author: JUSTICE LaPORTA

text:
    CINCINNATI INSURANCE COMPANY, Plaintiff-Appellant and Cross-Appellee, v. SUSAN MILLER, Defendant-Appellee and Cross-Appellant.
    First District (6th Division)
    No. 1—88—1603
    Opinion filed October 27, 1989.

      Hinshaw, Culbertson, Moelmann, Hoban & Fuller, of Chicago (Stephen R. Swofford, Peter C. Morse, and Robert G. Black, of counsel), for appellant.
    Jay A. Baier, Ltd., of Chicago (Jay A. Baier and Joseph P. Schreiber, of counsel), for appellee.
   JUSTICE LaPORTA

delivered the opinion of the court:

On August 24, 1985, defendant, her husband, and three other persons were on a family vacation in the van which defendant had purchased for her sole day-care business, The Children’s Discovery Center. While in Utah, the van was struck by an uninsured motorist.

Defendant’s husband, who was driving, suffered only minor injuries, but all four passengers in the van were hospitalized. Defendant was the most severely injured, ultimately undergoing a below-the-knee amputation of her right leg. At the time of the accident, defendant was approximately 11 weeks pregnant. Defendant’s injuries included a claim for the loss of the fetus. Her medical expenses totaled $105,447.48.

The van was insured under a business auto liability policy issued to The Children’s Discovery Center, covering both the van and a second vehicle. The business auto policy included uninsured motorist coverage with limits of $100,000 per individual and $300,000 per accident. The Children’s Discovery Center was also insured under a commercial umbrella liability policy which provided additional insurance coverage in excess of amounts in certain listed underlying insuranee policies, including the automobile policy, up to $1 million. Plaintiff issued both the automobile policy and the umbrella policy.

Plaintiff filed its complaint for declaratory judgment against defendants Susan Miller, the sole proprietor of Children’s Discovery Center, her husband Larry Miller, and the estate of Baby Miller. The suit sought a declaration by the court of the rights and liabilities of the parties under the business auto liability policy and the commercial umbrella liability policy issued to the Children’s Discovery Center by the plaintiff. The complaint alleged (1) that both policies were in effect on the date of the accident, (2) that defendant Susan Miller was injured, (3) that plaintiff had paid her $100,000, which was the limit under the uninsured motorist coverage of the business auto liability policy, and (4) that payment of $100,000 represented full satisfaction of plaintiff’s obligation to defendant. The complaint further alleged that an actual controversy existed between the parties, because the defendant took the position that uninsured motorist coverage under the business auto liability policy could be stacked to provide a $200,000 limit since the policy insured two vehicles. The defendants also took the position that plaintiff was required to offer uninsured motorist coverage in its commercial umbrella liability policy under the requirements of the Illinois Insurance Code (Ill. Rev. Stat. 1983, ch. 73, par. 755a) and having failed to do so, plaintiff breached a duty to defendants.

Defendants moved for summary judgment and a finding that by operation of law the commercial umbrella liability policy contains uninsured motorist coverage limits in the amount of $1 million and a finding that the business auto liability policy contains uninsured motorist coverage limits of $200,000 per person and $600,000 each accident.

By an agreed order, defendants Susan Miller and Larry Miller were appointed jointly as special administrators of the estate of Baby Miller for purposes of this litigation. Subsequently settlement was reached for the death of the fetus, and all defendants except Susan Miller were dismissed. For purposes of this appeal, all references in this opinion to defendant refer to Susan Miller.

Plaintiff moved for summary judgment and for a finding that the uninsured motorist coverage under the business auto liability policy may not be stacked and/or a declaration that the Illinois Insurance Code does not require an insurer to offer uninsured motorist coverage on its umbrella policy whether the policy was designated as a commercial lines or personal lines policy.

The trial court ruled in favor of plaintiff and against defendant on the question of stacking, thereby limiting the recovery under the business auto liability policy’s uninsured motorist coverage to defendant to the $100,000 amount already paid. The trial court ruled in favor of defendant and against plaintiff on their respective summary judgment motions on the question of the alleged requirements to offer uninsured motorist coverage under the commercial umbrella policy. Defendant then filed a motion for finding that by operation of law the commercial umbrella liability policy issued by plaintiff contains uninsured motorist coverage with limits of $1 million.

Following a full hearing the trial court made the following findings and declaration of rights and obligations: (1) Under the statutory language of section 143a — 2 of the Insurance Code (Ill. Rev. Stat. 1983, ch. 73, par. 755a — 2), plaintiff had an affirmative duty to offer uninsured motorist coverage to the insured defendant under the commercial umbrella liability policy; (2) from the evidence produced at the hearing, the court found the defendants would have purchased $500,000/$! million uninsured motorist coverage under the umbrella policy if it had been offered; (3) the defendant’s motion for finding that by operation of law the umbrella policy included uninsured motorist coverage of $1 million was denied; and (4) the uninsured motorist coverage under the business auto liability coverage was limited to $100,000 and defendant’s motion with respect to stacking to increase coverage to $200,000 under that policy was denied.

Plaintiff appeals from the trial court’s decision which held that plaintiff insurer had a duty to offer uninsured motorist coverage to defendant as part of its commercial liability coverage. Defendant appeals the trial court’s decision which denied stacking of coverage under the business auto liability policy to double the policy limits and further appeals the court’s decision in denial of defendant’s motion for a finding that by operation of law the commercial umbrella policy included uninsured motorist coverage with limits equal to the bodily injury liability limits of the policy. Defendant argues that the trial court’s ruling was contrary to the manifest weight of the evidence and based on inadmissible evidence.

We first consider the nature of the insurance coverage purchased by defendant. Plaintiff issued a business auto liability policy for the period from October 5, 1984, to October 5, 1989, naming as the insured The Children’s Discovery Center, operated by the defendant as a sole proprietorship. The automobile schedule attached to the policy identified as the covered autos a 1979 Plymouth Van and “Hired and Non-Owned” vehicles. On July 22, 1985, by automobile change endorsement, a 1985 Plymouth Voyager was added to the policy coverage and an additional premium was paid. This is the vehicle involved in the accident on August 24, 1985. The policy provided liability insurance with bodily injury limits of $100,000 each person/$300,000 each accident and property damage liability $50,000 each accident, automobile medical payments insurance with a $5,000 limit, uninsured motorists insurance with bodily injury limits of $100,000 each person/ $300,000 each accident, comprehensive physical damage coverage, collision physical damage coverage less $250 deductible, and towing and labor coverage of $25 for each disabled auto.

Plaintiff issued its separate commercial umbrella liability policy with liability limits of $1 million each occurrence and $1 million aggregate for the period from October 5, 1984, to October 5, 1987, naming as the insured The Children’s Discovery Center. The coverage portion of the policy provided: “We will pay on behalf of the insured the ultimate net loss for occurrences during the policy period in excess of the underlying insurance or for occurrences covered by this policy which are either excluded or not covered by underlying insurance because of Personal Injury, Property Damage or Advertising Liability, anywhere in the world.” The underlying policies listed in Schedule A were three policies issued by plaintiff for employer’s liability coverage, comprehensive general liability, including contractual liability, completed operations, products liability, personal injury liability, and the business auto liability policy, including owned automobiles, nonowned automobiles and hired automobiles in this appeal. The umbrella policy contained no separate endorsement provision for uninsured motorist coverage.

When a court interprets an insurance policy, there are only two sources upon which it may base its analysis: the plain language of the policy and the plain language of the Insurance Code of 1937 as it existed at the time the policy was written. (Bailey v. State Farm Fire & Casualty Co. (1987), 156 Ill. App. 3d 979, 984, 509 N.E.2d 1064, 1067.) Unless an ambiguity exists, the court should not refer to other materials. (Price v. State Farm Mutual Automobile Insurance Co. (1983), 116 Ill. App. 3d 463, 470, 452 N.E.2d 49, 52.) When interpreting the effects of a statute, all relevant parts of the statute must be read in conjunction, not in isolation. People v. Jordan (1984), 103 Ill. 2d 192, 206, 469 N.E.2d 569, 576.

The Illinois Insurance Code of 1937 at section 4 classifies insurance into three major groups as: Class 1 — life, accident and health; Class 2 — casualty, fidelity and surety; and Class 3 — fire and marine, etc. (Ill. Rev. Stat. 1983, ch. 73, par. 616.) The policies in this appeal are properly classified as casualty insurance under the Class 2 group identified in the statute. In section 4, the statute further defines and distinguishes auto liability insurance from liability insurance in the following manner:

“Class 2 ***
* * *
(b) Vehicle. Insurance against any loss or liability resulting from or incident to the ownership, maintenance or use of any vehicle (motor or otherwise), draft animal or aircraft. Any policy insuring against any loss or liability on account of the bodily injury or death of any person may contain a provision for payment of disability benefits to injured persons and death benefits to dependents, beneficiaries or personal representatives of persons who are killed, including the named insured, irrespective of legal liability of the insured, if the injury or death for which benefits are provided is caused by accident and sustained while in or upon or while entering into or alighting from or through being struck by a vehicle (motor or otherwise), draft animal or aircraft, and such provision shall not be deemed to be accident insurance.
(c) Liability. Insurance against the liability of the insured for the death, injury or disability of an employee or other person, and insurance against the liability of the insured for damage to or destruction of another person’s property.” Ill. Rev. Stat. 1983, ch. 73, par. 616.

Liability insurance protects the insured from financial losses for claims brought by other persons which are legally recoverable against the insured. In contrast and regardless of insured’s liability, uninsured motorist coverage protects the insured from financial losses for his or her injury, death or property damage caused by and legally recoverable from another person who owns and/or operates an uninsured motor vehicle. The “Class 2 Vehicle” insurance definition of the statute clearly is broad enough to include uninsured motorist coverage while the “Class 2 Liability” statutory definition is not.

The defendant purchased from plaintiff business auto liability insurance coverage which also included uninsured motorist coverage by the addition of a specific endorsement. The defendant also purchased from plaintiff a commercial umbrella liability policy which contained no specific endorsement for uninsured motorist coverage.

Defendant made claims for her medical expenses under both the business auto policy’s uninsured motorist coverage and under the commercial umbrella policy, in the belief that the umbrella policy included uninsured motorist coverage in excess of the limits in the business auto liability policy. When plaintiff rejected defendant’s claim under the umbrella policy, defendant filed her summary judgment motion, citing sections 143a and 143a — 2 of the of the Illinois Insurance Code (Ill. Rev. Stat. 1983, ch. 73, pars. 755a, 755a — 2) for the proposition that plaintiff had a duty to offer uninsured motorist coverage under the umbrella policy, and having failed to do so, plaintiff had breached its statutory duty to defendant. Defendant argued further that because plaintiff breached its duty, the court should find as a matter of law that the umbrella policy included uninsured motorist coverage with limits of $1 million in excess of the underlying auto policy.

Section 143a of the Illinois Insurance Code requires that on or after July 1, 1963, all automobile insurance policies must include coverage “provided therein or supplemental thereto, in limits for bodily injury or death set forth in Section 7 — 203 of the Illinois Vehicle Code (Ill. Rev. Stat. 1983, ch. 951/2, par. 7 — 203) for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles *** because of bodily injury, sickness or disease, including death, resulting therefrom.” (Ill. Rev. Stat. 1983, ch. 73, par. 755a(l).) Section 7 — 203 of the Illinois Vehicle Code set minimum limits for bodily injury at $15,000 per person and $30,000 per accident. Ill. Rev. Stat. 1983, ch. 95x/2, par. 7 — 203.

Section 143a — 2 of the Illinois Insurance Code requires that the insurer offer additional uninsured motorist coverage over the minimum specified in the Illinois Vehicle Code in an amount up to the insured’s bodily injury limits and provided that the insured had the right of election or rejection of the additional uninsured motorist coverage. The business auto liability policy purchased by defendant from plaintiff met this statutory requirement and defendant recovered $100,000 for her injuries under its uninsured motorist coverage.

At issue is whether the statutory requirement to offer additional uninsured motorist coverage applies to the commercial umbrella liability policy issued by the plaintiff to this defendant. Section 143a — 2(6) provides in pertinent part “[ijnsurers providing personal liability coverage on an excess or umbrella basis are neither required to offer, nor are they prohibited from offering or making available coverages conforming to this Section on a supplemental basis.” Ill. Rev. Stat. 1983, ch. 73, par. 755a-2(6).

We note that section 143a — 2 of the Illinois Insurance Code became effective on August 16, 1982. Prior to that date, in Hartbarger v. Country Mutual Insurance Co. (1982), 107 Ill. App. 3d 391, 437 N.E.2d 691, the court considered an interpretation of the requirement under section 143a urged by an insured that uninsured motorist insurance should be declared by the court to be included in an umbrella policy which identified the primary automobile liability policy as an underlying policy to the umbrella coverage. In finding the uninsured motorist coverage was not included in the umbrella policy absent any express provision for uninsured motorist coverage and absent any ambiguity in the policy terms, the court analyzed umbrella coverage as “[a]n umbrella liability policy is generally designed to protect the insured from a judgment against him in an amount greater than that provided for in the underlying policies.” (Hartbarger, 107 Ill. App. 3d at 394, 437 N.E.2d at 693.) The Hartbarger court found that umbrella policy coverage is entirely different from coverage under an automobile policy and found that both insured and insurer intended that this umbrella policy was to protect the insured against excess judgments in favor of others. (Hartbarger, 107 Ill. App. 3d at 396, 437 N.E.2d at 694.) The court refused to rewrite provisions of the umbrella policy which it found unambiguous in order to expand coverage for the benefit of the insured, and found that section 143a of the Illinois Insurance Code did not require uninsured motorist coverage in the umbrella policy. Hartbarger, 107 Ill. App. 3d at 396, 437 N.E.2d at 694.

We find the Hartbarger court’s analysis that the intended purpose of umbrella policy coverage is to protect an insured from judgments in favor of a claimant against the insured in an amount greater than the auto liability policy to be a compelling argument in our case.

We construe the word “liability” in these insurance policies to mean liability for injuries or other losses to persons other than the insured. If an insurance policy contained no express uninsured or under-insured coverage provision, the insured could not recover on his own liability policy. The umbrella policy here listed as underlying auto policy coverage only the bodily injury liability for automobiles owned or operated by the insured and made no reference to uninsured motorist coverage for bodily injury suffered by the insured.

By amendment to the Illinois Insurance Code, the legislature added section 143a — 2, which mandated that the insurer offer additional uninsured motorist coverage above the minimum required in section 143a prior to issuance of any new or renewed automobile insurance policy. Section 143a — 2(6) also provides: “Insurers providing personal liability coverage on an excess or umbrella basis are neither required to offer, nor are they prohibited from offering or making available coverages conforming to this Section on a supplemental basis.” Ill. Rev. Stat. 1983, ch. 73, par. 755a — 2(6).

We construe the statutory language “personal liability coverage on an excess or umbrella basis” of section 143a — 2(6) to mean liability coverage in its plain sense. We find no distinction here between the word “personal” in the statute and the word “commercial” in the umbrella caption. Here the insured is The Children’s Discovery Center, operated by the defendant, who alone is personally liable for its activities because she is a sole proprietor. The umbrella policy covers the liability which might befall the defendant personally in her operation of The Children’s Discovery Center. The statutory language which permits but clearly does not require insurer to offer her the additional uninsured motorist coverage of section 143a — 2 under this umbrella policy imposes no duty on the insurer to offer it, and therefore, the trial court’s finding that insurer had such a duty and that insurer was guilty of a breach of duty for failing to offer the coverage should be reversed.

In summary we find that when the Illinois Insurance Code statutory provisions are read together, section 143a requires that an automobile policy must include uninsured motorist coverage in a minimum amount of $15,000/$30,000 as required by the Illinois Vehicle Code, that section 143a — 2 requires an insurer to offer, and the insured can accept or reject, additional uninsured motorist coverage up to the maximum liability limits of the automobile policy, and that section 143a — 2(6) provides that the insurer may but is not required to offer additional uninsured motorist coverage on an excess basis under the umbrella policy. Ill. Rev. Stat. 1983, ch. 73, pars. 755a, 755a — 2(1), 755a — 2(6); Ill. Rev. Stat. 1983, ch. 95V2, par. 7-203.

For all of the same reasons, the court’s findings that the defendant would have purchased uninsured motorist coverage under the umbrella policy in limits of $500,000 is speculative, and because the plaintiff was not required to offer uninsured motorist coverage on an excess basis, we hold this finding of the trial court to be reversible error.

We next consider the question of stacking the uninsured motorist coverage under the business auto liability policy in an attempt to recover to the full policy limit twice because two vehicles are covered under the policy.

Defendant argues that the trial court erred in granting plaintiff summary judgment on the question of whether defendant could stack the uninsured motorist coverage for both vehicles covered by the automobile liability policy to double her recovery. Where adequate uninsured motorist coverage exists, a clause which clearly and unambiguously prohibits stacking will be upheld. Menke v. Country Mutual Insurance Co. (1980), 78 Ill. 2d 420, 424-25, 401 N.E.2d 539, 541-42.

In this business auto liability policy, the uninsured motorist endorsement provides: “Regardless of the number of covered autos, insureds, claims made or vehicles involved in the accident, our limit of liability is as follows: a. The most we will pay for all damages resulting from bodily injury to any one person caused by any one accident is the limit shown in this endorsement for ‘each person’, b. Subject to the limit for ‘each person’ the most we will pay for all damages resulting from bodily injury caused by any one accident is the limit shown in this endorsement for ‘each accident’.” The uninsured motorist limits of the policy for bodily injury are $100,000 each person and $300,000 each accident.

The Illinois Insurance Code, section 143a — 2, which requires uninsured motorist coverage, also provides “the limits of liability under this Section shall not be increased because of multiple motor vehicles covered under the same policy of insurance.” (Ill. Rev. Stat. 1983, ch. 73, par. 755a — 2(6).) Clearly, the trial court did not err in granting plaintiff summary judgment on the issue of stacking.

The judgment of the trial court in favor of plaintiff and against defendant on the issue of stacking is affirmed. The judgment of the trial court in favor of defendant and against plaintiff on the issue of whether the insured was required to offer excess uninsured motorist coverage under the umbrella policy and the court’s finding that defendant would have purchased such coverage in the sum of $500,000 is reversed.

Affirmed in part; reversed in part.

McNAMARA and QUINLAN, JJ., concur.


source: Caselaw Access Project

author: JUSTICE McNAMARA

license: Public Domain

text:
    UNITED STATES FIDELITY AND GUARANTY COMPANY, Plaintiff-Appellee, v. KLEIN CORPORATION et al., Defendants (Donna G. Klein, Defendant-Appellant).
    First District (6th Division)
    Nos. 1—88—2050, 1—88—3332 cons.
    Opinion filed October 27, 1989.

      Donald L. Johnson and Michael P. Fiflis, both of Johnson & Schwartz, of Chicago, for appellant.
    Hinshaw, Culbertson, Moelmann, Hoban & Fuller, of Chicago (D. Kendall Griffith, Lawrence R. Moelmann, and Bruce L. Carmen, of counsel), for appellee.
   JUSTICE McNAMARA

delivered the opinion of the court:

Defendants, Donna G. Klein and Klein Corporation, each appeal from separate orders granting summary judgment in favor of plaintiff, United States Fidelity and Guaranty Company (USF&G). The cases were consolidated on appeal. Defendants contend that the order granting USF&G’s motion for summary judgment was improperly entered where the evidence presented was incomplete and subject to multiple interpretations, that USF&G is not entitled to indemnity, and that the trial court erroneously found that there was no just reason to delay enforcement or appeal of its order.

The relevant facts are as follows. On April 1, 1982, USF&G entered into a master surety agreement with Klein Construction Company and various corporations controlled by Wayne Klein, Donna Klein’s husband. The agreement was executed by Donna Klein.

On or about July 19, 1984, Klein Construction entered into a construction contract with the Chicago Transit Authority (the CTA). Klein Construction agreed to act as general contractor for the construction of a bus facility. The contract price was $25,686,000. USF&G issued performance and payment bonds in that sum, with Klein Construction as principal and the CTA as obligee.

On August 20, 1986, Klein Construction filed a petition for reorganization under chapter 11 of the Bankruptcy Code. On October 15, 1986, the CTA informed USF&G that Klein Construction had defaulted under the construction contract. The CTA demanded that USF&G fulfill its obligations as surety under the performance bond. The master surety agreement provides:

“In the event of *** (2) any *** default in any contract secured by BOND(s) *** SURETY shall have the right, in its discretion, to take possession of any part or all of the work under contracts) secured by BOND(s) *** and, at the expense of UNDERSIGNED [defendant], to complete or cause completion of any such work, or relet or consent to the reletting or completion of such contract ***.”

Prior to the date of default, the CTA had paid Klein Construction and its subcontractors $15,653,143.61 under the construction contract. After adjustments due to change orders, there remained a balance of $10,808,567.79 to be paid pursuant to the contract.

On October 23, 1986, USF&G filed suit against Klein Corporation, Wayne J. Klein and Donna Klein. USF&G alleged, among other things, that it was entitled to be reimbursed for various amounts it paid pursuant to the bonds.

On February 20, 1987, USF&G, the CTA and Paschen Contractors, Inc., entered into a tri-party contract assumption agreement for the completion of the CTA project. The parties executed a supplemental and an auxiliary agreement on March 5, 1987. The CTA accepted USF&G’s offer of Paschen as completing contractor, and agreed to pay Paschen $10,808,000 less amounts paid by the CTA under a previous estimate. Paschen was required to deliver to the CTA performance and payment bonds in the sum of $10,808,567.79. The CTA agreed to pay Paschen that amount and to look to Paschen and its surety as primary obligors in the event of a default by Paschen.

The CTA also agreed to reduce the penal limits of USF&G’s performance bond by the following sums: the amounts paid for enclosure of the building and for all other work done subsequent to the CTA’s demand of October 15, 1986; the amounts paid by USF&G to Paschen as completing or interim contractor; and the amounts paid by USF&G to satisfy claims for labor or material used or reasonably required by any third person in the performance of the contract.

On December 23, 1987, USF&G filed a motion for partial summary judgment against Donna Klein, and on August 3, 1988, USF&G filed a motion for summary judgment against Klein Corporation. In each motion, USF&G alleged that it had paid $5,580,128.70 pursuant to its indemnity agreement with defendants. The motions sought judgment in the amount of $5,315,869.10 and reserved the right to proceed against defendants in the future for other amounts paid pursuant to the indemnity agreement. In support of the motion, USF&G filed the affidavit of Anna Nolc Ramirez. Ramirez is a claims officer at USF&G and is in charge of handling all claims on performance and payment bonds issued to Klein Construction as principal. The affidavit stated that USF&G entered into various contracts and made various payments to contractors, that USF&G had paid Paschen $3,122,299.80, and had paid subcontractors $2,193,569.96. Attached to the affidavit were photocopies of the checks representing those payments.

On June 1, 1988, the trial court granted USF&G’s motion and entered judgment in favor of USF&G in the amount of $5,315,869.10. The court found that there was no just reason to delay enforcement or appeal of the order.

Defendants first contend that USF&G was not entitled to indemnity from defendants for payments it made. Defendants argue that USF&G made the payments either in bad faith or as a volunteer, without legal obligation as a surety. USF&G maintains, however, that defendants’ contention is based merely on speculation, conjecture and innuendo, and accordingly, fails to raise a genuine issue of material fact which would preclude entry of summary judgment.

On a motion for summary judgment, the trial court must determine whether there is a genuine issue as to any material fact that requires a trial. (Bezin v. Ginsburg (1978), 59 Ill. App. 3d 429, 375 N.E.2d 468.) The motion should be granted when the pleadings, exhibits, depositions, and affidavits of record show that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 1005.) Nonetheless, summary judgment should be granted only where the evidence, when construed most strongly against the moving party, establishes clearly and without doubt his right thereto. Marquette National Bank v. Heritage Pullman Bank & Trust Co. (1982), 109 Ill. App. 3d 532, 440 N.E.2d 1033.

The right to indemnification may arise either by reason of contract or by reason of common law indemnity principles. (Tiffing Decorating Co. v. General Accident Fire & Life Assurance Corp. (1973), 12 Ill. App. 3d 597, 299 N.E.2d 378.) An indemnification contract is to be given a fair and reasonable interpretation based upon a consideration of all its language and provisions. (Bates v. Select Lake City Theater Operations Co. (1979), 78 Ill. App. 3d 153, 397 N.E.2d 75; Burns v. Ford Motor Co. (1974), 29 Ill. App. 3d 585, 331 N.E.2d 325.) Further, an indemnity contract or provision is to be construed as any other contract, and its meaning is to be determined from the language contained therein unless such language is ambiguous (Mosley v. Northwestern Steel & Wire Co. (1979), 76 Ill. App. 3d 710, 394 N.E.2d 1230), and a surety is entitled to stand on the language of the contract (Fidelity & Deposit Co. v. Bristol Steel & Iron Works, Inc. (4th Cir. 1983), 722 F.2d 1160).

The claim against defendants was grounded in paragraphs 111(A) and IV(A) of the master surety agreement. Paragraph 111(A) provides:

“UNDERSIGNED shall exonerate, indemnify and keep indemnified SURETY from and against any and all liabilities, losses and expenses of whatsoever kind or nature (including but not limited to, interest, court costs and counsel fees) imposed upon, sustained, or incurred by SURETY by reason of: (1) SURETY having executed, provided or procured BOND(S) on behalf of PRINCIPAL, or (2) UNDERSIGNED’S failure to perform or comply with any of the provisions of this AGREEMENT.”

Paragraph IV(A) provides:

“The liability of UNDERSIGNED hereunder shall extend to and include all amounts paid by SURETY in good faith under the belief that: (1) SURETY was or might be liable therefor; (2) such payments were necessary or advisable to protect any of SURETY’S rights or to avoid or lessen SURETY’S liability or alleged liability ***.”

Thus, the contract expressly provided that if USF&G believed in good faith that it might be liable for the payments, it was entitled to indemnity from defendants for payments made. Although defendants correctly note that an indemnitee owes its indemnitor a duty of good faith and fair dealing (Nogacz v. Procter & Gamble Manufacturing Co. (1975), 37 Ill. App. 3d 636, 347 N.E.2d 112), the contract here vested USF&G with discretion limited only by a showing of fraud or bad faith. See, e.g., Hess v. American States Insurance Co. (Tex. Civ. App. 1979), 589 S.W.2d 548.

Defendants maintain that their response to USF&G’s motion for partial summary judgment sufficiently raises the issues of fraud or bad faith. We disagree. Defendants have offered nothing in the way of counteraffidavit or documentary evidence that the payment was not “necessary or advisable to protect any of [USF&G’s] rights or to avoid or lessen [USF&G’s] liability or alleged liability.” We do not believe that USF&G’s failure to specifically allege good faith gives rise to an inference that it acted in bad faith.

Defendants cite La Salle National Bank v. Illinois Housing Development Authority (1986), 148 Ill. App. 3d 158, 498 N.E.2d 697, for the proposition that due to the nature of a summary judgment petition, the failure of USF&G to submit evidence that payments it made were in good faith, were reasonable, or were its legal obligation give rise to an inference that the payments were unnecessary, unreasonable, and in bad faith. Defendants incorrectly interpret the La Salle National Bank case.

In La Salle National Bank, the court examined a mortgage agreement with an accompanying mortgage note together with a related bond resolution. Plaintiff moved for summary judgment, the trial court granted plaintiff’s motion, and defendant appealed, alleging that a genuine issue of material fact existed. This court agreed with defendant’s contention. The court, however, did not base its decision on the failure of the parties to submit evidence of good-faith compliance with the contract terms. Rather, the court found that the trial court had erred in failing to recognize the language in the contract which gave defendant discretion to permit certain payments. La Salle National Bank v. Illinois Housing Development Authority (1986), 148 Ill. App. 3d 158, 498 N.E.2d 697.

Here, the trial court properly recognized the discretionary language in the master surety agreement which specifically stated that USF&G was entitled to indemnity from defendants provided it believed in good faith that it might be liable for the payments. Although the courts in this jurisdiction have not interpreted similar language, in Hess v. American States Insurance Co., comparable language was construed to vest the indemnitee with such discretion that it only can be challenged by a showing of fraud or bad faith. As we noted earlier, defendants have failed to introduce any evidence of fraud or bad faith.

Accordingly, we conclude that in the absence of any allegation of bad faith, the trial court reasonably could determine that USF&G acted in good faith when it made payments to the CTA and to various subcontractors.

Defendants next contend that the tri-party contract involving the CTA, USF&G and Paschen created a novation which released defendants from their obligations under the master surety agreement. Under the contract, the CTA released USF&G from its obligations as surety as to defaults by Paschen in its completion of the construction work commenced by Klein Construction. The CTA agreed that Paschen and its surety would be primarily liable for a default in performance by Paschen and would look to USF&G only as a secondary or excess obligor. Defendants conclude that this contract released them from any obligation under the original suretyship agreement because they were not parties to the new contract.

A novation occurs when a valid new contract or obligation is created and a valid existing contract or obligation is extinguished. (Faith v. Martoccio (1974), 21 Ill. App. 3d 999, 316 N.E.2d 164.) A novation may not be presumed, but rather, is an affirmative defense which must be established by a preponderance of the evidence. Alton Banking & Trust Co. v. Schweitzer (1984), 121 Ill. App. 3d 629, 460 N.E.2d 105.

Defendants failed to plead as an affirmative defense the novation argument or the argument that the tri-party contract released them from obligations under the master surety agreement. Accordingly, defendants have waived these arguments for purposes of our review. See Ill. Rev. Stat. 1987, ch. 110, par. 2 — 613(d) (the facts constituting an affirmative defense must be pled or are waived).

Moreover, even if the novation argument were properly before this court, we believe that the new contract did not extinguish the obligations created under the existing agreement. The tri-party contract specifically states that USF&G’s obligations under its performance bond incurred prior to the execution of the tri-party contract are unchanged. More importantly, paragraph VIII of the master surety agreement provides as follows:

“UNDERSIGNED shall not be relieved of liability hereunder by any change, addition, substitution, continuation, renewal, extension, successor or new obligation in connection with BOND(S) or any contracts secured thereby, whether known or consented to by SURETY, and notice of SURETY’S consent is hereby waived.”

Thus, defendants’ obligations under the master surety agreement remain unchanged by the subsequent tri-party contract.

Furthermore, there is no indication that any portion of the tri-party contract would operate to release defendants from their obligations as indemnitor. A release requires an abandonment of a claim to the person against whom the claim existed (Murphy v. S-M Delaware, Inc. (1981), 95 Ill. App. 3d 562, 420 N.E.2d 456), and must be backed by consideration. (American National Bank v. Warner (1984), 127 Ill. App. 3d 203, 468 N.E.2d 184.) We find no suggestion that any right of indemnity conferred upon USF&G by the master surety agreement was abandoned to defendants. Similarly, we are unable to find any evidence of consideration. Accordingly, we conclude that the tri-party contract neither worked a novation which relieved defendants of their obligations under the master surety agreement, nor did it specifically release defendants from those obligations.

Defendants next argue that USF&G acted as a volunteer in payment for change orders approved prior to Klein Construction’s default. Defendants maintain that because these change orders were made subsequent to the issuance of the bond, they were not included in USF&G's obligations under the bond. We disagree.

The master surety agreement obligates USF&G to make available sufficient funds to pay the costs of completing the contract, less the balance of the contract price. The term “balance of the contract price” is defined as “the total amount payable by Owner to contractor under the contract and any amendments ' thereto, less the amount properly paid by Owner to Contractor.” (Emphasis added.) Thus, the contract contemplated amendments and obligated USF&G to cure defaults on outstanding change orders and to seek indemnity from defendants for those payments. Moreover, paragraph VIII of the master surety agreement specifically states that defendants’ obligations are not changed by amendments to the contract. Thus, we conclude that USF&G acted pursuant to its contractual obligations and not as a volunteer.

Defendants also contend that USF&G’s damages were not ascertainable from its motion for summary judgment. Defendants argue that questions of fact exist as to the amount of those damages.

An indemnitee has the right to settle claims against it and then sue the indemnitor. (Boston v. Old Orchard Business District, Inc. (1960), 26 Ill. App. 2d 324, 168 N.E.2d 71.) Thus, USF&G has the right to make the required payments to the CTA and to the various subcontractors. Furthermore, paragraph IV(C) of the master surety agreement provides that vouchers or other evidence of payments made under the belief that the surety was liable “shall be prima facie evidence of the fact and extent of the liability of UNDERSIGNED to SURETY.” Defendants did not provide any counteraffidavits, or other evidence, which would effectively rebut USF&G’s prima facie evidence of liability. Accordingly, we believe the trial court properly concluded that USF&G’s damages were ascertainable from its motion for summary judgment.

Defendants finally contend that the trial court improperly found that there was no just reason to delay the enforcement or appeal of its order granting partial summary judgment to USF&G. Defendants note that the order did not dispose of all the claims against them.

Initially we note that the master surety agreement specifically provides that separate suits on the agreement may be brought as causes of action accrue regardless of the status of other causes of action. Thus, the fact that other claims were asserted against defendants would not bar the trial court from finding that there was no just reason to delay the enforcement or appeal of the summary judgment order. Furthermore, subsequent to the entry of the summary judgment order, USF&G obtained a judgment against Wayne J. Klein and voluntarily dismissed all of its other claims. Accordingly, there are no other claims remaining, and the jurisdictional defect, if any, in the previous order is cured and we need not address defendants’ contention.

For the foregoing reasons, the judgments of the circuit court of Cook County granting summary judgment in favor of USF&G and against Donna Klein and Klein Corporation are affirmed.

Judgments affirmed.

QUINLAN and La PORTA, JJ., concur.


author: JUSTICE QUINLAN

text:
    AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, AFL-CIO, Petitioner-Appellant, v. THE ILLINOIS STATE LABOR RELATIONS BOARD et al., Respondents-Appellees.
    First District (6th Division)
    No. 1—88—3091
    Opinion filed October 27, 1989.

      Cornfield & Feldman, of Chicago (Stephen A. Yokich, of counsel), for petitioner.
    Neil F. Hartigan, Attorney General, of Springfield (Robert J. Ruiz, Solicitor General, and William D. Frazier, Assistant Attorney General, of Chicago, of counsel), for respondent Illinois State Labor Relations Board.

      Sidley & Austin, of Chicago (John G. Levi, Pamela B. Strobel, and Neil L. Brilliant, of counsel), for respondent State of Illinois, Departments of Central Management Services and Corrections.
    Winston & Strawn, of Chicago (Gregory J. Malovance and William G. Miossi, of counsel), for amicus curiae.

   JUSTICE QUINLAN

delivered the opinion of the court:

The American Federation of State, County, and Municipal Employees (AFSCME) appeals a final order of the Illinois State Labor Relations Board (ISLRB or Board). On September 29, 1988, ISLRB ruled that the Illinois Departments of Central Management Services (CMS) and Corrections (IDOC or Corrections) were compelled to bargain with AFSCME about the impact of employee discipline under the new policy for drug testing but not about the institution of drug testing itself. ISLRB allowed IDOC to institute the new policy but ordered both parties to bargain further on the subject of employee discipline. AFSCME now appeals directly to the appellate court, claiming court jurisdiction under section 11 of the Illinois Public Labor Relations Act (Ill. Rev. Stat. 1987, ch. 48, par. 1611(c)) and Supreme Court Rule 335 (107 Ill. 2d R. 335).

On this appeal AFSCME asserts:

(1) The ISLRB ruling that the IDOC policy to implement employee drug testing was a managerial right and not a mandatory subject of bargaining is unreasonable and should be reversed.

(2) The ISLRB finding that IDOC did not waive its right to institute a drug-testing program for corrections employees during the term of the current contract is not supported by substantial evidence and should be reversed.

The AFSCME dispute over drug testing began when AFSCME and CMS negotiated a contract to cover 37,000 State employees in eight bargaining units for the contract period of July 1, 1986, to June 30, 1989. AFSCME and CMS had discussed possible drug testing (blood and urine) for all State employees under AFSCME. After substantial disagreement, CMS withdrew its proposals.

As far as the record shows, the parties did not bargain over CMS’s withdrawal or discuss whether CMS had waived drug testing for the duration of the contract. The parties did, however, place a waiver “zipper clause” in article XXXIV, section 4, of their master collective bargaining agreement. In this clause, the parties acknowledged their mutual “unlimited right and opportunity to make demands and proposals with respect to any subject or matter within the area of collective bargaining *** and that the understandings and agreements arrived at by the parties after the exercise of that right and opportunity are set forth in this Agreement.”

In January 1988, a manager from CMS informed an AFSCME official that IDOC wanted to begin drug testing for the roughly 9,000 employees in the Corrections unit. AFSCME did not question the State’s right to implement a drug-testing program but did want to help shape the terms. Therefore, during January and February, AFSCME met with CMS and IDOC four times to consider and negotiate many aspects of a testing policy. Parties agreed to limit testing to situations where IDOC has a “reasonable suspicion” that the employee was a user or trafficker. Parties also agreed on such items as the procedure for urine testing, the allocation of costs, and confidentiality. However, they still had not agreed on the important topic of discipline measures for employees who either refuse to take the test or who take it and test positive.

On March 1, 1988, AFSCME challenged the new policy by filing a charge with ISLRB under section 11 of the Illinois Public Labor Relations Act (Act) (Ill. Rev. Stat. 1987, ch. 48, pars. 1601 through 1627). AFSCME alleged unfair labor practices on the grounds that IDOC and CMS had not engaged in all the necessary mandatory bargaining for the new drug-testing policy.

Both the hearing officer and later the Board itself reached their decisions by reviewing the AFSCME complaint as a problem of applying two contradictory sections of the Illinois Public Labor Relations Act (Act). To resolve the problem, both tribunals balanced section 7, on the duty to bargain, with section 4, on management rights. The four relevant provisions provide:

(1) The public employer has a duty to “negotiate in good faith with respect to wages, hours, and other conditions of employment, not excluded by Section 4 of this Act ***.” Ill. Rev. Stat. 1987, ch. 48, par. 1607.
(2) Employers are “not *** required to bargain over matters of inherent managerial policy” which include the “selection of new employees, examination techniques and direction of employees.” Ill. Rev. Stat. 1987, ch. 48, par. 1604.
(3) Employers are required to “bargain collectively” over “policy matters directly affecting wages, hours and terms and conditions of employment as well as the impact thereon” if employee representatives request bargaining. Ill. Rev. Stat. 1987, ch. 48, par. 1604.
(4) Furthermore, refusing to bargain collectively and in good faith constitutes an unfair labor practice. Ill. Rev. Stat. 1987, ch. 48, par. 1610.

By law, security is a concern of managerial policy for IDOC. The department must “establish rules and regulations for the protection of the person and property of employees of the Department and every committed person.” (Ill. Rev. Stat. 1987, ch. 38, par. 1003 — 7— 4.) One of the important present security concerns in State prisons involves drug traffic there. IDOC presented undisputed evidence that both visitors and employees brought drugs into the prison, that the majority of inmates were or had been drug users, and that some inmates died of overdoses while in prison.

Employee conduct is a key aspect of the security problem. At the initial hearing, the Bureau of Inspections and Audits (BIA) presented details about employee drug use and trafficking among inmates. In a voluntary survey conducted among Corrections’ trainees in 1985, almost 18% admitted they were involved with illegal drugs. In the six-month period before IDOC suggested the new program, BIA documented 21 drug- or alcohol-related activities involving employees. BIA ran 19 “sting” operations between July 1986 and spring 1988 to catch employees who deliver drugs to inmates. In 18 of these operations, the employee dealers were also drug users. As of spring 1988, BIA was investigating 217 employees for possible drug dealing at Corrections facilities.

Each Corrections unit also polices employee drug trafficking among inmates. Routinely, the units conduct canine sniffs of cars in the lot and of the employees themselves. Furthermore, if investigators have “reasonable suspicions,” they conduct pat-down and strip searches of employees. These measures, however, have not eliminated the drug traffic from employee to inmate in the State prisons.

On May 19, 1988, the ISLRB hearing officer issued a recommended decision and order stating that the IDOC plan to implement a drug-testing policy was an inherent managerial right, not a mandatory subject for bargaining. However, he suspended the drug testing for current employees until the parties bargained over the effects of the policy on these employees. Both parties appealed to the Board. On September 29, 1988, ISLRB issued a decision and order modifying the earlier recommendations so that IDOC could implement its policy even while it continued to bargain over the subject of discipline for employees who refuse to take the test or who take it and test drug-positive.

AFSCME’s first issue on appeal is that the ISLRB made an unreasonable decision when it found that the new IDOC plan for employee drug testing is not a mandatory subject for bargaining between the employer IDOC (or CMS) and the employees under AFSCME. To reach its decision, ISLRB applied a balancing test with two statutory provisions, one on the employer’s duty to bargain and the other on the employer’s right to effect managerial policies unilaterally. AFSCME now challenges ISLRB’s interpretation of the statute sections, its use of the balancing test, and its application of facts within that test.

The Supreme Court and Illinois courts grant “substantial weight and deference to an interpretation of an ambiguous statute by the agency charged with the administration and enforcement of the statute.” (Illinois Consolidated Telephone Co. v. Illinois Commerce Comm’n (1983), 95 Ill. 2d 142, 152, 447 N.E.2d 295, 300, citing Gladstone Realtors v. Village of Bellwood (1979), 441 U.S. 91, 107, 60 L. Ed 2d. 66, 81, 99 S. Ct. 1601, 1612.) Furthermore, in labor cases, the rulings of the National Labor Relations Board (NLRB) and the Federal courts when these bodies construe the National Labor Relations Act are persuasive authority for similar provisions in the State Act. East Richland Educational Association, IEA-NEA v. Illinois Educational Labor Relations Board (1988), 173 Ill. App. 3d 878, 902, 528 N.E.2d 751, 765.

When the Supreme Court reviewed an NLRB decision about whether a particular topic was a subject for mandatory bargaining, the court used a standard of “considerable deference” for that review. (Ford Motor Co. v. NLRB (1979), 441 U.S. 488, 495, 60 L. Ed 2d 420, 427, 99 S. Ct 1842, 1848.) Following Ford, the fourth district in Illinois used “substantial” or “considerable” deference for reviewing a decision on mandatory bargaining made by the Illinois Educational Labor Relations Board (IELRB). (Decatur Board of Education, District No. 61 v. Illinois Educational Labor Relations Board (1989), 180 Ill. App. 3d 770, 774-75, 536 N.E.2d 743, 746.) As a rule, that court would not substitute its less informed opinion for appropriate agency expertise. (Decatur, 180 Ill. App. 3d at 775, 536 N.E.2d at 746.) If the ISLRB construes the statute incorrectly, however, a court must then overturn the agency’s ruling which contains an erroneous interpretation of the law. County of Menard v. Illinois State Labor Relations Board (1988), 177 Ill. App. 3d 139, 143, 531 N.E.2d 1080, 1083.

In the case before us, the ISLRB applied the statute to very specific facts in a balance test between sections 4 on management rights and 7 on the duty to bargain. This balance depends on whether, before weighing the sections, ISLRB correctly interpreted the factual application of each section in this case. Thus, this case presents a mixed question of fact and law in the AFSCME challenge to the ISLRB ruling.

The threshold subissue then is whether IDOC and CMS did have a duty to bargain over the decision to implement a testing program. AFSCME argues that any program as invasive and intrusive as drug testing affects employees’ rights on the job, and because it affects employees’ rights, it is a subject of mandatory bargaining. The State, in turn, points out that drug testing based on “reasonable suspicion” is essential, under today’s circumstances, for IDOC to perform its legal functions. Therefore, drug testing is a managerial right.

Section 7 of the Illinois Public Labor Relations Act imposes a duty to “bargain collectively” or “negotiate in good faith with respect to wages, hours, and other conditions of employment, not excluded by Section 4 of this Act.” (Ill. Rev. Stat. 1987, ch. 48, par. 1607.) Section 4 allows employers to act unilaterally in “matters of inherent managerial policy, which shall include such areas of discretion or policy as * * * the *** selection of new employees, examination techniques and direction of employees.” (Ill. Rev. Stat. 1987, ch. 48, par. 1604.) Clearly, tension exists between the two provisions; any managerial policy will have some impact on conditions of employment.

The Supreme Court found the limits for managerial policy in the private sector by looking at its practical effects. Some areas of inherent management concern, the Court ruled, cannot be resolved through negotiations between sides and, therefore, are not subjects for mandatory bargaining. (First National Maintenance Corp. v. NLRB (1981), 452 U.S. 666, 678, 69 L. Ed. 2d 318, 330, 101 S. Ct. 2573, 2580.) The Court added: “Management must be free from the constraints of the bargaining process to the extent essential for the running of a profitable business.” (First National Maintenance, 452 U.S. at 678, 69 L. Ed. 2d at 330, 101 S. Ct. at 2580-81.) The ISLRB has adopted the Supreme Court standard for public sector cases in Illinois. State of Illinois, Department of Central Management Services, 1 Pub. Employee Rep. (Ill.) par. 2016, No. S — CA—36 (ISLRB August 29,1985).

In other States, courts have found that bargaining is not mandatory for public employers if it would impair public policy or contravene a statute. (In re Local 195 (1982), 88 N.J. 393, 401-05, 443 A.2d 187, 190-93.) For example, a police department may impose polygraph testing to investigate criminal conduct on the force. If the functions of the department are disrupted by the criminal conduct of employees, the employer’s needs for law enforcement on the job “override the employees’ interest in negotiation.” Local 36k, International Brotherhood of Police Officers v. Labor Relations Comm’n (1984), 391 Mass. 429, 440, 462 N.E.2d 96, 103.

The NLRB has considered drug testing for employees in the private sector. In one case, employees in a concrete pipe plant claimed the right to mandatory bargaining over the subject of drug testing for employees who suffer injuries on the job. NLRB found that drug testing was “germane to the working environment” but did not lie at the “core of entrepreneurial control” for plant employers. (JohnsonBateman Co. (1989), 295 NLRB Dec. (CCH) No. 26, par. _, 131 LRRM (BNA) 1393, 1396-97.) The implementation of this particular drug-testing policy, instituted only to reduce insurance rates, was a subject for mandatory bargaining. Johnson-Bateman, 295 NLRB Dec. (CCH) No. 26 at_, 131 LRRM (BNA) at 1397-98.

In the case here, IDOC ties its. new policy to the security needs of the prison system. Under the Unified Code of Corrections, IDOC must “establish rules and regulations for the protection of the person and property of employees of the Department and every committed person.” (Ill. Rev. Stat. 1987, ch. 38, par. 1003 — 7—4.) In the ISLRB hearing, IDOC presented evidence about the numerous prison security problems linked to the employee drug trade. IDOC also documented employee drug use, employee drug trafficking, and a strong correlation between the two. Finally, IDOC detailed the other measures it had taken to curtail the drug trade by employees. Canine sniffs, pat-down and even strip searches of employees had not eliminated the employee drug traffic among inmates at the prison.

We believe the new policy is a further security measure. IDOC plans to test employees only if the State has “reasonable suspicions” of employee drug use. The point of the policy is not to affect terms of employment, but rather to curb criminal conduct which affects the job. We agree with the hearing officer’s finding that the installation of a new drug-testing policy is necessary under the circumstances to perform IDOC’s statutory function of securing persons and property at the prison. Therefore, we find that the decision to install this testing is not a subject for mandatory bargaining as defined in section 4.

We also believe that, even if the institution of a drug-testing policy were a subject for mandatory bargaining, such bargaining has already occurred. AFSCME has not challenged IDOC’s right to install a drug-testing policy. After IDOC announced its intent to have drug testing, AFSCME and the State parties met four times in January and February of 1988. During those sessions, they negotiated many aspects of a drug-testing policy, including details about the urine sampling itself. The parties have not finished bargaining. The important topic still on the table is the problem of discipline for employees who refuse to test or who test positive. However, bargaining over the kind of policy and basics of testing has already been completed.

The next aspect of the first issue is whether ISLRB was incorrect in using a balancing test to weigh the unilateral managerial policies allowed in section 4 against the duty to bargain mandated in section 7. In its analysis, ISLRB did not simply find that introduction of drug testing could be a management right exempt from the manager’s duty to bargain. Instead, ISLRB first determined that the drug policy did, indeed, affect terms and conditions of employment. After making this determination, ISLRB weighed the employer’s interests in having such a program against its effects on employees.

On the Federal level, the Supreme Court has approved the NLRB’s use of a balance test to resolve private-sector disputes about management prerogatives and the duty to bargain. (First National Maintenance, 452 U.S. at 686-87, 69 L. Ed. 2d at 335-36, 101 S. Ct. at 2584-85.) In First National Maintenance, the Court acknowledged that a private employer’s decision to close a business would have a pronounced effect on the employees’ work lives. Even so, the employer did not have to bargain on this particular subject unless the benefits of bargaining for employees outweighed the burdens placed on the conduct of the business. First National Maintenance, 452 U.S. at 679, 69 L. Ed. 2d at 331,101 S. Ct. at 2581.

Labor boards in Illinois now routinely use a balance test to weigh the duty to bargain against management rights. Recently the fourth district approved this use in a dispute that involved some statutory language in the Illinois Educational Labor Relations Act which is nearly identical to the language here. (Decatur, 180 Ill. App. 3d 770, 536 N.E.2d 743.) First, the court distinguished between employer policies with a direct or indirect impact on the work force. Since all management decisions have some impact, a liberal interpretation of direct impact would leave management with no unilateral rights at all. (Decatur, 180 Ill. App. 3d at 773, 536 N.E.2d at 745.) But even if some policy has a direct affect, it is not automatically the subject of mandatory bargaining because of the great overlap between rules that affect workers and policies that promote management rights. (Decatur, 180 Ill. App. 3d at 773, 779-81, 536 N.E.2d at 745, 749-50.) When direct impact on workers overlaps with management rights, labor boards should use their expertise to determine whose interests are more at risk. Decatur, 180 Ill. App. 3d at 775-77, 536 N.E.2d at 746-48.

In this case, the ISLRB acknowledged strong employee interests. Under the new policy, “suspicious” employees would suffer the indignity of urine tests. Employees who tested positive would face discipline. Thus an employee might suffer sanctions on the job simply because he used drugs in his private time.

On the other side, ISLRB noted a severe security problem involving employee drug traffic at the State prisons. Prison officials are required by law to provide a secure environment for both inmates and employees. (Ill. Rev. Stat. 1987, ch. 38, par. 1003 — 7—4.) Toward that end, they have instituted numerous measures: the canine sniffs, the pat-down and strip searches, all to control the flow of drugs. In spite of these measures, officials continue to find drugs in the prison and drug use, including overdoses, among inmates. As of spring 1988, Corrections officials were investigating 217 employees for possible drug dealing at prison facilities. The new drug policy, ISLRB found, is one more measure designed to control criminal activity by employees at the prisons.

We find that both the hearing officer and the Board itself properly considered these factual matters and properly weighed the balance in favor of management rights. We further find that, given the need for some security at the prison, the decision to install new drug-testing measures at the prison might fall outside of mandatory bargaining on the grounds that bargaining will not resolve management’s need to control the security risks attendant with the drug traffic between inmates and employees. For these reasons, we affirm ISLRB’s use of a balance test and ISLRB’s decision that the management interest in drug testing outweighed the employees’ interest in bargaining over whether such testing would occur.

Regardless of whether IDOC must bargain on the topic of introducing a drug policy, however, it must still negotiate “with regard to policy matters directly affecting wages, hours and terms and conditions of employment as well as the impact thereon.” (Ill. Rev. Stat. 1987, ch. 48, par. 1604.) If the new policy includes disciplinary sanctions, these sanctions are mandatory subjects of bargaining. (City of East St. Louis, 3 Pub. Employee Rep. (Ill.) par. 2011 No. S — CA— 274 (ISLRB January 7, 1987).) Parties do not need endless discussion, but they should make a good-faith effort to reach agreement. National Labor Relations Board v. American National Insurance Co. (1952), 343 U.S. 395, 404, 96 L. Ed. 1027, 1037, 72 S. Ct. 824, 829.

In this case, the parties have already bargained successfully about all of the policy effects except discipline for employees who refuse to take the test or who test positive. ISLRB did not find that the parties had reached an impasse on this topic. Given the many topics which IDOC, CMS and AFSCME had covered in four sessions, it seems likely they could still expect results if they spent more time on this remaining effect. Therefore, ISLRB ordered parties to return to the table and continue talking about the subject of employee discipline.

We believe that ISLRB’s decision that parties could reach some bargain through continued discussions about employee discipline is a reasonable one. For this reason, we affirm the ISLRB order for further bargaining on that topic.

AFSCME’s second issue on appeal is that the ISLRB made an unreasonable finding of fact when it decided CMS had not waived the right to bargain about or institute a drug-testing program for the duration of the contract. During contract negotiations, CMS first proposed, then withdrew, a drug-testing program. CMS later agreed to the waiver clause in the master agreement. Since AFSCME considers drug testing a subject for mandatory bargaining, this petitioner now argues that CMS waived the right to bargain. Respondents, who do not consider drug testing a subject for mandatory bargaining, now argue that CMS did not waive either the right to bargain or the right to institute the program without bargaining.

A party does not waive rights in a labor negotiation unless the waiver is “clear and unequivocal.” (Rockwell International Corp. (1982), 260 NLRB Dec. (CCH) par. 1346, 1347, 109 LRRM (BNA) 1366, 1367.) So too, the evidence that a party in a labor negotiation intended to waive a statutory right must be clear and unmistakable. (Village of Oak Park v. Illinois State Labor Relations Board (1988), 168 Ill. App. 3d 7, 20-21, 522 N.E.2d 161, 169.) When parties sign a document so they can reach some necessary agreement, this action is not clear evidence that they relinquish rights to fix other terms later. Village of Oak Park, 168 Ill. App. 3d at 20-21, 522 N.E.2d at 169.

ISLRB and the parties here all agree on this legal standard, but they differ on what facts do constitute a clear and unmistakable waiver. Indeed, the standard for these facts has also varied with different State jurisdictions and with different membership on the National Labor Relations Board. (See East Richland, 173 Ill. App. 3d at 891-907, 528 N.E.2d at 758-68.) Radioear Corp. (1972), 199 NLRB Dec. (CCH) par. 1161, 81 LRRM (BNA) 1402, which is cited by the plaintiff, started the NLRB trend toward the acceptance of waivers without explicit language about a specific right. But many jurisdictions still prefer explicit language that identifies the subject of the waiver. East Richland, 173 Ill. App. 3d at 891-907, 527 N.E.2d at 758-68.

Thus, ISLRB had to decide whether the facts of this case constitute a clear and unmistakable waiver even though the contract waiver or zipper clause never mentioned either drug testing or, more generally, items dropped during negotiations. Once the ISLRB decides the legal effect of facts, the ISLRB’s decision must be upheld if it is reasonable and consistent with the statute and supported by substantial evidence. Rockford Township Highway Department v. Illinois State Labor Relations Board (1987), 153 Ill. App. 3d 863, 875, 506 N.E.2d 390, 397.

AFSCME cites a case where language “remarkably similar” to the language here precluded mid-term bargaining. However, the case cited by the AFSCME, American League of Professional Baseball Clubs, does not appear in the research materials. Furthermore, the number cited, 99 LRRM 1724, belongs to a case on retaliatory discharge, and not contract wáiver.

During negotiations for their contract agreement, the parties had discussed possible drug testing (blood and urine) for nearly 37,000 State employees. Then CMS withdrew its request. The reasons for withdrawal and any possible bargaining for that move are not reflected in the record. Furthermore, the parties did not allude to this bargaining in the zipper clause, article XXXIV, section 4, of their agreement. Instead, the parties acknowledged that each side had ample chance to propose terms “and that the understandings and agreements arrived at by the parties after the exercise of that right and opportunity are set forth in this Agreement.”

By contrast, cases which have found implicit waiver in zipper clauses have relied on more specific language. Radioear Corp., for instance, ruled on a zipper clause in which the union had agreed “that the Company shall not be obligated to bargain collectively with respect to any subject or matter not specifically referred to or covered in this agreement.” (Radioear Corp., 199 NLRB Dec. (CCH) par. 1161, 1162, 81 LRRM (BNA) 1402, 1403.) The clause here states that all agreements actually made are covered by the agreement. Unlike the Radioear Corp. clause, this one does not exclude all topics not covered by the agreement. For these reasons, when ISLRB reviewed the clause here, it did not find a clear and unmistakable waiver.

In this case, ISLRB looked for waiver by reviewing the history of contract negotiations and the zipper clause in the final agreement. Given this bargaining history and language, ISLRB did not find the zipper clause to be a clear statement of waiver for all topics discussed but not settled during negotiations.

We find the ISLRB holding that no waiver occurred is supported by substantial evidence. Therefore, we affirm the ISLRB ruling that CMS and IDOC had not waived their right to bargain over or institute drug testing during the contract term.

Affirmed.

EGAN, P.J., and McNAMARA, J., concur.


author: JUSTICE CAMPBELL

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. LARRY GREEN, Defendant-Appellant.
    First District (1st Division)
    No. 1—86—3107
    Opinion filed October 23, 1989.

      Paul P. Biebel, Jr., Public Defender, of Chicago (Sharon M. Shapiro and Aaron L. Meyers, Assistant Public Defenders, of counsel), for appellant.
    Richard M. Daley, State’s Attorney, of Chicago (Inge Fryklund, Jerry D. Bischoff, and Elizabeth L. Rivera, Assistant State’s Attorneys, of counsel), for the People.
   JUSTICE CAMPBELL

delivered the opinion of the court:

Defendant Larry Green was tried in absentia and convicted by a jury of armed robbery and sentenced to eight years’ imprisonment. Defendant appeals from the conviction, contending: (1) that his conviction must be reversed since he was not admonished in person that he could be tried in absentia; (2) that the prosecutor’s comments on defendant’s absence during closing and rebuttal arguments were improper; and (3) that the State failed to prove him guilty beyond a reasonable doubt.

The evidence presented at trial revealed the following facts. Rawfik Yasin was the owner of a grocery store in Chicago. On October 22, 1985, at approximately 7:30 p.m. he was in his store standing by the cash register which was near the front door. James Scott, an employee, and Yasin’s brother, Tawfik Yasin, were in the rear of the store. Three men entered the store, and one man pointed a gun at Rawfik and pulled him from behind the counter, while the other two men went to the rear of the store. Rawfik was pulled to the rear of the store, where he and Scott were handcuffed to a meat grinder. Defendant stated several times that “I should pop one of you.” One man pointed a gun at Rawfik and Scott while another assailant searched the men and took their wallets and money from their pockets. When Tawfik came out of the bathroom, defendant ordered him to open the cash register. Rawfik opened the cash register and also pressed the police alarm button. Both cash as well as lottery tickets were taken, and the three men left the store. Shortly thereafter police officers caught defendant and brought him back to the store, where the victims identified him.

Defendant was arrested and later released on bond. He failed to appear for trial set for July 7, 1986. The trial was continued to July 8, 1986, at which time he also failed to appear and a warrant was issued for his arrest. A certified letter was mailed to defendant informing him of his upcoming trial date of August 11, 1986, but he alleged he never received it. On August 11, 1986, defendant again failed to appear for trial, and he was tried by a jury in absentia and convicted of armed robbery. Defendant was identified by an in-court photograph as one of the assailants.

Defendant first contends that his conviction must be reversed since he was not admonished in person that he could be tried in absentia. Defendant further contends that notification of the upcoming trial date by certified mail did not cure the defective admonition. At oral argument in this matter, the State’s position was that the defendant had not furnished this court with a complete record, and therefore, defendant could not prevail in his argument that he was not adequately warned. Subsequent to oral argument, the defendant has supplemented the record on two occasions, and the State concedes that it believes the record is now complete and that the defendant was not given trial in absentia warnings.

The statute governing a defendant’s admonishment provides that where a defendant pleads not guilty, the court shall

“advise him at that time or at any later court date on which he was present that if he escapes from custody or is released on bond and fails to appear in court when required by the court that his failure to appear would constitute a waiver of his right to confront the witnesses against him and trial could proceed in his absence.” Ill. Rev. Stat. 1987, ch. 38, par. 113 — 4(e).

There is no question but that a criminal trial may be conducted in the defendant’s absence without violating his constitutional rights. (People v. Collins (1982), 109 Ill. App. 3d 1076, 441 N.E.2d 935; People v. Powell (1981), 95 Ill. App. 3d 93, 419 N.E.2d 708.) The legislative scheme providing for trial in absentia is designed to insure that such a trial is not held unless the defendant has made a valid waiver of his right to be present at trial and to confront the witnesses against him. (Ill. Rev. Stat. 1987, ch. 38, par. 113 — 4(e).) The statute unambiguously provides that the trial court shall advise a defendant who pleads not guilty, at the time he enters the plea or at a later time, on which he is present in court, that his failure to appear is a waiver of his right to confront witnesses and that the trial court will proceed in the defendant’s absence. (People v. Burns (1983), 117 Ill. App. 3d 123, 453 N.E.2d 21.) The section 113 — 4(e) admonishment is a prophylactic measure which is designed both to dissuade defendants from absconding at any time, before or after trial, and to provide for a formal waiver of their right to be present. (People v. Partee (1988), 125 Ill. 2d 24, 530 N.E.2d 460.) In Partee, the supreme court has most recently held that the statutory requirement for trial in absentia that the defendant pleading not guilty be advised of the section 113— 4(e) admonishment applies even in the case of a defendant who flees during trial as opposed to prior to trial. The court cited the longstanding principle that courts should abhor trial in absentia because of its inherent unfairness to a defendant. (See People v. Davis (1968), 39 Ill. 2d 325, 235 N.E.2d 634; People v. Evans (1961), 21 Ill. 2d 403, 172 N.E.2d 799.) The State here has conceded that it has found no reference in the record to support an argument that the defendant was ever admonished pursuant to section 113 — 4(e) and, therefore, we hold that there was a failure to comply with the statute.

The State argues that this court could construe that the defendant was warned since the bond slip signed by the defendant contained a printed notice warning of the possibility that his trial could be held in absentia. The right to be present at trial is of constitutional dimension and can only be waived by a defendant himself. (Snyder v. Massachusetts (1934), 291 U.S. 97, 78 L. Ed. 674, 54 S. Ct. 330.) In People v. Watson (1982), 109 Ill. App. 3d 880, 441 N.E.2d 152, on a theory of plain error, this court reversed and remanded a conviction where the defendant failed to receive in-court oral admonishments from the trial judge concerning trial in absentia. That holding was reiterated by this court in the subsequent case of People v. Broyld (1986), 146 Ill. App. 3d 693, 497 N.E.2d 147, where the court agreed with the Watson requirement that the defendant must be admonished personally and in court about trial in absentia. Since the case law is clear that the defendant must be orally warned in person, and courts have given strict construction to this statute (Lester (1988), 165 Ill. App. 3d 1056, 519 N.E.2d 1127; Watson (1982), 109 Ill. App. 3d 880, 441 N.E.2d 152), the State’s argument that the bond slips provided an adequate warning is without merit.

Some confusion does arise in the instant case since, when the State raised the issue as to whether a hearing should be held as to why the court was proceeding in absentia, the trial judge stated:

“I don’t think the defendant is ever in agreement with the trial in absentia, but we have fulfilled their obligation as far as the statute is concerned. The cases that have been sent down say when the defendant — when he’s allowed out on bond, as I read the statute, it says a defendant who is in custody and escapes or a defendant out on bond can be tried in absentia. He’s warned of that. This defendant was warned of that. The record is clear. He was warned about the trial in absentia.”

Further, the defendant does not contest that there was compliance with the statutory provision providing that the clerk of the court shall send to the defendant notice by certified mail at his last known address of the new date which has been set for trial. (Ill. Rev. Stat. 1987, ch. 38, par. 115 — 4.1(a).) However, proof of compliance with section 115 — 4.1(a) alone is not sufficient to cure a defective admonition under section 113 — 4(e). Although sections 113 — 4(e) and 115 — 4.1(a) complement each other, they serve different purposes. Section 113— 4(e) provides the substantive basis upon which it may be established that a defendant is informed of and understands his rights. Section 115 — 4.1(a) sets forth the procedural framework with which a defendant is provided a final opportunity to appear for trial. (See People v. Lester (1988), 165 Ill. App. 3d 1056, 519 N.E.2d 1127.) Regardless of the statement by the trial judge, a thorough review of the record fails to reveal that defendant was evér orally warned by the trial judge as a prerequisite to trial in absentia. Since section 113 — 4(e) unambiguously requires oral admonishments and there is no basis in the record to show that this requirement was met in the instant case, there was not sufficient compliance with the statute. Therefore, we reverse defendant’s conviction and remand this matter for a new trial.

Since this case must be remanded for a new trial, we find it unnecessary to address defendant’s remaining contentions of error on appeal. We note, however, that we believe the evidence presented at trial was sufficient to conclude that the defendant was guilty beyond a reasonable doubt. We do not mean we are making a finding as to the defendant’s guilt or innocence which would be binding on retrial, but, rather, our consideration of the sufficiency of the evidence admitted at trial will remove the risk of subjecting the defendant to double jeopardy. People v. Taylor (1979), 76 Ill. 2d 289, 391 N.E.2d 366.

For the reasons stated, the judgment of the circuit court is reversed and this cause is remanded for a new trial.

Reversed and remanded.

BUCKLEY and O’CONNOR, JJ., concur.


text:
    KATHLEEN McGRATH et al., Plaintiffs-Appellants, v. CHICAGO AND NORTH WESTERN TRANSPORTATION COMPANY, Defendant-Appellee.
    First District (6th Division)
    No. 1—88—1845
    Opinion filed October 27, 1989.

      George M. Elsener & Associates, of Chicago (George M. Elsener and Francis William Golden, of counsel), for appellants.
    Chicago and North Western Transportation Company, of Chicago (Daniel J. Mohan, of counsel), for appellee.
   JUSTICE QUINLAN

delivered the opinion of the court:

Kathleen and James McGrath, plaintiffs below and appellants here, sued Chicago and North Western Transportation Co. (C&N) for damages from a collision between two cars. This accident occurred on a public road which had been partly blocked while C&N performed repair work. After the jury returned a verdict for the defendant, the plaintiffs filed a motion for a judgment n.o.v. on liability and a new trial on damages or, in the alternative, a new trial on all issues. The trial judge denied this motion.

The McGraths now appeal, asserting they were deprived of a fair trial and are entitled to a new trial because: (1) the trial court should have declared a mistrial after the defense counsel asked a question about Kathleen McGrath’s settlement with her father, James McGrath; and (2) the trial court refused to allow jury instructions on statutory sections that prohibit unauthorized signs and obstructions on highways. On appeal, the McGraths ask that a new trial be granted.

On July 30, 1982, two workers from C&N performed emergency road repairs on a train gate at Euclid Avenue in Arlington Heights. This gate needed immediate repair because it protected the intersection of a busy street and a heavily used commuter rail track. During part of the repair work, the workers blocked the westbound side of Euclid Avenue with their truck, marked the area with cones and flares, and rerouted traffic in both directions down the open eastbound side.

While Euclid Avenue was rerouted, James McGrath proceeded east on Euclid, in the inside lane temporarily reserved for westbound traffic. Another driver, Andrew Bartoli, was driving east in the outside lane, which now carried all of the eastbound cars except McGrath’s. Bartoli then turned left from his outside lane. McGrath, driving east on the inside, or temporary westbound lane, broadsided Bartoli.

James McGrath and his passenger, his daughter Kathleen, sued Bartoli and C&N. The McGraths claimed damages to James’ car and injuries to Kathleen. The two defendants filed counterclaims against James McGrath and cross-claims against each other. Additionally, C&N filed a third-party action against the company whose employee damaged the gate. All of these claims have been disposed of by court action or settlement except one. The action that remained was that filed by the McGraths against C&N, which is now the only defendant.

At trial, C&N called James McGrath as an adverse witness. C&N had already cross-examined McGrath after the plaintiffs’ direct. On the defendant’s direct, C&N asked a question about a $5,000 settlement between James McGrath and his daughter. The McGraths’ counsel objected three times while C&N persisted in asking the entire question. In chambers, the C&N counsel explained that the purpose of the settlement question was to show bias by James McGrath, who had been a potential defendant in a third-party action by C&N. Since McGrath had settled, he could inflate Kathleen’s injury claims without fear that he might have to pay part of the final damages himself. The trial judge stated that this matter should have been discussed in chambers, not introduced in a question before the jury.

The McGraths’ counsel then moved for a default and judgment against the defendant. At that time, the trial judge said he would reserve a “motion on a mistrial.” The McGraths’ counsel did not press the point or ask for an immediate ruling on the mistrial motion. When the parties returned to the courtroom, the trial judge sustained the McGraths’ objection to the question about settlement and instructed the jury to disregard that question.

The McGraths also asked the court to take judicial notice of some provisions from the Illinois Commerce Commission, the Manual on Uniform Traffic Control Devices, and section 11 — 1416 from the Illinois Vehicle Code (Motor Vehicle Code) (Ill. Rev. Stat. 1981, ch. 951/2, par. 11 — 1416). The trial judge refused to do so on the grounds that the cited provisions did not relate to the evidence presented in the case.

At the end of the trial, the McGraths asked for jury instructions based on sections 11 — 310 and 11 — 1303 of the Illinois revised statutes. (Ill. Rev. Stat. 1981, ch. 951/2, pars. 11 — 310, 11 — 1303.) Section 11— 310 makes it a misdemeanor to display any “unauthorized sign, signal [or] marking” on any highway. (Ill. Rev. Stat. 1981, ch. 951/2, par. 11— 310.) Section 11 — 1303 provides that “[shopping, standing or parking” is “prohibited in specified places.” (Ill. Rev. Stat. 1981, ch. 951/2, par. 11 — 1303.) As stated, because the McGraths had no evidence specifically tied to these sections, the trial judge did not allow the instructions.

On October 20, 1987, the jury returned a verdict for the defendant C&N. After the verdict was returned, but before it was entered, the McGraths renewed the motion for a mistrial. The trial judge stated that he would rule on the mistrial motion before entering judgment on the verdict. Nonetheless, there is no mention of the trial judge’s ruling on the motion in the record, although the judgment was entered on October 21,1987.

On November 10, 1987, the McGraths filed a post-trial motion for judgment n.o.v. on liability and a new trial on damages or, in the alternative, a new trial on all issues. In the motion for a new trial, the Mc-Graths claimed that a mistrial should have been declared because of the problem with C&N’s settlement question, and hence, a new trial should now be granted. On appeal, the McGraths rely on the claims that a mistrial should have been declared and that additional jury instructions should have been given as the bases for requesting this court to grant a new trial.

The McGraths’ first issue on appeal is that they were deprived of a fair trial and are entitled to a new trial because the defense counsel asked a question about a settlement agreement between James Mc-Grath and his daughter Kathleen. The McGraths contend that the introduction of this question should have resulted in mistrial.

A motion for a mistrial is a procedural tool designed to cut short a trial for legal reasons which preclude a verdict and judgment. (Williams v. Deasel (1974), 19 Ill. App. 3d 353, 355, 311 N.E.2d 414, 415.) This motion prevents parties from getting two chances at a verdict. (Bauer v. Timucci (1975), 33 Ill. App. 3d 1051, 1056, 339 N.E.2d 434, 438-39.) A motion for a mistrial, therefore, can only be made before the jury returns its verdict. (Williams, 19 Ill. App. 3d at 355, 311 N.E.2d at 415.) Thus, if the motion for a mistrial has not been made before the verdict, then the party asking for a new trial has waived the mistrial issue. Bauer, 33 Ill. App. 3d at 1057, 339 N.E.2d at 439.

In this case, the McGraths originally moved for a default when C&N’s counsel asked a question about the settlement between Kathleen and James McGrath. The trial judge interpreted this as a motion for mistrial and said he would reserve the motion. The McGraths did not press the judge for an immediate ruling on the mistrial motion; instead, they waited until after the jury verdict had been returned. At that time, the judge stated he would rule on the motion before entering the judgment. However, judgment was entered the following day, without any record of a ruling on the mistrial. Later, the McGraths filed a post-trial motion requesting a new trial, for among other reasons, because, they said, the court should have declared a mistrial after C&N’s counsel asked the question about the settlement between the two plaintiffs.

We believe that the plaintiffs’ conduct, first in failing to ask for a ruling at the time the judge first mentioned mistrial and then in failing to renew the motion before the jury verdict, constitutes a waiver of mistrial as a basis for a new trial. Therefore, we do not find any error in the trial court’s decision denying plaintiff’s request for a new trial on this basis.

Nevertheless, a reviewing court may find error even if the matter was not preserved by the lower court or opposing counsel if the prejudicial conduct of one attorney affects the conduct of a case so severely that the litigants cannot receive a fair trial. (Manninger v. Chicago & Northwestern Transportation Co. (1978), 64 Ill. App. 3d 719, 729, 381 N.E.2d 383, 391.) For example, if one party introduces “unreasonable and highly prejudicial” material in the closing argument, a reviewing court might consider this issue and reverse the decision regardless of whether the other side objected at the time. Manninger, 64 Ill. App. 3d at 729, 381 N.E.2d at 391.

Here, the McGraths argue that C&N introduced such highly prejudicial material into the trial with their settlement question that reversal is warranted. As a rule, Illinois courts bar questions about settlement during a trial on liability. (De Lude v. Rimek (1953), 351 Ill. App. 466, 473-74, 115 N.E.2d 561, 565.) The McGraths cite numerous cases on the point that public policy encourages settlement and protects it by excluding the use of settlement evidence as proof of liability. (See, e.g., De Lude, 351 Ill. App. 3d 473-74, 115 N.E.2d at 565; Pientka v. Board of Fire Commissioners of North Main Fire Protection District (1984), 125 Ill. App. 3d 124, 131, 465 N.E.2d 677, 681.) However, evidence concerning a settlement is not automatically excluded if it tends to prove some other point, such as possible bias on the part of witnesses. See, e.g., Lam v. Lynch Machinery Division of Lynch Corp. (1988), 178 Ill. App. 3d 229, 533 N.E.2d 37; Kenny v. Lakewood Engineering & Manufacturing Co. (1979), 85 Ill. App. 3d 790, 796, 407 N.E.2d 551, 555-56.

When a party presents settlement evidence to prove a point like bias, the decision to include or exclude this evidence rests with the discretion of the trial judge. (Batteast v. Wyeth Laboratories, Inc. (1988), 172 Ill. App. 3d 114, 136-37, 526 N.E.2d 428, 443.) Furthermore, if a judge decides that evidence which has already been introduced to the jury should be excluded, the court can cure the error by instructing the jury to disregard the evidence. Austin v. City of East Moline Board of Fire & Police Commissioners (1972), 7 Ill. App. 3d 537, 543, 288 N.E.2d 113, 118.

In the case here, C&N called James McGrath as an adverse witness. During direct examination, C&N asked a single question about the $5,000 settlement which McGrath had made with his daughter Kathleen. The McGraths’ counsel objected three times while the C&N counsel persisted to the end of the question. In chambers, C&N’s counsel explained that the purpose of the question was to show bias by James McGrath, who could exaggerate his daughter’s injury claims since he had already settled with her and forestalled any third-party claims C&N might make against him. The trial judge admonished C&N for not presenting the bias argument in chambers instead of simply exposing the settlement question to the jury in open court. Back in the courtroom, the judge then sustained the McGraths’ objections and told the jury to disregard the question about settlement. The settlement topic did not come up again during the trial.

We find that the trial court properly exercised its discretion when it sustained the McGraths’ objections to the C&N settlement question. The trial judge also cured any possible error by instructing the jury to ignore the question. We therefore conclude that, even if we were to consider this issue, there was no error.

The McGraths’ second issue on appeal is that they were deprived of a fair trial and are entitled to a new trial because the trial court refused to give jury instructions based on sections 11 — 310 and 11— 1303 of the Motor Vehicle Code. The plaintiffs requested these instructions to support their theory that C&N obstructed the road and failed to provide proper warnings. Without these instructions, the plaintiffs contend, the jury could not render a verdict on their theory of the case.

Parties have a right to have the jury instructed according to the law applicable to the facts of a case. (Roberts v. City of Chicago (1982), 105 Ill. App. 3d 383, 386, 434 N.E.2d 420, 422-23.) Among other things, courts may instruct juries about sections of the Motor Vehicle Code that set the standard of care for certain negligence problems. (See, e.g., Amstar Corp. v. Aurora Fast Freight (1986), 141 Ill. App. 3d 705, 709, 490 N.E.2d 1067, 1169-70.) The instructions proffered, however, must concern an issue that is supported by evidence; it is reversible error for a court to instruct a jury on law in the absence of evidence to which the law might apply. In re Estate of Loesch (1985), 134 Ill. App. 3d 766, 771, 481 N.E.2d 32, 36.

The Motor Vehicle Code regulates use of the public highways. Section 11 — 310 makes it a misdemeanor to display any “unauthorized sign, signal [or] marking” on any highway. (Ill. Rev. Stat. 1981, ch. 95x/2, par. 11 — 310.) Section 11 — 1303 provides that “[shopping, standing or parking” is “prohibited in specified places.” (Ill. Rev. Stat. 1981, ch. 951/2, par. 11 — 1303.) Neither section specifies what class of persons it was enacted to benefit. The first division of this court, however has ruled that the purpose of section 11 — 1303 is to “facilitate the free and safe flow of vehicular *** traffic.” Sheehan v. Janesville Auto Transport (1981), 102 Ill. App. 3d 507, 513, 430 N.E.2d 131, 134.

The trial record does not reflect any specific request for judicial notice of the two Motor Vehicle Code sections named in this appeal. At trial, the McGraths did present evidence that C&N had used cones and flares as signs, signals or markings to reroute traffic during the repair work. In addition, the McGraths proved C&N never got authorization from any government body specifically for the repair job on the Euclid Avenue gate. The McGraths also established that C&N blocked the eastbound side of Euclid Avenue with the repair truck while C&N workers repaired the train gate. The McGraths did not, however, present any evidence to link the Motor Vehicle Code sections cited with the conduct of C&N. The McGraths did not suggest that section 11— 310 applied to signals erected during emergency repair work, or that section 11 — 1303 prohibited the blocking of a portion of a road while performing necessary repairs. Finally, they did not show that any particular authorized signs would have prevented the collision between James McGrath and Andrew Bartoli or that nonauthorized signs caused this accident.

At trial, the McGraths also asked the court to take judicial notice of some provisions from the Illinois Commerce Commission, the Manual on Uniform Traffic Control Devices, and section 11 — 1416 from chapter 951/2 of the Illinois Revised Statutes, 1981. The trial judge also noted that none of those sections were tied to specific facts in this case either and, consequently, refused to take judicial notice of these materials as well.

At the close of the trial, the McGraths’ counsel requested jury instructions based on only sections 11 — 310 and 11 — 1303. The judge refused to submit these instructions to the jury.

We find that the trial record does not show any specific request for judicial notice of sections 11 — 310 and 11 — 1303 of the Motor Vehicle Code or any evidence that relates the cause of the McGrath-Bartoli car collision to these Code provisions so that an instruction would be proper. For all of these reasons, we find that the trial court did not commit error, and accordingly, we affirm the judgment of the circuit court of Cook County.

Judgment affirmed.

EGAN, P.J., and McNAMARA, J., concur.