Case Notes & Comments

"Simplicity is the final achievement. After one has played a vast quantity of notes and more notes, it is simplicity that emerges as the crowning reward of art." ~ Frédéric Chopin

MONTHLY QUIZ: With a mortgage from Bank, Plaintiffs-Owners purchase home and reside there from 2004 through November 2010. Bank inspects the exterior of the property four times, but has no contact with Owners. In November 2010, Owners rent the home to Tenants. In February 2011, Insurer issues a hazard insurance policy (Policy) to Owners protecting "insureds" (i.e. defined as owners and "residents of your household") and Bank against loss and damage to the home caused by fire and other perils. Policy requires, among other things, that Bank to notify Insurer of any "change in ...occupancy or substantial change in the risk of which [Bank] is aware." In November 2011, Bank inspects again and speaks with Tenant. Three days later, the home burns down due to a faulty outlet. Insurer declines to pay and files a declaratory action on the grounds that the home was not occupied at the time of the fire. Insurer also contends that Bank was obligated to notify Insurer of the change in the risk and occupancy. Should Bank have been aware that Owners were not occupying the home? Did Bank comply with the Policy's notification requirement? You be the judge. (Answer below)

ILLINOIS SUPREME COURT - IMPACT RULE IS STILL THE LAW IN ILLINOIS FOR DIRECT VICTIMS OF ALLEGED EMOTIONAL DISTRESS: Homeowner fell into default and Bank foreclosed on the mortgage. After the judgment of foreclosure but before Bank could take possession, Homeowner continued to live in the home, reportedly with the intention of selling the property prior to the end of the redemption period. The mortgage provided that if Homeowner defaulted, Bank had the right to enter the home to inspect and repair. Thus, Bank hired Contractors to enter the home, inspect and make repairs if necessary. After determining that the home was unoccupied, Contractors removed one of the secondary locks and entered the home, only to encounter Homeowner. Homeowner filed a lawsuit against Bank, Contractors and others for numerous torts, including negligent infliction of emotion distress ("NIED"), claiming that the incident caused Homeowner great fear, anxiety, depression, and post-traumatic stress. Bank and Contractors (collectively, "Defendants") moved to dismiss Homeowner's NIED claim, contending that Homeowner did not plead the "impact rule". The impact rule requires direct victims of emotional distress to plead and prove that, in addition to emotional distress, the plaintiff suffered a "contemporaneous physical injury or impact." In reviewing the sufficiency of her complaint, the Illinois Supreme Court held that the pleading requirements for a direct victim's recovery for NIED still included an allegation of "contemporaneous physical injury or impact." In so doing, the high court held that its discussions in prior cases as to the continued viability of the impact rule were obiter dictum and thus, not binding authority or precedent. The dismissal of Homeowner's other claims was also discussed in great detail. EDITOR'S NOTE: Contractors were successfully represented by Jeffrey S. Pavlovich and Gerard C. Fosco of Leahy, Eisenberg & Fraenkel, Ltd. Schweihs v. Chase Home Finance, LLC, et al., 2016 IL 120041 (Dec. 15, 2016). 

SNOW AND ICE REMOVAL ACT - ILLINOIS SUPREME COURT UPDATE:  In Illinois, the common law rule is that a landowner owes no duty to remove natural accumulations of snow and ice. Liability, however, may arise where snow or ice accumulated by artificial causes or in an unnatural way, generally referred to as an "unnatural accumulation." Theories of liability for an unnatural accumulation include (a) a defective condition or negligent maintenance of the premises (e.g., an improperly hung gutter, improperly pitched roof, leaky roof/gutter, excessive slope of a parking lot, etc.), or (b) a voluntary undertaking (e.g., plowing snow into a pile resulting in a thawing and re-freezing of ice). In 1979, in an effort to encourage residential owners to clear snow and ice from residential properties, the Illinois General Assembly passed the Snow and Ice Removal Act ("Act", 745 ILCS 75/0.01 et seq.). The Act provides immunity to residential property owners in connection with their snow or ice removal efforts, unless the misconduct was willful or wanton.  Since the passage of the Act, a split of authority developed among the appellate court districts with regard to whether immunity under the Act was limited to those claims of unnatural accumulation arising under the "voluntary undertaking" theory, or extended to claims alleging a "defective condition" or "failure to maintain the premises".  Noting the split of authority among the appellate court districts, the Illinois Supreme Court held that the Act is limited to those cases involving the "voluntary undertaking" theory, reasoning that the stated purpose of the Act was to encourage residential property owners to "clean the sidewalks abutting their residences of snow and ice", and specifically addressed such owners' snow/ice removal efforts.  The Act was not, however, intended to immunize liability for falls on accumulations resulting from circumstances unrelated to snow and ice removal efforts, and therefore expanding the scope of the immunity under the Act would be improper. Murphy-Hylton v. Lieberman Mgmt. Servs., 2016 IL 120394 (Dec. 1, 2016).

WORKERS' COMPENSATION - PARTICIPATION IN AFTER-SCHOOL RECREATIONAL BASKETBALL GAME FOUND TO ARISE OUT OF EMPLOYMENT: Claimant-Teacher, a middle school science teacher who was not a basketball player, did not want to participate in an after school, student-teacher basketball game in the gym, but was  repeatedly pressured to do so by the school  principal.  Teacher testified that he was concerned that if he did not  participate, it might reflect badly on his performance review and he might not have been offered a teaching position the next year. During the game, Teacher was injured and filed an application for adjustment of claim under the Workers' Compensation Act ("Act"). Arbitrator awarded Teacher benefits under the Act, finding that he was not engaged in a "voluntary recreational program" under Section 11 of the Act (820 ILCS 305/11 (West 2010)) at the time of his injury and that his injury arose out of and in the course of his employment. The Illinois Workers' Compensation Commission (Commission) affirmed. On review, the circuit court of Cook County reversed the Commission's decision, finding that Teacher was participating in a "voluntary recreational program" under Section 11 of the Act and that therefore, his injury did not arise out of and in the course of his employment. The First District Appellate Court reversed, however, finding that the evidence in the record was sufficient to support a finding that Teacher did not participate in the basketball game for his own "diversion" or to "refresh" or "strengthen" his spirits after toil and that he, therefore, was not engaged in a "recreational" activity under section 11 of the Act at the time of his injury. HELD: Commission's finding that Teacher was not engaged in a "voluntary recreational program" under section 11 of the Act at the time of his injury was not against the manifest weight of the evidence. Calumet School District # 132 v. Illinois Workers' Compensation Comm'n, 2016 IL App (1st) 153034WC (Nov. 10, 2016)

MEDICAL NEGLIGENCE / FORUM NON CONVENIENS: Patient filed a medical negligence complaint in County A, based upon an injury that occurred while being treated at Hospital, located in County B. Hospital and Doctors ("Defendants") moved to transfer the case to County B under the doctrine of Forum Non Conveniens, which allows a court, in its discretion, to decline jurisdiction and transfer an action to another forum to better serve the convenience of the parties and the ends of justice. Defendants argued for transfer because the injury occurred in County B and because most of the Defendants and witnesses resided in County B. They argued that Plaintiff's choice of forum is entitled to little or no deference because it was neither the Patient's home forum, nor the forum where the cause of action arose. In applying forum non conveniens, Illinois courts should consider numerous factors of public and private interest, including: convenience, access to sources of evidence, considerations that make a trial expeditious and inexpensive, interest in deciding controversies locally, unfairness of imposing the burdens of trial and jury duty on a forum with little connection to the litigation, and difficulties of adding litigation to already congested court dockets. In denying the motion, the court observed that the counties were contiguous, the respective courthouses were only 42 miles apart and that some of Defendants lived in County A. Further, the Court clarified that while County A was neither Patient's home forum nor the location where the action arose and Patient's choice of forum was entitled to less deference, it did not mean that Patient's choice of forum was entitled to no deference. Foster v. Hillsboro Area Hospital, Inc., No. 2016 IL App (5th) 150055(Nov. 10, 2016).  

ANSWER TO QUIZ: Bank wins, Insurer loses. Looking at the pre-fire inspection reports, Bank did not speak to Owners and only spoke to the Tenant at the last inspection. In view of these facts, the court found insufficient evidence that Bank actually knew of a change in the occupancy of the home. Further, even if Bank had reason to know Owners did not occupy the home prior to the fire, Owners had already leased the home to Tenants prior to the issuance of the Policy. Thus, there was actually no change in occupancy to report.  Stongate Insurance Company v. Mark Hongsermeier, et al., 2017 IL App (1st)151835