August 2021 Case Notes & Comments

"The gem cannot be polished without friction nor man without trials." ~ Confucius

MONTHLY QUIZ: Driver is involved in a minor fender-bender with another vehicle, who calls the police. Village Officer responds. Driver claims that Officer should have stopped him at the scene as he was exhibiting “clues of intoxication”. Officer does not notice whether Driver is intoxicated and after obtaining his license, registration and insurance card, does not investigate further and allows Driver to leave the scene. About 20 minutes later, Driver falls asleep at the wheel, leaves the road and hits a pole. Upon transport to the hospital with injuries, Driver exhibits a blood alcohol concentration of 0.24. Driver sues Village and Officer for negligence, contending that the failure to properly investigate was wilful and wanton conduct. Driver also alleged that Officer failed to arrest him and take him into custody. Village and Officer move for dismissal, based on lack of duty and for the immunities afforded under the Local Government and Governmental Employees Tort Immunity Act (“Tort Immunity Act” or “Act”)(745 ILCS 10/ (West 2016)). Are Village and Officer immune under the Act? Were Officer’s omissions wilful and wanton conduct? Did Officer have a duty to investigate? Who is right? You be the judge. (Answer below).

DENIAL OF CLASS CERTIFICATION AFFIRMED ON APPEAL IN THIRD CIRCUIT - Thomas A. Gamache, Adam L. Fraenkel, and Daniel J. Offenbach were successful before the United States Court of Appeals for the Third Circuit in defending an appeal of a denial of class certification. Plaintiffs suffered property damage following a fire caused by a nearby lightning strike. Plaintiffs alleged the fire was caused by defective gas piping installed in the property, claiming that it caused the structure to be electrically energized such that the energy created a hole in the piping, resulting in fire. Plaintiffs sought nationwide and state-specific class certification on behalf of property owners in which the gas piping was installed; LEF, representing the manufacturer of the gas piping, opposed class certification. The District Court for the Western District of Pennsylvania denied Plaintiffs’ motion for class certification, ruling that Plaintiffs had failed to meet the standards for class certification under Federal Rule of Civil Procedure 23. The Third Circuit granted Plaintiffs’ Rule 23(f) petition for permissive appeal but, following hearing, affirmed the District Court, agreeing that Plaintiffs had failed to satisfy necessary elements of Rule 23, thereby precluding class certification.            

WORKERS’ COMPENSATION – VOCATIONAL REHABILITATION ASSESSMENT: Appellant-Employer (Respondent), a retail computer company hired Appellee-Employee (Petitioner), as a warehouse picker in 1999. In 2003, Petitioner injured her low back, and eventually had surgery and permanent restrictions. Petitioner’s surgeon and Respondent’s IME agreed with the need for surgery, as to Petitioner’s permanent restrictions and that Petitioner could not return to her pre-injury employment. Petitioner’s vocational expert found Petitioner could not return to any employment based on several factors including her lack of prior experience or computer skills and inability to speak English. Respondent’s vocational expert found Petitioner could work in several capacities with her permanent restrictions based on her work experience, transferable skills, knowledge of social applications and email software, and some prior college classes. The Arbitrator found petitioner’s expert credible and awarded Petitioner total and permanently disabled benefits on an “odd lot” theory. Respondent submitted the matter to the Commission who, upon de novo review, found Respondent’s vocational expert more credible than Petitioner’s vocational expert. The Commission found Petitioner employable and awarded 60% MAW. Petitioner reviewed the matter to the Circuit Court who reinstated the Arbitrator’s decision because the Commission award was against the manifest weight of the evidence. On further review, the Appellate Court reinstated the Commission decision as the finding that Respondent’s vocational expert more credible was not against the manifest weight of the evidence. The court reinstated the portion of the Commission award that reversed the Arbitrator’s award that found Petitioner was totally and permanent disabled on an “odd lot” theory. The Appellate Court also remanded the matter back to the Commission for a vocational rehabilitation assessment because the Act requires a vocational assessment when a petitioner cannot return to her regular and customary employment.  CDW v. Illinois Workers' Comp. Comm., et al., 2021 IL App (2d) 200562WC-U (Aug. 13, 2021).       

SUBROGATION – TENNESSEE SUPREME COURT ADOPTS NARROW FRAUD EXCEPTION TO ECONOMIC LOSS RULE: Motor Carrier purchased 243 commercial trucks from independent Dealership, which trucks were built by Manufacturer. After the sale, the trucks allegedly experienced premature failures. Carrier sued Dealership and Manufacturer for breach of contract and warranties, common law and statutory fraud and negligent misrepresentation, alleging that the trucks were “not as reliable as represented.” The trial court dismissed Carrier’s negligent misrepresentation claim, concluding it was barred by the “economic loss doctrine.” The “economic loss doctrine” is a judicially created rule that since 1965, has been increasingly raised in defense of tort subrogation claims. Generally understood, the doctrine prevents contracting parties from pursuing tort recovery from one another for “purely economic” or commercial losses, associated with the contract relationship. At present, the overwhelming majority of jurisdictions have adopted the economic loss doctrine, though many variations and nuances exist. Since 1995, courts have begun to consider how and whether the economic loss rule applies to fraud claims. Three approaches have emerged: 1) the “strict approach” - which bars all fraud claims; 2) the “broad fraud exception” - which permits fraud claims and is the current majority approach; and, 3) the limited or narrow fraud exception – which considers whether the fraud is “extraneous to” or “interwoven with” the contract. In a question of first impression, the TN Supreme Court adopted the narrow fraud exception, holding that when a fraud claim seeks recovery of only economic losses and is premised solely on misrepresentations or nondisclosures between sophisticated commercial parties about the quality of goods that are the subject of a contract, the economic loss doctrine applies. The high court ruled that the narrow fraud exception struck the proper balance between two concepts “crucial to Tennessee law,” freedom of contract and abhorrence of fraud. Dismissal of Carrier’s negligent misrepresentation claim affirmed. Milan Supply Chain Solutions, Inc. f/k/a Milan Express, Inc. v. Navistar, Inc. et al., Case No. C-14-285 (S.Ct. Tenn, Aug. 2, 2021).

MOTOR VEHICLE ACCIDENT WARRANTS CLARIFICATION OF THE INTERPLAY BETWEEN VARIOUS SECTIONS OF THE CONTRIBUTION ACT: Plaintiff was driving through a construction zone when the construction flagger abruptly turned the traffic sign to “STOP”, causing plaintiff to slam on his brakes and to be rear-ended by the tractor trailer behind him. Plaintiff filed suit against the driver of the tractor-trailer, who in turn filed third-party contribution claims against the construction site’s general contractor and safety subcontractor. The plaintiff settled with the driver and the general contractor, and the case proceeded to trial on the driver’s contribution claim against the safety subcontractor. The verdict form listed the driver, the general contractor, and the safety subcontractor, and the jury apportioned fault among all three. The driver argued that, because the general contractor had previously settled with the plaintiff, the share of fault attributable to it should be deemed “uncollectible” and re-allocated between the driver and the safety contractor. Based on its interpretation of the Contribution Act, the trial court denied this request. On appeal, the Illinois Supreme Court analyzed Sections 2 and 3 of the Contribution Act: Section 2(b) provided that a tortfeasor need not pay more than its own share of the common liability; Section 2(d) provided that a settling tortfeasor is “discharged” from contribution liability to another tortfeasor; Section 3 provided that “if the obligation of one or more of the joint tortfeasors is uncollectible”, the unpaid portion of the uncollectible obligation would be paid on a pro rata basis by the remaining tortfeasors. The Court found that a “discharged” obligation was distinct from an “uncollectible” obligation, and that, therefore, the assigned share of liability of the settled general contractor should not be re-allocated. Roberts v. Alexandria Transportation, Inc., 2021 IL 126249 (6-17-21).

ANSWER TO QUIZ: Officer and Village are immune. Driver loses. In this case, Driver argued that the dispute should focus on Officer’s failure to investigate and enforce the law and thus, Section 202 of the Tort Immunity Act applied. Section 202 provided only qualified immunity for Officer in the commission of an “act or omission in the execution or enforcement of any law”, but did not apply in cases of “willful and wanton conduct.” Section 4-102, which relates to a failure to provide adequate police protection or services and Section 4-107, which relates to the failure to make an arrest, both provide absolute immunity. There is no exception for wilful and wanton conduct. The appellate court, however, found that Driver’s case was “really about” Officer’s alleged failure to arrest Driver for his own criminal conduct and therefore, Sections 4-102 and 4-107 applied. Village and Officer had complete immunity. Given the finding of immunity, the appellate court did not reach the issue of duty. Further, in reaching this result, the appellate court stated that since Driver admittedly “chose to place himself in a position to be injured, we must leave him there.” Rodriguez v. Village of Park Forest, 2021 IL App (1st) 201269-U (Aug. 19, 2021).

 

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