STATUTE OF LIMITATIONS
- Personal Property5 Years735 I.L.C.S. § 5/13-205
- Personal Injury/Death2 Years735 I.L.C.S. § 5/13-202*
- Personal Injury/MalpracticeVaries735 I.L.C.S. § 5/13-212
- Breach of Contract/Written10 Years735 I.L.C.S. § 5/13-205
- Breach of Contract/Oral5 Years735 I.L.C.S. § 5/13-206
- Breach of Contract/U.C.C./Goods4 Years735 I.L.C.S. § 28/2-725
- Statute of Repose/Products/After Sale Date to User10 Years735 I.L.C.S. § 5/13-213**
- Statute of Repose/Products/After Delivery Date to Owner12 Years735 I.L.C.S. § 5/13-213**
- Statute of Repose/Real Property10 Years735 I.L.C.S. § 5/13-214***
- Breach of Warranty4 Years810 I.L.C.S. § 5/2-725****
- Workers’ Compensation2 Years820 I.L.C.S. § 305/5(b)
- Strict Product Liability/Personal Injury2 Years735 I.L.C.S. § 5/13-202
- Strict Product Liability/Personal Property5 YearsI.L.C.S. § 5/13-205
Statute of Limitations Exceptions
*4 Year SOL may apply if “design, planning, supervision, observation, management of construction, or construction of an improvement to real property” is involved. 735 I.L.C.S. § 5/13-214(a); Fed. Ins. Co. v. Konstant Architecture Planning, Inc., 902 N.E.2d 1213 (Ill. App. 2009).
**Shorter of 10 Years from sale date to initial user or 12 Years from delivery to first owner. 735 I.L.C.S. § 5/13-213.
***10 Years from improvement to real property, but after person had knowledge, 4 Years. 735 I.L.C.S. § 5/13-214.
****Except when an express warranty covers future performance past four-year SOL period. 810 I.L.C.S. § 5/2-725.
Contributory Negligence/Comparative Fault
Modified Comparative Fault: 51% Bar. Damaged party cannot recover if it is 51% or more at fault. If 50% or less at fault, it can recover, although its recovery is reduced by its degree of fault. Damages will be reduced pro-rata by amount of plaintiff’s negligence. 735 I.L.C.S. § 5/2-1116.
Med Pay/PIP Subrogation
Med Pay: Yes. Claim for reimbursement and/or subrogation allowed if provided for in the policy language. Bernardi v. Home & Auto. Ins. Co., 212 N.E.2d 499 (Ill. App. 1965); Damhesel v. Hardware Dealers Mut. Fire Ins. Co., 209 N.E. 876 (Ill. App. 1965). However, absent the consent of subrogor, subrogated party that has paid only a portion of the entire loss has no right to a direct subrogation claim against the tortfeasor in competition with a subrogor who is actively pursuing the entire claim. Krapfl v. Farm Bureau Mutual Ins. Co., 548 N.W.2d 877 (Iowa 1996); Aspelmeier, Fisch, Power, Warner & Engberg v. Allied Group Ins. Co., 556 N.W.2d 805 (Iowa 1996). The two-year personal injury statute of limitations runs from the date of the insured’s accident. 735 I.L.C.S. § 5/13-202.
PIP: Coverage not applicable. Not generally sold in Illinois. No special statute limiting suit or providing credit if PIP is present.
Automobile: Pro-Rata. 215 I.L.C.S. § 5/143b provides: “Any insurance carrier whose payment to its insured is reduced by a deductible amount under a policy providing collision coverage is subrogated to its insured’s entire collision loss claim including the deductible amount unless the deductible amount has been otherwise recovered by the insured, but if the deductible amount has been otherwise recovered by the insured it shall not be included in the subrogated loss claim and shall be excluded from the amount of loss pleaded. If the deductible amount is included in subrogated loss claim, the insurance carrier shall pay full pro-rata deductible share to its insured out of net recovery on the subrogated claim. Administrative expenses of the insurance carrier cannot be deducted from the gross recovery, and only incurred expenses of the carrier, such as attorney’s fees, collection fees and adjuster’s fees, may be deducted there from to determine the net recovery. When the insurance carrier is recovering directly from a third-party a claim by means of installments, the insured shall receive his full pro-rata deductible share as soon as such amount is collected and before any part of such recovery is applied to any other use.” Note: Administrative expenses are those incurred as a normal cost of doing business but “incurred expenses” are “out of pocket” expenses related to a specific claim.
Administrative expenses cannot be deducted- only incurred expenses, such as attorney’s fees, collection fees and adjuster’s fees. Installment payments must be reimbursed pro-rata when paid.
Related Case Law: Morel v. Coronet Ins. Co., 117 Ill.2d 18 (Ill. 1987).
Made Whole Doctrine
Illinois does not apply the Made Whole Doctrine as a blanket rule, and it does not recognize the Made Whole Rule the way other states do. In re Estate of Scott, 567 N.E.2d 605 (Ill. App. 1991). Illinois recognizes the validity of subrogation clauses in insurance policies and enforces them. Principal Mut. Life Ins. Co. v. Baron, 964 F. Supp. 1221 (N.D. Ill. 1997). In Illinois, the effect of a subrogation clause is identical to that of a reimbursement clause. Id. Illinois state courts will enforce contractual subrogation rights even if the insured is not fully compensated for all of his or her injuries. Id.; Capitol Indem. Corp. v. Strikezone, 646 N.E.2d 310 (Ill. App. 1995); Eddy v. Sybert, 783 N.E.2d 106 (Ill. App. 2003). However, Illinois still encourages the use of the Made Whole Doctrine in “appropriate circumstances.” In re Estate of Scott, supra; In re Estate of Schmidt, 398 N.E.2d 589 (Ill. App. 1979) (insurer had no right to be subrogated to insured’s widow’s right of recovery and wrongful death action where terms of subrogation contained in policy specifically provided that insurer was to be subrogated to insured’s right of recovery for loss and, under the Wrongful Death Act, the insured decedent has no right to recover for his own death). In Illinois, the doctrine of subrogation will be applied according to the dictates of “equity, good conscience, and public policy considerations” whenever a contractual subrogation provision is not present. In re Scott, supra. Case law in Illinois indicates that the Made Whole Doctrine can be overridden by contract terms in a policy or Plan. Hardware Dealers Mut. Fire Ins. Co. v. Ross, 262 N.E.2d 618 (Ill. 1970). Such a clause in a policy need not be specific, but must be enforceable. Strikezone, supra; Eddy v. Sybert, 783 N.E.2d 106 (Ill. App. 2003).
A new twist on the Made Whole Doctrine was passed by the Illinois Legislature on August 21, 2012 and became effective on January 1, 2013. Effective January 1, 2013, the Health Care Services Lien Act (HCSLA) was amended to add a new § 23/50. 2012 Ill. Legis. Serv. P.A. 97-1042 (H.B. 5823) (Eff. Jan. 1, 2013). This amendment codifies the Made Whole Doctrine in subrogation cases and other reimbursement actions by proportionately reducing such claims by the plaintiff/insured’s comparative fault or by proportionately reducing such claims in the amount in which a claim is deemed to be uncollectible due to limited liability insurance. 770 I.L.C.S. § 23/50.
Economic Loss Doctrine
Intermediate Rule. Illinois follows the Intermediate Rule and refers to the ELD as the “Moorman Doctrine.” The Moorman Doctrine precludes recovery of purely economic losses in tort for failure to fulfill contractual obligations. Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012); Catalan v. GMAC Mortgage Corp., 629 F.3d 676 (7th Cir. 2011); Rardin v. T & D Machine Handling, 890 F.2d 24 (7th Cir. 1989). Illinois defines “economic loss” as “damages for inadequate value, costs of repair and replacement of the defective product, or consequent loss of profits-without any claim of personal injury or damage to other property, as well as the diminution in the value of the product because it is inferior in quality and does not work for the general purposes for which it was manufactured and sold.” Moorman Mfg. Co. v. National Tank Co., 435 N.E.2d 443 (Ill. 1982). Where only the defective product itself is damaged, the Moorman Doctrine applies and the plaintiff is limited to recovery under contract law. Trans States Airlines v. Pratt & Whitney Canada, Inc., 682 N.E.2d 45 (Ill. 1997). This is so because “when the product damages itself only, the risks against which products liability law was designed to protect simply are not realized.” Id.
There are three exceptions to the ELD: (1) where the plaintiff has sustained personal injury or property damage resulting from a sudden or dangerous occurrence; (2) where the plaintiff’s damages are proximately caused by the defendant’s intentional, false representation; and (3) where the plaintiff’s damages are proximately caused by the defendant’s negligent misrepresentation where the defendant is in the business of supplying information to guide others in their business transactions.” Progressive N. Ins. Co. of Illinois v. Ford Motor Co., 259 F. Supp.3d 887 (S.D. Ill. 2017). A plaintiff may not recover for solely economic damages such as damage to the product alone in tort, unless accompanied by injury or damage to “other property”. Id. In Great West Casualty Co. v. Volvo Trucks North America, Inc., 2013 WL 617068 (N.D. Ill. 2013), a new Volvo truck caught fire and was destroyed due to a defect. The truck was purchased in January of 2006, a recall was issued shortly thereafter, and the fire occurred in November of 2006 before the trucks were repaired. Volvo argued that Chicago Logistics’ (Great West’s insured) remedy lie in contract law and its request for tort damages under theories of strict liability, failure to warn, and negligence were barred by the Moorman Doctrine. Great West argued that the damage to truck was separate from the damage to the engine within; i.e., the truck was other property excluded from the bar of the Moorman Doctrine. However, the federal district court rejected that argument, pointing out that the Illinois Supreme Court had announced in Trans States Airlines v. Pratt & Whitney Canada, Inc., 682 N.E.2d 45 (Ill. 1997), that the truck and engine constituted a single product. This is because the plaintiff bargained for a fully integrated truck.
Recovery depends upon the nature of defect and the manner in which damage occurred. When the defect causes an accident “involving some violence or collision with external objects,” the resulting loss is treated as property damage. On the other hand, when the damage to the product results from deterioration, internal breakage, or other non-accidental causes, it is treated as economic loss. Exceptions exist when fraud or negligent misrepresentation are involved. In re Chicago Flood Litigation, 680 N.E.2d 265 (Ill. 1997).
A “sudden and dangerous occurrence” has somewhat circularly been defined as an occurrence that is “highly dangerous and presents the likelihood of personal injury or injury to other property.” Exxon Mobil Oil Corp. v. Amex Constr. Co., Inc., 702 F.Supp.2d 942 (N.D. Ill. 2010). The Court in Moorman had in mind fires, explosions, or other calamitous occurrences due to the product and the resulting risk of harm to persons or property. Loman v. Freeman, 890 N.E.2d 446 (Ill. 2008). A sudden, dangerous, or calamitous event by itself is not sufficient – it must be coupled with personal injury or property damage. Mere damage to any property is not sufficient; instead, the property must be “other property,” extrinsic from the product itself. Allstate Ins. Co. v. Pulte Homes of St. Louis, LLC, 2010 WL 4482360 (N.D. Ill. 2010); Progressive N. Ins. Co. of Illinois v. Ford Motor Co., 259 F. Supp. 3d 887 (S.D. Ill. 2017). In a subrogation action to recover for damages to a Ford F-150 which started on fire, a federal district court held that manufacturing defects which caused a “sudden or dangerous occurrence”, such as a fire leading to the complete destruction of the vehicle, is not sufficient to overcome the ELD, where the only damage is to the truck itself. Progressive N. Ins. Co. of Illinois v. Ford Motor Co., 2017 WL 1425953 (S.D. Ill. 2017). When damages to other property are properly pleaded, “the sudden and calamitous event exception to the economic loss rule … allows a plaintiff to pursue non-economic damages.” Allstate Ins. Co. v. Pulte Homes of St. Louis, LLC, 2010 WL 4482360 (N.D. Ill. 2010). Illinois law is well-settled that the sudden or dangerous occurrence exception only applies when a plaintiff incurs either personal injury or damages to property other than the defective product itself. Progressive N. Ins. Co. of Illinois v. Ford Motor Co., 259 F. Supp.3d 887 (S.D. Ill. 2017).
One possible theory of recovery is the manufacturer’s breach of its duty under the Illinois UCC, 810 I.L.C.S. 5/2–314 (2016), which provides “a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind.” Specifically, Progressive claims that the subject truck was not merchantable and not fit for the ordinary purposes for which a truck is used because “it had a defective speed control deactivation switch … which constituted a hazardous and defective condition.” However, it only has a four-year statute of limitations, which runs from the date the vehicle is delivered to the owner. In Progressive Northern Ins. Co. of Illinois v. Ford Motor Co., 259 F.Supp.3d 887, 890 (S.D. Ill. 2017), the vehicle was delivered on 10/19/06, but suit wasn’t filed until 4/22/16, more than 10 years later. Ford argued that it was entitled to summary judgment on this claim because the relevant statute of limitations expired well before Progressive brought suit. Under Illinois law, the statute of limitations for a claim of breach of implied warranty is four years. 810 I.L.C.S. 5/2–725. The statute states, in relevant part:
(1) An action for breach of any contract for sale must be commenced within 4 years after the cause of action has accrued….
(2) A cause of action accrues when the breach occurs, regardless of the aggrieved party’s lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.
In other words, “a breach of an implied warranty is complete when a defective product is delivered, and the statute of limitations begins running at delivery, even if the buyer could not discover the defect until later.” Singer v. Sunbeam Prod., Inc., 2015 WL 4555188 (N.D. Ill. 2015); Cosman v. Ford Motor Co., 674 N.E.2d 61 (Ill. App. 1996) (under the UCC, “an implied warranty of merchantability only applies to the condition of the goods at the time of sale—not to their future performance”); Owens v. Glendale Optical Co., 590 F.Supp. 32 (S.D. Ill. 1984) (holding claim of implied warranty was untimely because “breach of warranty occurs when tender of delivery is made” and “the alleged breach occurred more than four years before” suit was filed); LaPorte v. R.D. Werner Co., Inc., 561 F.Supp. 189 (N.D. Ill. 1983) (noting that Illinois authorities “uniformly support th[e] straightforward reading” that § 2–725(2) “denies applicability of the discovery doctrine to all implied warranty actions”).
Residential Lease. Illinois has until recently avoided per se rules with regard to the “Sutton Rule” (see Oklahoma) and taken a more flexible case-by-case approach, holding that a tenant’s liability to the landlord’s insurer for negligently causing a fire depends on the intent and reasonable expectations of the parties to the lease as ascertained from the lease as a whole. Dix Mut. Ins. Co. v. LaFramboise, 597 N.E.2d 622, 625 (Ill. 1992). Dix was a case involving a residential lease. The Supreme Court said that although a tenant is generally liable for fire damage caused to the leased premises by his negligence, if the parties intended to exculpate the tenant from negligently caused fire damage, their intent – as expressed in the lease agreement – will be enforced. To make this determination, the lease must be interpreted as a whole so as to give effect to the intent of the parties. Stein v. Yarnall-Todd Chevrolet, Inc., 241 N.E.2d 439 (Ill. 1968). In Dix, the residential lease did not contain a provision expressly apportioning fault in the case of a negligently caused fire, so the Court construed the lease as a whole and concluded that it did not reflect any intent that the tenant would be responsible for fire damage. Absent any such intent, the tenant is considered a co-insured with the landlord by virtue of having paid rent which contributed to the insurance premiums, and the subrogated insurer could not sue its own insured for subrogation.
The rule, therefore, appears to be that a tenant will be an implied co-insured and cannot be sued by the landlord’s subrogee for fire or other damage unless a contrary intent can be gleaned from the four corners of the lease itself. Auto Owners Ins. Co. a/s/o John Ellis v. Thomas Callaghan, 952 N.E.2d 119 (Ill. App. 2011). Where a lease reflects the parties’ intent to place the responsibility for water damage on the tenants, they will not be considered implied co-insureds. Pekin Ins. Co. v. Murphy, 2014 WL 6092187 (Ill. App. 2014).
Oral Lease. The same outcome results from an oral lease which contains only basic terms such as rent and duration of the lease. Cincinnati Ins. Co. v. DuPlessis, 848 N.E.2d 220 (Ill. App. 2006).
Commercial Lease. The same anti-subrogation rule which applies to residential leases applies to commercial leases. Nationwide Mut. Fire Ins. Co. v. T & N Master Builder & Renovators, 959 N.E.2d 201 (Ill. App. 2011). In Nationwide, a provision of the commercial lease agreement provided that commercial tenants that held over were liable for all damages sustained to property while in the tenant’s possession. However, this clause did not render the tenants liable for damages caused by fire, because the lease specifically excepted losses caused by fire.
Tort of Negligent Spoliation: The Supreme Court of Illinois has declined to recognize spoliation of evidence as an independent tort and instead held that a spoliation claim can be stated under existing negligence principles. Dardeen v. Kuehling, 213 Ill.2d 329, 335, 821 N.E.2d 227, 231, 290 Ill. Dec. 176, 180 (Ill. 2004); Boyd v. Travelers Ins. Co., 652 N.E.2d 267 (Ill. 1995), as modified on denial of reh’g (June 22, 1995). The general rule is that there is no duty to preserve evidence; however, a duty to preserve evidence may arise through an agreement, a contract, a statute, or another special circumstance, and a defendant may voluntarily assume a duty by affirmative conduct. In order to state a negligence claim, a plaintiff must allege that the defendant owed him a duty, that the defendant breached that duty, and that the defendant’s breach proximately caused the plaintiff damages. The Court tailored the duty element to spoliation claims: “The general rule is that there is no duty to preserve evidence; however, a duty to preserve evidence may arise through an agreement, a contract, a statute or another special circumstance. Moreover, a defendant may voluntarily assume a duty by affirmative conduct. In any of the foregoing instances, a defendant owes a duty of due care to preserve evidence if a reasonable person in the defendant’s position should have foreseen that the evidence was material to a potential civil action.” Id. This claim requires conduct that is “deliberate [or] contumacious or [evidences an] unwarranted disregard of the court’s authority” and should be employed only “as a last resort and after all the court’s other enforcement powers have failed to advance the litigation.” Adams v. Bath and Body Works, Inc., 358 Ill.App.3d 387, 392, 830 N.E.2d 645, 651-655, 294 Ill. Dec. 233, 239 – 243 (Ill. App. 1st Dist. 2005).
Sanctions: Sanctions for discovery violations are imposed pursuant to Supreme Court Rule 219. Sanctions for spoliation require mere negligence, the failure to foresee “that the [destroyed] evidence was material to a potential civil action“. Dardeen, 213 Ill.2d at 336, 290 Ill. Dec. 176, 821 N.E.2d 227. Rule 219(c) permits sanctions only where a party unreasonably fails to comply with a discovery order and that a “party who had nothing to do with the destruction of evidence cannot be said to have unreasonably failed to comply with a discovery order” because “[b]efore noncompliance can be unreasonable, a party must have been in a position to comply”. A party confronted with the loss or destruction of relevant, material evidence at the hands of an opponent may either: (1) seek dismissal of his opponent’s complaint under Rule 219(c); or (2) bring a claim for negligent spoliation of evidence. The mode of relief most appropriate will depend upon the opponent’s culpability in the destruction of the evidence. There are circumstances when destroying potential evidence before a request for preserving it was ever made can lead to sanctions even if there is no specific statute that required that records be kept. The Illinois Supreme Court noted that failure to produce relevant evidence because it was destroyed prior to filing a lawsuit can be sanctioned because of the duty a potential litigant owes to preserve relevant and material evidence. Shimanovsky v. General Motors Corp., 692 N.E.2d 286 (Ill. 1998). The Court reversed a dismissal of the case as a sanction for pre-suit destructive testing by the plaintiff, but agreed that a sanction was warranted as the sanction must consider the level of prejudice to the opposing party. There is no specific sanction that is mandated as sanctions are in the court’s discretion and the court must consider several factors, according to Shimanovsky: (1) the surprise to the adverse party; (2) the prejudicial effect of the proffered testimony or evidence; (3) the nature of the testimony or evidence; (4) the diligence of the adverse party in seeking discovery; (5) the timeliness of the adverse party’s objection to the testimony or evidence; and (6) the good faith of the party offering the testimony or evidence.
Property Damage / Personal Injury. Parents liable for willful or malicious property damage or personal injury. 740 I.L.C.S. § 115/3. The limit of liability is $20,000.00 plus attorney’s fees. Child must be unemancipated and under 18-years-old.
Felony Institutional Vandalism. Parents liable for child’s damage to church, mosque, synagogue, cemetery, etc. 720 I.L.C.S. § 5/21-1.2. The limit of liability is $20,000.00 plus attorney’s fees. Child must be unemancipated and under 18-years-old.
Retail Theft. Parents civilly liable for retail theft by minor. 720 I.L.C.S. §§ 5/16-25, 5/16-27. The limit of liability is $20,000 for actual damages for the first act or occurrence of a willful or malicious act; $30,000 if a pattern or practice of willful or malicious acts by a minor exists. Also can recover taxable court costs and attorney’s fees. Child must be between 11 and 18.
Modified Joint and Several Liability. Joint and several liability, except when a defendant is less than 25% liable, which leads to joint and several liability for medical and related expenses, but several liability for plaintiff’s other damages. 735 I.L.C.S. § 10-5/2-1117; Unzicker v. Kraft Food Ingredients Corp., 783 N.E.2d 1024 (Ill. 2002).
Right of contribution exists between two or more parties liable for injury or property damage even if there is no judgment against any or all of them. Dunbar v. Latting, 621 N.E.2d 232 (Ill. App. 1993). Liability of contribution defendant must be extinguished. Contribution also allowed where contribution plaintiff settles and in good faith obtains release which extinguishes liability of both contribution plaintiff and contribution defendant. Also applies anytime a plaintiff collects damages inconsistent with jury’s finding of percentage of responsibility. No contribution against parties who settle in good faith. 740 I.L.C.S. § 100/2 (1987); Fed. Ins. Co. ex rel. Nat’l Mfg. Co. v. Helmar Lutheran Church, 2004 WL 2921874 (N.D. Ill. Dec. 14, 2004). The Contribution Act “promotes settlement by providing that a defendant who enters a good-faith settlement with the plaintiff is discharged from any contribution liability to a non-settling defendant.” BHI Corp. v. Litgen Concrete Cutting & Coring Co., 827 N.E.2d 435 (Ill. 2005).
If suit is not filed, the statute of limitations is two years from the date of the contribution plaintiff’s payment. 740 I.L.C.S. § 15/13-204. If suit is filed, the statute of limitations is two years from the date the contribution plaintiff is served. 740 I.L.C.S. § 15/13-204. However, a plaintiff may not add a third-party contribution defendant as a direct defendant if the relevant statute of limitations has run. Ponto v. Levan, 2012 Ill. App. 2d 110355 (2nd Dist. 2012).
Suspension of Drivers' Licenses
Administrative Suspension: An accident report form must be filed with the Illinois DOT if the accident results in personal injury, death, or property damage of at least $500. 625 I.L.C.S. § 5/7-201. If evidence supports probable liability on the part of the person(s) certified as uninsured, his driver’s license is suspended forty-five (45) days after the mailing of notice his driver’s license and/or vehicle registration is suspended. 625 I.L.C.S. § 5/7-205(a).
Judgment: If a judgment debtor has failed to satisfy a judgment for thirty (30) days, the Secretary of State shall suspend the driver’s license of the judgment debtor. 625 I.L.C.S. § 5/7-303. Suspension will remain in place for three (3) years or until the judgment is satisfied. 625 I.L.C.S. § 5/7-305.
Contact Information: State of Illinois, Secretary of State, Department of Driver Services, 2701 S. Dirksen Parkway, Springfield, IL 62723, (217) 782-6212, http://www.cyberdriveillinois.com/departments/drivers/home.html.
Prohibits Intermediate Indemnity. Applies to Construction Contracts or Agreements. Indemnification for Negligence Act, 740 I.L.C.S. § 35/0.01, et seq. (§ 35/1-3).
Not applicable to insurance contracts or agreements, or construction bonds.
Diminution of Value
First Party: Evidence of diminution in value will lead to coverage for property damage even though there was no physical injury. Alleged diminution in value of homes from installation of plumbing system was not “physical injury to tangible property,” within meaning policies. Traveler’s Ins. Co. v. Eljer Mfg., Inc., 757 N.E.2d 481 (Ill. 2001). Illinois courts have also held that “[t]o expand the ordinary meaning of ‘repair or replace… with other of like kind and quality’ to include an intangible, diminished-value element would be ignoring the policy’s language or giving the policy’s text a meaning never intended.” Sims v. Allstate Ins. Co., 851 N.E.2d 701 (Ill. App. 2006). The term “like kind and quality,” means “sufficient to restore a vehicle to its pre-loss condition.” Use of non-OEM parts would not necessarily constitute a breach of the “like kind and quality” promise. Avery v. State Farm Mut. Auto. Ins. Co., 835 N.E.2d 801 (Ill. 2005).
Third Party: Illinois courts have stated that “[t]he measure of damages for a repairable injury to personal property, is ordinarily the cost of making the repair and the value of the use of the property while the owner is necessarily deprived of it by reason of the repair.” If the property is worth less after it is repaired than its value before the injury, the measure of damages is the difference in the market value before the injury and in its repaired condition in addition to the reasonable cost of repairs.” Trailmobile Div. of Pullman, Inc. v. Higgs, 12 Ill. App. 3d 323 (1973).
All-Party Consent (One-Party for “private electronic communications”): The law in Illinois is confusing and in flux. For years, § 5/14-2(a) made it a crime to use an “eavesdropping device” to overhear or record a phone call or conversation without the consent of all parties to the conversation, regardless of whether the parties had an expectation of privacy. All parties had to consent to the recording of telephonic, electronic, or in person oral conversation. Illinois courts had ruled that “eavesdropping” only applied to conversations that the party otherwise would not have been able to hear, thereby effectively making it a one-party consent state. However, there still appears to be confusion and debate over the law. The statute had repeatedly and controversially been used to arrest people who have video-taped police. In People v. Clark, 6 N.E.3d 154 (Ill. 2014) and People v. Melongo, 6 N.E.3d 120 (Ill. 2014), the Supreme Court held that § 5/14-2 made it a crime to knowingly and intentionally use eavesdropping devices to hear or record all or any part of any conversation, unless done with consent of all parties to conversation or authorized by court order, was unconstitutionally overbroad on its face, declaring it unconstitutional.
On December 30, 2014, the statute was amended to permit recording of conversations in public places, such as in courtrooms, where no person reasonably would expect it to be private. The new statute draws a distinction between a “private” conversation and other public communications. The new statute includes language indicating that in order to commit a criminal offense, a person must be recording “in a surreptitious manner.” It addressed a number of circumstances where there were no legitimate privacy interests. The statute provides no guidelines or factors with regard to when an expectation of privacy is reasonable. While the statute leaves open to debate whether a particular “private conversation” falls within the purview of the revised law, some argue that the new statute leaves no doubt that Illinois remains firmly within the minority of “all-party” consent states. The amended statute requires that all parties to an oral communication consent to the use of an eavesdropping device for that use to be lawful.
On the other hand, by negative implication, the amended statute also appears to establish a “one-party” consent rule for private electronic communications, by prohibiting only someone who is not a party to a conversation from surreptitiously using an eavesdropping device to intercept, record or transcribe such a communication (e.g., telephone, video conference, etc.). A private electronic communication is defined as “any transfer of signs, signals, writing, images, sounds, data, or intelligence … transmitted in whole or part by a wire, radio, pager, computer, electromagnetic, photo or optical system, when the sending or receiving party intends the electronic communication to be private under circumstances reasonably justifying that expectation. Therefore, by negative implication, the revised statute appears to permit someone who is a party to a telephone or a video conference to electronically record the call without notifying any other party to the call or obtaining their consent.
A first offense is a Class 3 felony (maximum 2-5 years and $25,000 fine) and a subsequent offense is a Class 2 felony (maximum 3-7 years and $25,000 fine).
720 I.L.C.S. § 5/14-2(a) (Illinois Eavesdropping Law); People v. Beardsley, 503 N.E.2d 346 (Ill. 1986); People v. Clark, 6 N.E.3d 154 (Ill. 2014).
Section 5/14-2(a)(1)(2) was amended in 2014 to make “eavesdropping” a felony if a person:
(1) Uses an eavesdropping device, in a surreptitious manner, for the purpose of overhearing, transmitting, or recording all or any part of any private conversation to which he or she is not a party unless he or she does so with the consent of all of the parties to the private conversation; or
(2) Uses an eavesdropping device, in a surreptitious manner, for the purpose of transmitting or recording all or any part of any private conversation to which he or she is a party unless he or she does so with the consent of all other parties to the private conversation.
(3) Intercepts, records, or transcribes, in a surreptitious manner, any private electronic communication to which he or she is not a party unless he or she does so with the consent of all parties to the private electronic communication;
Section 5/14-1 defines “eavesdropping” (a felony) as using any device capable hearing or recording oral conversation or intercept or transcribe electronic communications whether such conversation or electronic communication is conducted in person, by telephone, or by any other means.
The use of an eavesdropping device is surreptitious if it is done with stealth, deception, secrecy, or concealment. Therefore, it permits recording of conversations in public places, such as courtrooms, that no person could expect to be private.
If a defendant is convicted for a violation of the Illinois Criminal Code, and the victim suffered a personal injury or damage to his/her property as a result, a court can order the appropriate criminal restitution.
According to the Illinois statute, an insurance carrier who has indemnified the victim may be entitled to restitution of the appropriate “out-of-pocket expenses, losses, damages, or injuries” but specifically disavows restitution for damage awards of pain and suffering. 730 I.L.C.S. § 5/5-5-6.
Health and Disability Insurance
Statute of Limitations: 2 Years. 735 I.L.C.S. § 5/13-202. (Statutes for medical mal-practice actions vary as defined in 735 I.L.C.S. § 5/13-212.)
Subrogation of Medical and Disability Benefits are allowed. Gibson v. Country Mut. Ins. Co., 549 N.E.2d 23 (Ill. 1990); In re Estate of Scott, 567 N.E.2d 605 (Ill. App. Ct. 1991); 770 Ill. Comp. Stat. 23/50. Made-Whole does not apply. (Illinois lien reduction statute applies – pro-rata reduction for comparative fault or limited liability insurance. 770 Ill. Comp. Stat. 23/50.) Common Fund applies. Bishop v. Burgard, 764 N.E.2d 24 (Ill. 2002); 770 I.L.C.S. § 23/50.
Funeral Procession Traffic Laws
Illinois law gives funeral processions the right-of-way at intersections when headlights are lit. The lead vehicle must comply with stop signs and traffic lights, but once it has done so, all the following vehicles can proceed without stopping, provided they exercise due caution. Also, the procession must yield to an approaching emergency vehicle or when directed by a police officer. Vehicles not in the procession cannot enter it unless directed by a police officer and other vehicles cannot join the procession and turn on their headlights in order to gain the right-of-way granted to the procession. 625 Ill. Comp. Stat. 5/11-1420.
Statute of Limitations: 2 Years. 820 I.L.C.S. § 305/5(b).
Can Carrier Sue Third Party Directly: Yes, 3 months before the statute of limitations runs.
Recovery from UM/UIM Benefits: No.
Subrogation Against Medical Malpractice: Yes.
Subrogation Against Legal Malpractice: No.
Recovery Allocation/Equitable Limitations: The carrier gets first money off the top, less attorney’s fees.
Employer Contribution/Negligence: No, Kotecki Contribution only, up to Kotecki cap.
Attorney’s Fees/Costs: Pro-Rata. Limited to 25%.
Future Credit: Yes, 25% of the future benefits owed as attorney’s fees.
Auto No-Fault: No.
Dog Bite Laws
Dog owner will be liable for all injuries, even if not caused by a bite, absent provocation or trespass by the victim. 510 I.L.C.S. 5/16 § 16.
Employee Leasing Laws
Illinois’ statute provides that unless the employee leasing contract specifies otherwise, both the employee leasing company and the client employer are protected by the Exclusive Remedy Rule. 215 I.L.C.S. 113/45.
Condominium Waiver of Subrogation Laws
Associations are required to maintain property insurance, general liability insurance, and fidelity bonds. Each unit owner is an insured person under the policy. Additionally, the insurer waives its right to subrogation under the policy against any unit owner or members of the unit owner’s household and against the association and members of the board of directors. The unit owner also waives his or her right to subrogation under the association policy against the association and the board of directors. 765 I.L.C.S. § 605/12.
Automobile Total Loss Thresholds
Total Loss Formula (See HERE for definition).
Insurer determines when vehicle is salvage/total loss. Must not be from hail damage or a vehicle that is nine model years or older. 625 I.L.C.S. § 5/3-117.1(b).
Sudden Medical Emergencies While Driving
Act of God Instruction. An Act of God is an unforeseeable sudden illness which renders a defendant incapable of controlling his vehicle and can preclude tort liability for a resulting collision. Grote v. Estate of Franklin, 573 N.E.2d 360 (Ill. 1991); Burns v. Grezeka, 508 N.E.2d 449 (Ill. 1987).
Liability is only precluded if the alleged Act of God constitutes the sole and proximate cause of the injuries. Evans v. Brown, 246, 925 N.E.2d 1265 (Ill. 2010).
State Sovereign Immunity And Tort Liability
Tort Claims Act: State Lawsuit Immunity Act. 745 I.L.C.S. § 5/1 (1972). State is immune unless legislative exception.
Court of Claims Act. 705 I.L.C.S. § 505/1. All claims against the State for damages in cases sounding in tort, if like cause of action would lie against a private person or corporation shall be heard before the Court of Claims (7 judges). 705 I.L.C.S. § 505/8.
Notice Deadlines: Tort claims against the State shall be filed within two years from when the claim arose. 705 I.L.C.S. § 505/22.
Claims/Actions Allowed: Tort claims made against the State involving the negligent operation of a State vehicle are to be heard by the Court of Claims and are not limited to the $100,000 cap. 705 I.L.C.S. § 505/8(d).
Comments/Exceptions: Illinois State employees are immune from liability if their act or omission is discretionary in function. Michigan Ave. Nat. Bank v. Cty. of Cook, 191 Ill.2d 493, 732 N.E.2d 528 (2000); Harinek v. 161 N. Clark St. Ltd. P’ship, 692 N.E.2d 1177 (1998).
Discretionary acts of a local government and its employees are entitled to absolute immunity. Johnson v. Mers, 664 N.E.2d 668 (Ill. App. 1996). Discretionary acts are unique to public office and require deliberation, decision, or judgment. White v. Village of Homewood, 673 N.E.2d 1092 (Ill. App. 1996). Ministerial acts are generally performed in prescribed manner in obedience to legal authority. Snyder v. Curran Township, 657 N.E.2d 988 (Ill. 1995).
Damage Caps: Claims for tort damages are limited to $100,000 if it does not involve the operation of a State motor vehicle. 705 I.L.C.S. § 505/8. If State-owned vehicle operated by State employee, no limit.
Recovery of Sales Tax After Vehicle Total Loss
First-Party Claims: Insurer must (1) offer a cash settlement based upon the ACV of a “comparable auto”, If within 30 days the insured buys or leases a new vehicle, the carrier must pay the applicable sales tax, transfer, and title fees in an amount equivalent to the value of the total loss vehicle, or (2) offer a replacement comparable auto including all applicable taxes, license fees, and other fees, if the insured purchases a vehicle with a market value less than the amount previously settled upon, the company must pay only the amount of sales tax actually incurred and include transfer and title fees. Ill. Admin. Code tit. 50, § 919.80(C).
Exhibit A to § 919 states: “If within 30 days of a cash settlement, you can prove that you have purchased another vehicle, the company must pay the applicable sales tax, transfer and title fees in an amount equivalent to the value of the total loss vehicle. If you purchase a vehicle with a market value less than the amount previously settled upon, the company must pay you only the amount of sales tax that you actually incurred and include transfer and title fees.”
Third-Party Claims: No applicable statute, case law, or regulation governing recovery of sales tax. In a third-party claim, you do not have a direct contract with the party you are seeking to recover from and their primary obligation is to their own policyholder. http://insurance.illinois.gov/autoinsurance/auto_own_claim.pdf; Cramer v. Ins. Exch. Agency, 174 Ill.2d 513, 531, 675 N.E.2d 897, 906 (1996).
Damage to Property Without Market Value
Service Value: “Computation based on the life expectancy of the pole and the other materials should be confined to the materials damaged and the costs of the replacement items.” Central Illinois Light Co. v. Stenzel, 195 N.E.2d 207 (Ill. App. Ct. 1964).
Intrinsic Value: “…we believe that the law in Illinois is that where the object destroyed has no market value, the measure of damages to be applied is the actual value of the object to the owner.” Jankoski v. Preiser Animal Hosp., Ltd., 510 N.E.2d 1084 (Ill. App. Ct. 1987).
Sentimental Value: “The concept of actual value to the owner may include some element of sentimental value in order to avoid limiting the plaintiff to merely nominal damages.” Jankoski v. Preiser Animal Hosp., Ltd., 510 N.E.2d 1084 (Ill. App. Ct. 1987).
Municipal/County/Local Governmental Immunity and Tort Liability
Local Governmental and Governmental Employees Tort Immunity Act: Lists exceptions to the liability of local governments and their employees, including legislative or discretionary functions. 745 I.L.C.S. § 10/2-101, et seq. The Act does not impose duties but, instead, only confers immunities and defenses. Kirschbaum v. Village of Homer Glen, 848 N.E.2d 1052 (Ill. App. 2006).
Public Duty Rule Abolished: Illinois municipalities used to be able to claim this defense, which states that is no common law duty to the general public for a municipality’s failure to enforce an ordinance or building code. However, the Illinois Supreme Court abolished the Public Duty Rule in 2016 in Coleman v. E. Joliet Fire Prot. Dist., 46 N.E.3d 741 (Ill. 2016). This is retrospective, so parties can look back to claims that were not recoverable in 2016 due to this Public Duty Doctrine.
Notice Deadlines: Suit against local entity and/or public employee must be filed within one (1) year of date cause of action accrued. 745 I.L.C.S. § 10/8-101(a). Suit against local entity for patient care must be brought within two (2) years after date on which claimant knew or should have known of injury, but in no event longer than four (4) years. 745 I.L.C.S. § 10/8-101(b).
Claims/Actions Allowed: Local government liable if there is a duty, except for:
- Adopt or fail to adopt or enforce law. § 2-103.
- Administration of licenses. § 2-104.
- Negligent inspection of property. § 2-105.
- Unsafe conditions of property with notice. § 3-106.
- Failure to supervise activity on public property. § 3-108.
- Hazardous recreation activity. § 3-109.
- Absolute immunity for discretionary acts as opposed to ministerial acts. § 2-201.
- Ministerial act is merely execution of set task, which law imposes. Nothing remains for judgment or discretion. Must point to act/omission.
Duty to maintain property (stop signs) in safe condition. Bubb v. Springfield Sch. Dist. 186, 657 N.E.2d 887 (Ill. App. 1995). Must be actual or constructive notice of dangerous condition in sufficient time to remedy. Mostafa v. City of Hickory Hills, 677 N.E.2d 1312 (Ill. App. 1997).
Discretionary Act. Municipality immune from liability for discretionary acts. They involve personal deliberation and judgment.
Ministerial Act. Municipality not immune for acts which a person performs on a given state of facts in a prescribed manner, in obedience to legal authority and without reference to discretion of the propriety of the act.
Burden on government to prove. Case by case basis. Strictly construed against government. §§ 2-109 and 2-201; Gutstein v. City of Evanston, 929 N.E.2d 680 (Ill. App. 2010).
Two-Prong test: (1) Employee’s Position: Must determine policy and exercise discretion. (2) Employee’s Act: Does claim involve “discretionary policy determination”? Collins v. Bartlett Park Dist., 997 N.E.2d 821 (Ill. App. 2013). No duty to install traffic signs or street lights. Once decided, however, liable if not maintained. Parsons v. Carbondale Township, 577 N.E.2d 779 (Ill. App. 1991). Operation of a sewage system is subject to statutory and regulatory guidelines and is ministerial. Trtanj v. City of Granite City, 884 N.E.2d 741, 750 (Ill. App. Ct. 2008).
Damage Caps: No punitive damages (unless employee sued in personal capacity). 745 I.L.C.S. § 10/2-102. Purchase of liability insurance does not waive immunity. 745 I.L.C.S. § 10/9-103(c).
Laws Regarding using Cell Phones/Headphones/Texting While Driving
Cell Phone/Texting: A person cannot operate a vehicle on a roadway while using an electronic communication device. Exceptions include law enforcement officers or emergency vehicle operators while doing their duty, or if the device is hands-free or the driver is parked or sitting in traffic. 625 I.L.C.S. ֻ§ 5/12-610.2.
A person under the age of 19 who has an instruction permit or a graduated license may not drive while using a wireless phone. 625 I.L.C.S. § 5/12-610.1
No person, regardless of age, may use a phone while driving if in a construction/maintenance zone or school speed zone, or within 500 feet of an emergency scene. 625 I.L.C.S. § 5/12-610.1
Other Prohibitions: Drivers cannot wear a headset receiver while driving. Exceptions include single ear headsets/earpieces used with phones, hearing aids, or equipment used exclusively for safety or traffic engineering studies, law enforcement personnel on duty or medical/fire service personnel. 625 I.L.C.S. § 5/12/610.
Workers’ Compensation Claims by Undocumented Employees
Statute: Expressly includes “aliens” as employees. 820 Ill. Comp. Stat. § 305/1(4)(b)(2).
Case Law: Econ. Packing Co. v. Ill. Workers’ Comp. Comm’n, 901 N.E.2d 915 (1st Dist. 2008).
Comments/Explanation/Other: Econ. Packing Co. held that the Illinois Workers’ Compensation Act allows benefits including PTD benefits to be awarded to undocumented aliens, and it is not preempted by federal immigration law.
Admissibility of Expert Testimony
Admissibility Standards: Frye
Case/Statutory Law: Ill. R. Evid. 702
The second sentence of Rule 702 enunciates the core principles of the Frye test for admissibility of scientific evidence as set forth in Donaldson v. Central Illinois Public Service Co., 767 N.E.2d 314 (Ill. 2002).
Imputing Contributory Negligence of Driver to Vehicle Owner
Imputed Contributory Negligence Law: Negligence of a driver is not imputed to an owner or passenger unless there is a finding of a master/servant relationship or a joint enterprise. Liability attaches only if the owner is independently negligent. Bauer v. Johnson, 403 N.E.2d 237 (Ill. 1980).
Negligence of driver cannot be imputed to owner suing third party for damage to vehicle, absent showing of respondeat superior or joint enterprise relationship. Universal Underwriters Ins. Co. ex rel. Manley Ford v. Long, 574 N.E.2d 1284 (Ill. App. 1991).
Vicarious Liability/Family Purpose Doctrine: No Vicarious Liability Statute.
No Family Purpose Doctrine. Any negligence or willful misconduct of the minor when driving a motor vehicle shall be imputed to the person who signed the application. White v. Seitz, 342 Ill. 266 (Ill. 1930).
Illinois is one of three states with a guest statute (See Ala. & Ind.). Driver not liable for injury to hitchhiker. 625 I.L.C.S. § 5/10-201.
However, there is a general presumption of agency as between the owner of a vehicle and a driver. The owner must show that the driver was, in fact, not acting in capacity of the owner’s agent at the time of the incident. DeLeonardis v. Checker Taxi Co., 545 N.E.2d 155 (Ill. App. 1989).
Sponsor Liability for Minor’s Driving: No Sponsorship Liability Statute.
Product Liability Law
Statute of Limitations/Repose: 2 years for personal injury and wrongful death. 735 I.L.C.S. § 5/13-202. Discovery Rule applies. Statute of Repose is 12 years. 735 I.L.C.S. § 5/13-213(b).
Liability Standards: Negligence, Strict Liability, Warranty.
Fault Allocations: Modified Comparative. 735 I.L.C.S. § 5/2-1116.
Non-Economic Caps/Limits On Actual Damages: No.
Punitive Y/N and Limits: Yes.
Heeding Presumption?: No.
Innocent Seller Statute: Yes.
Joint and Several Liability: Yes. 735 I.L.C.S. § 5/2-1117.
Available Defenses: Assumption of Risk; Misuse; Alteration; Learned Intermediary; Inherently Unsafe Products; State of the Art; Government Contractor Defense; Presumption; Compliance With Government Standards; Sophisticated User.
Restatement 2nd or 3rd?: Both.
Owner Liability For Stolen Vehicles
Key In The Ignition Statutes: 625 I.L.C.S. § 5/11-1401.
Common Law Rule: It has been held that the theft of a car is a consequence too remote to have been reasonably contemplated by the owner, and the affirmative act of the thief amounted to an intervening cause insulating any negligence of the owner of the vehicle. Childers v. Franklin, 46 Ill. App.2d 344, 197 N.E.2d 148 (5th Dist. 1964).
However, several cases have held that in regard to a vehicle owner leaving his keys in the ignition in violation of a statute on public property, the statutory violations were prima facie evidence of negligence, but not necessarily the proximate cause of injury caused by a thief driving the vehicle. Kacena v. George W. Bowers Co., 211 N.E.2d 563 (1965); Ney v. Yellow Cab Co., 117 N.E.2d 74 (1954).
With regard to a vehicle owner leaving his keys in the ignition on private property, Illinois courts have held that no duty exists to a third party injured by the defendant’s stolen vehicle absent special circumstances that made the theft foreseeable. Hallmark Insurance Co. v. Chicago Transit Authority, 534 N.E.2d 501 (1989); Hensler v. Renn, 520 N.E.2d 1110 (1988); Ruyle v. Reynolds, 357 N.E.2d 804 (1976).
An Insurer may not subrogate against its own insured or any person or entity that maintains a “co-insured” status. Dix Mut. Ins. Co. v. LaFramboise, 597 N.E.2d 622 (Ill. 1992). ASR does not preclude an insurer from asserting a subrogation claim against its own insured where the policy does not cover the risk at issue. LaSalle Nat’l Bank v. Massachusetts Bay Ins. Co., 958 F. Supp. 384 (N.D. Ill. 1997). An insurer may subrogate against a party covered by a different policy issued by that same insurer, as long as the party’s policy limits are sufficient. Benge v. State Farm Mut. Auto. Ins. Co., 697 N.E.2d 914 (Ill. App. Ct. 1998). If the party’s limits are inadequate, the subrogating carrier may have a conflict of interest. Id. If a party is an insured under the liability policy, they can still be subrogated against under the collision policy. Universal Underwriters Group v. Pierson, 787 N.E.2d 296 (Ill. App. Ct. 2003). If a contract or lease requires an insured to carry insurance for the benefit of another, the other party might attain the status of co-insured. Reich v. Tharp, 521 N.E.2d 530 (Ill. App. Ct. 1987). Where a general contractor purchases a policy in the name of the property owner for the mutual benefit and protection of both the general contractor and the property owner, the insurer is barred from seeking indemnification from the general contractor when they are defending the property owner. Vandygriff v. Commonwealth Edison Co., 408 N.E.2d 1129 (Ill. App. Ct. 1980).
In LaSalle Nat. Bank, a man intentionally burns down the home that he and his wife live in, and as a result, the home’s insurers pay the wife for her losses and then seeks subrogation against the husband for payments made to the wife. The court rules that because the policy explicitly did not apply to intentional acts, the ASR did not bar the insurer from asserting subrogation claims against the husband. In Benge, the court considered whether an insurance carrier can exercise its subrogation rights under one policy against a party it insures under a different policy. The court held that the auto insurer could, without violating the ASR or public policy, assert a policy’s subrogation provision to avoid paying physical damage coverage benefits after it had already paid for the damage under the liability coverage of an unrelated policy it had coincidentally issued to the at-fault driver, where no conflict of interest existed insofar as the at-fault driver’s liability coverage exceeded the property damage coverage. In Pierson, Universal Underwriters Group (“UUG”) insured a car dealership that permitted Pierson to borrow a car. Pierson was subsequently involved in an accident and UUG paid for the damage to the car. UUG then brought a subrogation action against Pierson. The court permitted the subrogation action on the basis that because subrogation is allowed when there are two separate policies, UUG could defend Pierson under the third-party liability portion of the policy and subrogate for damage to the vehicle itself under the collision policy.
Use of Non-Original Equipment Manufacturer (OEM) Aftermarket Crash Parts in Repair of Damaged Vehicles
Authority: Ill. Admin. Code tit. 50 § 919.80(d)(5); 815 I.L.C.S. § 308/15.
Summary: Insurers must guarantee that non-OEM parts are of equal quality to their OEM counterpart. Any non-OEM parts used must identify their manufacturer in some way on the part and the mark identifying the manufacturer should be visible after the part is installed, if at all practical. The insured must be informed in writing that non-OEM parts are going to be used and must be given an estimate that identifies the non-OEM parts and a disclosure informing them that the manufacturer/distributor warrants the non-OEM part, not the auto manufacturer.