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Illinois Law Blog Legal updates, news, and commentary from the attorneys of Baker Sterchi Cowden & Rice LLC

Prejudgment Interest Has Hit Illinois

June 3, 2021 | Laura Beasley

Governor Pritzker has signed into law SB72 (PA102-0006), which imposes a 6% prejudgment interest on personal injury and wrongful death actions effective July 1, 2021.

The prejudgment interest has been a threat since HB3360 was first proposed on January 13, 2021. The first proposal, a 9% per annum interest with unlimited scope and running from the date of the accident, was vetoed on March 25, 2021.  After the veto, the General Assembly made amendments to SB72 and those modifications became PA102-0006 on May 28, 2021.

The effects of this new law will be vast.  The law applies a 6% per annum interest to personal injury or wrongful death actions arising out of any theory of tort liability. The prejudgment interest applies to most categories of damages, including non-economic and future damages, and is effective July 1, 2021. For current claims, the interest begins to accrue from the time of the accident or the enactment of the statute, whichever is later. Otherwise, the interest starts accumulating at the time the cause is filed. 

The law does have some limitations for the prejudgment interest, such as limiting the total years for it to run to five. Settlement offers will also play a part in limiting the amount of prejudgment interest.  The interest can be cut off by the highest written settlement offer made within 12 months of the suit being filed and not accepted within 90 days or rejected by the plaintiff.  If the judgment is greater than the highest offer, then the plaintiff only gets prejudgment interest on the difference between the highest offer and the judgment.  If the judgment is less than or equal to the highest offer, then the plaintiff gets no prejudgment interest. 

There are many issues with the statute that cannot be answered.  Such as what happens to defendants who are added after the suit is filed, at what point does their time start running to make a qualified offer or how do you deal with third-party plaintiffs. Who gets taxed with discovery deadlines and compliance delays?  It will also bring up coverage interest and could expose insurers to pay covered damages in excess of the limits. 

Defendants need to be mindful of the prejudgment interest and its ramifications to the case as well as the vast number of unanswered questions regarding the full effect of the new law.   If you have questions about how this new law will impact you or your organization, please contact the author or Baker Sterchi Cowden & Rice.

Illinois Courts Begin Weighing in on COVID-19 Exposure Claims

April 19, 2021 | Gregory Odom

As discussed in a prior blog post, one consequence of the COVID-19 pandemic may be a wave of lawsuits arising from exposure to the virus. Now that we have passed the one-year anniversary of the pandemic outbreak, perhaps not surprisingly, court opinions in COVID-related litigation are increasingly being issued. Below, we discuss several opinions recently issued in this litigation, including in some cases discussed in the firm’s prior blog post on this issue.

Direct Exposure Claims

Since the pandemic outbreak, multiple lawsuits against nursing homes have been filed in Illinois related to residents contracting COVID-19. As previously discussed, one such case was filed against a Bloomington, Illinois nursing home. In that case, the plaintiff alleged that the defendant failed to properly monitor residents’ medical conditions and, consequently, her mother contracted and died from COVID-19. On December 29, 2020, the defendant removed the case to the District Court for the Central District of Illinois. The defendant also moved to dismiss the complaint, arguing that it is immune from liability under the Public Readiness and Emergency Preparedness Act for Medical Countermeasures Against COVID-19 (“the PREP Act”). Recall, the PREP Act makes “covered persons” immune from suits under federal and state law for all claims, except for willful misconduct claims, caused by, arising out of, relating to, or resulting from the administration or use of a “covered countermeasure” to diseases, threats, and conditions, including COVID-19. In response, the plaintiff argues that she is not alleging liability based upon the administration or use of a countermeasure, but rather, based upon the nursing home’s alleged failure to act to prevent the spread of COVID-19. At this point, the court has yet to rule on the motion to remand or motion to dismiss. Any ruling on the motion to dismiss could be consequential because there is currently limited guidance on how courts will interpret the scope of the PREP Act’s immunity provision.      

In addition to the PREP Act, courts also face questions over the extent to which Governor Pritzker’s Executive Order No. 17 shields nursing homes from liability against COVID-19 litigation. According to Section 3 of that Order, during the pendency of Governor Pritzker’s disaster proclamation related to COVID-19, health care facilities shall be immune from civil liability for any injury or death alleged to have been caused by any act or omission by the health care facility, if the injury or death occurred at a time when the health care facility was engaged in the course of rendering assistance to the State by providing health care services in responsive to the COVID-19 outbreak, unless the injury or death was caused by gross negligence or willful misconduct. On April 1, 2021, the District Court for the Northern District of Illinois declined to dismiss a lawsuit based upon Executive Order No. 17 immunity. In Claybon v. SSC Westchester Operating Co., 20-cv-04507, 2021 U.S. Dist. LEXIS 64067 (N.D. Ill. Apr. 1, 2021), the plaintiff alleged that while the decedent resided at the defendant’s nursing home, members of the home’s nursing staff began to show symptoms of COVID-19, one member tested positive, and one member was hospitalized for the virus. According to the plaintiff, despite these developments, the defendant instructed its employees to report to work. Eventually, the decedent passed away after developing a dry cough, fever, and shortness of breath. In the lawsuit, the plaintiff alleged that the defendant was responsible for the decedent’s death, claiming that the defendant required symptomatic employees to report to work, failing to provide PPE, and failing to implement pandemic-related guidelines issued by the Center for Medicare & Medicaid Services. 

The defendant argued it was immune from liability pursuant to Section 3 of Executive Order No. 17. The court explained that the “problem” with the defendant’s argument was that whether it was assisting the State in response to the pandemic when it committed the allegedly tortious conduct was a question of fact that could not be resolved at the pleadings stage. Moreover, the plaintiff died on March 30, 2020, but the Executive Order was not filed until April 1, 2020. The court noted that it was unclear whether the Order applied retroactively and declined to make that determination at the pleadings stage.

In a related case, the District Court for the Northern District of Illinois again declined to dismiss a complaint against Westchester based upon immunity under Executive Order No. 17. In Brady v. SSC Westchester Operating Co., 20CV4505, 2021 U.S. Dist. LEXIS 68920 (N.D. Ill. Apr. 9, 2021), the court explained that Section 3 immunity applies when a healthcare facility is engaged in the course of rendering assistance to the State; thus, immunity applies where a facility spreads COVID-19 while affirmatively treating or trying to prevent its spread, but does not apply where a facility allows the virus to spread through inaction. The court determined that it was unclear from the face of the plaintiffs’ complaint, which alleged that Westchester failed to protect its residents from infected nursing staff spreading the virus, whether plaintiffs’ claim triggered the immunity provision.

The court also found that the plaintiffs’ claim survived because they sufficiently alleged a willful and wanton misconduct claim. The Executive Order expressly notes that its immunity provision does not apply to claims arising from death or injuries caused by a facility’s willful misconduct. The court found the plaintiffs sufficiently alleged willful misconduct through their claims that the defendant knew about the risks of exposing its residents to infected nursing staff by mid-March 2020 and, despite that knowledge, required employees who had tested positive for, or were displaying symptoms of, COVID-19 to report to work. The plaintiffs further alleged that Westchester failed to provide PPE to its staff in March 2020. Finally, the court rejected Westchester’s argument that it could not have known the symptoms of COVID-19 so early in the pandemic. According to the court, by March 2020, at least two of the defendant’s employees had tested positive for the virus, so it had objective knowledge that members of its staff were carrying the virus. The court also relied on the plaintiffs’ allegations that official guidance issued by mid-March 2020 listed symptoms of a respiratory infection (e.g., fever, cough, shortness of breath, or sore throat) as signs of the virus, that members of Westchester’s staff reported those symptoms to management, and Westchester still required its staff to report to work.

Recently, the District Court for the Southern District of Illinois allowed a COVID-related lawsuit to proceed beyond an initial review. In Brown v. Watson, 21-cv-00138-JPG, 2021 U.S. Dist. LEXIS 65560 (S.D. Ill. Apr. 5, 2021), the plaintiff alleged he had been subjected to unconstitutional conditions while confined in the St. Clair County Jail. Among other things, the plaintiff claimed he developed COVID-19 due to conditions at the jail, including being forced to sleep in proximity to COVID-positive inmates. According to the complaint, jail staff were provided with masks and gloves to prevent infection, but inmates were not. Additionally, incoming inmates were not tested for COVID-19, separated from one another, or allowed to use protective gear. The plaintiff alleged that a COVID-19 outbreak occurred due to conditions at the jail, resulting in 300 inmates testing positive for the virus. Finally, the plaintiff claimed that he was denied adequate testing and medical care for COVID-19. The plaintiff asserted claims against the St. Clair County Sheriff and the jail’s doctor.

Under federal law, the court was required to conduct what is known as a preliminary review to filter out non-meritorious claims. See, 28 U.S.C.§ 1915A. The court determined that the plaintiff satisfied the conditions necessary to survive a preliminary review by setting forth allegations suggesting that each defendant acted objectively unreasonable or deliberately indifferent to the conditions of his confinement and/or medical condition. 

Outside of the healthcare realm, as discussed in our prior post, several McDonald’s employees and their relatives filed suit against McDonald’s, alleging negligence and public nuisance arising from its decision to remain open during the pandemic without taking implementing certain health and safety standards. The plaintiffs sought injunctive relief in the lawsuit, including that McDonald’s provide its employees with certain protective equipment and implement various workplace safety measures. McDonald’s subsequently filed suit against its insurer Austin Mutual, arguing that it owed a duty to defend McDonald’s in the underlying lawsuit. On February 22, 2021, the District Court for the Northern District of Illinois denied Austin Mutual’s motion to dismiss, finding that the complaint in the underlying lawsuit potentially gave rise to coverage. McDonald’s Corp. v. Austin Mut. Ins. Co., No. 20C5057 (N.D. Ill. Feb. 22, 2021). The primary issue in that case was whether the underlying lawsuit sought “damages because of bodily injury.” Austin Mutual argued that the underlying case did not trigger coverage because the plaintiffs sought injunctive, not monetary relief. In response, McDonald’s argued that if it was forced to expend money to comply with injunctive relief granted in the underlying case, such damages would constitute “damages” that would only arise because the plaintiffs in the underlying case contracted COVID-19, a “bodily injury.” Noting that the case was a “very close call,” the District Court concluded that if the plaintiffs in the underlying lawsuit succeeded in obtaining injunctive relief, it would be only because they contracted a bodily injury. The court found that an alternative avenue for coverage existed; namely, that exposure to COVID-19 is itself a bodily injury that McDonald’s would be forced to expend “damages” to remedy.

Secondary Exposure Claims

Following our prior blog post, there have been significant developments in two cases discussed in that post. Specifically, in the two secondary exposure cases, the courts have ruled on the defendants’ motions to dismiss. In Erika Iniguez v. Aurora Packing Co., 20-L-372, the Circuit Court of Kane County dismissed the plaintiff’s complaint with prejudice. In that case, the plaintiff alleged that the decedent’s husband worked for the defendant, contracted COVID-19 at work, and passed the disease on to the decedent, resulting in her death. The court found that the defendant did not owe a duty of care to the decedent. In reaching that conclusion, the court explained that the decedent and the defendant did not stand in a “special relationship” that would give rise to a duty of care. According to the court, the decedent’s relationship to the defendant was no different from the relationship of any other citizen of the world who might encounter an employee of the defendant who had contracted COVID-19 while at work. 

The court also found it important that the Illinois legislature and Illinois Appellate Court have refused to extend the duty owed by employers and physicians to third parties that are not part of the employer-employee and physician-patient relationships. As to employers, the court explained that in its most basic sense, the plaintiff’s claim was based on the defendant’s alleged failure to protect its employees from contracting COVID-19 at work. According to the court, Illinois policy regarding employee exposure to dangerous workplace conditions is reflected by the Illinois Workers’ Compensation Act, which provides that the statutory remedies afforded by the Act serve as an employee’s exclusive remedy for compensable injuries. Thus, the court questioned whether Illinois policy would be served by imposing upon employers a common law duty owed to an unlimited pool of potential claimants, “mediated only by the travels and uncontrolled contacts of employees outside the workplace[.]” As to physicians, the court relied upon prior court opinions in which plaintiffs filed suit against physicians, alleging that they developed communicable diseases due to the physicians’ failure to diagnose third-party patients. In those cases, the Illinois appellate court refused to extend the physicians’ duty beyond their patients. See, Britton v. Soltes, 205 Ill. App. 3d 943 (1st Dist. 1990); Heigert v. Riedel, 206 Ill. App. 3d 556 (5th Dist. 1990).

Finally, the court distinguished the plaintiff’s claim from “take home asbestos” cases (i.e., where plaintiffs allege that they developed cancer due to asbestos exposure they experienced through the work clothes of a spouse or relative). The court reasoned that in those cases, the alleged injuries resulted from contact with a byproduct of the defendant’s very business, the use or manufacturing of asbestos or asbestos-containing products, whereas the plaintiff in this case based her claim on the relationship between the defendant and its employee. 

By contrast, the Circuit Court of Will County recently allowed a plaintiff’s secondary exposure case to proceed beyond the pleadings stage. In Miriam Reynoso v. Byrne Schaefer Electrical, No. 20-L-620, the plaintiff alleged that she developed COVID-19 from her husband after he contracted the virus through his employment with the defendant. In ruling on the defendant’s motion to dismiss, the court denied the motion as to Count I of the plaintiff’s complaint, while granting the motion as to Count II. The court, however, granted the plaintiff leave to amend Count II of her complaint.

Baker Sterchi will continue tracking developments in this litigation. Please monitor our blog for updates on this and many other legal issues. 

Governor Pritzker Vetoed HB3360 but HA2 which imposes a 6% prejudgment interest is already close on its tail.

March 26, 2021 | Laura Beasley

The saga continues over prejudgment interest in Illinois. Although Governor Pritzker vetoed HB 3360, which would have imposed a 9% prejudgment interest on person injury and wrongful death action, a modified version of the bill is already speeding its way through the system.  See letter from JB Pritzker in support of his Veto.

HA2 is in front of the Senate and would soften the blow to defendants.  However, it still penalizes defendants for exercising their right to trial. For instance, in HA2 prejudgment interest would be 6% instead of 9% per annum and would not apply to punitive damages, sanctions, statutory attorneys’ fees, statutory costs, and the amount of the highest timely written settlement offer. Further, it would cut off interest at 5 years and toll interest if the case is voluntary dismissed. These are all improvements from the prior bill but still would penalize defendants who defend themselves and the interest rate is still arbitrary. 

In Governor Pritzker’s letter he urges the sponsors of HB 3360 to negotiate a compromise which adds protection for health care providers while still encouraging a quick resolution to a case. HA2 seems to be just that, a compromise which still punishes only the defendant for a slow moving case, not considering the back log of the courts or what actions plaintiffs may take to delay a case just to make its value go up.

Defendants need to be mindful of the pre-judgment interest accrual that results from delays in litigation caused by either side or the court. If you have questions about how this development might impact you or your organization, please contact the author or Baker Sterchi.

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About Illinois Law Blog

The BSCR Illinois Law Blog examines significant developments, trends and changes in Illinois law on a broad range of topics that are of interest to Illinois practitioners and to businesses evaluating risks under Illinois law or managing litigation subject to Illinois law. Learn more about the editor, Lisa Larkin.

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