Our panel of leading appellate attorneys review Thursday's top Illinois Supreme Court Civil opinions in Kakos v. Butler, Bayer v. Panduit Corp., Moon v. Rhode, and J&J Ventures Gaming, LLC v. Wild, Inc.

Kakos v. Butler

By Michael T. Reagan, Law Offices of Michael T. Reagan

In Kakos v. Butler, the court unanimously affirmed Judge Gomolinski’s judgment in the circuit court that the 6-person jury regime established by Public Act 98-1132 is facially unconstitutional.  Chief Justice Garman wrote for the court.

The Act eliminated the right to request a jury of 12 members and provided instead that “all jury cases shall be tried by a jury of 6.”  The Act also established a uniform rate of pay for jury service at $25 for the first day and $50 per day thereafter.  Because the circuit court found the Act to be unconstitutional, plaintiffs were able to take a direct appeal to the Supreme Court as a matter of right pursuant to Supreme Court Rule 302(a). 

The court first explained that it applies a limited lockstep approach when interpreting cognate provisions of the state and federal constitutions.  Care in that regard was appropriately taken because the Supreme Court of the United States has held that the amendments contained in the Bill of Rights do not require 12-person juries.  The court found the distinction that the Illinois constitution revealed an intent on the part of the drafters to maintain common-law characteristics of jury trials.  Accordingly, a different construction of the Illinois constitution, as opposed to the rights protected by the federal constitution, is called for.

The court then noted a long history in Illinois describing juries of consisting of 12 men.  The court took note of the respective arguments of both plaintiffs and defendants as to whether the size of a jury affects the performance of juries, commenting that both positions have some merit.  However, “our task is limited to determining whether the challenged legislation is constitutional, and not whether it is wise.”  The court found ample evidence that the drafters of the 1970 Constitutional Convention believed that they were specifically preserving the right to a 12-person jury.  A proposal to the contrary was not adopted by the Convention. 

The court distinguished its opinion in 1939 which held that women, as opposed to just men, could serve on juries.  Among other distinctions, the court stated that the sex of a juror is a matter of juror qualification, and not an essential element of the right of trial by jury.  The court concluded that the 12-person size of a jury was an essential element of the right of trial by jury enjoyed at the time the 1970 constitution was drafted, that that right was protected in the constitution, and that therefore the Act was unconstitutional.

The court further decided that the companion provision for increasing the pay of jurors was not severable from the unconstitutional portion of the Act, and therefore it was found to be invalid as well.  It was clear to the court that the legislation was intended to make jury trials more efficient and to incentivize citizens to participate in jury duty.  If the increased pay scale alone survived, the cost of jury trials throughout the state would dramatically increase. 

Bayer v. Panduit Corp.

By Karen Kies DeGrand, Donohue Brown Mathewson & Smyth LLC

Interpreting a provision of the Workers’ Compensation Act, the Illinois Supreme Court held that an employer who is relieved of an obligation to pay its employee’s future medical care as a result of the employee’s recovery in a lawsuit against a third party must include that reduction in calculating how much the employer owes in statutory attorney fees for the legal work of the employee’s attorney.  In this instance, the employer, Area Erectors, Inc., began paying temporary and total disability benefits to Ronald Bayer after he was rendered a quadriplegic in a workplace accident. Bayer also sought recovery from Panduit Corporation, for whom Area Erectors was building warehouse facilities at the time of the accident. Ultimately Bayer prevailed in the lawsuit and obtained a judgment on a jury verdict of $64 million.

Section 5(b) of the Workers’ Compensation Act, 820 ILCS 305/5(b) (West 2006), protects an employer’s right to receive reimbursement for compensation paid under the Act if the employee recovers from a third party legally responsible for the employee’s injuries. The employer’s obligation to make future payments may be suspended until the employee’s recovery from the third party has been exhausted. Section 5(b) also requires the employer to pay for the legal work resulting in the recovery from which the employer is reimbursed. In the absence of an agreement stating otherwise, Bayer’s lawyers were entitled to 25 % of the amount Area Erectors was reimbursed.

The only dispute was whether Area Erectors had to include the reduction in future medical expense payments in the attorney fee calculation. Based on a plain language interpretation of Section 5(b), the court concluded that the employer would have to pay the statutory attorney fee on the value of medical expenses the employer was relieved from paying in the future by virtue of the recovery in the lawsuit. Citing In re Estate of Dierkes, 191 Ill. 2d 326 (2000), the court explained that Section 5(b) equitably permits the employer to come out even, places the ultimate loss on the wrongdoer, and allows the employee to recover more fully for actual damages than is possible under the Act alone.     

Moon v. Rhode

By Joanne R. Driscoll, Forde Law Offices LLP

Does the discovery rule found in the medical malpractice statute of limitations apply only when the injured person survives the injury but not when the injured person dies from the injury? Reversing a divided appellate court, the Illinois Supreme Court held that it applies in either circumstance.

Departing from over 30 years of precedent from decisions of the First, Second, and Fifth Districts of the Illinois Appellate Court (and two federal district court rulings by the Northern District of Illinois), the Third District, in a 2-1 decision, strictly construed section 13-212(a) of the Illinois Code of Civil Procedure (735 ILCS 5/13-212(a) (West 2012)) to hold that the two-year statute of limitations for medical malpractice claims relating to a decedent’s death or injury begins to run from the date of death or injury without regard to knowledge of the negligent conduct.  The court reasoned that a strict construction of that provision was necessary because the Wrongful Death Act (740 ILCS 180/0.01 et seq. (West 2012)) and the Survival Act (755 ILCS 5/27-6 (West 2012)) were statutes in derogation of the common law. 

The Supreme Court reversed.  It construed the term “death” in the phrase “injury or death” found in section 13-212(a) and held that a causation component was required for purposes of triggering the running of the statute of limitations for wrongful death actions premised on medical malpractice.  In support, the Court first cited to its construction of the term “injury” in Witherell v. Weimer, 85 Ill. 2d 146, 153-54 (1981), to include a causation component.  Second, the Court cited several appellate court decisions that applied section 13-212(a) in wrongful death actions and required knowledge of death and that it was wrongfully caused.  Third, the Court rejected defendants’ reliance on the requirement in section 2(c) of the Wrongful Death Act (740 ILCS 180/2(c)) that the action to be commenced within two years of death, holding that section 13-212(a) was the more specific statute of limitations relating to medical malpractice lawsuits.  Lastly, the Court relied on the absence of any legislative action to amend section 13-212(a) in light of the case law interpreting that provision in the context of wrongful death actions. 

Turning to the Survival Act claim, the Court relied on its prior decision in Advincula v. United Blood Services, 176 Ill. 2d 1 (1996), which instructed that the Survival Act did not create a statutory cause of action – it merely allowed the representative of the decedent to step into the decedent’s shoes and take his/her rights – and Advincula’s holding that the date the decedent learned of his injury triggers the running of the statute of limitations period.  The Court saw no reason to impose statute of limitations constraints, such as those recognized in Advincula, without also allowing the benefits of the discovery rule that the decedent would have been realized had the injuries not lead to death.

Turning to the facts of the case, the Court rejected the defendants’ argument and reliance on Witherell that, even if the discovery rule tolled the statute of limitations in this case, the plaintiff’s complaint was untimely as a matter of law.  Citing the general rule that a question of fact exists as to when a party knew or reasonably should have known both of the injury and the wrongful cause, the Court distinguished the facts in Witherell.  Acknowledging that the plaintiff may not be successful on remand, the Court refused to hold that the record only supported defendants’ conclusion.

J&J Ventures Gaming, LLC v. Wild, Inc.

By Joanne R. Driscoll, Forde Law Offices LLP

This case, lodged before the Illinois Supreme Court on a certificate of importance, asks whether the Illinois Gaming Board has exclusive jurisdiction, pursuant to the Video Gaming Act (the Act) (230 ILCS 40/1 et seq. (West 2012)), to determine the requirements and limitations for agreements that purport to control the placement and operation of video gaming terminals.  The Supreme Court held that it did. Justice Karmeier took no part in the decision.

The Act and the regulations adopted by the Gaming Board require “written use agreements” between licensed terminal operators and owners of establishments that prescribe the terms and conditions for placement and operation of video gaming terminals.  The plaintiff, a licensed video gaming terminal company, who was the assignee of exclusive “location agreements” entered into by an unlicensed terminal operator and the defendant establishments, sought declarations as to the validity of the agreements and the assignments.  A competitor, who also had entered into similar “location agreements” with the same defendant establishments, intervened. 

The circuit court ruled in favor of the plaintiff and found that the location agreements were not use agreements and that they were valid and enforceable contracts.  The court enjoined the competitor from operating at the establishments, and the competitor appealed.  Raising the issue of subject matter jurisdiction sua sponte, and after supplemental briefing on that issue, the appellate court vacated the circuit court’s orders; held that the Gaming Board had exclusive jurisdiction over the controversy; and dismissed the appeals.  In doing so, it declined to follow Triple 7 Illinois, LLC v. Gaming and Entertainment Management-Illinois, LLC, 2013 IL App (3d) 120860, a case directly on point as to the legality of the agreements and their assignments (followed by the circuit court), holding that the appellate court in that case usurped the Gaming Board’s exclusive authority to regulate use agreements.  The Supreme Court allowed the Gaming Board to intervene as an appellee.

Reviewing the Video Gaming Act to determine legislative intent, the Court concluded that the comprehensive statutory scheme demonstrated an explicit intent to give the Board exclusive jurisdiction over the video gaming industry and the use agreements that are a necessary prerequisite of engaging in that industry.  Turning to the question of whether the “location agreements” fell within the purview of the Act, the Court held that they did.  It rejected arguments by the operators that the agreements were “precursor” or preliminary contracts reviewable by the circuit courts.  According to the Court, the content of the agreements and their amendments showed that they were not preliminary – they set forth definite terms and conditions concerning the rights and obligations of the parties relating to the placement of video gaming terminals and the division of profits – and the agreements acknowledged that they were subject to Board review and consent.  The Court also noted the anomaly that would arise if the circuit court were allowed to determine the validity of those agreements but could not enforce them because only the Board had exclusive jurisdiction over enforcement.