Guzman v. 7513 West Madison Street, Inc.
988 N.E.2d 201
Ill. App. Ct.2013Background
- Plaintiffs Marcelino Guzman, Bertha Guzman, and Beverly Myers were injured when Klassert’s vehicle, driven intoxicated, collided with their vehicles and Klassert had been served by Duffy’s Tavern.
- Klassert’s automobile liability insurer settled for $40,000 (policy limits) paid to the Guzmans and Myers.
- Guzman plaintiffs each recovered $36,666.66 from their underinsured motorist coverage; Myers recovered $236,666.67 from auto coverage and $87,529.78 from group health insurance.
- Defendant was insured by Constitutional Casualty Co.; the insurer was declared insolvent on Jan 21, 2011 and the Illinois Insurance Guaranty Fund (the Fund) assumed defense.
- The Dramshop Act caps damages at $58,652.33 per plaintiff; the Fund’s defense was pursued under §537.2 and §546(a) of the Guaranty Fund Act; the question is how §546(a)’s “other insurance” reduction applies when the Fund defends.
- Trial court denied a motion to strike the 546(a) defense; the question was certified to determine how reductions are applied, and the case was remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| How is §546(a) reduction applied when the Fund defends a dramshop claim? | Guzman argues reductions come from the jury’s award. | Duffy’s argument: reduction comes from the Fund’s total obligation. | Reduction must come from the Fund’s obligation (the $58,652.33 per-plaintiff cover). |
Key Cases Cited
- Roth v. Illinois Insurance Guaranty Fund, 366 Ill. App. 3d 787 (2006) (guides Fund reduction principles under 546(a))
- Tralmer v. Soztneps, Inc., 283 Ill. App. 3d 677 (1996) (limits and applicability of 546(a) when Fund defends; same facts/loss rule later clarified by amendment)
- Kurth v. Amee, Inc., 3 Ill. App. 3d 506 (1972) (setoff rule pre-amendment; double recovery vs. total recovery issue)
- Hasemann v. White, 177 Ill. 2d 414 (1997) (Fund is a last-resort, subject to covered claims)
- Tralmer v. Soztneps, Inc. (amended discussion), — (1997) (legislative amendment to 546(a) after Tralmer clarifies 'same facts, injury, or loss' language)
- Rogers v. Imeri, 2013 IL App (5th) 110546 (2013) (Fifth District: deduction from jury award; differing result from Illinois court)
- Illinois Insurance Guaranty Fund v. Farmland Mutual Insurance Co., 274 Ill. App. 3d 671 (1995) (Fund as last-resort; limitation framework)
- Harrell v. Reliable Insurance Co., 258 Ill. App. 3d 728 (1994) (Fund’s role and limitations)
- Hasemann v. White, — (1997) (Fund liability and covered claim concept)