The attorney representing parents of a teen killed by a drunk driver asked the Illinois Supreme Court on Wednesday “to preserve a plaintiff’s right to a jury trial.”
Christopher A. Koester told the justices that they can do this by affirming the reasoning of the Fifth District Appellate Court on how to reduce a jury verdict for other insurance recovered in actions under the state’s Dram Shop Act involving the Illinois Insurance Guaranty Fund.
Answering a certified question from the circuit court in Effingham County, the appeals panel in this case --Roy Dean Rogers II, et al. v Gani Imeri, Indv., etc. --determined that these reductions should first apply against the jury’s verdict and then, if necessary, be reduced to the statutory maximum of damages allowed under the Dram Shop Act.
On behalf of the Illinois Insurance Guaranty Fund, Hugh C. Griffin urged the justices to reverse the lower court and instead adopt the more recent analysis of the issue by the First District Appellate Court in Marcel Guzman, et al. v 7513 West Madison Street Inc., etc.
Contrary to Rogers, the appeals panel in Guzman held that the reduction for other insurance recoveries should not be applied to the jury’s award, but instead to the defendant’s maximum dram shop liability to each plaintiff.
Griffin told the justices that Koester’s stance, as well as the Fifth District’s reasoning, basically renders Section 546(a) of the state’s Insurance Code meaningless.
Also known as the Illinois Insurance Guaranty Fund statute, Section 546(a) provides that “an insured or claimant shall be required first to exhaust all coverage provided by any other insurance policy … if the claim under such other policy arises from the same facts, injury, or loss that gave rise to the covered claim against the Fund.”
It further provides that “the Fund’s obligation under Section 537.2 shall be reduced by the amount recovered or recoverable, whichever is greater, under such other insurance policy.”
While Griffin focused his arguments on the language and intent of Section 546(a), as well as other provisions of the statute, Koester urged the justices to look at those, as well as the Dram Shop Act, and “construe them to give meaning to both.”
“If you do what the First District did and what the Fund is suggesting we do here, you are completely nullifying the plaintiff’s right to a jury trial, you are completely ignoring the statute that says in every case a jury shall determine damages,” Koester said.
The issue presented to the court in Wednesday’s arguments stems from a lawsuit Roy Imeri II and Teresa Rogers brought after their son, Roy, was killed in a car crash with a drunk driver.
Koester told the court that Oct. 22 will mark the four year anniversary of Roy’s death. He said that the drunk driver, John Winterrowd, crossed the center lane into Roy’s vehicle after drinking at Johnny’s Bar and Grill, which Imeri owned.
Shortly after the incident, Koester said “all the normal insurance events started to happen.” Winterrowd’s insurer tendered about $26,550 to the family, which received an additional $80,000 under its insurance policy for a total of $106,550.
The Rogerses, he said, filed its dram shop action against Imeri and his bar in June 2010. Imeri had a dram shop liability policy with Constitutional Casualty Co., but the company liquidated and was declared insolvent while the case was pending.
As a result of the company being deemed insolvent, the Illinois Insurance Guaranty Fund took over as the defense.
The fund, according to its website, was created by statute in 1971 for the purpose of providing “protection for certain ‘covered claims’ of policyholders and claimants under property and casualty insurance policies issued by insolvent member companies.”
As the defendant in the suit, the Fund then filed a motion for summary adjudication of the amount that liability must be reduced.
It argued that the maximum dram shop liability in the case was set at $130,338.51 and that that amount should then be reduced by the $106,550 that the plaintiffs received from other insurance companies.
As soon as the Fund took over the defense, Koester said “the Fund said ‘We’re not going to play by the normal rules that you play in dram shop cases. We’re going to have different rules.”
Koester told the justices that “There are no different rules. There is nothing in Section 546 of the Guaranty Fund Act that says what the fund is saying it says. It doesn’t even mention the Dram Shop Act.”
Griffin characterized the situation differently. He said that when the company was declared insolvent, it not only triggered Imeri’s defense by the Fund, but also the application of all of the Insurance Guaranty Fund Act’s provisions, including Section 546(a).
Under this section, Griffin argued that the amount of insurance recovered --$106,550 – should be reduced from the maximum dram shop liability of $130,338.97, which would leave the Fund paying the difference of $23,778.51.
On behalf of the plaintiffs, Koester told the justices that the insurance reductions should be applied to the jury verdict and provided a hypothetical situation in which a jury returns a $500,000 verdict.
Koester said the $106,550 of other insurance recovered in this case would be reduced from the jury verdict, which would bring it down to $393,450, an amount that would then be reduced because it exceeds the statutory dram shop maximum of $130,338.51.
While Griffin acknowledged that Koester’s hypothetical is how it would work in cases that do not involve the Fund, he told the justices that “normal set off rules basically are altered when the fund is involved.”
This case marked the last arguments of the Supreme Court's September term, which was held in Chicago as the court's building in Springfield undergoes renovations.