Illinois Appellate Lawyer Blog

January 6, 2010

Appellate Court Defines Obiter And Judicial Dictum, And Affirms Auto Insurer’s Summary Judgment

Alex Pajic was injured while driving a truck for his employer. Alex contended that another vehicle caused the accident, but left the scene and never was identified. Alex’s lawsuit against his employer’s insurer, Old Republic Insurance, asked for reformation of the underinsured and the uninsured motorist coverages, and for an award of the limits of those coverages. Alex complained that, contrary to the Illinois Insurance Code, Old Republic did not make a “meaningful offer” of the coverages to the employer.

The trial court ruled that Old Republic complied with the Code, so it gave the insurance company summary judgment. Alex appealed.

The case turned on the interplay among two Illinois Supreme Court cases and a 1990 amendment to the Insurance Code. Alex argued that comments by the Illinois Supreme Court about the amended statute were dictum, and were not controlling, because the case it was deciding involved the pre-1990 amended Code.

January 2, 2010

Illinois 4th District Appellate Court Refuses 30-Year “Legitimate Business Interest” Test As Made Of Whole Cloth

by Steven R. Merican

Neil Ehlers worked as a salesman for Sunbelt Rentals, a seller and renter of industrial equipment. After about five years, Ehlers left Sunbelt and went to work for Midwest Aerials & Equipment, a company that competed with Sunbelt. Sunbelt sued Ehlers and Midwest to enforce restrictive covenants in Sunbelt’s employment agreement with Ehlers. Sunbelt got a preliminary injunction against Ehlers and Midwest, who then appealed.

One of the issues on appeal was whether the trial court properly followed the “legitimate business interest” test when it analyzed the propriety of the restrictive covenants. That test had been used by Illinois appellate courts for more than 30 years.

But the Fourth District Illinois Appellate Court ruled that it didn’t matter because the “legitimate business interest” test had been “spun out of whole cloth” and never had been adopted by the Illinois Supreme Court. The appellate court ruled it was not constrained to abide a standard set by other state appellate courts despite 30 years of acceptance and use. Here’s the court’s rationale:

December 24, 2009

Punitive Damages Verdict Against Broadcaster Affirmed; Court Uses Two-Pronged Standard Of Review

by Steven R. Merican

Jerri Blount sued Jovon Broadcasting. She claimed the company fired her because she agreed to testify for another employee who alleged racial and sexual discrimination against the company. After a trial, a jury awarded Blount $3,082,350, $2.8 million of which was for punitive damages. Jovon appealed, and among other things, argued that the punitive damages award was excessive.

The First District Illinois Appellate Court affirmed the verdict. The court indicated the standard of review for the propriety of a punitive damages verdict has two levels of analysis. First, the “amount of a punitive damages award will not be reversed unless it is so excessive that it must have been a result of passion, partiality, or corruption.” The appellate court also used the more familiar “manifest weight” standard: “Because a jury’s determination of the amount of punitive damages is a predominately factual issue, we will not reverse a jury’s determination as to the amount of punitive damages unless it is against the manifest weight of the evidence.”

So to get a reversal, an appellant must show by a manifest weight of the evidence that a punitive damages verdict was the result of passion, partiality, or corruption.

December 20, 2009

No Appellate Jurisdiction Over Trustee’s Appeal Filed Before Final Distribution Of Assets

by Steven R. Merican

After Eleanor Miller died, Melodee Miller-Hanson became the successor trustee of Eleanor’s trust. Melodee got into a dispute with the other beneficiaries of the trust, and they ended up suing each other. The beneficiaries wanted Melodee removed as trustee; Melodee wanted the beneficiaries disinherited.

Melodee’s counterclaim was dismissed. And with “a few specific exceptions that were to be assessed against Melodee’s final distribution share,” the trial court ruled against the beneficiaries in their claim against Melodee. Melodee later asked the court to grant her litigation expenses, which the court largely denied.

Under Illinois Supreme Court Rule 304(b)(1) [allowing an interlocutory appeal from a judgment or order entered in the administration of an estate, guardianship, or similar proceeding which finally determines a right or status of a party], Melodee appealed a number the trial court’s rulings in connection with her requests for fees and costs. But she filed her notice of appeal before the court ruled on a final distribution of the assets of the trust.

December 15, 2009

Failure To Make Offer Of Proof Dooms Appellate Argument Opposing Oral Settlement Agreement

by Steven R. Merican

K4 Enterprises sued Grater, Inc. and James Zavacki During the trial, the parties met with the judge, but without attorneys, to discuss settlement of the case. The case was settled, at least everyone thought so at the time. But over the following weeks, the parties could not agree on the terms of a written agreement.

K4 asked the trial judge to enforce the oral agreement made during the settlement discussions in the court’s chambers. Grater and Zavacki opposed the motion, and asked for an evidentiary hearing. They wanted to question the judge as a witness to the settlement negotiations. The judge denied the request for an evidentiary hearing, and said he would not give testimony. Instead, the judge ruled that Grater and Zavacki could make an offer of proof to show what their other witnesses would say. Grater and Zavacki declined to make the offer of proof, saying they were unable to do so without the testimony of the trial judge. The court then granted K4’s request to enforce the oral settlement agreement.

On appeal, Grater and Zavacki claimed the trial court was wrong to refuse to hold an evidentiary hearing. But the First District Illinois Appellate Court disagreed, and ruled that Grater and Zavacki forfeited the argument by declining to make an offer of proof. Here’s how the appellate court explained it:

December 12, 2009

Notice Of Appeal More Than 30 Days After 304(a) Finding Still Vests Appellate Jurisdiction

by Steven R. Merican

This insurance coverage case has a unique twist on when an interlocutory order under Illinois Supreme Court Rule 304(a) may be appealed.

John J. Rickhoff Sheet Metal Co. filed a third-party complaint against Meridian Mutual Insurance Co and the Horton Group, Inc. Meridian and Horton asked the trial court to dismiss Rickhoff’s third-party complaint, which the court did.

Rickhoff then asked the court to reconsider the dismissals. The trial court denied Rickhoff’s request as to Meridian, and entered Rule 304(a) language [no just reason to delay enforcement or appeal] permitting an interlocutory appeal within 30 days. The trial court took the reconsideration request as to the Horton dismissal under advisement. More than 30 days later, the court also denied that request to reconsider, and made a similar Rule 304(a) finding.

December 7, 2009

Failure To Designate Amount Of Attorney Fee Award Deprives Appellate Jurisdiction For Interlocutory Appeal

by Steven R. Merican

The City of West Chicago passed a zoning ordinance that banned certain billboards. Lamar Whiteco Outdoor Corporation sued the city, claiming the ordinance was unconstitutional. Lamar and the city eventually settled: an injunction was entered prohibiting the city from enforcing the ordinance against Lamar, and Lamar withdrew the lawsuit.

Lamar then filed a petition for its attorney fees. The trial court ruled that Lamar was entitled to the fees. But the court did not state how much money Lamar should get. The city asked the court to reconsider the ruling. The court refused to reconsider, and also ordered under Illinois Supreme Court Rule 304(a) [no just reason to delay enforcement or appeal of final judgments as to one or more but fewer than all of the parties or claims] that its order allowing the attorney fees was a final and appealable interlocutory order.

The city appealed. But Lamar argued the appellate court did not have jurisdiction to hear the appeal. Lamar maintained that Rule 304(a) did not give the appellate court a basis to consider the appeal.

November 28, 2009

Appeal of Home Foreclosure Late When Filed At Conclusion Of Divorce Case

by Steven R. Merican

Elena and Michael Sanfratello were in a disputed divorce case. Michael appealed rulings concerning child support and classification, apportionment, and dissipation of marital assets.

Elena cross-appealed (1) whether certain of Michael’s businesses were marital assets and (2) confirmation of a sale to Michael’s parents of the marital home, which was in foreclosure. The foreclosure action, filed by the bank that held the mortgage, was handled in another court by another judge. Elena made Michael’s parents parties to that action, claiming they and Michael were guilty of fraud in the foreclosure and sale. But Elena did not appeal the order within 30 days. The foreclosure matter then was consolidated into the divorce case.

About a year later, after the divorce case was concluded and Michael appealed, Elena filed her cross-appeal, including an appeal of the foreclosure confirmation. Michael’s parents argued that Elena’s cross-appeal should be dismissed for lack of appellate jurisdiction. They claimed that the confirmation order was final and appealable when it was issued, and that Elena’s appeal should have been filed within 30 days of that time.

November 25, 2009

State Courts At Tipping Point Of Dysfunction?

by Steven R. Merican

The New York Times posted an editorial today agreeing with Massachusetts Supreme Judicial Court Chief Justice Margaret Marshall that “because of budget cuts in tough economic times, state courts across the country stand at “‘the tipping point of dysfunction.’” The piece explains the results of budget cuts in different state courts, and concludes: “[A]t some point, slashing state court financing jeopardizes something beyond basic fairness, public safety and even the rule of law. It weakens democracy itself.”

November 25, 2009

Request To Modify Language Of Judgment Does Not Extend Time To File Appeal

by Steven R. Merican

Cheryl Heiden claimed Craig Ottinger was her daughter’s father. So Cheryl sued Craig under the Illinois Parentage Act, and asked for support payments from Craig. A DNA test of Craig’s blood excluded him as father. But Cheryl claimed Craig’s vial of blood was mishandled, so she sued the DNA Diagnostics Center, the company that agreed to do the test.

DNA Diagnostics asked for, and received, summary judgment on Cheryl’s complaint. Within the 30-day deadline, Cheryl filed a “Motion to Reconsider Court Order of April 13, 2007, and For Clarification of said Order.” The trial court denied the motion, and Cheryl appealed within 30 days of that order.

But Diagnostics asserted that Cheryl’s appeal should be dismissed because it was filed more than 30 days after the summary judgment was entered by the trial court. Cheryl’s Motion to Reconsider, Diagnostics argued, was not a valid post-judgment motion, so it did not extend the time for her to file the appeal.