Insurer’s subrogation suit against municipality

Jury Instructions-IL > Insurance > Insurer’s subrogation suit against municipality

Allstate Insurance Company, Atlantic Mutual Insurance Company, Encompass

Insurance, St. Paul Companies, & State Farm Fire and Casualty, both individually

and as subrogee of insureds vs The City of Chicago – 03 l 16284

Insurer’s subrogation suit against municipality for flood damage

In 2001 the Chicago implemented a $68 million “Rain Blocker System” program using restrictors on street drain basins to slow rain water inflow which allegedly was improperly implemented and caused massive backflow flooding during a “100 years storm”. This resulted in a multi-million dollar subrogation claim brought by Allstate for claims paid to its insured property owners.

The case was tried to a verdict in 2010 in the Circuit Court of Cook County. Chicago successfully defended a three count complaint for Negligence, Willful & Wanton & Nuisance by asserting affirmative defenses of immunity for its discretionary acts or policy-making decisions. The parties mutually agreed to a definition of “a ministerial act” in response to a jury query.

IPI 1.01 – Modified by the court to be read at end of case, and updated by IPI Committee in 2009 to include old IPI 3.01 language)

Now that the evidence has concluded, I will further instruct you as to the law and your duties. The law regarding this case is contained in the instructions I will give to you. You must consider the Court’s instructions as a whole, not picking out some instructions and disregarding others.

It is your duty to resolve this case by determining the facts and following the law given in the instructions. Your verdict must not be based upon speculation, prejudice, or sympathy. Each party, whether a municipality, insurance company, or an individual, should receive your same fair consideration.

I have not meant to indicate any opinion as to the facts of this case by any of my rulings, remarks, or instructions.

You will decide what facts have been proven. Facts may be proven by evidence or reasonable inferences drawn from the evidence. Evidence consists of the testimony of witnesses and of exhibits admitted by the court. You should consider all the evidence without regard to which party produced it. You may use common sense gained from your experiences in life in evaluating what you see and hear during trial.

You are the only judges of the credibility of the witnesses. You will decide the weight to be given to the testimony of each of them. In evaluating the credibility of a witness you may consider that witness’ ability and opportunity to observe, memory, manner, interest, bias, qualifications, experience, and any previous inconsistent statement or act by the witness concerning an issue important to the case.

The use of cell phones, text messaging, Internet postings and Internet access devices in connection with your deliberations violates the rules of evidence and you are prohibited from using them

You must make your decision based on what you recall of the evidence. You will not receive a written transcript of the testimony when you retire to the jury room.

An opening statement is what an attorney expects the evidence will be. A closing argument is given at the conclusion of the case and is a summary of what an attorney contends the evidence has shown. If any statement or argument of an attorney is not supported by the law or the evidence you should disregard that statement.

Non-IPI – Subrogation Defined – 735 ILCS 5/2-403C

The Plaintiffs in this case are: Allstate Insurance Company. Atlantic Mutual Insurance Company, Encompass Insurance, St. Paul Companies, & State Farm Fire and Casualty, both individually and as subrogee of insureds

The Defendant in this case is: The City of Chicago

“Subrogation” is a legal term that means that an insurance company is “subrogated” to take over the rights of the insured person for the purpose of recovering any payments made on the insured’s loss.

In this case the Plaintiffs, as insurance companies, are the subrogees, and the property owners, who were compensated for sewer surcharge, are the subrogors.

As subrogees for the property owners, the Plaintiffs may bring suit against anyone who they claim to be legally responsible for the loss. In this case they have brought suit against the Defendant, City of Chicago.

The rights of the Plaintiffs, as subrogees, as against the Defendant are no greater and no less than those rights which the insured property owners would have against the Defendant.

Non-IPI – Benders Forms 71.30 – NUISANCE

A person who intentionally or negligently invades the property interest of another, or who uses its own property in a manner that is inappropriate or abnormal considering the character of the surrounding property, may be liable for creating a nuisance.

The person may be liable for the nuisance if his use of the property disturbs the use or enjoyment, or causes an invasion, of the property of another that renders its ordinary use or occupation physically disagreeable.

Plaintiffs in this case claim that Defendant, through the use of the property of its insureds, has created a nuisance that has interfered with the health, comfort, and safety of Plaintiffs’ insureds. Plaintiffs claim that its insureds suffered economic injury as a result of this nuisance, and seek to recover damages from Defendant for that injury.

Non-IPI 745 ILCS 10/2-103 [Adoption or failure to adopt enactment; failure to enforce law]

A local public entity is not liable for an injury caused by adopting or failing to adopt an enactment or by failing to enforce any law.

IPI 2.01 – Evidence Deposition

The testimony of John Velon was presented by video tape. You should give this testimony the same consideration you would give it had the witness personally appeared in court.

IPI 3.02 Witness Who Has Been Interviewed by Attorney

An attorney may, if a witness agrees, interview a witness to learn what testimony will be given. Such an interview, by itself, does not reflect adversely on the truth of the testimony of the witness.

IPI 3.08 – Opinion Testimony

You have heard a witness give opinions about matters requiring knowledge and skill. You should judge this testimony in the same way you judge the testimony from any other witness. The fact that such person has given an opinion does not mean that you are required to accept it. Give the testimony whatever weight you think it deserves, considering the reasons given for the opinion, the witness’ qualifications, and all of the other evidence in the case

IPI 3.04 Circumstantial Evidence

A fact or a group of facts, may, based on logic and common sense, lead you to a conclusion as to other facts. This is known as circumstantial evidence. A fact may be proved by circumstantial evidence. For example, if you are in a building and a person enters who is wet and is holding an umbrella, you might conclude that it was raining outside. Circumstantial evidence is entitled to the same consideration as any other type of evidence.

IPI 10.01 Negligence—Adult—Definition

When I use the word “negligence” in these instructions, I mean the failure to do something which a reasonably careful person would do, or the doing of something which a reasonably careful person would not do, under circumstances similar to those shown by the evidence. The law does not say how a reasonably careful person would act under those circumstances. That is for you to decide.

*IPI 10.02 Ordinary Care—Adult—Definition

When I use the words “ordinary care,” I mean the care a reasonably careful person would use under circumstances similar to those shown by the evidence. The law does not say how a reasonably careful person would act under those circumstances. That is for you to decide.

IPI 10.04 Duty to Use Ordinary Care—Adult—Defendant

It was the duty of the Defendant, before and at the time of the occurrence, to use ordinary care for the safety of the property of the Plaintiffs’ insured. That means it was the duty of the Defendant to be free from negligence.

14.01 Willful and Wanton Conduct—Definition

When I use the expression “willful and wanton conduct” I mean a course of action which shows an utter indifference to or conscious disregard for the safety of property of others.

14.04 Duty to Refrain From Willful and Wanton Conduct—Defendant

It was the duty of the Defendant under Count II of the complaint, before and at the time of the occurrence, to refrain from willful and wanton conduct which would endanger the safety of the property of others.

IPI 15.01 Proximate Cause—Definition [Updated Sept.2009]

When I use the expression “proximate cause,” I mean a cause that, in the natural or ordinary course of events, produced the Plaintiffs’ injury. It need not be the only cause, nor the last or nearest cause. It is sufficient if it combines with another cause resulting in the injury.

IPI 20.01 – ISSUES – Negligence

There are three counts in the Plaintiffs’ complaint.

Count I alleges Negligence against the Defendant.

Count II alleges Willful and Wanton Misconduct against the Defendant.

Count III alleges Nuisance against the Defendant.

As to Count I, the plaintiffs claim to have sustained loss or damages, and that the defendant was negligent in one or more of the following respects:

Failed to properly implement Rainblocker in accordance with the specification of its plan and design;
Failed to properly investigate the effectiveness of Rainblocker in the City given existing conditions;
Failed to properly warn city residents prior to August of 2001 to disengage residential down spouts;
Implemented Rainblocker when it should have known that the down spouts were not adequately disconnected;

The Plaintiffs further claims that one or more of the foregoing was a proximate cause of damage to the property owners insured by the Plaintiffs

As to Count II, the plaintiffs claim to have sustained loss or damages, and that the defendant was willful and wanton in one or more of the following respects:

Failed to properly implement Rainblocker in accordance with the specification of its plan and design;
Failed to properly investigate the effectiveness of Rainblocker in the City given existing conditions;
Failed to properly warn city residents prior to August of 2001 to disengage residential down spouts;
Implemented Rainblocker when it knew that the down spouts were not adequately disconnected;

The Plaintiffs further claims that one or more of the foregoing was a proximate cause of damage to the property owners insured by the Plaintiffs

As to Count III, the plaintiffs claim to have sustained loss or damages, and that the defendant created a Nuisance on the insured’s properties in one or more of the following respects:

Installed inlet control devices without first determining that the down spout disconnection rate was a level such that installation of inlet control devices was reasonable;
Installed inlet control devices that did not have reasonable flow restriction rates.

The Plaintiffs further claims that one or more of the foregoing was a proximate cause of damage to the property owners insured by the Plaintiffs

As to Count I, II, and III of the Plaintiffs’ complaint, the Defendant denies doing any of the things claimed by the Plaintiffs, denies that it acted wrongfully in doing any of the things claimed by the Plaintiffs, and denies that any claimed act or omission on the part of the Defendant was a proximate cause of sewer surcharge.

[Non-IPI – Affirmative Defense – Discretionary Decisions – Harinek v. 161 N. Clark St., 181 Ill 2d 335, 347 (1998); Van Meter v. Darien Park Dist., 207 Ill 2d 359, 380 (2003); Snyder v. Curran Township, 167 Ill. 2d 466, 478 (Ill. 1995); Moore v. Bd. of Educe. of Chi., 300 F. Supp. 2d 641, 2004 U.S. Dist. LEXIS 4156 (N.D. Ill. 2004).]

The Defendant, City of Chicago, also sets up the affirmative defense of immunity as to Count I, II, and II of the Plaintiffs’ complaint, claiming that the City’s decisions concerning the implementation of the Rainblocker Program were discretionary, policy-making decisions.

The Plaintiffs deny the City’s affirmative defense of immunity.

IPI 21.01 – BURDEN OF PROOF

When I say that a party has the burden of proof on any proposition, or use the expression “if you find,” or “if you decide,” I mean you must be persuaded, considering all the evidence in the case, that the proposition on which a party has the burden of proof is more probably true than not true.

IPI B21.02 BURDEN

As to Count I, the Plaintiffs have the burden of proving each of the following propositions:

First, that the Defendant acted or failed to act in one of the ways claimed by the Plaintiffs as stated to you in these instructions and that in so acting, or failing to act, the Defendant was negligent;

Second, that the Plaintiffs suffered damages;

Third, that the negligence of the Defendant was a proximate cause of the Plaintiffs’ damages;

If you find from your consideration of all the evidence that any of these propositions has not been proved, then your verdict should be for the Defendant on Count I.

On the other hand, if you find from your consideration of all the evidence that each of these propositions has been proved, then you must consider the Defendant’s affirmative defense to this claim on Count I.

As to Count II, the Plaintiffs have the burden of proving each of the following propositions:

Second, that the Plaintiffs suffered damages;

Third, that the willful and wanton conduct of the Defendant was a proximate cause of the Plaintiffs’ damages;

If you find from your consideration of all the evidence that any of these propositions has not been proved, then your verdict should be for the Defendant on Count II.

As to Count III, the Plaintiffs have the burden of proving each of the following propositions:

First, that the Defendant did negligently or intentionally

Invade the use and enjoyment of property
The invasion was substantial
The invasion was unreasonable

Second, that the Plaintiffs suffered damages

Third, that the Nuisance created by the Defendant was a proximate cause of the Plaintiffs’ damages

If you find from your consideration of all the evidence that any of these propositions has not been proved, then your verdict should be for the Defendant on Count III.

As to Count I, II, and III, the Defendant sets up an affirmative defense of immunity, claiming that the City’s decisions concerning the implementation of the Rainblocker Program were discretionary, policy-making decisions. As to this affirmative defense, the Defendant, City of Chicago, has the burden of proving that the City’s acts or omissions concerning the decisions to implement the Rainblocker Program were both

(1) determinations of policy*, and

(2) the exercise of discretionary acts, rather than ministerial acts**.

*(1) Determination of policy are those decisions which require the municipality to balance competing interests and to make a judgment call as to what solution will best serve each of those interests.

**(2) Discretionary acts are those which are unique to a particular public office, while ministerial acts are those which a person performs on a given state of facts in a prescribed manner, in obedience to the mandate of legal authority, and without reference to the official’s discretion as to the propriety of the act. In other words, a governmental agency has discretion in determining whether to perform a public work or make an improvement, however once the decision to perform the work is made, it must be done with reasonable care.

As to Counts I, II, and II, if you find from your consideration of all the evidence, that any one of the propositions the Plaintiffs is required to prove has not been proved, or that the Defendant’s affirmative defense has been proved, then your verdict(s) should be for the Defendant as to that Count or Counts.

If, on the other hand, you find from your consideration of all the evidence that each of the propositions required of the Plaintiffs has been proved and that the Defendant’s affirmative defense has not been proved, then your verdict(s) should be fore the Plaintiffs as to that Count or Counts.

50.11 A Corporation Acts Through Its Employees

The Plaintiffs and the Defendant are corporations. They can act only through their officers and employees. Any act or omission of an officer or employee within the scope of his employment is the action or omission of the corporation.

B45.01 – FORMS OF VERDICT

When you retire to the jury room you will first select a foreperson. He or she will preside during your deliberations.

Your verdict must be unanimous.

Forms of verdicts are supplied with these instructions. After you have reached your verdict, fill in and sign the appropriate form of verdict and return it to the court. Your verdict must be signed by each of you. You should not write or mark upon this or any of the other instructions given to you by the court.

The Defendant in this case is: The City of Chicago

As to Count I of the complaint alleging Negligence, if you find for Plaintiffs and against the Defendant and if you further find that the Defendant’s affirmative defense has not been proved, then you should use Verdict Form A. On the other hand, if you find from your consideration of all the evidence, that any one of the propositions the Plaintiffs is required to prove has not been proved, or that the Defendant’s affirmative defense has been proved, then you should use Verdict Form B.

As to Count II of the complaint alleging Willful and Wanton Conduct, if you find for Plaintiffs and against the Defendant and if you further find that the Defendant’s affirmative defense has not been proved, then you should use Verdict Form C. On the other hand, if you find from your consideration of all the evidence, that any one of the propositions the Plaintiffs is required to prove has not been proved, or that the Defendant’s affirmative defense has been proved, then you should use Verdict Form D.

As to Count III of the complaint alleging Nuisance, if you find for Plaintiffs and against the Defendant and if you further find that the Defendant’s affirmative defense has not been proved, then you should use Verdict Form E. On the other hand, if you find from your consideration of all the evidence, that any one of the propositions the Plaintiffs is required to prove has not been proved, or that the Defendant’s affirmative defense has been proved, then you should use Verdict Form F.

A “Special Interrogatory” is supplied with these instructions. After you have reached a verdict, fill in and sign the Special Interrogatory and return it to the court along with the forms of verdict. The Special Interrogatory must be signed by each of you.

*IPI B45.01.A – VERDICT FORM A/C/E

VERDICT FORM A

As to Count I of the complaint alleging negligence, we, the jury, find for the Plaintiffs and

against the Defendant.

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B45.01.B Verdict Form B-

VERDICT FORM B

As to Count I of the complaint alleging negligence, we, the jury, find for the Defendant and

against the Plaintiffs.

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IPI B45.01.A – VERDICT FORM C

VERDICT FORM C

As to Count II of the complaint alleging Willful and Wanton Conduct, we, the jury, find for the Plaintiffs and against the Defendant.

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B45.01.B Verdict Form D-

VERDICT FORM D

As to Count II of the complaint alleging Willful and Wanton Conduct, we, the jury, find for the

Defendant and against the Plaintiffs.

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IPI B45.01.A – VERDICT FORM E

VERDICT FORM E

As to Count III of the complaint alleging Nuisance, we, the jury, find for the Plaintiffs and against the Defendant.

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**B45.01.B Verdict Form F-

VERDICT FORM F

As to Count III of the complaint alleging Nuisance, we, the jury, find for the Defendant and

against the Plaintiffs.

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Jury Question & DEFINITION “MINISTERIAL” APPROVED BY BOTH SIDES

Question: Can we get a clear definition of a ministerial act?

Jury began deliberations around 12:45 p.m. The parties were contacted by telephone around 2:30 p.m., Mark Grotefeld for plaintiffs and Stephen Glockner and Mark Harrison for City.

Reading from the case of Chicago v. Seben, 165 Ill. 371, 378 (Ill. 1897), the court constructed an answer integrating requests by both sides who agreed to the following answer to the Jury which all sides approved telephonically:

“A municipal corporation is not liable for any error when it exercises discretion in selecting and adopting a plan in the making of public improvements; but as soon as it begins to carry out that plan, it acts ministerially, and is bound to see that the work is done in a reasonably safe and skillful manner.”

Accordingly, the note listed below was sent to the jury at 2:35 p.m..

Special Interrogatory[Non-IPI – Affirmative Defense – Discretionary Decisions – Harinek v. 161 N. Clark St., 181 Ill 2d 335, 347 (1998); Van Meter v. Darien Park Dist., 207 Ill 2d 359, 380 (2003); Snyder v. Curran Township, 167 Ill. 2d 466, 478 (Ill. 1995); Moore v. Bd. of Educe. of Chi., 300 F. Supp. 2d 641, 2004 U.S. Dist. LEXIS 4156 (N.D. Ill. 2004).]

SPECIAL INTERROGATORY

On or before August of 2001, were the decisions by the City of Chicago to implement the Rainblocker Program both:

(1) Determinations of policy, and

(2) The exercise of discretionary acts, rather than ministerial acts.

YES _________________ NO ___________________

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