Listeman, Bandy & Hamilton Ass'n v. Wilson

430 N.E.2d 749, 103 Ill. App. 3d 87, 58 Ill. Dec. 717, 1982 Ill. App. LEXIS 1359

• Court: Appellate Court of Illinois
• Decided: January 19, 1982
• Docket: No. 81-37
• Status: Published

Opinions

JUSTICE WELCH

delivered the opinion of the court:

This suit in interpleader was brought by the law firm of Listeman, Bandy and Hamilton as plaintiff against defendant-claimant Linda Barriger, executrix of the estate of Charles J. Swan, and defendant-claimant Elizabeth Sue Swan Wilson, whose marriage to Charles J. Swan had been dissolved. Charles Hamilton of the plaintiff law firm had represented Elizabeth Sue Swan Wilson as plaintiff in a personal injury suit against Venture Stores. In dispute here is a portion of the amount for which that suit was settled.

The lawsuit against Venture Stores was filed on August 18,1978, prior to dissolution of the marriage on September 20,1978. During the dissolution proceedings Charles Swan was not represented by counsel though his wife was. The judgment for dissolution provided in part:

“IT IS FURTHER ORDERED that with reference to the matter of Elizabeth Swan vs. Venture (No. 78-L-645), upon a verdict, settlement and recovery, the proceeds will be divided equally between the petitioner [Elizabeth Sue Swan] and respondent [Charles Swan], if the respondent is living.”

On April 22, 1980, claimant Wilson agreed to accept Venture’s offer of settlement in the amount of $30,000. On Friday, May 2, 1980, her attorney received at his office a draft from Venture’s insurer in the amount of $30,000 together with a release and settlement agreement and a stipulation to dismiss the lawsuit. At approximately 10:30 a.m. on Saturday, May 3,1980, claimant Wilson endorsed the draft for $30,000, signed the release and settlement agreement and authorized her attorney to execute the stipulation to dismiss the lawsuit. About two hours later claimant Wilson learned that at approximately 9:15 that same morning Charles Swan had suffered a gunshot wound accidentally inflicted by another person. At 1:15 p.m. on May 3, 1980, Charles Swan was pronounced dead. On Monday, May 5, 1980, claimant Wilson’s attorney presented the endorsed draft for payment, and it was duly paid. Plaintiff law firm subsequently made distribution to Elizabeth Sue Swan Wilson of half of the amount of the settlement that remained after payment of expenses and deposited with the trial court the amount of the other half, that is, $10,940.48, which represented the portion of the settlement claimed by both Elizabeth Sue Swan Wilson and the executrix of Charles Swan’s estate.

After a hearing the trial court concluded that although a “settlement” had been reached, there had been no “recovery” during the lifetime of Charles Swan. The court reasoned that the money which the draft represented, and not the draft itself, was the object of the settlement and that since claimant Wilson had not actually received prior to Charles Swan’s death the “funds or monies” she sought from the settlement, no “recovery” had been had pursuant to the terms of the judgment for dissolution. Finding that the disputed portion of the settlement belonged to claimant Wilson, he entered judgment in her favor and subsequently denied claimant Barriger’s motion for rehearing to vacate judgment and to enter judgment in her favor. From the order denying that motion claimant Barriger appeals.

Initially, we note that this case does not involve the effect of the acceptance of the draft on the underlying obligation of Venture to claimant Wilson. (Compare Ill. Rev. Stat. 1979, ch. 26, par. 3—802(1); Consolidated Freightways v. Industrial Com. (1971), 48 Ill. 2d 221, 269 N.E.2d 291). It involves an ancillary obligation, one which arose from the 1978 judgment for dissolution. The question is whether “a verdict, settlement and recovery” was obtained by claimant Wilson when Charles Swan was alive.

The phrase which must be interpreted does not provide an obvious answer. It refers to verdict settlement and recovery in a conjunctive sense. But, as noted by claimant Barriger, a verdict is reached after undergoing a jury trial (Ill. Rev. Stat. 1979, ch. 110, par. 65), while a settlement traditionally refers to an out of court agreement to conclude litigation. (Webster’s Third New International Dictionary 2079 (1961) (“settle,” definition 7b).) Certainly it could not have been intended that the Venture litigation must result in a verdict and settlement before Charles Swan became entitled to half of the “proceeds.”

Nor does the use of the word “recovery” hint at a solution of the problem. It is not clear whether the recovery must accompany the “verdict,” the “settlement,” or either procedure. The courts of this State have construed “recovery” to apply only to judicial proceedings (Peavler v. City of Mt. Vernon (1910), 158 Ill. App. 610), but they have also read the term to refer to settlements. (Standidge v. Chicago Rys. Co. (1912), 254 Ill. 524, 93 N.E. 963.) “Recovery” could refer to claimant Wilson’s receipt of proceeds, as opposed to her merely obtaining a judgment (Donoho v. O’Connell’s Inc. (1960), 18 Ill. 2d 432, 164 N.E.2d 52), or, the term may simply be another way to describe a judgment. Peavler.

In the interests of brevity, we will not belabor the point, but it is obvious that the phrase “verdict, settlement and recovery” is too ambiguous to state definitively when Charles Swan would become the owner of half of the proceeds from the Venture litigation. Since the language of the judgment of dissolution contains this significant ambiguity, we may consider extrinsic evidence to determine what was intended by the language in question. La Throp v. Bell Federal Savings & Loan Association (1977), 68 Ill. 2d 375, 370 N.E.2d 188, cert. denied (1978), 436 U.S. 925, 56 L. Ed. 2d 768, 98 S. C. 2818; Maloney v. Maloney (1980), 88 Ill. App. 3d 146, 410 N.E.2d 416.

To us, the most probative extrinsic evidence available was given by claimant Wilson in the 1978 dissolution proceedings. The relevant testimony, which reveals an uncanny prescience, is reproduced below.

Q. “Now, you have agreed with your husband that you will split any verdict, settlement or recovery of that case?

A. [Claimant Wilson]: Right.

Q. And isn’t it also a fact that we have talked about this in my office?

A. Right.

Q. And I advised you against doing this?

A. Right.

Q. And you still told me that you want to do it, is that correct?

A. That is right.

Q. And it was on your initiative that you decided that you would split the proceeds of that lawsuit with your husband?

A. Right. That is in the event that he is living at the time.

Q. Do you think there is some chance he might be dead?

A. No, but it is just the bunch that he lives with. He lives a dangerous life. He really does.

Q. Does he? Okay.

A. And I don’t want it to go into an estate, his estate or something like that. Do you understand what I am saying?”

This testimony shows that, when she requested the inclusion of the provision in question in the judgment of dissolution, claimant Wilson anticipated the situation which ultimately occurred. Clearly, she intended to divide the proceeds of the Venture litigation with Charles Swan only if she could make that division with Swan himself, and not with an estate. Claimant Wilson wanted Swan, and not his heirs, to enjoy the results of the lawsuit. But that was not possible, for, by the time any division could be made, Charles Swan was dead.

Were we to require distribution of half of the Venture settlement to Swan’s estate, we would frustrate the intent of the parties to the order of dissolution, as expressed in open court under oath by one of those parties. It barely needs citation that the guiding principle in the interpretation of contracts is to ascertain the intent of the parties. (United Farm Bureau Mutual Insurance Co. v. Elder (1980), 89 Ill. App. 3d 918, 412 N.E.2d 630). Because the decision of the trial court effectuates that obvious intent, we believe that it was correct and should be affirmed.

Affirmed.

HARRISON, J., concurring.