2017 IL App (1st) 170181
Ill. App. Ct.2018Background
- Scot Vandenberg was rendered quadriplegic after falling from a Brunswick-manufactured yacht; plaintiffs sued Brunswick and RQM (settled with RQM). Trial against Brunswick proceeded to verdict stage.
- While the jury deliberated, AIG (insurer) authorized a $25 million unconditional settlement; plaintiffs informed their counsel at ~3:40 p.m. they would accept.
- At ~3:52 p.m. Judge Budzinski’s clerk Agee called plaintiffs’ trial counsel McNabola and (according to some testimony) disclosed a jury note asking whether the jury could find RQM liable without finding Brunswick liable. McNabola did not immediately tell Brunswick’s counsel.
- Brunswick’s adjuster Patitucci learned of and accepted the plaintiffs’ acceptance at ~4:03 p.m.; counsel later convened in chambers at ~4:40 p.m., reviewed the jury note, and the settlement was placed on the record at ~4:50 p.m. The jury later returned a defense verdict at ~5:00 p.m.
- Judge Lynch (after an evidentiary hearing) vacated the settlement finding plaintiffs’ counsel fraudulently concealed knowledge of the jury note and entered judgment on the jury verdict for Brunswick. A successor judge (Judge O’Hara) later vacated those orders and reinstated the settlement; Brunswick appealed.
Issues
| Issue | Plaintiff's Argument (Vandenberg) | Defendant's Argument (Brunswick) | Held |
|---|---|---|---|
| Whether the $25M oral settlement entered on the record is enforceable | Settlement was entered with all material facts disclosed before entry; Brunswick’s counsel participated in placing it on the record | McNabola concealed prior knowledge of the jury note (fraudulent concealment/mistake) so settlement is voidable | Settlement enforceable; trial court correctly reinstated it |
| Whether plaintiff’s counsel had a duty to disclose ex parte knowledge of the jury note to Brunswick | No duty creating civil liability; disclosure occurred before settlement entry | McNabola had duty under court rules/ethics and fraudulently induced settlement by silence | Court: rules of professional conduct do not create civil duty to support fraud claim; Brunswick failed to show duty |
| Whether unilateral or mutual mistake justifies rescission | Plaintiffs decided to accept before learning of the note; rescission would be unjust to plaintiffs | Brunswick claims unilateral mistake/material omission would have prevented settlement; jury verdict is the proper status quo ante | Unilateral mistake insufficient; rescission would do injustice and status quo ante cannot be restored by awarding defense verdict |
| Whether due process was violated by clerk’s/ counsel’s conduct to justify vacating settlement | (Plaintiffs) no prevailing due process deprivation; settlement appropriately entered | Brunswick asserts clerk Agee’s bias and conspiracy with plaintiffs’ counsel deprived them of fair trial and property interest in settlement | Issue not preserved/forfeited in that form; court rejected due process claim on the record and reinstated settlement |
Key Cases Cited
- City of Chicago v. Ramirez, 366 Ill. App. 3d 935 (Ill. App. Ct.) (standard for reviewing settlement-enforcement rulings discussed)
- K4 Enterprises, Inc. v. Grater, Inc., 394 Ill. App. 3d 307 (Ill. App. Ct.) (appellate standard for oral settlement findings)
- In re Marriage of Bielawski, 328 Ill. App. 3d 243 (Ill. App. Ct.) (settlements generally not subject to appellate review; public policy favors settlement)
- Schrager v. North Community Bank, 328 Ill. App. 3d 696 (Ill. App. Ct.) (elements of fraudulent concealment)
- People ex rel. Brazen v. Finley, 119 Ill. 2d 485 (Ill.) (Supreme Court’s exclusive authority to regulate attorney conduct)
- Owens v. McDermott, Will & Emery, 316 Ill. App. 3d 340 (Ill. App. Ct.) (professional conduct rules do not create independent civil causes of action)
- Cole Taylor Bank v. Cole Taylor Bank, 224 Ill. App. 3d 696 (Ill. App. Ct.) (unilateral mistake insufficient to invalidate settlement)
- McCracken Contracting Co. v. R.L. DePrizio & Associates, Inc., 122 Ill. App. 3d 680 (Ill. App. Ct.) (standards for rescission based on mistake)