Example of a Case In Which Court's Good-Faith Order Was Premature
Was the Court's Good-Faith Order Premature as the Settling Parties Failed to Allocate the Settlement Amount Among the Residents of a Water Damaged Home ?
In Cianci v. Safeco Insurance Co. of Illinois, 356 Ill. App. 3d 767, 826 N.E.2d 548, 292 Ill. Dec. 407 (2005), four residents of a water-damaged home sued their homeowner's insurance company and two companies hired to clean and repair the home. Cianci, 356 Ill. App. 3d at 771-72.
The plaintiffs' amended complaint against the defendants alleged breach of contract, violation of the Insurance Code (215 ILCS 5/1 et seq. (West 2006)), negligence, consumer fraud and deceptive business practices, vicarious liability, and intentional or recklessly caused emotional distress. Cianci, 356 Ill. App. 3d at 772.
The plaintiffs settled with the insurance company for $ 150,000 and the first cleaning company for $ 30,000. the trial court issued orders finding the settlements were made in good faith, but also directed the settling parties to allocate the settlement amounts. Cianci, 356 Ill. App. 3d at 773.
Later, the trial court amended those orders to include certain allocations. Cianci, 356 Ill. App. 3d at 774. Concerning the insurance company's settlement, the court allocated $ 15,000 among the four plaintiffs for their tort, statutory and vicarious liability claims and $ 135,000 for their contractual claims.
Concerning the cleaning company's settlement, the trial court allocated the entire $ 30,000 among the four plaintiffs for their tort claims. Cianci, 356 Ill. App. 3d at 774.
On appeal, the court found that the trial court's good-faith order was premature because the settling parties failed to allocate the settlement amounts among the plaintiffs' theories of recovery, and instead lumped together negligence claims, for which contribution could be available, with intentional tort and vicarious liability claims, for which contribution would not be available. Cianci, 356 Ill. App. 3d at 782.
That failure to allocate foreclosed the nonsettling defendant from seeking a setoff. Cianci, 356 Ill. App. 3d at 783.
Furthermore, the record contained no information upon which the trial court could have based its good-faith finding that the settlement amounts were within a reasonable range of the settling parties' fair shares of liability.
Specifically, the case was still in the pleading stage, motions to dismiss were pending, and only one defendant had answered the amended complaint. Cianci, 356 Ill. App. 3d at 783.