almost all, however, concern the failure to timely diagnose a cancer that was already there or the misdiagnosis of one form of cancer as another form. In either of these cases, the claim is that proper treatment was delayed, often beyond the point at which the claimant could hope for recovery.

But there have been at least a few Illinois cases in which a doctor has erroneously diagnosed a benign tumor as cancerous -- I say there must have been a few because I know personally of one, although the Appellate Court opinion is not reported -- but the gist of that such an action is to recover damages for the cost of the resultant unnecessary treatment and the associated pain and suffering caused by that treatment.

Mr. Brandick apparently did not seek treatment for his 'cancer' -- he treated himself to an end of life party... a party that ended suddenly when he found he was not yet going to die... and he had only the suit on his back left.

If Mr. Brandick were in Illinois, I don't think I would like his chances for any recovery in his case.

And I think I would persist in this opinion even if it could be readily shown that the misdiagnosis of the non-life-threatening inflammation of the pancreas as pancreatic cancer did not meet the standard of care.

Now that is the prerequisite for any successful medical malpractice suit in Illinois. But there are other considerations that might come into play were Mr. Brandick's situation repeated in Illinois: Would the damages recoverable by his suit make the case worthwhile for any Illinois lawyer?

I do not handle medical malpractice cases now and I do not expect to handle medical malpractice cases in future. The very few attorneys in Illinois who can properly handle such a case for plaintiffs are both extraordinarily specialized and have the resources to pursue those few cases that they accept: Medical malpractice litigation, at least in Illinois, is very expensive and -- although there are competing statistics out there provided by lobbyists for one interest group or another -- my observation is that early settlements are rare. Mr. Brandick admits up front that no one made him spend all his money -- so, no, if Mr. Brandick were in Illinois, I wouldn't like his chances.

Now, for any creative attorneys out there who may stumble upon this: Have you a different opinion? Would his prospects be any brighter in the jurisdiction where you live and practice?

The case of Cho Seung-Hui: What became of his referral to counseling?

The Chicago Tribune advises this morning, in an editorial, "[W]hen we encounter another person whose inner voice seems to be screaming at him or her, we can take the uncomfortable step of notifying someone in authority at our school, or our workplace, or our community." That might do more to prevent a future Cho Seung-Hui from launching a murderous rampage than anything else, the paper suggests.

And I'd be inclined to agree IF "someone in authority" would act on this sort of notice.

Matt Apuzzo, in a story in this morning's Chicago Sun-Times, reports that one of Cho's professors, Carolyn Rude, thought "Cho's writing was so disturbing that he had been referred to the university's counseling service." But, Apuzzo reports, Professor Rude "did not know what the outcome of counseling was."

Did Cho ever go? Did the university ever follow up? Presumably the university could not force Cho to accept help; I don't know this for certain, but I assume this to be true. But did the university ever tell Cho that his future attendance at the school was contingent on his accepting help? The university was under no obligation to keep an increasingly dangerous and erratic young man as an enrolled student and resident in its dorms.

Nor was Professor Rude alone, apparently, in her concerns about Cho's pre-rampage behavior. An AP story by Adam Geller, also posted this morning at the Chicago Sun-Times, repeats Professor Rude's suspicions (Geller identifies her as the Chair of the university's English Department) and also quotes the concerns raised by a poetry professor, Nikki Giovanni. Geller reports, "Giovanni said her students were so unnerved by Cho's behavior that she had security check on her room and eventually had him taken out of her class."

Geller's AP story is now updated on Yahoo! News. In the latest article, Geller reports that Cho was reported to the police for stalking two female students and had once been taken to a mental health facility "in 2005 after an acquaintance worried he might be suicidal."

So one professor reported Cho to security, another recommended him for counseling. There were police contacts -- but no charges -- and he may have even been, briefly, in the mental health system.

The newspapers and radio this morning have seized upon the fact that Cho purchased his weapons legally -- and the usual suspects are bleating for increased gun control in the wake of this tragedy.

And that may or may not be a good idea.

But if I were a news editor the lines I'd want my reporters to follow would be this: Did Professor Rude really refer Cho for counseling? What became of that referral? Did he go? Did he refuse? Apuzzo's story indicates that Cho may have been taking medications for depression. Was this related to his counseling? Or did the doctor prescribing these medications even have an inkling about the warning signs Cho was flashing in the university community? What treatment was offered when Cho was brought to a mental health facility?

What did security do to follow up on Professor Giovanni's concerns? Did Professors Giovanni and Rude ever communicate with each other about this troubled student in their department? Who else 'notified someone in authority' at Virginia Tech? What happened?

There are 33 grieving families here -- and, yes, the shooter's family should be numbered among the grieving. Lockdowns and email or text alerts and all the other elaborate security plans that either were followed or weren't followed, or that will be imagined anew in the aftermath of this horror, would never have been necessary if Cho could have been helped. And the Virginia Tech community, at least, might not be in mourning today if Cho had been removed from their midst.

Why did people 'in authority' fail to act on the notices they were apparently given?

My office will be closed on Good Friday; here's a secular reason why the Illinois courts should close, too

The Circuit Court of Cook County used to close on Good Friday. Some years back, however, it was decided that it was politically incorrect to suspend public business because of a religious observance.

This has always confused me. Even if the day has no religious significance to you, why should you object to an extra day off?

School districts in Illinois have wrestled with this problem, too, but most have found a way to fit Good Friday into a religiously neutral "Spring Break." That wouldn't work for the Circuit Court.

So allow me to offer this secular, legally-themed justification for the restoration of the Good Friday court holiday: The most famous lawyer Illinois ever produced was murdered on Good Friday.

Granted, we already commemorate Lincoln's Birthday with a court holiday -- but this additional recognition would be consistent with the extraordinary influence that Abraham Lincoln had on the legal system in this state. That this holiday would always coincide with a religious observance that many would observe anyway would only be a bonus.

What do you think?

More on damages for tainted dog food

This dog of a blog is not going to turn into the pet corner of the Blogosphere, but this story posted on Yahoo! News suggests that damages for pets lost to tainted dog food would be severely limited in most American jurisdictions, not just Illinois.

Pet losses from tainted food unlikely to result in big recoveries, at least in Illinois

Image captured from Wonkette

There's been a lot of news about pet food recalls and there's always the chance that pet deaths associated with tainted food may prompt an inquiry from a grieving pet owner.

There's no question that our society cherishes pets. Recently, the Illinois legislature amended the Trusts and Trustees Act by adding §15.2 recognizing the validity of trusts set up for the benefit of "designated domestic or pet animals." (760 ILCS 5/15.2, eff. Jan. 1, 2005.)

But that does not mean that a pet owner can hope to have his grief assuaged by a large damage award against a pet food company that served up tainted kibbles.

The leading case on the value of an animal destroyed by tortious conduct of a third party is probably Jankoski v. Preiser Animal Hospital, 157 Ill.App.3d 818, 510 N.E.2d 1084 (1st Dist. 1987). The case concerned the death of a dog, but the court made the point that a dog is valued as any other item of personal property.

Where personal property is destroyed, the measure of damages is generally the difference "between the market value of the property before the injury and the value of the wreckage." Trailmobile Division of Pullman, Inc. v. Higgs, 12 Ill.App.3d 323, 297 N.E.2d 598, 600 (5th Dist. 1973). However, there is a special rule that applies in cases where the lost property has no market value.

Long v. Arthur Rubloff & Co., 27 Ill.App.3d 1013, 327 N.E.2d 346 (1st Dist. 1975), illustrates that rule that applies in this unusual circumstance.

When Rubloff fired Arthur Long, the firm kept a file that Long had accumulated over the years of 'leasing data.' Long testified at trial that the file was around six inches thick and contained leasing information on 40 or 50 buildings including "the names of tenants, their lease-expiration dates, the name of the contact, the number of square feet occupied, the amount paid per square foot, whether the tenant contemplated expanding, and similarly pertinent information." (27 Ill.App.3d at 1016-17). (Long had been compiling this information since 1960, long before he'd become associated with Rubloff; Rubloff insisted that this data became its property when Long became its employee. The Appellate Court, however, stated that it was "unaware of any rule which would deprive an employee of his personal property merely because its use during the employment relationship accrued to the benefit of the of the employer." 27 Ill.App.3d at 1025.) In any event, the relevant question on appeal was the measure of damages that Long could recover because of Rubloff's refusal to surrender the file to him upon termination.

The Long court stated that the proper way to measure damages in a case like this would be to determine the "actual value to plaintiff" of the purloined file.

However, the court reversed the damage award in Long's favor. Long's highly subjective opinion "was insufficient to establish damages." To recover, Long would have had to produce "testimony. . . to show what value the leasing data had been to the plaintiff in the past, what commissions, if any, were made by use of the data, or other testimony to show how possession of the book economically benefitted plaintiff." (27 Ill.App.3d at 1026.) The burden of proving value is on the plaintiff "and the evidence must afford some reasonable and proper basis for ascertaining value. At a minimum, it must rise to the dignity of proof, and supply such elements or standards for measuring value to enable the trier of fact to exercise its judgment." (27 Ill.App.3d at 1026.)

The dog owners in the Jankoski case admitted that their lost dog had no particular market value (they expressly stated at one point that the dog had no value as property), so the court found, citing Long, that the proper measure of damages for the dog's loss was the "actual value to [the] plaintiff." However, "damages must be ascertained in some rational way from such elements as are ascertainable." (157 Ill.App.3d at 820.) In the case of the lost dog, the court acknowledged the possibility that some element of sentimental value might be properly considered "in order to avoid limiting the plaintiff to merely nominal damages." The Jankoski case stands for the proposition that damages in a case "where the object destroyed has no market value. . . while not merely nominal, are severely circumscribed." (157 Ill.App.3d at 821.)

The law knows how to value the diamonds in your mother's engagement ring -- but it has no good way to evaluate the sentimental value of that ring. So it is also with dogs.

The fearless prediction here: There will be no boxcar numbers awarded by Illinois courts to Illinois pet owners... no matter how far the tainted pet food scandal spreads.

A peek inside the jury room

What goes on in the jury room? The February 16 ABA Journal eReport published an article summarizing research out of Arizona that provides some insight.

These were not mock trials with volunteers; these were actual civil cases including auto injury and medical malpractice cases.

Shari S. Diamond, a professor of law and psychology at Northwestern University Law School and a senior research fellow at the American Bar Foundation, was a member of a panel discussing these research findings at the recent American Bar Association Mid Year Meeting in Miami. There was a time, she told the group, she didn’t believe it was a good idea to put so much power into the hands of laypeople. The article quotes Professor Diamond as having changed her mind on the subject: “It turns out I [was] like a scientist who doesn’t think hummingbirds should fly.”

Experts. Sheeesh!

As it happens, research now confirms what every lawyer who's ever faced a jury already knew: Jurors -- almost without exception -- take their task seriously. The linked article says the researchers now believe that juries do not start out their deliberations either pro-plaintiff or pro-defense. But the research made clear they are sensitive to how the lawyers act: “Don’t ever let the jurors think that you’re talking down to them,” Professor Diamond warned.

Eliminating juries, or limiting their roles, will not enhance the cause of justice. You want juries to do a better job? Then focus on the quality of evidence placed before them. That's a topic I'd like to come back to in these postings.

Let's talk about pleadings: Skipping straight to a §2-619 motion may waive a party's right to challenge the sufficiency of a complaint under §2-615

A new case, Cordts v. Chicago Tribune, tackles some pretty thorny and important privacy issues, particularly one's right not to have personal treatment information disclosed under the Mental Health and Developmental Disabilities Confidentiality Act, 740 ILCS 110/1 et seq., but this essay will not address those issues except as they relate to the pleadings issue I do want to discuss.

Michael Cordts was a Tribune employee who made a short term diability claim. The newspaper used Medeval Corporation to evaluate the merits of such claims. In his suit against his employer and Medeval, Cordts alleged that Medeval learned about his treatment for depression in the course of its investigation... and that a Medeval employee disclosed that treatment to Cordts' ex-wife.

Cordts hadn't mentioned this treatment to his ex-wife and he had no intention of doing so. His Complaint against the Tribune and Medeval had four counts. Counts I and III alleged defamation. According to the Defendants, Counts II and IV attempted to state a claim under the common law invasion of privacy. The Defendants filed a §2-615 motion to dismiss the defamation counts. Their motion to dismiss Counts II and IV was brought solely under §2-619.

And that's where the Defendants went fatally off course.

The trial court dismissed the entired case, but Cordts elected to appeal the dismissal of only Counts II and IV.

In Storm & Associates, Ltd. v. Cuculich, 298 Ill.App.3d 1040, 700 N.E.2d 202, 206 (1st Dist. 1998), the Appellate Court explained the difference between §2-615 and §2-6159 motions: "A section 2-615 motion attacks the sufficiency of a complaint and raises the question of whether it states a cause of action upon which relief can be granted." The Storm court goes on to point out that, in deciding a §2-615 motion, "the court may only consider the facts apparent from the face of the complaint, matters of which the court may take judicial notice, and judicial admissions in the record. Mt. Zion State Bank & Trust v. Consolidated Communications, Inc., 169 Ill.2d 110, 115, 660 N.E.2d 863 (1995)." That means that a court can usually only consider what is within the 'four corners' of a pleading in deciding a §2-615 motion.

A motion brought under §2-619 is different. For one thing, a court can consider affidavits or other material competent under Supreme Court Rule 191 in deciding such a motion. Also, as the Storm court points out (700 N.E.2d at 206), "A section 2-619 motion raises certain defects or defenses and poses the question of whether the defendant is entitled to judgment as a matter of law."

Most importantly, however, a §2-619 motion, like a summary judgment motion, "admits the legal sufficiency of a complaint." Joseph v. Collis, 272 Ill.App.3d 200, 649 N.E.2d 964, 969 (1st Dist. 1995). In this sense, the §2-615 and §2-619 motions are contradictory: The 2-615 motion admits well-pleaded allegations, but denies that these allegations together state any cause of action; the 2-619 motion admits that the allegations of the complaint state a cause of action which, if proved, would be successful but for some affirmative matter which defeats the claim.

In the Cordts case, the Defendants had a strategic reason to bring their motion under §2-619: They wanted to use matter outside the four corners of the pleading. Justice Joseph Gordon, writing for a unanimous panel, explained (slip op. at p. 9):

[T]o state a common law claim for invasion of privacy through public disclosure of private facts, a plaintiff must plead that: "(1) publicity was given to the disclosure of private facts; (2) the facts were private, and not public, facts; and (3) the matter made public was such as to be highly offensive to a reasonable person." [Citations omitted.] * * * Generally, to satisfy the publicity element of the tort, a plaintiff must show that the information was disclosed to the public at large; however, the publicity requirement may be satisfied where a disclosure is made to a small number of people who have a "special relationship" with the plaintiff.

Even the Defendants were obliged to concede that the plaintiff's ex-wife was a person with whom the plaintiff had a "special relationship." Getting back to Justice Gordon's opinion (slip op. pp. 10-11):

[D]efendants contend by way of affirmative defense that the disclosure was, nevertheless, excusable because Kathleen had a "natural and proper interest" in the information. Specifically, defendants contend that Kathleen had a right to know the information because Cordts was responsible for helping support their child pursuant to the couple's marital settlement agreement and his mental condition could potentially hinder his ability to meet his obligations, financially and otherwise. Under prevailing law, the "special relationship" exception to the requirement that the disclosure be made to the general public will not apply where the person in the "special relationship" with the plaintiff has a "natural and proper interest" in the information disclosed. [Citations omitted.] We note, however, that although a person in a "special relationship" with a plaintiff is more likely than others to have a "natural and proper interest" in the plaintiff's private information by virtue of that "special relationship," the existence of a "special relationship" does not necessarily create a "natural and proper interest."

The Appellate Court concluded (slip op. at p. 13-14):

[W]e would have to agree with defendants that an ex-wife would have a natural and proper interest in learning about any debilitating condition suffered by her ex-husband that could impact his ability to maintain support of the their children. In this case, no one disputes that Cordts was liable to provide support to his daughter and that if he ceased to be able to support her, that obligation would fall solely to Kathleen, the child's mother. * * * Cordts, by his claim, tacitly concedes that his mental condition was such that a disability claim was appropriate. Therefore, in the absence of any other information tending to minimize the potential effect of his condition, we conclude that the fact that Cordts sought disability benefits was sufficient to indicate that his condition could have potentially impacted his ability to support his daughter and, thereby, could have harmed his ex-wife, Kathleen. Consequently, we cannot disagree with the circuit court's determination that the common law action should be dismissed pursuant to section 2-619.

And if the Appellate Court had agreed with the Defendants that this was all Plaintiff was attempting to plead in Counts II and IV, it would have affirmed the trial court.

But the Appellate Court did not agree.

The court quoted this allegation from Cordt's complaint (slip op. at pp. 2-3):

[Defendants] owed a duty of care to [Cordts] so as not to unreasonably give publicity to the private life of [Cordts] and additionally owed a duty of care to [Cordts] under 740 ILCS 110/3, commonly known as the Mental Health and Developmental Disabilities Confidentiality Act and also under the Defendant Tribune's own privacy policies.

The Appellate Court found (slip op. at 16-17) that this allegation was sufficient to raise a claim -- to put Defendants on notice of a claim -- founded on the Confidentiality Act.

While Cordts' Complaint was "formally defective" because it 'intermingled' the Confidentiality Act claim with the common law invasion of privacy claim, this claim was not "dismissible on that basis" because "neither defendants nor the circuit court ever challenged the sufficiency of Cordts's allegations under the Confidentiality Act." (Slip op. at 17.)

In support of this conclusion, the Appellate Court cited §§2-612(a) & (c)of the Code of Civil Procedure (slip op. at p. 17):

• "If any pleading is insufficient in substance or form the court may order a fuller or more particular statement. If the pleadings do not sufficiently define the issues the court may order other pleadings."

• "All defects in pleadings, either in form or substance, not objected to in the trial court are waived"

and this provision of §2-615:

• "All objections to pleadings shall be raised by motion. The motion shall point out specifically the defects complained of, and shall ask for appropriate relief, such as *** that a pleading be made more definite and certain in a specified *** manner".

I've been waiting a long time for this case. I've been saying for years that -- since a §2-619 motion admits the legal sufficiency of a complaint -- filing such a motion waives a later motion under §2-615. How can you first argue that a complaint states a claim but for some affirmative matter -- and then say, nope, it doesn't state a claim after all? Cordts comes as close as any I've found to standing for this proposition.

Can anyone point me to a better example?

Dona nobis pacem

Ironic that all these "peace globes" are being posted in the Blogosphere on Election Day in the U.S. -- but this is not meant as a political statement of any kind. People of good will can disagree on how true peace may best be achieved, but can people of good will ever doubt that peace must be our ultimate goal? It's Veteran's Day on Saturday: Ask a vet about it.

For more on the peace globe idea, ask Mimi.

So where's the follow up?

I saw this AP story in the Chicago Sun-Times on Wednesday, November 1:

A German court has ordered a self-proclaimed witch to refund a client her hefty fee for a spell that failed to win back the woman's boyfriend.

The court ruled the witch must pay back the $1,275 on the grounds she offered a service that was "objectively, completely impossible."

I've been waiting for the follow up story since, but I haven't seen it:

A German judge recently transformed into a toad. German scientists are baffled by the sudden transformation of the respected jurist who'd ruled recently in a controversial witchcraft case....

Bar Association Judicial Retention Recommendations

From the Chicago Sun-Times.

Do blogs by lawyers amount to advertising?

Read about it in this link to the September 29 ABA Journal eReport.

This is the link to the proposed New York rule.

The eReport article suggests that this provision would make the rule applicable to everyone, since blogs by out-of-state lawyers -- such as this one -- could be freely accessed in New York State.

I thought the disclaimer would be enough. Wouldn't you?

Dead storage claim a non-starter in new case -- just like the motorcycle that burned down the storage facility

John Marx collected motorcycles and he rented two storage bays from M & S Rentals, Inc. in Morris, Illinois in which to keep them. Marx considered the bikes to be collectors’ items; whether Marx’s 1976 Honda Goldwing, 1980 Honda Goldwing, and two 1979 Yamaha 750 cc motorcycles actually were collector’s items is not resolved by the Appellate Court’s opinion in Standard Mutual Ins. Co. v. Marx, 2006 WL 2381967 (Ill.App.3rd Dist. 8/15/06).

Marx came by the storage units from time to time to visit his collection. But he didn’t just visit; he sometimes rode the bikes, too. But only the 1980 Honda was actually licensed and insured.

And he wasn’t riding the Honda on September 1, 2003; on that day, Marx had come to visit one of the ‘79 Yamahas. He’d operated this bike without incident only a month before, but when he went to start the machine on this occasion, there was an explosion – and a fire. Marx tried to put the fire out with a towel, but failed; he subsequently called 911. The fire caused more than $177,000 worth of damage to the storage facility. M & S Rentals’ insurer, Springfield Fire & Casualty Co., paid the claim and brought a subrogation suit against Marx.

Marx tendered the suit to his homeowner’s carrier, Standard Mutual; the newly reported opinion arises from the declaratory judgment action that Standard Mutual filed in response to the tender.

The Circuit Court of Grundy County found for Standard Mutual, agreeing that the homeowner’s carrier did not have a duty to defend Marx in this suit. The Appellate Court, in a unanimous opinion by Justice Kent Slater, affirmed.

Marx was not a party to the appeal: He failed to file a timely notice of appeal; his subsequent motion to adopt Springfield Fire’s brief was denied by the Appellate Court. This may seem odd to persons unfamiliar with coverage litigation, but it happens frequently. The underlying plaintiff and the insured do have a common interest: Both want the insurer’s carrier to remain on the risk – but is it not logical to assume that the insured will want this just a little bit more? It is the insured’s assets that are at risk; the easy collectibility of an eventual judgment against the insured is all the underlying plaintiff really has at stake.

In affirming the judgment in Standard’s favor, the Appellate Court noted that the “homeowner’s policy issued to Marx by plaintiff excluded liability and medical payments coverage for injury or property damage arising out of: ... The ownership, maintenance, use, loading or unloading of motor vehicles or all other motorized land conveyances, including trailers, owned or operated by or rented or loaned to an ‘insured’[.]”

On the other hand, the court noted that the policy provided that this exclusion did not apply to:

“A vehicle or conveyance not subject to motor vehicle registration which is:

* * *
(c) In dead storage on an ‘insured location’[.]”

The Standard Mutual court held that the exploding Yamaha was neither in “dead storage” nor at an “insured location.”

Courts around the country have split on what constitutes “dead storage”; the Standard Mutual court indicated that it was the first Illinois court to construe the term.

These are the cases cited by the Standard Mutual court as supporting the position that Marx’s Yamaha was in dead storage:

Allstate Insurance Co. v. Burns, 837 N.E.2d 645 (Ind.Ct.App.2005) (unlicensed car which had been inoperable for over a month was in dead storage notwithstanding that fire occurred while insured was attempting to start car); Allstate Insurance Co. v. Geiwitz, 86 Md.App. 704, 587 A.2d 1185 (1991) (car kept by insured as collectible rather than for transportation was in dead storage despite fact that car was occasionally driven on property where it was stored and accident occurred while repairing gas gauge); Nationwide Mutual Fire Insurance Co. v. Allen, 68 N.C.App. 184, 314 S.E.2d 552 (1984) (motorcycle which had been inoperable for six months prior to fire caused when insured was “inspecting” cycle in his living room was in dead storage); Sharpe v. State Farm Fire & Casualty Co., 558 F.Supp. 10 (E.D.Tenn.1982) (old, unlicensed vehicles that were not driven on highway but were occasionally driven on insured’s property were in dead storage).

The Standard Mutual court found other cases more persuasive, particularly North Star Mutual Insurance Co. v. Carlson, 442 N.W.2d 848 (Minn.Ct.App. 1989). Justice Slater’s opinion quotes the Minnesota Court:

“We believe this determination appropriately highlights the distinction between homeowners and automobile insurance policies. Motor vehicles are inherently dangerous instrumentalities and homeowners policies generally do not contemplate coverage of injuries when the vehicle is maintained or used in one of its inherently dangerous capacities. One inherently dangerous aspect is a motor vehicle’s use of highly volatile materials (gasoline) around ignition sources (spark plugs). This was precisely the cause of the accident in this case. Accidents caused by maintenance or use of a vehicle in such an inherently dangerous capacity are not appropriately covered in a homeowners policy, but rather in an automobile policy which requires consequently higher premiums for the increased risk of injury.”

(Quoting Carlson, 442 N.W.2d at 855.)

The Standard Mutual court stated that the focus should properly be on “the vehicle’s status at the time the accident occurred. For example, if the fire at the rental facility had been caused by spontaneous combustion of oily rags while Marx was absent, the Yamaha might very well have been considered to be in dead storage.” On the other hand, quoting American Family Mutual Insurance Co. v. Van Gerpen, 151 F.3d 886, 888 (8th Cir.1998), another case relied upon by the Standard Mutual court, “The ‘dead’ in ‘dead storage’ suggests, at the least, that the engine would not be running.”

Other cases cited by the insurer for the proposition that a vehicle “undergoing maintenance” or being started is not in dead storage were Nationwide Mutual Insurance Co. v. McMahon, 365 F.Supp.2d 671 (E.D.N.C.2005); David v. Tanksley, 218 F.3d 928 (8th Cir.2000) (same); Holliman v. MFA Mutual Insurance Co., 289 Ark. 276, 711 S.W.2d 159 (1986); and Broadway v. Great American Insurance Co., 465 So.2d 1124 (Ala.1985).

The underlying plaintiff suggested that this split of authority nationwide supported a conclusion that the term “dead storage” was at least ambiguous. Rejecting this argument, however, the Standard Mutual court stated, “A vehicle which is periodically driven by its owner, even briefly on private property, is not in dead storage, and an accident caused by an attempt to start that vehicle is not the type of risk contemplated by the parties to a homeowner's policy. We find no ambiguity under these circumstances.”

Besides, even if the old Yamaha could be said to be in “dead storage,” the Appellate Court concluded that it was not at an “insured location”:

“As defined in the policy, an insured location includes “premises occasionally rented to an ‘insured’ for other than ‘business' use.” * * * [I]n this case, the storage units where the fire occurred cannot be said to have been rented to Marx on an irregular or infrequent basis. According to Marx’s deposition testimony and his answers to plaintiff’s request to admit facts, Marx had rented the same two storage bays for a period of three years prior to the fire. Such extended and continuous use cannot be characterized as “occasional” and therefore, even if the motorcycle was considered to be in dead storage, it was not in an “insured location” within the terms of the policy.

-----------------------------------------------------------------

It did not matter to the coverage determination, but I have to admit to some curiosity about where Springfield Fire’s claimed $177,000 in damages came from.

Because Marx could come and go and visit his motorcycles as he pleased, Springfield’s insured, M & S Rentals, was probably a self-service storage facility, regulated under the Self-Service Storage Facility Act, 770 ILCS 95/1 et seq. Section 2(A) of the Act provides expressly that a “self-service storage facility is not a warehouse for purposes of Article 7 of the Uniform Commercial Code” (unless the owner “issues any warehouse receipt, bill of lading, or other document of title for the personal property stored,” in which case the provisions of the Act do not apply.)

If a self-service storage facility is not a warehouse, it can limit its liability to customers; it is not bound by §7-204(2) of the UCC (815 ILCS 5/7-204(2)), which allows warehousemen to limit liability only on a “per article or item” basis, or by “value per unit of weight.” Of course, a warehouse has to know what is coming in and going out of its facility; what comes in and out of the self-service storage facility is limited only by the amount of space the customer rents (and, hopefully, by §7 of the Act which provides, “No occupant may use a self-service storage facility for residential purposes,” 770 ILCS 95/7).

So did M & S Rentals limit its liability to customers in the Standard Mutual case – and, if so, where did the $177,000 in damages come from? It must have been some fire.

If a tree falls in the insurance policy, will it be covered?

Can a tree be cut by accident?

Well, unless you have super powers, you can’t accidentally cut down a tree: Cutting a tree takes considerable effort.

But you can accidentally cut down the wrong tree – a tree you weren’t supposed to cut – a tree you didn’t intend to cut.

This fine distinction is at the heart of Pekin Ins. Co. v. Miller, 2006 WL 2265604 (Ill.App. 1st Dist. 8/8/06).

Sarang Construction hired Miller Tree Service to cut down trees on lots 13, 14, and 15 of a subdivision in Hanover Park. Miller removed the trees from lots 10, 11, and 12 instead.

The owners of these lots took umbrage. They sued for trespass – an intentional tort – and for violation of the Wrongful Tree Cutting Act, 740 ILCS 185/0.01 et seq. Section 2 of the Act provides that, “Any party found to have intentionally cut or knowingly caused to be cut any timber or tree which he did not have the full legal right to cut or caused to be cut shall pay the owner of the timber or tree 3 times its stumpage value.” (740 ILCS 185/2.) Later amendments to the property owners’ complaint alleged “negligent trespass.”

Miller tendered the suit to Pekin for a defense. Pekin brought a declaratory action instead, contending that it did not owe a defense. First, it argued, the property owners’ suit did not allege an “occurrence.” That would keep the incident outside the insuring agreement of the Pekin policy. In addition, Pekin argued, even if the incident described in the property owners’ suit was an occurrence, two policy exclusions would defeat coverage. The trial court rejected these contentions and found that Pekin had a duty to defend; the Appellate Court, in a unanimous opinion by Justice Warren Wolfson, affirmed.

The Pekin policy provided coverage for “those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.” Property damage would be covered only if the damage were caused by an “occurrence.” The policy, in turn, defined “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” (2006 WL 2265604 at *2.)

The word “accident” is typically not defined in insurance policies. This was apparently the case here. Quoting Monticello Insurance Co. v. Wil-Freds Construction, Inc., 277 Ill.App.3d 697, 703, 661 N.E.2d 451, 455 (2nd Dist. 1996), Justice Wolfson noted that, “Courts define an accident as ‘an unforeseen occurrence, usually of an untoward or disastrous character or an undesigned sudden or unexpected event of an inflictive or unfortunate character.’ ... ‘The natural and ordinary consequences of an act do not constitute an accident.’”

This is consistent with the definition of the word “accident” in other cases. In Travelers Ins. Co. v. P.C. Quote, Inc., 211 Ill.App.3d 719, 570 N.E.2d 614, 619 (1st Dist. 1991) the court stated:

An insurance policy’s use of the word “occurrence” instead of “accident” broadens coverage and eliminates the need to find an exact cause of damages so long as they are neither expected nor intended from the standpoint of the insured. Nevertheless, the occurrence must still be accidental. (Aetna Casualty and Surety Co. v. Freyer (1980), 89 Ill.App.3d 617, 619, 44 Ill.Dec. 791, 411 N.E.2d 1157.) An accident is defined as “an unforseen occurrence of untoward or disastrous character” or “an undesigned sudden or unexpected event.”

Miller surely intended to chop down trees but, just as surely, Miller did not intend to chop down trees on the wrong lots. That was not expected from the insured’s standpoint.

Pekin, relying on the formulation in Wil-Freds, contended that the trees were removed as the natural and ordinary consequence of chopping them down. Thus, there was no accident. But Justice Wolfson noted that, while “the construction defects alleged in the [Wil-Freds] complaint for breach of contract were the natural and ordinary consequences of improper construction techniques. . . the plaintiffs in the underlying complaint do not allege Miller used improper techniques in removing trees on their property. Rather, they allege he removed trees on the wrong property.” (2006 WL 2265604 at *2.)

The Pekin court looked instead to Lyons v. State Farm Fire & Casualty Co., 349 Ill.App.3d 404, 811 N.E.2d 451 (5th Dist. 2004), a case in which the insureds allegedly built levees that “protruded onto the plaintiffs’ property.” According to the Pekin court, the Lyons court concluded that “the focus of the inquiry in determining whether an occurrence is an accident is ‘whether the injury is expected or intended by the insured, not whether the acts were performed intentionally.’” ((2006 WL 2265604 at *2, quoting Lyons, 811 N.E.2d at 723.) Applying this approach, because “[t]here is no evidence Miller intended the harmful result – the clearing of trees on the wrong property,” the Pekin court concluded that the property owners’ complaint alleged an “occurrence.” (2006 WL 2265604 at *2.)

Significantly, the Pekin court found it “immaterial that the underlying complaint alleges intentional torts.” (2006 WL 2265604 at *6.) The words used to describe the conduct giving rise to the claim are not controlling; the conduct described is what counts.

That brings us to the exclusions on which Pekin also relied.

Section 2j(5) of the Pekin policy excluded coverage for property damage to “[t]hat particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the ‘property damage’ arises out of those operations.” (2006 WL 2265604 at *3.)

Section 2j(6) excluded coverage for property damage to “[t]hat particular part of any property that must be restored, repaired or replaced because ‘your work’ was incorrectly performed on it.” (2006 WL 2265604 at *3.)

“Your work” was defined in the policy as:

a. Work or operations performed by you or on your behalf; and
b. Materials, parts or equipment furnished in connection with such work or operations.

(2006 WL 2265604 at *3.)

The Pekin court found no Illinois case which provided any guidance in this case. Instead, the court looked to a case from Minnesota, Thommes v. Milwaukee Insurance Co., 641 N.W.2d 877 (2002).

The Pekin court read Thommes as distinguishing two different types of risk “undertaken by an insured contractor.” One is a ‘business risk’ – a risk that the insured “may be liable as a matter of contract law to make good on products or work which is defective or otherwise unsuitable” – as in a guarantee or warranty. CGL policies do not guarantee the quality of the work performed by their insureds. Instead, CGL policies “are intended to insure against the second type of risk – ‘the risk that [the contractor’s] work or product will cause bodily injury or property damage to other property,’ which may give rise to tort liability to third parties.” (2006 WL 2265604 at *5.)

The Minnesota court found both exclusions ambiguous – and therefore construed them against the insurer. The Pekin court agreed. With regard to exclusion 2j(5), there was a question as to whether the phrase “that particular part of real property” refers to the land – or the trees. (2006 WL 2265604 at *5.)

“In addition,” the Pekin court continued, “section 2j(5) is ambiguous because it is not clear whether the exclusion refers to any property or only to property that the insured is contractually obligated to perform operations on. Given the purpose of CGL policies, one could reasonably interpret exclusion 2j(5) to apply only to property the insured is contractually obligated to work on” – the lots on which the trees were left standing. (2006 WL 2265604 at *6.)

As for exclusion 2j(6), the Pekin court likewise found “two reasonable interpretations of the provision. The phrase ‘incorrectly performed’ could refer to the manner in which the trees were removed. Here, there was nothing incorrect about the manner in which Miller removed the trees. It also could refer to the location from which they were removed, which would be applicable in this case. It is not clear whether the exclusion applies to the unusual situation in this case because the underlying complaint does not allege Miller's tree-removal procedures were incorrect, only that trees were removed from the wrong lots. We also believe the phrase ‘your work’ as applied to 2j(6) is ambiguous. Nowhere in the exclusion or in the definition of ‘your work’ does the policy indicate whether ‘your work’ is confined to the actual location [where] Miller was hired to perform his tree-cutting work.” (2006 WL 2265604 at *6.)

The Pekin court concluded that section “2j(6) does not define the phrase ‘any property.’ If it means the land Miller cut trees on it might reasonably be argued the exclusion does not apply because it is not the land that must be ‘restored, repaired or replaced;’ it is the trees. If ‘any property’ refers to the trees that were cut, the exclusion makes no sense in this case because Miller's ‘work’ was not ‘incorrectly performed’ on the trees. We find exclusion 2j(6) is ambiguous and construe it against the insurer. It does not apply in this case.” (2006 WL 2265604 at *6.)

Wrongful tree cutting cases are not a major burden on the courts of Cook County. But Pekin has a general lesson, as well as the specific ones we’ve just gone through: When in doubt, if you’re sued, tender the complaint to your carrier. Even though the complaint does not plead “negligence” – even though the suit pleads only intentional torts – tender. The insurer has an obligation to carefully evaluate its obligations whenever a suit is tendered for a defense.

It’s all relative in new State Farm household exclusion case

Donya Tyree Hooks and her brother, Donald Hooks, owned an apartment building on Green Street in Chicago. Donald lived in the building; Donya did not. The property was insured with State Farm Fire and Casualty Company.

The building was damaged in a fire on March 4, 2001 and a building tenant, Sharon Conner Hooks, was injured.

Sharon was married to Donald at the time of the fire.

Sharon sued Donya, but not Donald, for the injuries she sustained in the fire, alleging that Donya failed to provide or maintain working smoke and carbon monoxide detectors; that she negligently allowed “tenants with connections to drug activity” to go into the basement where the fire started; and that she failed to provide an emergency escape light in the common hallways.

Donya tendered Sharon’s suit to State Farm. State Farm initially provided a defense pursuant to a reservation of rights, but ultimately withdrew that defense and filed the declaratory suit that gave rise to State Farm Fire and Casualty Co. v. Hooks, 2006 WL 1676212 (Ill.App. 1st Dist. 6/19/06).

State Farm contended that Sharon was an insured under Donya’s policy and, in general, an insurer has no obligation to defend a suit by one insured against another.

Specifically, State Farm relied on the policy definitions to establish who was supposed to be insured under the contract: “‘You’ and ‘your’ mean the ‘named insured’ shown in the Declarations. Your spouse is included if a resident of your household. ‘We’, ‘us' and ‘our’ mean the Company shown in the Declarations.” Donya and Donald were named insureds under the policy – and Donald’s spouse, Sharon, the plaintiff in the underlying case, would also be included within this definition.

The policy also separately defined insured to mean “you and, if residents of your household... a. relatives.” The policy also separately defined insured to mean “you and, if residents of your household... a. relatives.”

The liability coverage of the policy contained an exclusion purporting to excuse State Farm from defending against any claim for “bodily injury to you or any insured within the meaning of part a. or b. of the definition of insured. This exclusion also applies to any claim made or suit brought against you or any insured to share damages with or repay someone else who may be obligated to pay damages because of the bodily injury sustained by you or any insured within the meaning of part a. or b. of the definition of insured. (Bolded terms are terms defined in the policy.)

The trial court accepted State Farm’s interpretation and agreed that it had no duty to defend or indemnify Donya Hooks against her ex-sister-in-law’s suit (by the time the case reached the summary judgment stage in the Cook County Chancery Court, Donald and Sharon’s marriage had ended). The Appellate Court, however, in a unanimous opinion written by Justice Joseph Gordon, reversed.

The Appellate Court’s decision is grounded in the severability provision of the State Farm policy. That provision read, “This insurance applies separately to each insured. This condition shall not increase our limit of liability for any one occurrence.”

Construing a similar provision in the 1975 case of United States Fidelity & Guaranty Co. v. Globe Indemnity Co., 60 Ill.2d 295, 327 N.E.2d 321, 323 the Illinois Supreme Court found, “the severability clause provides each insured with separate coverage, as if each were separately insured with a distinct policy, subject to the liability limits of the policy.” Essentially, then, Sharon could not sue Donald (which she didn’t) because she’d be an insured under ‘his’ policy – but she could sue Donya because she did not come within the definition of an ‘insured’ when the policy was analyzed in terms of Donya.

State Farm argued that this conclusion would be inconsistent with State Farm Fire and Casualty Co. v. Guccione, 171 Ill.App.3d 404, 525 N.E.2d 595 (2nd Dist. 1988). In Guccione, a named insured, Anthony Guccione, was accused of negligently discharging a firearm in the direction of his stepson, Gus Kazas, causing injury to Gus. Prior to the shooting, at least, Anthony, Gus, and Gus’ mother had all lived under the same roof (presumably, although the opinion does not discuss this, not as an entirely happy family).

Discussing the severability clause in Guccione, the Appellate Court stated (525 N.E.2d at 597), “even if we view Anthony Guccione as a separately insured party, the exclusionary clause still applies. That provision states that the personal liability coverage does not apply to ‘bodily injury to you or to any insured within the meaning of part (a) or (b) of the definition of insured.’ Since, as we have previously seen, Gus Kazas falls within the definition of insured as that term is defined in the policy, the personal liability coverage afforded to Anthony Guccione does not apply to bodily injuries suffered by Kazas.”

But the Hooks court distinguished Guccione on the facts (2006 WL 1676212 at *5): “Under both policies, in order for someone to qualify as an ‘insured,’ that person must be both a relative of the named insured and reside in the same domicile as the named insured. In Guccione, the underlying plaintiff, Gus, met both requirements in that he was related to and living with both of the named insureds, Anthony and Tessie.... Although Gus’s relationship to Anthony would appear to be that of stepson, the declaratory plaintiff in that case did not contend that he was not Anthony’s relative because of a lack of consanguinity.”

State Farm was the plaintiff in Guccione as well; one can hardly have expected State Farm to raise this argument. On the other hand, the Guccione court did not address the absence of any blood tie between Anthony and Gus. The point that the Hooks court stressed, however, was that, unlike Anthony and Gus, Sharon and Donya never lived under the same roof. (2006 WL 1676212 at *5.)

Referring to the policy definition of “insured” therefore (“you and, if residents of your household... a. relatives”) Sharon was not an insured under Donya’s ‘separate’ coverage: They were not residents of the same household.

The Hooks court goes on to discuss the ‘business purposes’ behind “family exclusion” clauses, noting that two of the commonly stated justification for these provisions is to prevent “collusion between resident household members” or “to keep premiums down by excluding those individuals most likely to be injured, namely, resident family members.” The court concluded: “Interestingly, each of [these]... business reasons would emphasize the need for a combined familial and residence-sharing relationship in order to come within the underlying business purpose. Thus, the application of the severability clause to narrow the scope of the exclusion to permit coverage for a claim against an insured residing in a separate domicile is by no means inconsistent with the foregoing articulated business purposes.” (2006 WL 1676212 at *8).

Under Hooks it is clear that and insurer can refuse to defend its insured against a suit brought by related persons living with the insured. Left unresolved by the Hooks case is whether it is the ‘living together’ or the familial relationship that justifies the exclusion.

Other insurance companies have crafted an exclusion to attempt to prevent persons from suing a named insured with whom they reside, whether or not the person suing has any familial relationship with the insured.

For example, in Peters v. Farmers Ins. Co. of Washington, 2003 WL 734208 (Wash.App. 2003), an unpublished opinion, Daniel Peters rented an “upstairs bedroom” from David Wearn, a colleague of his from work. Peters sued Wearn after falling down the stairs leading to his rented bedroom. This mishap may not have fatally wounded their friendship, however: Wearn settled with Peters for $180,000, but he didn’t pay his erstwhile tenant any of that money; he merely assigned his claims against Farmers to Peters (2003 WL 734208 at *2). Farmers thereafter refused to pay – based on an exclusion which purportedly excused the insurer from defending or indemnifying against claims of “bodily injury to any resident of the residence premises except a residence employee” – and this was affirmed by the Washington court.

Similarly, in Illinois Farmers Ins. Co. v. Neumann, 596 N.W.2d 685 (Minn.App. 1999), the underlying tort claimant, Barbara Brenny, was a ‘sublessee’ of the apartment rented by Farmers’ insured, Katina Neumann. Brenny argued, unsuccessfully, that the absence of any “social relationship” between with Ms. Neumann should have been taken into account concerning the applicability of the exclusion pertinent in that case. But the tort claimant and the defendant insured did reside in the same apartment.

Certainly, insurers are entitled to be protected against collusive claims. However, family or resident exclusions, like other “provisions that limit or exclude coverage are to be construed liberally in favor of the insured and ‘most strongly against the insurer.’” See, National Union Fire Ins. Co. of Pittsburgh v. Glenview Park District, 158 Ill.2d 116, 632 N.E.2d 1039, 1042 (1994); see also, State Farm Mutual Automobile Ins. Co. v. Villicana, 181 Ill.2d 436, 692 N.E.2d 1196, 1199 (1998). Moreover, insurance policies are to be construed “as a whole, taking into account the type of insurance for which the parties have contracted, the risks undertaken and purchased, the subject matter that is insured and the purposes of the entire contract.” Crum & Forster v. Resolution Trust Corp., 156 Ill.2d 384, 620 N.E.2d 1073, 1078 (1993); see also, Lenny Szarek, Inc. v. Maryland Casualty Co., 357 Ill.App.3d 584, 829 N.E.2d 871, 874 (1st Dist. 2005) (“court must construe the policy as a whole”). An exclusion drawn so broadly as to encompass all likely collusive scenarios would leave precious little that was covered; it is unlikely, however, that so broad an exclusion would survive ordinary policy analysis.

Why don't they ever offer more than 25%?

I know it's becoming redundant (all together now: "and repetitive") but I can't help but read these scam fund transfer e-mails. The facts change; the size of the fortune varies -- but 20 or 25% seems to be the going rate for participation in these ventures.

My Dear Friend,

I am interested in a partnership investment programme with your self/corporation.

Clearly they've done their due diligence; they seem to know so much about me.

There is this huge amount of Five million Seven hundred and fifthy thousand U.S dollars($5,750,000.00)which my late father kept in a security/financial company before he was assasinated by unknown persons, during a political crisis in my country. My father deposited it as a family treasure and that was before his death.

As opposed to deposits made after death, as is alleged in some of these....

Now I and mother left Angola to Senegal,through the help of my late father's good friend. Right now we are in refugee camp and we have decided to invest these money in your country or anywhere safe enough outside my country Angola and the whole of Africa for security and political reasons.

Maybe I'm just a spoiled American, but if I had $5.75 million burning a hole in my pocket, I'd find a decent hotel to stay in, not a refugee camp. Couldn't your "father's good friend" direct you to the local Holiday Inn? Is that why you're not looking to him to help direct your investment strategy? Because you think any random stranger with an e-mail address can do better than he could?

We would want you to assist us to transfer this fund to your country for safty and investment purposes on the followings below:

1).Telecommunication
2).Manufacturing
3).Real Estate Business

If you will be able of rendering an assistance to us we will adequately compensate you 25% Of the total fund.

We will arrange all the necessary procedures in ensuring a smooth process for the funds to get to you. We will also appreciate if you contact me once you receive this mail to enable me give you more details.

Such as the your bank's ABA routing number and your account number so that funds can be 'smoothly' wired in. Or out.

This matter requires your urgent attention , confidentiality and discretion no matter what your decision maybe.

Thank you and God bless you.
Your's Sincerely,
Duoala Mbale

These things keep coming, so I have to assume that -- at least sometimes -- they actually work. When? Who's fallen for this? How? If you know of a 'for instance' please leave me a comment.

New Spam Technique?

Maybe I wasn't paying attention before, but this one strikes me as new: I may have received an actual follow-up e-mail to a scam fund-transfer e-mail. Here it is:

Dear friend,

I am pleased to introduce a business opportunity to transfer to your overseas account the sum of ($15;US Dollars) Fifteen Million United States Dollars from one of the Fidelity Finance & Security Company here in Dakar-Senegal.

I am M/s Laura Jones the Auditor General in the Real Estate Finance & Security Company here in Bangkok, Thailand, During the course of our auditing , I discovered a floating fund in an account opened in the our custody since 1998 and till date no body has operated or inquired about this fund.

After going through some old files in the records I discovered that the owner of the account died long ago in a plane crash along with his family without leaving [Heir/WILL] hence the funds is floating and if I do not remit this money out urgently it will be forfeited for nothing.

The owner of this account is Engr.Taha Ali William a foreigner, before his death, he was a management consultant and he died since 1992. No other person knows about this account or any thing concerning it the account has no other beneficiary.

Since I hardly know any foreigner,I am only contacting you as a foreigner to stand and apply as his international business partner because this money can not be approved to a local person here as his next of kin.

I need your full co-operation to make this workout fine because the management is ready to approve this payment to any foreigner who has correct documents concerning this fund, which I will provide to you upon your positive response and once I am convinced of your capability and assurance that you will never never let me down.

At the conclussion of this project ,we may proceed into an investment as equal partners of which you are to guide it pending my resignation which will be in a short while after the transfer if you may wish or we may share it in a ratio of 2.5 for you and 7.5 for me.

Regarding moral justification of the fund ,i wouldn't want you to consider it haramful. If you had been the victim, Certainly you wouldn't be happy having your hard earned fund shared among government as an unclaimed deposit, i believe there are aspects of life we may contribute with this fund to help the less priveledged and the needy in our society .

Furnish me with your direct telephone & Fax number for easy comminucation with you as soon as possible, and finally, please send your response to me at my other email....

Once again, I've left off the return address. But what a letter: It doesn't just appeal to greed. There are appeals to altruism (we may contribute with this fund to help the less priveledged and the needy in our society) as well as xenophobia (The owner of this account is Engr.Taha Ali William a foreigner). I'm not sure how the name "William" got in there, however; last week it was "Al-Akram Bin Abdullah an Iraqi Oil Merchant" who died in the war last year, not in 1992. (Not that I'm being critical, here, but if Taha Ali William died in 1992, who opened his account with Ms. Jones' company in 1998?) And that Laura Jones sure gets around, too: First she was only in Thailand; now she's both in Thailand and "Dakar-Senegal." One could almost wonder if Ms. Jones has two accounts she's trying to be rid of....

I hope she finds a taker for her accounts soon. Laura might think of investing some of her profits in English lessons. From her name we might assume that she was educated in English, but not much of it seems to have 'taken.' At the very least, in her travels she seems to have forgotten most of it....

AOL may have read my last post...

Because this letter was intercepted by the spam filter:

Dear friend,

Thanks for spending your time to go through this proposal, even though we do not know each other. It would have been more formal for a transaction or business of this magnitude should have commenced properly with a formal meeting between you and us to enable both parties know ourselves, have a fore knowledge of the nature of the business, discuss and acquaint ourselves with the responsibilities and functions of both parties and appropriate shares accordingly.

Let me start by first introducing myself properly to you. I am Professional Financial Advisor on offshore and real estate investment, Portfolio Management with a Private Security & Finance Company Here In Bangkok Thailand. My company work for expatriate community here in Thailand. I came to know of you in my private search for a reliable and reputable person to handle this confidential transaction, which involves the transfer of a huge sum of money to a foreign account requiring maximum confidence.

The proposition is this: A Foreigner, Late Engineer Al-Akram Bin Abdullah an Iraqi Oil Merchant/Contractor with the Thailand National Petroleum Corporation, lodged the sum of $19.5 Million USD with our company. Upon Maturity, I have sent a routine notification to his forwarding address but got no reply, after a month I sent a reminder and finally discovered from his contract employers (TNPC) that Mr. Abdullah died in war in Baghdad last year. Ever since no close relative or family has come forward to claim the money deposited with us. Therefore, my colleague and I, who are the direct fund managers, have decided to move/transfer this fund into a nominated foreign account, for future investment. To this regards, we sincerely request for your immediate assistance and co-operation for our mutual benefit.

1. I will forward to you copies or the deposit certificate and agreement
2. I will issue to you a Transfer Authorization of the Consignment,
3. We shall guide you up in all that we will do in ensuring that we claims this consignment as soon as possible.

You should rest assured that no one will question it because all financial deposit Certificates and transfer authorization pass my desk for final approval. To facilitate a smooth transaction, we have agree on the following : 20% of the money for you as reward, 10% For expenses on hotel , flight tickets and any other, While, 70% shall be for us (I and my colleague)

All these will be worked out as soon as we get your interest and acceptance. Upon the receipt of your mail message, send to me the following: Your private telephone and fax number for easier communication and to enable me fax to you the documents concerning the consignment. This is a sensitive and private business, The knowledge of which should be restricted , therefore do not discuss it with a third party, and bear it mind that these funds is not terrorist or drug money. I am assuring you of a 100% risk free transaction. While awaiting your prompt reply, please contact me on these emails.

I love these letters! But wouldn't you think that these titans of business would be able to construct a proper English sentence?

Oh -- I did not include the return address for you to send your e-mail response. You'll just have to respond to the copy of this letter that's probably in your own spam filter.

Spam, spam, spam, spam, spam, eggs, bacon, spam -- and e-mail, too.

I've been on AOL since it was new, through all the years when it's been the "Internet on training wheels." I'm used to it. And my AOL e-mail address is published in enough places that people can find me. Such as clients. I hope.

Since even AOL now offers a spam filter, I assume that everyone who can read this is familiar with what spam filters are and what they do. Or what they're supposed to do.

But here's what my spam filter did yesterday: It intercepted and blocked an order sent by the District Court in one of my cases -- but it passed this e-mail through:

My Dear Friend,

I am Hajjiah. Mariam Abacha, wife to the late Nigerian Head of state, General Sani Abacha who is late now, l am contacting you with the hope that you will be of great assistance to me....

I have moved this e-mail to my spam pile -- but, if you want me to refer this case to you, well, feel free to e-mail me. Who knows where your e-mail will end up?

Hawking says humanity has to move to the stars, not just look

In an AP story posted this morning on Yahoo, super-physicist Stephen Hawking says humanity must expand from Earth in order to insure the survival of the race. A long clip from the article follows:

HONG KONG - The survival of the human race depends on its ability to find new homes elsewhere in the universe because there's an increasing risk that a disaster will destroy the Earth, world-renowned scientist Stephen Hawking said Tuesday.

The British astrophysicist told a news conference in Hong Kong that humans could have a permanent base on the moon in 20 years and a colony on Mars in the next 40 years.

"We won't find anywhere as nice as Earth unless we go to another star system," added Hawking, who arrived to a rock star's welcome Monday. Tickets for his lecture planned for Wednesday were sold out.

He added that if humans can avoid killing themselves in the next 100 years, they should have space settlements that can continue without support from Earth.

"It is important for the human race to spread out into space for the survival of the species," Hawking said. "Life on Earth is at the ever-increasing risk of being wiped out by a disaster, such as sudden global warming, nuclear war, a genetically engineered virus or other dangers we have not yet thought of."

The 64-year-old scientist -- author of the global best seller "A Brief History of Time" -- is wheelchair-bound and communicates with the help of a computer because he suffers from a neurological disorder called amyotrophic lateral sclerosis, or ALS.

And, yes, Stephen Hawking is a "super-physicist." We have "supermodels," don't we?

Hawking numbers 'sudden global warming' among the potential events that may wipe out Earth-bound humanity. I have argued global warming may not be caused by humanity -- but that does not mean that it isn't happening. The global climate is always changing -- and we know that it has sometimes changed dramatically, in a relatively short time (without human assistance). Indeed, focusing our efforts at "stopping" global warming -- by curtailing auto emissions or handicapping industry -- may well cripple our global economy... and be about as effective at holding back global climate change as standing on a beach with an umbrella would be at trying to hold back a tsunami. Nature is bigger and stronger than we are. We should diversify, and not limit ourselves to the hope that we can control the heating and air conditioning system on Spaceship Earth.

And for a truly good scare about a bleak human future without space exploration, read Stephen Baxter's Titan. It's a 1997 book, slightly out of date, but all too plausible in its description of the slow strangulation of the space program, the International Space Station, the failure to replace the Shuttle, the abandonment of the once-so-very-real excitement about going into space to live and work. (One plot element I'll question: Why would Evangelical Christians be against the exploration of space? Do they not really believe that God gave them dominion over His creation?)