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Sharp  Thinking

No. 203   Perspectives on Developments in the Law from Sharp-Hundley, P.C.    December 2021 

Court Issues Key Decision On Judicial Estoppel

By John T. Hundley, Sharp Thinking Editor

The Appellate Court in Chicago has issued a potentially seminal decision involving application of judicial estoppel in Illinois.

In Davis v. Pace Suburban Bus Div., Regional Transp. Auth., 2021 IL App (1st) 200519, the court:

• emphasized that even when the traditional factors of judicial estoppel are met, the decision to apply the doctrine rests within the court’s discretion;
• ruled that when a judicial estoppel case is appealed, the discretion at issue is the Appellate Court’s “without deference to the trial court”;
  • ruled that a party may be guilty of inconsistent positions for judicial estoppel purposes “solely on the basis that the dramatically different positions were being articulated via an expert, as opposed to the plaintiff personally”;
• said that judicial estoppel is an equitable doctrine and “equitable remedies are a special blend of what is necessary, what is fair, and what is workable”; and
• ruled that plaintiff’s inconsistent positions on proximate cause did not bar the second claim, but merely barred plaintiff from arguing sole proximate cause therein.

In Davis, a public transit bus driver slammed on his brakes when an automobile began to enter his lane from the right.  This caused plaintiff, who was walking to the front of the bus, to lose his footing and fall, suffering severe injuries. The driver of the automobile never was identified.  Plaintiff sought and recovered $50,000 (policy limits) under his uninsured motor vehicle coverage, alleging that the unidentified driver’s negligence was a proximate cause of his injuries.  He also sued the bus line, alleging the driver’s negligence was a proximate cause of his injuries.

The appellate panel recognized that the pleadings did not satisfy the judicial estoppel requirement of inconsistency because “there can be more than one proximate cause of a plaintiff’s injuries”.  However, in an apparent attempt to maximize the recovery from the bus line, plaintiff’s expert testified that the driver’s negligence was the sole proximate cause of the injuries and that the unidentified driver was not at fault.  This was inconsistent with the position taken in the suit against plaintiff’s insurer, and the court ruled the testimony from plaintiff’s expert was sufficient for judicial estoppel purposes.

However, after recognizing that all the other tests for judicial estoppel also were met, the panel said the remedy was not to award summary judgment to the defendant.  “Rather than use the sword of summary judgment, we choose the scalpel of barring plaintiff from arguing sole proximate cause against the Pace defendants,” it said.  “He may argue, via his expert or otherwise, that the Pace defendants’ negligence was a proximate cause of his injuries. . . . But he may not argue that (1) the [unidentified] driver was not negligent, or (2) the [unidentified] driver’s negligence was not a proximate cause of his injuries”.

Key to the court’s result was the role that discretion plays in applying judicial estoppel.  However, the trial court had not applied such discretion.  Because it ruled that the standard of review was de novo, the appellate panel said the familiar “abuse of discretion” was not applicable and the issue was “our discretion, without deference to the trial court.”

Agent Conduct Imputed To Principal For Specific Jurisdiction

Attribution of an agent’s conduct to a principal to establish specific personal jurisdiction comports with both federal and state due process requirements, the Seventh Circuit Court of Appeals has held.

In Bilek v. Federal Ins. Co., 8 F.4th 581 (7th Cir. 2021), the named defendant contracted with another company, Health Insurance Innovations (HII), to generate business for its health insurance lines, and HII in turn contracted with “lead generators” to conduct telemarketing, leading to undesired robocalls to the plaintiff.  Plaintiff sued under state and federal laws governing robocalls.  HII, a non-Illinois business, objected to personal jurisdiction over it.

However, the court of appeals held that the conduct of the lead generators could be attributed to HII for purposes of specific jurisdiction (i.e., jurisdiction in the specific cause of action to which the agent’s conduct related).

“For that purpose, attributing an agent’s actions to a principal which are intertwined with the very controversy at issue is consistent with the purposeful availment requirement underlying the Supreme Court’s specific personal jurisdiction precedent,” the panel said.  Noting the “fundamental agency principle that a principal is liable for the wrongful acts of an agent acting within its authority,” the panel said “it follows that attributing an agent’s suit-related contacts to a principal to establish specific personal jurisdiction poses no due process bar.”

It noted there was “no operative difference” between Illinois and federal constitutional limits under the respective due process clauses.  It also noted the result might be different if the plaintiff were trying to establish general jurisdiction.

Abode Service Statute Has No Competency Requirement

The Illinois statute on abode service (735 ILCS 5/2-203(a)(2)) contains no requirement on mental competency of the recipient of service, and an Illinois trial court may not add one, the Appellate Court in Chicago held recently.

In U.S. Bank Trust N.A. v. Zofkie, 2021 IL App (1st) 201232, the process server served defendants’ 31-year-old son, who suffered an alleged cognitive mental impairment (autism) and allegedly failed to inform defendants of the service.

Reviewing § 2-203(a)(2), the Appellate Court said “there is no statutory requirement that the recipient of the substitute service be proved to be mentally competent in a legal sense, and we lack authority to add such a requirement.”