October 2010 Case Notes & Comments

Ive given it my all. Ive done my best. ~ Chicago Mayor, Richard M. Daley

MONTHLY QUIZ: While carrying bags of groceries, Plaintiff trips on the sidewalk outside her apartment and sues Owner and Management Company for negligence. Plaintiff contends that although she knew that a gap in the sidewalk existed and that it was “obvious” and in plain view, she was distracted from seeing the open and obvious condition because she was carrying groceries. Owner and Management Company move to dismiss based upon the “open and obvious” doctrine, which provides that possessors of land are not liable for injuries caused by known or obvious conditions, unless the possessor should still expect harm despite such knowledge or obviousness. Plaintiff contends that “distraction exception” applies as a defense to the “open and obvious” condition. Who wins? You be the judge. (Answer below).

NEGLIGENCE: 7th CIRCUIT EXTENDS BUSINESS OWNERS’ DUTY TO INCLUDE PROTECTING PATRONS FROM OFF-PREMISES ATTACKS: Plaintiff left bar only to find her car would not start. Bartender told plaintiff that since taxis were unavailable, she would have to get a ride from a patron. Two men offered a ride but, prior to leaving, bought plaintiff drinks possibly laced with drugs. After leaving together, plaintiff realized that the men were not driving to her hotel. Plaintiff escaped but, being intoxicated, was injured when she wandered onto an on-ramp over a mile from the bar. Plaintiff sued the bar Owner for negligence. Plaintiff alleged that Bartender was either an active accomplice in the scheme, or at least knew or should have known of the plan to assault her. In IL, general rule is that once a patron has left the premises, she ceases to be an invitee and a business is not responsible for off-premises injuries. An exception to the general rule was added to include attacks just off the premises, under theory that businesses owe a duty to provide safe means of ingress and egress. Under the circumstances, the court found the attack foreseeable and the likelihood of injury high. The 7th Circuit found that, though Owner had no duty to investigate each patron’s purpose in buying drinks, it would not be overly burdensome to require the bar to protect its invitees if it knows that one of its patrons intends to attack another, “even if the attack is to occur far from” the premises. Reynolds v. CB Sports Bar, Inc., -- F.3d --, 2010 WL 4137569, (7th Cir. Oct. 22, 2010) COMPARE/CONTRASTSanchez v. Wilmette Real Estate And Management Co.et al., -- N.E.2d--, 2010 WL 3290992 (1st Dist. Aug. 19, 2010)(No duty to protect tenant from criminal acts of 3rd persons occurring within building where landlord did not voluntarily undertake a duty to provide security measures and there was no evidence establishing a previous criminal attack)

INSURANCE LAW: EQUITABLE SUBROGATION CLAIM DISMISSED WHERE INSURER FAILED TO SECURE ASSIGNMENT FROM INSURED: Homeowner settled claim with Insurer under a homeowners’ policy for damage caused by rain and moisture penetration. Homeowner did not, however, assign his rights to Insurer. Homeowner filed suit against Contractors for the same damage on the theory that the damage was caused by Contractors’ negligent work.  Insurer also filed suit against Contractors, as a subrogee of Homeowner, based on the theory of equitable subrogation.  The trial court granted motions to dismiss Insurer’s complaint filed by both Homeowner and one of the Contractors on the basis that (1) Insurer was not the subrogee of Homeowner since there had been no assignment; and (2) the contractual subrogation provision precluded Insurer from seeking equitable subrogation.  In affirming the dismissal, the 1st District, held that where the right of subrogation is created by contract, the contractual terms control, rather than common law or equitable principles. American Family Mutual Insurance Company v. Northern Heritage Builders, L.L.C., -- N.E.2d --, 2010 WL 4026750 (1st Dist. Oct. 12, 2010).


Both car and truck were initially insured on different policies through Insurer No. 1. Vehicle Owners decided to place coverage for car with another company, Insurer No. 2, and renew truck policy with Insurer No. 1. Due to a mistake, policy with Insurer No. 1 (“Reinstatement Policy”) listed the car, not the truck. The mistake went unnoticed until the car was involved in an accident, for which Insurer No. 1 denied coverage. Insurer No. 2 settled the personal injury lawsuit for $100,000, the policy limit. In the ensuing declaratory action, Insurer No. 1 argued that its policy should be interpreted as providing coverage for the truck, not the car, consistent with the parties’ intentions. Insurer No. 2 contended that the policy should be enforced as written and that it was entitled to $50,000 from Insurer No. 1 under a theory of equitable contribution. Based upon the “clear intention of the parties” the court found that the Reinstatement Policy did not provide coverage for the car; and that therefore, there was no basis to apportion liability between Insurer No. 1 and Insurer No. 2. Mid-Century Ins. Co. v. Founder Ins. Co., -- N.E.2d --, 2010 WL 3768073 (1st Dist. Sept. 24, 2010)

ANSWER TO QUIZ: Owner and Management Company win.  In IL, the distraction exception sustains the duty of due care if the landowner/possessor should expect that an invitee may be distracted, such that she would not discover what is obvious, forget what she has discovered and/or fail to protect herself against the condition. However, in order for the distraction to apply, the distraction should not be solely within the plaintiff's own creation. Here, to the extent carrying groceries was a distraction, plaintiff created the danger by either blocking her view or forgetting about the gap. Since neither the Owner nor Management Company created or contributed to the distraction, both should be dismissed. Lake v. Related Management Co., L.P. --N.E.2d--, 2010 WL 3450068 (4th Dist, Aug. 30, 2010)