{ "id": 2927303, "name": "GORDON L. NORBERG, Plaintiff, v. CENTEX HOMES CORPORATION, Defendant and Third-Party Plaintiff-Appellee (R & D Thiel, Inc., Third-Party Defendant-Appellant)", "name_abbreviation": "Norberg v. Centex Homes Corp.", "decision_date": "1993-01-22", "docket_number": "No. 1\u201491\u20142498", "first_page": "267", "last_page": "277", "citations": [ { "type": "official", "cite": "247 Ill. App. 3d 267" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "243 Ill. App. 3d 246", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5107243 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/243/0246-01" ] }, { "cite": "548 N.E.2d 1081", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "191 Ill. App. 3d 816", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2510834 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/191/0816-01" ] }, { "cite": "550 N.E.2d 654", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1989, "opinion_index": 0 }, { "cite": "193 Ill. App. 3d 947", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2500883 ], "year": 1989, "opinion_index": 0, "case_paths": [ "/ill-app-3d/193/0947-01" ] }, { "cite": "520 N.E.2d 743", "category": "reporters:state_regional", "reporter": "N.E.2d", "pin_cites": [ { "page": "744" } ], "opinion_index": 0 }, { "cite": "165 Ill. App. 3d 759", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3613742 ], "pin_cites": [ { "page": "760" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/165/0759-01" ] }, { "cite": "407 N.E.2d 638", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "85 Ill. App. 3d 867", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3193996 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/85/0867-01" ] }, { "cite": "367 N.E.2d 469", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "52 Ill. App. 3d 237", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3386562 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/52/0237-01" ] }, { "cite": "777 F. Supp. 619", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 7409735 ], "year": 1991, "opinion_index": 0, "case_paths": [ "/f-supp/777/0619-01" ] }, { "cite": "776 F. Supp. 368", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 11308155 ], "year": 1991, "opinion_index": 0, "case_paths": [ "/f-supp/776/0368-01" ] }, { "cite": "421 N.E.2d 886", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "85 Ill. 2d 1", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5470281 ], "opinion_index": 0, "case_paths": [ "/ill-2d/85/0001-01" ] }, { "cite": "461 N.E.2d 382", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "101 Ill. 2d 1", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3160770 ], "weight": 2, "pin_cites": [ { "page": "14-15" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/101/0001-01" ] }, { "cite": "547 N.E.2d 437", "category": "reporters:state_regional", "reporter": "N.E.2d", "pin_cites": [ { "page": "448" } ], "opinion_index": 0 }, { "cite": "132 Ill. 2d 304", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5588617 ], "pin_cites": [ { "page": "329" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/132/0304-01" ] }, { "cite": "518 N.E.2d 1232", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "119 Ill. 2d 344", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3192653 ], "opinion_index": 0, "case_paths": [ "/ill-2d/119/0344-01" ] }, { "cite": "369 N.E.2d 841", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "68 Ill. 2d 326", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5809967 ], "opinion_index": 0, "case_paths": [ "/ill-2d/68/0326-01" ] }, { "cite": "349 N.E.2d 654", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1977, "opinion_index": 0 }, { "cite": "38 Ill. App. 3d 910", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2801944 ], "year": 1977, "pin_cites": [ { "page": "913" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/38/0910-01" ] }, { "cite": "519 N.E.2d 1203", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1976, "opinion_index": 0 }, { "cite": "166 Ill. App. 3d 224", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5071893 ], "weight": 2, "year": 1976, "pin_cites": [ { "page": "230" }, { "page": "230" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/166/0224-01" ] }, { "cite": "585 N.E. 2d 606", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "145 Ill. 2d 345", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5596434 ], "opinion_index": 0, "case_paths": [ "/ill-2d/145/0345-01" ] }, { "cite": "230 N.E.2d 831", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "38 Ill. 2d 223", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2861276 ], "opinion_index": 0, "case_paths": [ "/ill-2d/38/0223-01" ] }, { "cite": "585 N.E.2d 1023", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "146 Ill. 2d 155", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5597125 ], "weight": 5, "pin_cites": [ { "page": "174", "parenthetical": "Freeman, J., dissenting" }, { "page": "162" }, { "page": "162" }, { "page": "174", "parenthetical": "Freeman, J., dissenting" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/146/0155-01" ] } ], "analysis": { "cardinality": 1021, "char_count": 24038, "ocr_confidence": 0.755, "pagerank": { "raw": 1.0744789182168466e-07, "percentile": 0.5606236116468566 }, "sha256": "3f22eef632b595a4f03d69f6bdfd5c199623fc559598a2d523260395ed733a5d", "simhash": "1:358bd9ba1849b653", "word_count": 3928 }, "last_updated": "2023-07-14T17:38:22.874712+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "GORDON L. NORBERG, Plaintiff, v. CENTEX HOMES CORPORATION, Defendant and Third-Party Plaintiff-Appellee (R & D Thiel, Inc., Third-Party Defendant-Appellant)." ], "opinions": [ { "text": "JUSTICE EGAN\ndelivered the opinion of the court:\nThe plaintiff, Gordon L. Norberg, filed suit against the defendant, Centex Homes Corporation (Centex), to recover damages for personal injuries he suffered while working as a carpenter at a building site being developed by Centex. Centex filed a third-party complaint against the plaintiff\u2019s employer, R & D Thiel, Inc. (Thiel), for contribution.\nAt the time of the plaintiff\u2019s injury, Thiel had been insured under a workers\u2019 compensation and employer\u2019s liability policy with Optimum Insurance Company (Optimum). However, Optimum was placed in liquidation, and the Illinois Insurance Guaranty Fund (Fund or Guaranty Fund) undertook Optimum\u2019s obligations with respect to the defense and indemnification of Thiel.\nThe case was heard by a jury. The evidence established that the plaintiff was working for Thiel as a trim carpenter installing permanent railings around a stairwell opening on the second floor of a townhouse. There was no temporary guardrail around the stairwell. The contract between Centex and Thiel expressly provided that Thiel was responsible for erecting a temporary guardrail around the stairwell opening. The plaintiff had not been instructed by Thiel to have a temporary guardrail in place while he installed the permanent guardrail. While the plaintiff was drilling a hole at the top of the stairwell, he slipped and fell down the stairs and was injured.\nThe jury returned a verdict on April 16, 1991, in favor of the plaintiff and against Centex. The jury calculated the plaintiff\u2019s damages to be $380,438.24, but found the plaintiff 20% contributorily negligent. Accordingly, they awarded $304,350.59 to the plaintiff. The jury also returned a verdict on Centex\u2019s third-party complaint and held Thiel 50% liable for the judgment.\nOn April 18, 1991, the plaintiff requested that a written judgment order be entered nunc pro tunc confirming the jury verdict that had been rendered on April 16. The judge granted the request and signed the written judgment order on April 18.\nAlso on April 18 the Illinois Supreme Court filed its opinion in Kotecki v. Cyclops Welding Corp. (1991), 146 Ill. 2d 155, 585 N.E.2d 1023, holding that an employer\u2019s liability for contribution is limited to the extent of its workers\u2019 compensation liability. That same day, Thiel filed a motion to conform the judgment to reflect the holding of Kotecki and a motion to limit Centex\u2019s recovery to the amount allowed under the Illinois insurance guaranty fund act. (Ill. Rev. Stat. 1989, ch. 73, par. 1065.82 et seq.) The judge denied both motions; he held that the Kotecki decision would apply prospectively to cases that began trial on or after April 18, 1991, and would not apply retroactively to cases in which trial had begun before April 18, 1991.\nCentex settled with the plaintiff for $260,000, reserving its right of contribution from Thiel. The trial judge reviewed the settlement and entered a finding under the Contribution Act (Ill. Rev. Stat. 1989, ch. 70, par. 301 et seq.) that the settlement was in good faith.\nThiel first maintains that Kotecki should be applied retroactively, and Centex maintains that Thiel has waived its right to contest the limits of contribution liability of an employer because Thiel did not raise the claim until after the jury verdict.\nWe note initially that both sides have taken inconsistent positions. In urging that Thiel has waived the argument, Centex contends that Thiel should have been aware of its right to claim a limitation on the extent of its liability for contribution before Kotecki was decided. On the other hand, in arguing that Kotecki should be given prospective application, Centex insists that Kotecki was in fact new law. Thiel insists that it did not waive its right to raise its argument until after the trial because it could not have anticipated the Kotecki opinion. But, in arguing that Kotecki should have retrospective application, Thiel maintains that Kotecki was not a change in the law but rather an \u201cevolution\u201d of the law.\nWe believe that Centex\u2019s claim that Thiel waived its argument here is not to be dismissed lightly, particularly when we consider the concession made by Thiel, perhaps unwittingly, in its brief in this court:\n\u201cWhile litigants did not know the result prior to its filing, the Kotecki decision came as no great surprise. Undoubtedly, Defendant Centex\u2019s counsel was, like the rest of the Illinois trial bar, monitoring this decision. That Centex finds the decision not to its liking is no surprise, but Kotecki is applicable to this case.\u201d (Emphasis added.)\nWe further judge, however, that if waiver is present here, we should not invoke it.\nThe Kotecki opinion was published on April 18, 1991. It did not say expressly whether its application was to be prospective or retroactive. The opinion was without a dissent. Two justices abstained from participating. On May 9, the third-party plaintiff filed a petition for rehearing and alternatively requested that the opinion be modified to provide expressly that it was to apply only prospectively. On December 2, the supreme court denied the petition for rehearing with one justice dissenting and again with two justices abstaining from participation. The dissenting justice said that the opinion at least should address the question of whether the application of the opinion should be applied retroactively or prospectively. Kotecki, 146 Ill. 2d at 174 (Freeman, J., dissenting).\nIn Hux v. Raben (1967), 38 Ill. 2d 223, 230 N.E.2d 831, the supreme court said that the responsibility of a reviewing court for the maintenance of a sound and uniform body of precedent may override the considerations of waiver. We are not concerned here with the maintenance of a precedent but rather with the establishment of a precedent. Nonetheless we believe the rationale of Hux v. Raben is applicable here. The time of the application of Kotecki must be decided sometime by a reviewing court. Moreover, if we held that Thiel had waived the argument and the supreme court disagreed with our holding, it is not unlikely that the supreme court would remand the case to this court for the resolution of all remaining issues. (Cf. Waste Management of Illinois, Inc. v. Illinois Pollution Control Board (1991), 145 Ill. 2d 345, 585 N.E. 2d 606.) For the sake of finality, therefore, we will disregard any possible waiver of Thiel\u2019s right to claim the application of Kotecki, and we will decide whether Kotecki should be applied prospectively or retroactively.\nThiel maintains that decisions are to be applied retroactively \u201cunless the court expressly declares that its decision is a clear break with the past, such as when a court explicitly overrules its own past precedent, disapproves a practice *** it *** previously approved, or overturns a well-established body of lower court authority,\u201d citing Larrance v. Human Rights Comm\u2019n (1988), 166 Ill. App. 3d 224, 230, 519 N.E.2d 1203. A case is generally governed by the law as it exists when the judgment is rendered, not when the case is brought. GTE Automatic Electric Inc. v. Allphin (1976), 38 Ill. App. 3d 910, 913, 349 N.E.2d 654, aff\u2019d (1977), 68 Ill. 2d 326, 369 N.E.2d 841.\nHowever, courts have inherent power to determine whether their decisions should be applied prospectively or retroactively. (Larrance, 166 Ill. App. 3d at 230.) Whether a decision will be limited to prospective application depends upon whether the decision establishes a new principle of law, either by overruling clear past precedent on which litigants may have relied, or by deciding an issue of first impression whose resolution was not clearly foreshadowed. (Elg v. Whittington (1987), 119 Ill. 2d 344, 518 N.E.2d 1232.) If the decision establishes a new principle of law, the court should balance both sides of the issue in question by determining whether prospective application will advance or hinder the purpose of the rule, and the court should also consider whether there is any injustice or hardship in holding the decision retroactive. Castaneda v. Illinois Human Rights Comm\u2019n (1989), 132 Ill. 2d 304, 329, 547 N.E.2d 437, 448.\nBefore the Kotecki case was decided, the supreme court held that contribution claims against employers were not barred by the Workers\u2019 Compensation Act (Ill. Rev. Stat. 1981, ch. 48, par. 138.1 et seq.). (Doyle v. Rhodes (1984), 101 Ill. 2d 1, 461 N.E.2d 382.) The court in Doyle added the following:\n\u201cIn this connection, however, we feel compelled to invite the attention of the parties to the possible relevance of the provisions of section 5(b) of the Workers\u2019 Compensation Act (Ill. Rev. Stat. 1981, ch. 48, par. 138.5(b)). *** The extent to which any right of contribution from the employer under the Contribution Act may impact upon this right of recoupment by the employer has not been raised by the parties in their pleadings and consequently not briefed. At this point, absent the assistance of any guidance by the third-party plaintiff and the employer, and bearing in mind that this case is still at the pleading stage, we are not prepared to indicate how this aspect of the Compensation Act may affect the operation of the Contribution Act or what adjustments will be necessary because of the recoupment provision. Nevertheless, we caution that some accommodation between these two statutes may be in order.\u201d (Doyle, 101 Ill. 2d at 14-15.)\nExactly what \u201caccommodation\u201d would be necessary was not indicated in Doyle.\nAfter surveying the law of other States, the Illinois Supreme Court resolved this issue in Koteeki and adopted the Minnesota Supreme Court\u2019s position, holding that an employer\u2019s liability for contribution would be limited to the extent of its liability for workers\u2019 compensation payments.\nWe do not agree with Thiel that the supreme court in Koteeki \u201ctook care to emphasize that it was not announcing a \u2018change\u2019 in the law previously stated in Doyle v. Rhodes.\u201d Rather, the supreme court took care to emphasize that in Doyle v. Rhodes it had not decided the question of the extent of an employer\u2019s liability for contribution:\n\u201cContrary to [the third-party plaintiff\u2019s] suggestion, the question, as to whether or not there is a limit on the amount that an employer may be found liable for, was not answered in Doyle.\u201d Kotecki, 146 Ill. 2d at 162.\nThe majority in Koteeki addressed the third-party plaintiff\u2019s claim that a limitation on the amount of contribution would require a \u201cchange\u201d in the law and that any \u201cchange\u201d should be left to the legislature. In rejecting that argument the court referred to Alvis v. Ribar (1981), 85 Ill. 2d 1, 421 N.E.2d 886, which abolished the doctrine of contributory negligence despite the presence of six bills in the legislature:\n\u201cThe preceding discussion of legislative inaction prior to Alvis concerned a \u2018change\u2019 to be made in the common law. That discussion is equally applicable here, where the \u2018change\u2019 concerns how this court reconciles two, potentially conflicting, statutes.\u201d Kotecki, 146 Ill. 2d at 162.\nWe read the majority opinion in Koteeki to be a recognition that its holding constitutes a change in the law. There is no doubt about the position of the dissenting justice:\n\u201cThe rule established in this cause is so fundamental a change in the law of contribution that this court should avoid unnecessary confusion by the bench and bar of Illinois as to its application by explicitly stating whether it is to be applied retroactively or prospectively.\u201d (Emphasis added.) (Kotecki, 146 Ill. 2d at 174 (Freeman, J., dissenting).)\nWe conclude, therefore, that the supreme court recognized that in Kotecki it established a new principle of law. That being so, we must next decide whether retroactive application of Kotecki would hinder or advance its application and whether retroactive application would create an injustice or hardship.\nThiel has not advanced any reason why retroactive application of Kotecki to cases which have been tried before Kotecki was decided would further its application. Instead, Thiel seeks only to deprecate Centex\u2019s argument that the Kotecki decision substantially affects the liability among the parties and their respective trial strategies. Centex extends that argument on the question of hardship by pointing out that a direct defendant might be better served by abstaining from filing a third-party action against a culpable employer. The judge accepted that argument. He pointed out, and we paraphrase, that a jury, unaware of the limitation of the employer\u2019s liability, might be more likely to return a larger verdict against two defendants than it would against only the direct defendant. We agree with the reasoning of the trial judge. Unable to foresee the result in Kotecki, many defendants undoubtedly made a different strategic decision, and retroactive application of Kotecki to these defendants would be unjust.\nThe Federal cases cited by Thiel support a limitation of its application to cases in which trial had not commenced on the date that the Kotecki opinion was filed. All of those cases involved pretrial proceedings. See Doran v. Corn Products-U.S. (N.D. Ill. 1991), 776 F. Supp. 368; Moore v. Wausau Club (N.D. Ill. 1991), 777 F. Supp. 619; Fosco v. Transport International Pool (N.D. Ill. Sept. 19, 1991), No. 91\u2014C\u201462; Kalp v. American Can Co. (N.D. Ill. May 17,1991), No. 90\u2014C\u20144910.\nBecause the Kotecki opinion was a case of first impression which was not clearly foreshadowed by Doyle and because retroactive application of the decision would hinder its application and result in prejudice to many defendants, we hold that the Kotecki decision applies only to cases in which trial had not yet commenced on the date the Kotecki opinion was released. In view of our holding, it is unnecessary to discuss Thiel\u2019s argument that Kotecki was decided before a formal judgment order was entered. That part of the trial judge\u2019s order denying Thiel\u2019s motion to limit its liability in contribution to the extent of its workers\u2019 compensation liability is affirmed.\nWe turn now to Thiel\u2019s claim that Centex is barred from recovering from the Guaranty Fund more than the amount of its deductible of $100,000. The effect of the trial judge\u2019s order was to require the Fund to pay Centex $130,000.\nThe Illinois insurance guaranty fund act (the Act) was established to protect policyholders against the insolvency of their insurers. (Ill. Rev. Stat. 1989, ch. 73, par. 1065.82; Lucas v. Illinois Insurance Guaranty Fund (1977), 52 Ill. App. 3d 237, 367 N.E.2d 469.) The Guaranty Fund obtains its funds by assessing all insurance companies licensed to transact business in the State of Illinois based upon a percentage of their net direct written premiums. (Ill. Rev. Stat. 1989, ch. 73, par. 1065.87\u20146.) Those assessments are passed along to the insurance-buying public in the form of higher premiums. (Adams v. Illinois Insurance Guaranty Fund (1980), 85 Ill. App. 3d 867, 407 N.E.2d 638.) When an insurer is declared insolvent, the Fund assumes the defense of that company\u2019s insureds. In this case, the Fund took over Centex\u2019s defense when its insurer, Optimum Insurance Company of Illinois, was declared insolvent.\nThe Fund covers all claims covered under the policy except:\n\u201cany claim for any amount due any reinsurer, insurer, insurance pool, or underwriting association as subrogated recoveries, reinsurance recoverables, contribution, indemnification or otherwise. No such claim held by a reinsurer, insurer, insurance pool, or underwriting association may be asserted in any legal action against a person insured under a policy issued by an insolvent company other than to the extent such claim exceeds the Fund obligation limitations set forth in Section 537.2 of this Code.\u201d Ill. Rev. Stat. 1989, ch. 73, par. 1065.84\u20143(b)(v).\nCentex was insured under a policy issued by Travelers Insurance Company to a limit of $500,000 per occurrence with a $100,000 deductible. Thiel argues that any recovery in contribution above Centex\u2019s $100,000 deductible, which would be $30,000, is a claim \u201cheld by\u201d Centex\u2019s insurer, Travelers, and is therefore not a covered claim under the Act. The trial judge held that Centex\u2019s claim was not \u201cheld by\u201d Travelers because only .Centex, as a joint tortfeasor, held the right to bring that action and to recover under the Contribution Act.\nMany other States have enacted legislation similar to the Illinois statute. All courts construing those statutes speak with one voice when addressing the rights of solvent insurers to sums of money which would come from a guaranty fund. In the first Illinois case to do so, Pierre v. Davis (1987), 165 Ill. App. 3d 759, 760, 520 N.E.2d 743, 744, the appellate court said:\n\u201cSince all Illinois licensed insurers contribute to the Illinois Guaranty Fund, the philosophy of the Fund is to have all potential claims against the Fund\u2019s assets reduced by a solvent insurer, not the [F]und, wherever possible.\u201d\nIn Pierre, the plaintiff\u2019s workers\u2019 compensation insurer had intervened in the action seeking recovery of its statutory lien. The court held that the plaintiff could not recover damages from the Fund, because the lien made the judgment an amount due an insurer as a subrogated recovery or otherwise. Similarly, in Herriford v. Boyles (1990), 193 Ill. App. 3d 947, 550 N.E.2d 654, the plaintiff\u2019s insurer claimed a lien against his recovery; the court held that the insurance company\u2019s lien could not be paid from the assets of the Fund. In Cardiel v. Warren (1989), 191 Ill. App. 3d 816, 548 N.E.2d 1081, the plaintiff had assigned to the insurance company her entire interest in any judgment paid. The court held that the plaintiff\u2019s claim was \u201cheld by\u201d the insurance company and, therefore, was not a covered claim under the Act.\nThe trial judge in this case accepted Centex\u2019s argument that Cardiel and Pierre were distinguishable because Centex had not assigned its right to Travelers and Travelers had not asserted a lien. Centex repeats that argument in this court. The issue, therefore, boils down to whether we may properly say that the claim is, in fact, held by Centex rather than Travelers.\nIn this court Centex takes pains to distance itself from any suspicion that Travelers will ultimately receive any money the Fund might pay Centex. We disagree with Centex that there is nothing in the post-trial proceedings that might be construed as a concession that Travelers would be the ultimate beneficiary of any money paid to Centex by the Fund. At the post-trial motion, Thiel\u2019s attorney argued that the $30,000 was going to go to Travelers. The following occurred:\n\u201c[THIEL\u2019S ATTORNEY]: But nobody has ever challenged the idea that it\u2019s Travelers\u2019 $30,000 we are arguing about here, not Centex\u2019. Travelers is the real party in interest for getting its hands on that $30,000. It is not going into Centex\u2019 pocket.\nJUDGE: That\u2019s conceded. That ultimately Travelers would have a claim against Centex for the $30,000 that it collects.\n[THIEL\u2019S ATTORNEY]: Right.\nJUDGE: Everybody agrees with that.\n* * *\n[THIEL\u2019S ATTORNEY]: I mean, eventually that $30,000 is Travelers\u2019 claim and they\u2019re going to want their money. It\u2019s not going to be money that goes into the pocket of Centex. It\u2019s going to be money that goes into the pocket of Travelers.\nJUDGE: Yes, but that\u2019s not what the statute prohibits. That\u2019s the problem I have. The statute doesn\u2019t prohibit them from just \u2014 you know, Centex distributing the whole $130,000 to Travelers, if they felt generous, saying \u2018You folks had the usual expense for a defense, ah, we\u2019ll just give it to you.\u2019\n* * *\n[THIEL\u2019S ATTORNEY]: You\u2019re not denying that the $30,000 is Travelers\u2019?\n[CENTEX\u2019S ATTORNEY]: I don\u2019t honestly know where it\u2019s going to go, Gene. I really don\u2019t, how its [sic] going to get parceled out.\nJUDGE: The assumption would be that they would.\n[CENTEX\u2019S ATTORNEY]: The assumption would be that it\u2019s going to go to Travelers. I agree with that.\n* * *\nJUDGE: I have a very strong suspicion that $30,000 is going to wind up in Travelers\u2019 hands.\n[THIEL\u2019S ATTORNEY]: $30,000 would wind up in Travelers\u2019 hands.\nTHE COURT: Exactly.\u201d (Emphasis added.)\nWe believe that colloquy between the judge and counsel discloses a tacit concession that Travelers would ultimately take steps to insure that the $30,000, or at least a part of it, went to Travelers. Indeed, a strong argument may be made that the agents for Travelers would be acting in violation of their fiduciary obligations to Travelers if they did not take such steps.\nCentex also argued in the trial court and continues to argue in this court that, since Illinois does not permit direct actions against insurers, Travelers could not pursue a contribution claim against Thiel. The trial judge\u2019s acceptance of that argument appears to be the linchpin of his holding. We believe the recent case of Prudential Insurance Co. v. Romanelli (1993), 243 Ill. App. 3d 246, is a clear answer against Centex\u2019s argument. In that case Prudential settled a claim against its insured, who had filed a claim for contribution against a third party. The trial judge ordered that Prudential pursue its contribution claim in its own name. The appellate court upheld the order on the ground that Prudential became the subrogee of its insured under the express provisions of the Contribution Act. (Ill. Rev. Stat. 1989, ch. 70, par. 302(f).) The appellate court held that Prudential became the real party in interest and that the insured no longer had any interest in the subrogated claim. So also in this case, Travelers became the subrogee of $30,000 of any claim Centex might have against Thiel for contribution. We hold, therefore, that Travelers held a \u201cclaim\u201d for $30,000 regardless of whether it sought to formally assert it and that its claim was not a covered claim under the Act. To hold otherwise would be an invitation to insurers to avoid the intent of the Act by sub rosa arrangements with their insureds.\nThiel also argues that Centex\u2019s claim to $30,000 from the Fund is barred by what has been described as the \u201cnon-duplication of recovery\u201d provision in the Act. (Ill. Rev. Stat. 1989, ch. 73, par. 1065.96(a).) That section of the Act provides as follows:\n\u201cAny insured or claimant having a covered claim against the Fund shall be required first to exhaust his rights under any provision in any other insurance policy which may be applicable to the claim. Any amount payable on a covered claim under this Article shall be reduced by the amount of such recovery under such insurance policy.\u201d Ill. Rev. Stat. 1989, ch. 73, par. 1065.96(a).\nIt is the position of Thiel that Centex must first exhaust its claim against Travelers before it may recover from the Fund. We agree with Thiel. We do not agree with Centex that Thiel has waived this argument or that the nonduplication provision refers only to uninsured motorist cases. The language of the Act imposes no such restriction on its application. We do agree with Thiel that if the claim asserted by Centex is a covered claim, Centex is obliged to exhaust its right to $30,000 from Travelers first. A strong argument may be made that the nonduplication provision was designed to prevent any sub rosa arrangements between an insured and a solvent insurer at the expense of the Fund.\nFor these reasons we reverse that part of the order which denied Thiel\u2019s post-trial motion to limit Centex\u2019s recovery to $100,000 from the Fund.\nJudgment affirmed in part and reversed in part.\nMcNAMARA, P.J., and RAKOWSKI, J., concur.", "type": "majority", "author": "JUSTICE EGAN" } ], "attorneys": [ "Greenberg, Keele, Lunn & Aronberg, of Chicago (Mitchell S. Goldgehn and Gene H. Hansen, of counsel), for appellant.", "Baker & McKenzie, of Chicago (Francis D. Morrissey, Michael A. Pollard, Richard B. Foster III, and Moira Ann Dages, of counsel), for appellee." ], "corrections": "", "head_matter": "GORDON L. NORBERG, Plaintiff, v. CENTEX HOMES CORPORATION, Defendant and Third-Party Plaintiff-Appellee (R & D Thiel, Inc., Third-Party Defendant-Appellant).\nFirst District (6th Division)\nNo. 1\u201491\u20142498\nOpinion filed January 22, 1993.\nModified on rehearing April 30, 1993.\nGreenberg, Keele, Lunn & Aronberg, of Chicago (Mitchell S. Goldgehn and Gene H. Hansen, of counsel), for appellant.\nBaker & McKenzie, of Chicago (Francis D. Morrissey, Michael A. Pollard, Richard B. Foster III, and Moira Ann Dages, of counsel), for appellee." }, "file_name": "0267-01", "first_page_order": 285, "last_page_order": 295 }