author: JUSTICE MEJDA

text:
    JOSEPH CARRAO et al., Plaintiffs-Appellees, v. HEALTH CARE SERVICE CORPORATION d/b/a Blue Cross-Blue Shield Health Services, Defendant-Appellant.
    First District (5th Division)
    No. 82—1030
    Opinion filed September 23, 1983.

      Karl F. Nygren, P.C., Donald J. Duffy, Howard J. Swibel, and G. Christian Kronberg, all of Chicago (Kirkland & Ellis, of counsel), for appellant.
    William J. Harte, Ltd., Joyce & Kubasiak, P.C., Goldberg & Murphy, Ltd., Plotkin & Jacobs, Ltd., and Schwartzberg, Barnett & Cohen, all of Chicago (William J. Harte, John G. Jacobs, Edward T. Joyce, Benjamin Cohen, Jerome F. Goldberg, and Michael H. Moirano, of counsel), for appellees.
   JUSTICE MEJDA

delivered the opinion of the court:

Pursuant to Supreme Court Rule 308 (87 Ill. 2d R. 308), the circuit court entered an order finding that certain previous interlocutory orders involve questions of law as to which there is substantial ground for difference of opinion, and that an immediate appeal would materially advance the ultimate termination of the litigation. We granted defendant’s application for leave to appeal to consider the following questions certified by the trial court:

“1. In the circumstances of this case, where the relevant health care benefits contracts do not explicitly state that the insurer will not pay claims for services that the insurer determines are ‘not medically necessary,’ do the plaintiffs state a claim for relief based upon the insurer’s denial of claims on the basis of its determination that the health care was ‘not medically necessary?’
2. In the circumstances of this case, does the question stated above present common questions of law or fact which predominate over individual questions, and do the parties designated by the Court as representative parties adequately represent the interests of the class in conformance with the requirements of Illinois Civil Practice Act, Section 57.2(a)(3)?
3. Is the Illinois Department of Insurance a necessary party to this action?”

The trial court’s orders answered the first two questions in the affirmative and the last question in the negative. For the reasons which follow, we affirm the orders of the trial court.

Plaintiffs are beneficiaries of health insurance policies issued by the defendant, Health Care Services Corporation (hereinafter referred to as “Blue Cross”) and health care providers who rendered care to persons insured by Blue Cross. This suit was brought as a class action for damages, declaratory judgment, and injunctive relief. The gravamen of the consolidated complaint is that Blue Cross, in the absence of contractual or other legal authority, regularly refused to pay for medical and hospital care which Blue Cross independently determined was not medically necessary. Blue Cross moved under section 45 of the Civil Practice Act (Ill. Rev. Stat. 1981, ch. 110, par. 45, now codified without change of substance at Ill. Rev. Stat. 1981, ch. 110, par. 2 — 615) to dismiss the complaint on the ground that it was insufficient as a matter of law. Blue Cross also moved to join the Department of Insurance as a necessary party. On October 8, 1980, the trial court refused to dismiss three of the four counts of the consolidated complaint and ruled that the Department was not a necessary party. The trial court also determined that the cause could be tried as a class action and certified three sub-classes. As already indicated, the circuit court subsequently made the necessary findings to support an interlocutory appeal under Rule 308 and we granted the defendant’s application for leave to appeal.

Opinion

The first issue presented for review is whether plaintiffs state a claim for relief by alleging that Blue Cross denied their insurance claims based on Blue Cross’ independent determination that the health care rendered was not “medically necessary” despite the failure of the relevant contracts to state explicitly that this determination may be made by the insurer and that it could form the basis for the noncoverage. In deciding whether the trial court properly denied Blue Cross’ motion to dismiss, we need only determine whether the consolidated complaint alleges facts sufficient to constitute a cause of action. See Illinois Housing Development Authority v. Sjostrom & Sons, Inc. (1982), 105 Ill. App. 3d 247, 253, 433 N.E.2d 1350.

Count I of the consolidated complaint alleged that various named plaintiffs were at all relevant times insured under group or nongroup contracts issued by Blue Cross and that they had regularly paid or caused to be paid premiums to the defendant in consideration of the insurance provided. Copies of the insurance agreements were attached to the complaint. The complaint further alleged that the terms and conditions of the contracts are substantially identical in all material respects and that none of the policies provides for independent review of a determination by an insured’s physician as to when hospitalization is medically necessary or desirable, nor for denial of claims in the event that Blue Cross disagrees with the medical determination made by the insured’s physician. The complaint also alleged that Blue Cross has engaged in a pattern of refusing to pay its insureds’ legitimate claims for the costs of health care for the stated reason that Blue Cross determined that such care was not medically necessary despite authorization of the care by the insureds’ physicians. The complaint concluded that this practice constituted a breach of contract. Count I also alleged that the cause was brought as a class action because the large size of the class (over 1,000 members) makes joinder of all class members impracticable, that questions of fact and law common to the class predominate over questions affecting only individual members, and that the named plaintiffs will fairly and adequately protect the interest of the class.

Count II sought recovery for common law fraud and Count III sought recovery for violation of the Consumer Fraud and Deceptive Business Practices Act (Ill. Rev. Stat. 1981, ch. 121V2, pars. 261 through 272). Count IV was stricken by the trial court. This appeal concerns only the sufficiency of count I.

Count I adequately alleges the existence of a valid contract and breach thereof (see generally Steinberg v. Chicago Medical School (1977), 69 Ill. 2d 320, 371 N.E.2d 634), and the defendant’s brief does not actively dispute the sufficiency of these allegations.

Blue Cross contends, however, that the Non-Profit Health Care Service Plan Act (Ill. Rev. Stat. 1981, ch. 32, pars. 551 through 562i (hereinafter referred to as the Act)) under which Blue Cross is organized, authorizes it to review claims and deny those which it determines to be “medically unnecessary.” Technically, this contention comprises “affirmative matter” which avoids the legal effect of the claim and therefore should have been raised by a motion under section 48(l)(i) of the Civil Practice Act. (Ill. Rev. Stat. 1981, ch. 110, par. 48(l)(i), now codified without change of substance as Ill. Rev. Stat. 1981, ch. 110, par. 2 — 619(a)(9); see Illinois Housing Development Authority v. Sjostrom & Sons, Inc. (1982), 105 Ill. App. 3d 247, 252, 433 N.E.2d 1350.) A court of review may, however, treat an improperly designated motion to dismiss as though brought under the proper section (see 105 Ill. App. 3d 247, 253, 433 N.E.2d 1350), and we shall so treat the instant motion. Blue Cross relies on that part of section 5 of the Act which provides:

“Sec. 5. Any corporation subject to the provisions of this Act may enter into contracts for the rendering of health care service to any of its subscribers and provide for payment for any such service.
A health care service plan corporation shall impose no restrictions on the physician who treats a subscriber as to methods of diagnosis or treatment ***. ***
The rates charges by such corporation to the subscriber for health care service shall, at all times, be subject to the approval of the Director of Insurance of the State of Illinois.
Rates to be charged to subscribers or subscriber groups shall be deemed unreasonable if the Director of Insurance finds that the health care service corporation has failed to make a vigorous, good-faith effort to contain rates of reimbursement to hospitals and other participating health care providers as well as to promote cost-effective alternative forms of health care.” (Emphasis added.) (Ill. Rev. Stat., 1982 Supp., ch. 32, par. 555.)

While we agree with Blue Cross that one of the goals of the Act is health care cost control, we cannot agree that the cited portion of the Act mandates the particular, after-the-fact, form of cost control advocated by Blue Cross. The statute is couched in general terms and, contrary to Blue Cross’ interpretation, does not purport to require any particular method of cost control.

Moreover, Blue Cross’ argument relies on an isolated part of the statute taken out of context. “ Tt is a cardinal rule of statutory construction that significance and effect should, if possible, without destroying the sense or effect of the law, be accorded every paragraph, sentence, phrase and word. [Citation.] A statute should be so construed, if possible, that no word, clause or sentence is rendered meaningless or superfluous. [Citations.]’ (People ex rel. Barrett v. Barrett (1964), 31 Ill. 2d 360, 364-65.)” (People v. Lutz (1978), 73 Ill. 2d 204, 212, 383 N.E.2d 171.) The rest of section 5 of the Act states:

“All rates or basis of payments to health care providers made by [Corporations organized under the Act] pursuant to the contracts provided for above shall be approved prior to payment by the Director of Insurance.
The Director shall have the power to require immediate renegotiation of such rates or basis of payments whenever he determines that they provide for excessive payments or that they fail to include reasonable incentives for cost control, or that they otherwise substantially and unreasonably contribute to escalation of the costs of providing health care services to subscribers, or that they are otherwise inconsistent with the purposes of this Act.” (Ill. Rev. Stat., 1982 Supp., ch. 32, par. 555.)

When read in context, the statutory language upon which Blue Cross relies does not appear to be intended as a limit on Blue Cross’ obligation to pay claims arising from existing contracts, but rather limits the rate base allowable by the Department of Insurance to payments made by Blue Cross for services which were “necessary or desirable.” Blue Cross intimates as much in its brief, citing the Report and Recommendation of the Hearing Officer in Blue Cross’ 1976-77 rate proceedings. This report concluded that the “necessary or desirable” language of the statute “may be used as a limiting standard in evaluating payments to providers as a component of rates” (Emphasis added.) Our conclusion that the statute does not limit Blue Cross’ obligation to pay claims predicated on existing contracts is bolstered by the statutory language which provides that “[a] health care service plan corporation shall impose no restrictions on the physician who treats a subscriber as to methods of diagnosis or treatment ***.” (Ill. Rev. Stat., 1982 Supp., ch. 32, par. 555.) This prohibition indicates a legislative intent to maintain the traditional physician-patient relationship and to insulate the physician’s exercise of independent judgment and discretion from constraints developed by insurance companies. We conclude therefore that the Act does not limit Blue Cross’ obligation to pay under the instant contracts and accordingly does not constitute affirmative matter sufficient to avoid the thrust of plaintiffs’ complaint.

Blue Cross also argues that the Department of Insurance has ordered Blue Cross to deny coverage based on medical necessity evaluations. As support for this assertion, Blue Cross relies oh several orders issued by the Department of Insurance. Blue Cross argues that because payment of claims is largely the determining factor in establishing the rates which Blue Cross may charge for coverage, the Department of Insurance will only sanction claim payments that are “necessary or desirable.” Initially, we note that most of the orders which Blue Cross cites were entered in rate-setting proceedings. In this context the purpose for which the Department will “sanction” Blue Cross’ claim payments becomes clear: the Department of Insurance will not allow payments which were neither necessary nor desirable to form the basis for the establishment of premium rates. This is made even clearer in the report and recommendation in the above 1976-77 rate proceeding statement already quoted that the “necessary or desirable” language of the statute “may be used as a limiting standard in evaluating payments to providers as a component of rates." (Emphasis added.) This cannot be equated with requiring Blue Cross, regardless of contractual provisions, to deny claims for services which it determines independently to be medically unnecessary.

Further examination of the orders cited by Blue Cross reveals that none of them may fairly be characterized as requiring Blue Cross to deny claims for unnecessary services. The Insurance Director’s order of November 14, 1975, required Blue Cross to “[i]nstitute a procedure whereby any claim settlement resulting in a reduction of benefits based upon an apparent lengthy or unnecessary hospitalization shall be substantiated by facts and not assumptions.” Contrary to Blue Cross’ assertion, this order does not mandate Blue Cross to refuse to pay otherwise valid claims based on an evaluation of medical necessity, but rather orders Blue Cross not to deny a claim because the length of hospitalization exceeds an arbitrary “cut-off” point. The next “order” on which Blue Cross relies is the Director’s formulation of a rate-base issue: “Are the proposed filed rates based only upon costs incurred for that care which is necessary or desirable for the promotion or preservation of a person’s mental or physical health?” The obvious import of this query is that an inflated basis of payment should not be used to increase the rates which Blue Cross may charge for coverage. As indicated above, this is quite different from requiring Blue Cross, regardless of contractual provisions, to evaluate claims independently for medical necessity. The next order on which Blue Cross relies requires Blue Cross to notify “subscribers of the reasons for denial in readily understandable language whenever [Blue Cross] denies reimbursement for care determined not to be covered, inappropriate [sic] or unnecessary [sic].” (Emphasis added.) This order does not require a necessity determination in the absence of contractual authorization and we will not interpret it to provide such a contractual exclusion by implication. The next order which Blue Cross calls to our attention rejected Blue Cross’ proposed rider providing for medical necessity denials and does not support Blue Cross’ position.

Blue Cross has characterized these orders as “the Department’s enforcement policy,” but nothing in any of the orders supports Blue Cross’ position in this court. We conclude that Blue Cross is not required by the Department of Insurance to conduct medical necessity evaluations in the absence of contractual authorization.

Blue Cross next contends that the unambiguous language of the governing contracts provides coverage only for hospital care that is medically necessary. Blue Cross points to the contract of plaintiff Allison as an example and admits that this contract is identical to those of several other plaintiffs and “closely resembles the contracts” of the remaining plaintiffs. Blue Cross contends that the medical necessity requirement is included in the contractual definitions of the terms “hospital” and “hospital service.” The Allison contract defines “hospital” as

“any institution governmentally licensed as such for the care of the sick which provides service under the supervision of a Physician to patients whose conditions require continuous confinement to bed, including the regular provision of bedside service by registered nurses. ***.”

“It is axiomatic that ‘[a]mbiguous provisions or equivocal expressions whereby an insurer seeks to limit its liability will be construed most strongly against the insurer and liberally in favor of the insured.’ (Bell v. Continental Assurance Co. (1970), 123 Ill. App. 2d 274, 278, 260 N.E.2d 114.)” (Van Vactor v. Blue Cross Association (1977), 50 Ill. App. 3d 709, 715, 365 N.E.2d 638.) The contractual provision above quoted does not, however, even rise to the level of ambiguity; nothing in the definition gives any warning that treatment which the insurer determines to be medically unnecessary is excluded from coverage. Blue Cross also points out the contractual definition of “hospital service” which “means the necessary services and supplies listed in 11(A)(1) which are provided by a Hospital and regularly included in its charges.” Paragraph 11(A)(1) lists a variety of hospital services but does not provide that Blue Cross may make an independent medical necessity evaluation. In the absence of an explicit statement that Blue Cross may make such an independent evaluation, the insured is justified “in relying on the good faith judgment of his treating physician as to the medical necessity of services prescribed.” (Van Vactor v. Blue Cross Association (1977), 50 Ill. App. 3d 709, 717-18, 365 N.E.2d 638.) We note that in Van Vactor, although the relevant contract there did incorporate the term “medical necessity,” summary judgment against Blue Cross was affirmed on review because the contract did not explicitly warn the insured that Blue Cross, rather than the insured’s physician, would determine if the care rendered was necessary. In the instant case, the relevant contracts do not even contain the phrase “medical necessity,” and we are constrained by the holding in Van Vactor to conclude that no exclusion based on medical necessity is contained in these contracts. Parenthetically, we observe that Blue Cross has not alleged that the care in question was prescribed in bad faith by the plaintiffs’ physicians. Nothing in this opinion should be construed as foreclosing an exclusion from coverage for bad faith prescriptions of care. See Van Vactor v. Blue Cross Association (1977), 50 Ill. App. 3d 709, 720-21, 365 N.E.2d 638.

It is appropriate for us to note here that, despite criticism from some authorities (see, e.g., 1C Appleman, Insurance Law and Practice sec. 705.35 n.6 (1981)), we think Van Vactor remains analytically sound. Blue Cross’ brief has focused on the policy considerations associated with reducing unnecessary medical treatment and the concomitant cost of insurance premiums. This policy analysis is one-sided, however; the other side which we must consider is the legitimate expectation of the insured that coverage will be provided unless a specific exclusion applies. (Schmidt v. Equitable Life Assurance Society of the United States (1941), 376 Ill. 183, 190-91, 33 N.E.2d 485.) Our supreme court’s consistent application of the rule of construction cited in Schmidt (see, e.g., Dora Township v. Indiana Insurance Co. (1980), 78 Ill. 2d 376, 379-80, 400 N.E.2d 921 (and cases cited therein); St. Paul Fire & Marine Insurance Co. v. Frankart (1977), 69 Ill. 2d 209, 215, 370 N.E.2d 1058; Squire v. Economy Fire & Casualty Co. (1977), 69 Ill. 2d 167, 179, 370 N.E.2d 1044) indicates a conscious determination that the latter policy will prevail. This has particular application in the instant case in that other methods (e.g., hold harmless agreements running from health care providers to insureds in conjunction with independent necessity review) would operate to lower health care costs -without depriving the consumer of the protection for which he has paid. Accordingly, we conclude that Van Vactor remains a sound explication of Dlinois law. Because Dlinois case law provides precedent adequate to dispose of the question presented, we have no need to resort to the cases from other jurisdictions which Blue Cross cites in its brief.

In summary, we agree with the trial court that count I of plaintiffs’ complaint states a cause of action not avoided by other affirmative matter and we conclude that the motion to dismiss was properly denied as to this count.

The second issue for review is whether a class action is appropriate to an adjudication of this case. Section 2 — 801 of the Code of Civil Procedure provides:

“An action may be maintained as a class action in any court of this State and a party may sue or be sued as a representative party of the class only if the court finds:
(1) The class is so numerous that joinder of all members is impracticable.
(2) There are questions of fact or law common to the class, which common questions predominate over any questions affecting only individual members.
(3) The representative parties will fairly and adequately protect the interest of the class.
(4) The class action is an appropriate method for the fair and efficient adjudication of the controversy.” (Ill. Rev. Stat. 1981, ch. 110, par. 2 — 801.)

In the instant case, the trial court specifically found that each of these

requirements was satisfied. The decision to certify a class is a matter committed to the sound discretion of the trial court and will be reversed only upon a clear abuse of discretion or the application of impermissible legal criteria. (Schlenz v. Castle (1981), 84 Ill. 2d 196, 203, 417 N.E.2d 1336, appeal dismissed (1981), 454 U.S. 804, 70 L. Ed. 2d 73, 102 S. Ct. 76.) The scope of our review is limited to an assessment of the trial court’s exercise of discretion and does not extend to an independent, de novo, evaluation of the facts alleged to justify litigation of the case as a class action. McCabe v. Burgess (1979), 75 Ill. 2d 457, 464-65, 389 N.E.2d 565, cert. denied (1979), 444 U.S. 916, 62 L. Ed. 2d 170, 100 S. Ct. 230.

The first requirement under the statute is that the class must be so numerous that joinder of all members is impracticable. (Ill. Rev. Stat. 1981, ch. 110, par. 2 — 801(1).) The allegation in the complaint that the class consists of over 1,000 members provides an ample basis for the trial court’s conclusion that joinder of all members is impracticable. See Tassan v. United Development Co. (1980), 88 Ill. App. 3d 581, 594, 410 N.E.2d 902.

The second requirement under the statute is that there are questions of law or fact common to the class and which predominate over any questions affecting only individual members. (Ill. Rev. Stat. 1981, ch. 110, par. 2 — 801(2).) Blue Cross argues that the need for proof, on a case-by-case basis, of the attending physician’s actual determination of medical necessity requires reversal of the trial court’s ruling on the ground that the common questions of law or fact do not predominate. Initially, we note that unlike McCabe v. Burgess (1979), 75 Ill. 2d 457, 389 N.E.2d 565, cert. denied (1979), 444 U.S. 916, 62 L. Ed. 2d 170, 100 S. Ct. 230, in the instant case there has been no prior determination of the common issues. The contention that case-by-case proof is required to substantiate the attending physician’s determination was considered and rejected by this court in Van Vactor v. Blue Cross Association (1977), 50 Ill. App. 3d 709, 720-21, 365 N.E.2d 638. Van Vactor impliedly held that, for the purpose of determining insurance coverage, the decision by a physician to hospitalize a patient warrants a presumption, in the absence of proof of fraud, duress or bad faith, that the physician has made a determination of medical necessity. (See 50 Ill. App. 3d 709, 720-21.) Blue Cross argues that no “irrebuttable” legal presumption of propriety attends the physician’s determination, and we agree.

“Certainly if Blue Cross were to produce clear and convincing evidence of fraud, duress or bad faith in any of the *** identified claims, or any of the additional subscribers found to be within the class, the court would deal appropriately with that claim. However, ‘the hypothetical existence of individual issues is not a sufficient reason to deny the right to bring a class action.’ Harrison Sheet Steel Co. v. Lyons (1959), 15 Ill. 2d 532, 538, 155 N.E.2d 595.)” (Emphasis added.) Van Vactor v. Blue Cross Association (1977), 50 Ill. App. 3d 709, 721, 365 N.E.2d 638.

Scott v. Ambassador Insurance Co. (1981), 100 Ill. App. 3d 184, 426 N.E.2d 952, is inapposite to the case at bar in that the “ ‘amplíate array of causative, contributive or influencive factors’ ” identifiable in Scott (100 Ill. App. 3d 184, 188, 426 N.E.2d 952, quoting Morrissy v. Eli Lilly & Co. (1979), 76 Ill. App. 3d 753, 762, 394 N.E.2d 1369) is not present in the instant case. Accordingly, the trial court was well within its discretion in determining that the issue of contract construction predominated over any questions affecting only individual members. See Van Vactor v. Blue Cross Association (1977), 50 Ill. App. 3d 709, 721, 365 N.E.2d 638.

The third statutory requirement for the maintenance of a class action is that the representative parties will fairly and adequately protect the interests of the class. (Ill. Rev. Stat. 1981, ch. 110, par. 2 — 801(3).) Blue Cross contends that the representative plaintiffs are unable to represent the class because of antagonistic interests arising from potential class members concerned only with coverage for psychiatric care and others concerned with nonpsychiatric issues. Blue Cross does not indicate how this distinction may be equated with antagonism. Under the Illinois statute, there is no “typicality” requirement (compare Ill. Rev. Stat. 1981, ch. 110, par. 2 — 801(3), with Fed. R. Civ. P. 23(aX3)), and this absence “should insure that the duty to represent fairly and adequately will not be confused with a similarity in claims ***.” (Ill. Ann. Stat, ch. 110, par. 2 — 801, Historical and Practice Notes, at 92 (Smith-Hurd 1983).) Hence, a class representative may not be disqualified merely because his claim is not exactly the same as the claims of other potential class members. As Blue Cross notes, however, where the representative party seeks relief antagonistic to the interests of class members, the representation is not fair and adequate. (Client Follow-Up Co. v. Hynes (1982), 105 Ill. App. 3d 619, 625, 434 N.E.2d 485.) In Client Follow-Up, the representative plaintiffs sought attorney fees from the other class members. Because there was no “common fund” created by the success of the underlying action, the court reasoned that any judgment for attorney fees would have to be paid by the class members. The interests of the class representatives were therefore antithetical to those of the class members, and the class representatives accordingly could not fairly and adequately protect those interests. In the instant case, Blue Cross has not shown, except through speculation in its brief, how the relief sought by the class representatives would adversely affect the interests of the class members. Accordingly, we cannot hold that the trial court abused its discretion in certifying the class representatives. However, should such a conflict in interest be developed by competent evidence at an appropriate hearing on the merits, the trial court may reconsider the adequacy of representation for those members with conflicting interests. Frank v. Teachers Insurance & Annuity Association of America (1978), 71 Ill. 2d 583, 590, 376 N.E.2d 1377.

The fourth requirement under the statute for the maintenance of a class action is that the class action is an appropriate method for the fair and efficient adjudication of the controversy. (Ill. Rev. Stat. 1981, ch. 110, par. 2 — 801(4).) Blue Cross argues that a class action is an inappropriate method of adjudication because “individualized” notice would be grossly unmanageable or impossible. This argument confuses the requirements of the cited statutory provision (which mandates a consideration of the relative economy and efficiency of a class action (McCabe v. Burgess (1979), 75 Ill. 2d 457, 468-69, 389 N.E.2d 565, cert. denied (1979), 444 U.S. 916, 62 L. Ed. 2d 170, 100 S. Ct. 230)) with the provisions of section 2 — 803 of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, par. 2 — 803). Section 2 — 803 provides in relevant part:

“Upon a determination that an action may be maintained as a class action, or at any time during the conduct of the action, the court in its discretion may order such notice that it deems necessary to protect the interests of the class and the parties.” (Emphasis added.) (Ill. Rev. Stat. 1981, ch. 110, par. 2 — 803.)

The statutory requirement of notice is thus not absolute; rather, whether notice is to be given at all and the kind of notice which may be required are matters for the trial court’s discretion. The exercise of this discretion is, of course, limited by the dictates of due process. Due process, however, does not require individual notice in all circumstances. (People ex rel. Wilcox v. Equity Funding Life Insurance Co. (1975), 61 Ill. 2d 303, 312, 335 N.E.2d 448.) Our supreme court has indicated that “[t]he question of what notice must be given to absent class members to satisfy due process necessarily depends upon the circumstances of the individual action. (Frank v. Teachers Insurance & Annuity Association of America (1978), 71 Ill. 2d 583, 593.)” (Miner v. Gillette Co. (1981), 87 Ill. 2d 7, 15, 428 N.E.2d 478, cert. dismissed (1982), 456 U.S. 914, 74 L. Ed. 2d 249, 103 S. Ct. 484.) In Miner, the nonresident class members lacked the requisite “minimum contacts” with this State to support an exercise of in personam jurisdiction. The supreme court held that personal notice to these class members was required by due process and noted that the identity and address of each nonresident class member could be readily obtained from the defendant’s files. (87 Ill. 2d 7, 15, 428 N.E.2d 478, cert. dismissed (1982), 456 U.S. 914, 74 L. Ed. 2d 249, 103 S. Ct. 484.) In the instant case, the potential class members are residents of Illinois and thus one of the major obstacles to class litigation present in Miner is lacking here. Additionally, the absence of antagonism between the interests of the class members and the representative parties lessens the need for individual notice. (Client Follow-Up Co. v. Hynes (1982), 105 Ill. App. 3d 619, 625, 434 N.E.2d 485.) Assuming, ad arguendo, that individual notice is impossible as Blue Cross claims, the objection to class litigation is merely hypothetical because notice may not be a necessary component of this suit. The trial court has not ruled explicitly on the issue of notice and we do not read the order of class certification as implicitly holding that no notice is required. Under these circumstances, the determination of questions of notice should be made in the trial court before the issue is presented to this court. (See Tassan v. United Development Co. (1980), 88 Ill. App. 3d 581, 594-95, 410 N.E.2d 902.) Accordingly, we hold that, at this time, the inability to provide individual notice to all class members is not a bar to proceeding as a class action. We conclude that Blue Cross has shown no abuse of the trial court’s discretion. We also caution that nothing in the foregoing discussion should be construed as indicating an opinion as to what notice, if any, the trial court should actually require when it does rule on this issue.

The final issue for review is whether the Illinois Department of Insurance should be joined as a necessary party. (See Ill. Rev. Stat. 1981, ch. 110, par. 2 — 405.) The standard of review of a trial court’s refusal to require joinder of a party is whether the trial court abused its discretion. (Lain v. John Hancock Mutual Life Insurance Co. (1979), 79 Ill. App. 3d 264, 267, 398 N.E.2d 278.)

“A necessary or indispensable party is one whose presence in the suit is required for any of three reasons: (1) to protect an interest which the absentee has in the subject matter of the controversy which would be materially affected by a judgment entered in his absence [citations]; (2) to reach a decision which will protect the interests of those who are before the court [citations]; or (3) to enable the court to make a complete determination of the controversy [citation].” (79 Ill. App. 3d 264, 268-69, 398 N.E.2d 278.)

Blue Cross’ argument that the Department is a necessary party rests on the assumption that “a disputed practice results from the agency’s activities.” As we have already decided, the Department has not required Blue Cross’ disputed practice. Interestingly, the Department filed an affidavit in the trial court stating that the Department “is aware of no provision of the Act [the Non-Profit Health Care Service Plan Act (Ill. Rev. Stat. 1981, eh. 32, pars. 551 through 562i)] which would permit the Department to render interpretations of contracts between [Blue Cross] and its subscribers; or to adjudicate the rights of such parties ***.” The affidavit concluded that no decision of the circuit court in the instant case could “in any way detract” from the Department’s regulatory activities. In light of these circumstances, we conclude that the Department does not qualify as a necessary party for any of the reasons enumerated above. We therefore cannot hold that the trial court abused its discretion in failing to require joinder of the Department.

For the foregoing reasons, we affirm the orders of the circuit court.

Affirmed.

WILSON, P.J., and LORENZ, J., concur.


source: Caselaw Access Project

author: JUSTICE O’CONNOR JUSTICE RIZZI,

license: Public Domain

text:
    DUNCAN MUDD, a Minor, by his Mother and Next Friend, Rosalie Mudd, Plaintiff-Appellant, v. GOLDBLATT BROS., INC., et al., DefendantsAppellees.
    First District (3rd Division)
    No. 81—2779
    Opinion filed September 21, 1983.

      RIZZI, J., dissenting.

      Anesi, Ozmon, Lewin & Associates, Ltd., of Chicago (Nat P. Ozmon, Mark Novak, Noel C. Lindenmuth, Rick A. Gleason, and Dario A. Garibaldi, of counsel), for appellant.
    Sweeney & Riman, Ltd., and Epton, Mullin, Segal & Druth, both of Chicago (Elliot R. Schiff, Keven P. Donohue, and Don Segal, of counsel), for appellees Goldblatt Bros., Inc., Boy Carriers, Inc., and Terry Frankovich.
    John B. Grogan, Ltd., of Chicago (Susan Gunty, of counsel), for appellee First Baptist Church of Hammond.
   JUSTICE O’CONNOR

delivered the opinion of the court:

Plaintiff Duncan Mudd brought this action to recover damages for injuries he suffered due to the alleged negligence of defendants, Boy Carriers, Inc., First Baptist Church of Hammond, Indiana, Indiana Harbor Belt Railroad Company and Terry Frankovich. An amended complaint included Goldblatt Bros., Inc., the parent company of Boy Carriers, Inc., as a defendant. The Indiana Harbor Belt Railroad Company was dismissed upon motion and is no longer involved. The trial court directed a verdict in favor of defendant First Baptist Church of Hammond at the end of plaintiff’s case. The jury returned verdicts in favor of the remaining defendants. Plaintiff appeals from both the directed verdict and the jury verdicts.

Defendant has not presented any questions relating to the factual basis for the jury’s verdicts. We will therefore state only the facts necessary to our discussion of the various assigned errors.

The injuries sustained by plaintiff, an 11-year-old boy at the time, occurred on March 26, 1975, in Hammond, Indiana. Plaintiff testified that he went with two friends to a vacant lot where several buses were parked. They boarded these buses, which were up on blocks, with wheels missing and windows broken. After one of his friends broke a window, they noticed some men coming from a nearby building.

Plaintiff stated that he jumped out the back door of the bus to get away from one of the men who came on the bus. He ran down the alley and saw that he was being chased by the same man (defendant Frankovich). He then ran across a street and through a parking lot. At this point he was near some railroad tracks upon which a freight train was traveling. Plaintiff, just five feet from the tracks, changed his direction and was cut off by the man chasing him. He stopped abruptly and fell backwards. Plaintiff’s left hand was severed as it fell across one of the rails.

Frankovich was employed in its Hammond office by Boy Carriers, Inc., a subsidiary of Goldblatt Bros., Inc. Plaintiff’s theory is that Boy Carriers, Inc., agreed with First Baptist Church of Hammond for its employees to protect school buses owned by the Church. Thus, it is alleged, Frankovich was not only acting as an agent of Boy Carriers and Goldblatt, Bros., but also as an agent of the First Baptist Church.

Frankovich was the only other eyewitness to the accident. He testified that he was in Boy Carriers’ office when a fellow employee came in and said that some boys were breaking windows on the buses parked in the vacant lot. Frankovich and two other employees went outside to check. Several boys ran from one of the buses and Frankovich chased the boy (plaintiff) who came out the back door of the bus. He chased plaintiff down the alley, across a street and into a small parking lot near the railroad tracks. He saw plaintiff run alongside the tracks and dive under the train. As he arrived at the spot where he saw plaintiff, Frankovich saw him lying between the rails.

Frankovich further testified that he worked for Boy Carriers. He stated that his immediate supervisor told him and his fellow employees to keep an eye on the buses in the vacant lot. Frankovich’s answer to the original complaint admitted the allegation of a relationship between Boy Carriers and First Baptist Church for the purpose of protecting the buses. This answer was later withdrawn by leave of court so that Frankovich could file a motion to dismiss plaintiff’s amended complaint. However, a similar answer was made in response to plaintiff’s third amended complaint which was filed during the trial and after the directed verdict for First Baptist Church. In his answer to an interrogatory propounded by plaintiff, Frankovich also stated there was an oral agreement for Boy Carriers and First Baptist Church to watch over each other’s vehicles.

Boy Carriers’ answer to the original complaint was filed in conjunction with Frankovich. However, an answer to an interrogatory, made by Boy Carriers’ general supervisor, denied knowledge of any agreement with First Baptist Church. Subsequent answers to the second and third amended complaints filed by Goldblatt Bros, denied the existence of any relationship with First Baptist Church, but admitted that there was an understanding by certain employees that they would watch over property of First Baptist Church.

First Baptist Church denied all allegations that an agreement or agency relationship existed with Boy Carriers for the protection of church buses. Its theory is that plaintiff did not present any basis to conclude that such a relationship did exist. First Baptist Church argued at trial that any admissions of codefendants made in the pleadings were inadmissible against it. The trial court agreed, sustaining the Church’s objections. At the close of plaintiff’s case, the trial court granted the Church’s motion for a directed verdict.

Plaintiff first argues that the trial court committed error when it applied the Illinois rule, rather than the Indiana rule, regarding the burden of proof on the issue of contributory negligence. In Indiana, the burden of pleading and proving contributory negligence is placed upon the defendant. (See Ind. Code Ann. Rule TR. 9.1(A) (Burns 1983).) In Illinois, at the time of trial in this matter, the burden was on the plaintiff to prove freedom from contributory negligence. See Williams v. Brown Manufacturing Co. (1970), 45 Ill. 2d 418, 261 N.E.2d 305.

Under traditional conflict of law rules, a “forum will apply its own local law in determining which party has the burden of persuading the trier of fact on a particular issue unless the primary purpose of the relevant rule of the state of the otherwise applicable law is to affect decision of the issue rather than to regulate the conduct of the trial.” (Restatement (Second) of Conflict of Laws sec. 133 (1971); Babcock v. Chesapeake & Ohio Ry. Co. (1979), 83 Ill. App. 3d 919, 404 N.E.2d 265, appeal denied (1980), 81 Ill. 2d 589; People v. Saiken (1971), 49 Ill. 2d 504, 275 N.E.2d 381, cert. denied (1972), 405 U.S. 1066, 31 L. Ed. 2d 796, 92 S. Ct. 1499.) In Babcock, this court was faced with a similar issue when it was argued that an instruction on the burden of proof for contributory negligence should have allocated the burden according to Michigan law. Under Michigan law, contributory negligence is an affirmative defense. We found the Michigan law was a procedural law designed to regulate conduct of the trial and determined that the trial court’s instruction according to Illinois law was proper. Babcock v. Chesapeake & Ohio Ry. Co. (1979), 83 Ill. App. 3d 919, 929.

We, too, determine the Indiana rule is one of procedure regulating the conduct of the trial. Support for this proposition is found in Midland Trail Bus Lines, Inc. v. Martin (1935), 100 Ind. App. 206, 194 N.E. 862, in which it was stated that the predecessor statute to the current rule was “a rule of practice and not a rule governing a right of action.” 100 Ind. App. 206, 211, 194 N.E. 862, 864; see also Chicago Terminal Transfer R.R. Co. v. Vandenberg (1905), 164 Ind. 470, 73 N.E. 990; Cleveland, Cincinnati, Chicago & St. Louis Ry. Co. v. Wolf (1920), 189 Ind. 585, 128 N.E. 38; Southern Ry. Co. v. McNeeley (1909), 44 Ind. App. 126, 88 N.E. 714.

Plaintiff contends the Indiana rule is a' substantive rule, or is substantive in effect, and therefore falls within the exception in the general rule stated above, citing Evansville & Terre Haute R.R. Co. v. Berndt (1909), 172 Ind. 697, 88 N.E. 612, Rhea v. Sawyer (1913), 54 Ind. App. 512, 102 N.E. 52, and Wamsley v. Cleveland, Cincinnati, Chicago & St. Louis Ry. Co. (1907), 41 Ind. App. 147, 82 N.E. 490. In these cases, plaintiff argues, the respective reviewing courts based their decision on the important substantive effect of the statute allocating the burden of proving contributory negligence on the defendant. After an analysis of these cases, we find they do not support plaintiff’s contentions.

In Wamsley, the trial court directed a verdict in favor of the defendant. Reversing the trial court, the reviewing court noted that the defendant had the burden of proving contributory negligence and could not make assumptions that facts already in evidence showed the deceased’s actions contributed to the accident. (41 Ind. App. 147, 151, 82 N.E. 490, 491.) In Rhea, an action for property damages, the trial court’s instruction to the jury placed the burden of proving contributory negligence on the defendant. The appellate court reversed because the rule, as it existed in Indiana at that time, applied only to personal injury and death cases. (54 Ind. App. 512, 102 N.E. 52.) Finally, in Berndt, the Indiana Supreme Court made only passing reference to the statute making contributory negligence a matter of defense when it held harmless a presumption stated in an instruction. The court noted that the statute did not create a presumption of due care, but that it could have the same result when there is no evidence relating to contributory negligence. 172 Ind. 697, 705-06, 88 N.E. 612, 615.

Plaintiff also argues that the Indiana rule should be followed because the Illinois rule should be considered substantive. (Citing Valleroy v. Southern Ry. Co. (Mo. 1966), 403 S.W.2d 553; Precourt v. Driscoll (1931), 85 N.H. 280, 157 A. 525.) In an action under Federal Employers’ Liability Act (45 U.S.C.A. sec. 51 et seq. (1976)) arising out of an accident in Illinois, the Missouri Supreme Court considered whether the plaintiff was required to follow the Illinois rule and plead the exercise of due care or if the Missouri rule placing the burden on defendant should be followed. Following Missouri case law (see O’Leary v. Illinois Terminal R.R. Co. (Mo. 1957), 299 S.W.2d 873), the court determined the Illinois rule was a substantive requirement and thus should be applied. Precourt involved a similar analysis with an accident occurring in Vermont, the Vermont rule and the lawsuit brought in New Hampshire.

These cases represent a line of cases which have held that a foreign State’s rule allocating the burden of proving contributory negligence on the plaintiff was intended to affect substantive rights and therefore should be applied in a lawsuit in the forum State. (See Annot., 35 A.L.R3d 289, 318 (1971).) Illinois considers the burden of proof of contributory negligence to be a procedural matter. (Babcock v. Chesapeake & Ohio Ry. Co. (1979), 83 Ill. App. 3d 919, 929.) We have determined that under Indiana law this burden of proof, placed on the defendant there, is also procedural. Thus, the trial court was correct in applying Illinois law in this regard.

Plaintiff next argues that he was prejudiced by the giving of the following special interrogatory:

“Do you find that plaintiff was, before and at the time of the occurrence, exercising ordinary care for his own safety so as to avoid proximately causing himself injury?”

Plaintiff contends this interrogatory prejudiced him by holding him to a standard of care greater than that required of a minor. He also argues that the interrogatory was confusing, misleading, did not control the general verdict and was not limited to the actual injuries sustained.

A special interrogatory must be given when it is in proper form and relates to an ultimate issue of fact. (Norton v. Wilbur Waggoner Equipment Rental & Excavating Co. (1980), 82 Ill. App. 3d 727, 403 N.E.2d 108.) When there is a factual question as to a plaintiff’s conduct and its causal relationship to the injury in a negligence case, a special interrogatory on the question of contributory negligence is proper. (Wissmann v. Jedrzejak (1979), 71 Ill. App. 3d 688, 389 N.E.2d 8, appeal denied (1979), 79 Ill. 2d 619.) A special interrogatory on the question of a minor’s contributory negligence should contain a definition of the standard of care by which the minor is to be judged. (Babcock v. Chesapeake & Ohio Ry. Co.; Shaver v. Berrill (1976), 45 Ill. App. 3d 906, 358 N.E.2d 290, appeal denied (1977), 65 Ill. 2d 584.) An interrogatory which does not contain such a definition may properly be given, however, if the definition of a minor’s standard of care is provided in a jury instruction. Babcock v. Chesapeake & Ohio Ry. Co.

In the case at bar, two instructions were given which reflected the appropriate standard by which to judge plaintiff’s conduct. Both of these instructions accurately stated the same standard under both Indiana and Illinois law. (See Petroski v. Northern Indiana Public Service Co. (1976), 171 Ind. App. 14, 354 N.E.2d 736; LaNoux v. Hagar

(1974), 159 Ind. App. 646, 308 N.E.2d 873.) Plaintiff’s instruction No. 12 follows Indiana Pattern Instruction No. 5.01, providing in pertinent part:

“Negligence on the part of the plaintiff is the failure to do what a reasonably careful and prudent child of like age, knowledge, judgment and experience would have done under the same or like circumstances or the doing of something which a reasonably careful and prudent child of like age, knowledge, judgment and experience would not have done under the same or like circumstances; in other words, negligence on the part of the plaintiff is the failure to exercise that reasonable or ordinary care which a child of like age, knowledge, judgment and experience would exercise.”

Plaintiff’s instruction No. 13A follows Illinois Pattern Instruction (IPI), Civil, No. 10.05, and states:

“A minor is not held to the same standard as an adult. When I use the words, ‘ordinary care’ with respect to the plaintiff, I mean that degree of care which a reasonably careful and prudent child of like age, knowledge and judgment and experience would have used under the same or like circumstances.”

These instructions, read together with the special interrogatory, gave a proper statement to the jury on the law of contributory negligence as it relates to a minor. See Babcock v. Chesapeake & Ohio Ry. Co.

Plaintiff relies on Shaver v. Berrill in support of his argument that an interrogatory which fails to state the degree of care required of a child in determining contributory negligence is error. The Shaver court found an interrogatory to be deficient because it did not contain such a definition. As in Babcock, however, we find Shaver to be internally inconsistent. IPI Civil No. 10.05, stating the child standard of care, was given in Shaver. Since special interrogatories must be considered together and in light of other instructions of the court (Vuletich v. Bolgla (1980), 85 Ill. App. 3d 810, 407 N.E.2d 566, appeal denied (1980), 81 Ill. 2d 600), any deficiency should have been cured. Bruske v. Arnold (1969), 44 Ill. 2d 132, 254 N.E.2d 453, cert. denied (1970), 398 U.S. 905, 26 L. Ed. 2d 65, 90 S. Ct. 1697.

Plaintiff’s remaining arguments in regard to the special interrogatory are interrelated and based on some of the same arguments already considered. It is contended that the interrogatory is confusing because it did not state the minor’s standard of ordinary care, it could not control the general verdict and did not place the burden of proof on defendants. It is argued that the interrogatory could not control the general verdict because of the standard-of-care issue and the fact that it was not limited to the actual injuries which occurred.

Plaintiff argues that the jury might have believed the interrogatory referred to possible injuries from other sources. The test of the correctness or propriety of instructions is not what meaning the ingenuity of counsel can, at leisure, attribute to them, but how and in what sense, under the evidence before them and the circumstances of the trial, ordinary men acting as jurors will understand the instructions. (Newton v. Meissner (1979), 76 Ill. App. 3d 479, 394 N.E.2d 1241.) It is clear from the interrogatory and the instructions given that the jury was to limit its consideration of plaintiff’s conduct to the avoidance of the injuries which resulted in this litigation. (Cf. Vuletich v. Bolgla (the word “occurrence” in a special interrogatory is sufficiently clear to focus the jury’s consideration to the critical period of defendant’s alleged negligence).) The jury’s answer turned on its determination of whether plaintiff’s conduct contributed to his injuries. The answer did control the general verdict.

We next address the claimed errors which led to a directed verdict in favor of defendant First Baptist Church. Plaintiff claims the trial court erred in excluding certain testimony of Charles Perez and defendant Frankovich, both of whom were employees of Boy Carriers at the time of the incident. The controverted testimony related to an alleged agreement by which Boy Carriers’ employees would look out for vandals on First Baptist Church buses parked in a vacant lot behind the Boy Carriers’ office.

Frankovich, called by plaintiff as an adverse witness (Ill. Rev. Stat. 1981, ch. 110, par. 2 — 1102), testified that Richard Ross, his supervisor, told him to watch over the church buses in the vacant lot. This testimony was allowed only after the trial court gave a limiting instruction to the jury stating that Frankovich’s testimony was not binding on First Baptist Church, but could be relative to other parties in the case. An offer of proof made by plaintiff revealed that Perez would have testified that Ross told him and coworkers that there was an agreement with the church to watch out for the buses on the vacant lot. Perez also would have testified that he was present during a conversation between Ross and Reverend Jack Hyles, pastor of the First Baptist Church, when it was agreed that Boy Carriers’ employees would watch out for the buses.

Plaintiff argues this testimony was direct and first-hand testimony of the relationship and agreement between Boy Carriers and First Baptist Church. Defendant First Baptist Church states this testimony merely shows the witnesses were agents of Boy Carriers and Goldblatt Bros, and argues that only the testimony of the witnesses’ superior would be direct and first-hand testimony. Under similar circumstances, the appellate court in Kapelski v. Alton & Southern R.R. (1976), 36 Ill. App. 3d 37, 41-42, 343 N.E.2d 207, appeal denied (1976), 63 Ill. 2d 552, stated:

“As a general rule admissions are inadmissible as hearsay when made by a person who is not in privity with the party against whom such are introduced. (Callaghan v. Myers, 89 Ill. 566; Brotherhood of Railroad Signalmen v. Zoning Board of Appeals, 348 Ill. App. 106, 108 N.E.2d 43.) Thus, in order to introduce a statement or act by an agent or employee as an admission it must first be shown (1) that he was such an agent or employee (Washburn v. Terminal Railroad Association, 14 Ill. App. 2d 95, 252 N.E.2d 389), (2) that such statement or act was made or done in and about a matter over which he had actual or apparent authority (Burgard v. Mascoutah Lumber Co., 6 Ill. App. 2d 210, 127 N.E.2d 464), and (3) that he spoke or acted under or by virtue of his authority as such agent or employee (City of Chicago v. Jewish Consumptives Relief Society, 323 Ill. 389, 154 N.E. 117). While an agent is competent to testify as to his agency or authority, the fact of agency or authority, when disputed or denied, must ordinarily be established by evidence of the acts or conduct of the principal or his statements to the agent or third persons. (Merchants’ National Bank v. Nichols & Shepard Co., 223 Ill. 41, 79 N.E. 28.) Neither the fact nor the extent of the agency can be proved by evidence of the purported agent’s past declarations asserting agency. (4 Wigmore, Evidence sec. 1078, at 176 (Chadbourn rev. ed. 1972); McCormick on Evidence sec. 267, at 642 (2d ed. 1972); 5 Callaghan’s Illinois Evidence sec. 10.78, at 428 (1964); Card, Illinois Evidence Manual, Rule 174, at 201-02 (1963).) As stated in Holbeck v. Illinois Bankers Life Assurance Co., 318 Ill. App. 296, 47 N.E.2d 721:
‘The law is well settled in Illinois that an agent cannot confer power on himself and his agency or authority cannot be established by showing what he said or did. [Citations.]’ (318 Ill. App. 296, 304.)
See King v. Chicago, Burlington & Quincy R.R. Co., 235 Ill. App. 401. See also Beccue v. Rockford Park District, 94 Ill. App. 2d 179, 236 N.E.2d 105.”

In the instant case, plaintiff alleged Boy Carriers was an agent of the First Baptist Church for purposes of protecting the church buses. Defendant First Baptist Church denied any such relationship. The authority to bind a principal will not be presumed, but rather, the person alleging authority must prove its source unless the act of the agent has been ratified. (Schoenberger v. Chicago Transit Authority (1980), 84 Ill. App. 3d 1132, 405 N.E.2d 1076; Wing v. Lederer (1966), 77 Ill. App. 2d 413, 222 N.E.2d 535.) Since the authority of an agent comes only from the principal, it is necessary to trace the source of an agent’s authority to some word or act of the alleged principal. City of Evanston v. Piotrowicz (1960), 20 Ill. 2d 512, 170 N.E.2d 569; Schoenberger v. Chicago Transit Authority.

Proof of this allegation of agency was attempted by plaintiff’s counsel through evidence of a conversation between Reverend Jack Hyles and a Boy Carriers’ supervisor, Ross. At the time this evidence was offered, in the form of Perez’ testimony, no foundation had been laid concerning the scope and extent of Reverend Hyles’ authority to act for the First Baptist Church in this regard. The trial court correctly ruled that plaintiff needed to establish this agency and authority before the conversation of Ross and Reverend Hyles was admissible against the defendant First Baptist Church. See Kapelski v. Alton & Southern R.R.

For this purpose, Reverend Jack Hyles and Reverend David Hyles were examined in chambers by the parties. Subsequently, plaintiff called only Reverend David Hyles as a witness. Reverend David Hyles testified that he was an assistant pastor at the First Baptist Church. His father is Reverend Jack Hyles. He knew the church owned some buses in March 1975. However, he did not have any responsibility over the buses and had no knowledge of where they were parked and stored. He also had no knowledge of any agreement between the church and Boy Carriers relating to the buses. During his examination in chambers, Reverend David Hyles stated that the Board of Deacons of the church took care of business transactions and the managing of church property. He further stated that his father, to whom he was an assistant, was in charge of the spiritual duties of the church, but also moderated the Board of Deacons’ meetings.

The voir dire examination in chambers of Reverend Jack Hyles revealed that he had been with the church for 22 years. He stated he was the “boss man” when it came to the pastoral duties of the church. He was not aware of any agreement with Boy Carriers relating to the buses. He stated that would not be part of his responsibilities. He further stated that any budget for bus maintenance was made by the Board of Deacons and approved by the church congregation.

The record does not establish a prima facie case that Reverend Jack Hyles was an agent with authority to bind defendant First Baptist Church. See Chmieleski v. Venture Stores, Inc. (1982), 106 Ill. App. 3d 312, 436 N.E.2d 4; Kapelski v. Alton & Southern R.R.

Plaintiff further argues that the trial court should have allowed into evidence the answers to the complaint and certain interrogatories made by Boy Carriers and Frankovich. The effect of these answers was to admit there was an oral agreement with the church in regard to watching over the buses. However, these answers by Boy Carriers and Frankovich are not admissible against their codefendant First Baptist Church for the purpose of establishing privity between them. (29 Am. Jur. 2d Evidence sec. 699 (1967).) Only where the relationship is admitted or proved by evidence other than the statements in the pleadings would the answers be admissible. We do not think the trial court abused its discretion in directing a verdict for defendant First Baptist Church. Pedrick v. Peoria & Eastern R.R. Co. (1967), 37 Ill. 2d 494, 229 N.E.2d 504.

Plaintiff also contends that the trial court erred by not informing the jury why the church was no longer participating in the trial. By not so informing the jury, plaintiff argues, the jury could have concluded that a settlement with the church had been reached. This argument was advanced by plaintiff in the trial court at the time the directed verdict was granted. We agree with the trial court's assessment made at the time, i.e., that there would be less of a chance of misconception if a neutral statement was made to the jury, which was done. Plaintiff has made no showing that the neutral statement made by the trial court was prejudicial (Joynt v. Barnes (1979), 71 Ill. App. 3d 187, 388 N.E.2d 1298, appeal denied (1979), 79 Ill. 2d 611), and we find no abuse of discretion in that regard.

Finally, it is contended that the closing argument by defense counsel for Frankovich materially prejudiced plaintiff by implying that Frankovich had no insurance. In closing argument, Frankovich’s counsel stated:

“That complaint is served on Terry [Frankovich], he comes to court, he hires an attorney, he defends the case.”

This statement was not objected to at the time it was made. The question was raised in the post-trial motion, which was denied. When read in the context of the record, it is clear this statement does not refer to insurance coverage or the lack of it. No specific mention of insurance was made; even where insurance is merely mentioned, reversal is not required. (Kosch v. Monroe (1982), 104 Ill. App. 3d 1085, 433 N.E.2d 1062; Baikie v. Luther High School South (1977), 51 Ill. App. 3d 405, 366 N.E.2d 542.) If the lack of insurance was in some way implied by the argument, the statement does not require a reversal.

The judgment of the circuit court of Cook County is affirmed.

Affirmed.

McGILLICUDDY, J., concurs.

JUSTICE RIZZI,

dissenting:

I believe plaintiff was denied a fair trial. I would reverse the judgment entered on the directed verdict in favor of defendant First Baptist Church of Hammond (Church). I would also reverse the judgment entered on the jury verdict in favor of defendants Boy Carriers, Inc. (Carriers), Terry Frankovich and Goldblatt Bros., and remand the case for a new trial as to all defendants.

I will first address the directed verdict in favor of the Church. Plaintiff’s theory is that there was an oral agreement between Carriers and the Church that Carriers would protect the Church’s school buses from vandalism, and that Carriers was, therefore, an agent of the Church for the purpose of protecting the buses. In order to establish the oral agreement and the agency, plaintiff called Charles Perez as a witness. Perez testified that he was employed by Carriers and that shortly before the occurrence he was being trained to become an assistant manager. His immediate supervisor was Richard Ross. Ross told Perez that his job included keeping an eye on the Church’s school buses and chasing away children who might vandalize the buses.

When plaintiff attempted to question Perez regarding an oral agreement that was made in his presence between Ross and the senior pastor of the Church, Reverend Jack Hyles (Hyles), the trial court sustained an objection to the questioning, and plaintiff made an offer of proof. The offer of proof shows that Perez would have testified that he was present during a conversation between Ross and Hyles when it was agreed that Carriers’ employees would watch out for the Church’s school buses and protect them from vandalism. The offer of proof was denied, and the offered evidence was excluded. Since Ross and Hyles denied making the agreement, plaintiff was not able to prove that an oral agreement was made between Carriers and the Church to have Carriers protect the Church’s school buses from vandalism. However, Carriers’ employees did in fact protect the Church’s school buses.

At the conclusion of plaintiff’s case, the trial court directed a verdict in favor of the Church on the basis that plaintiff did not prove the oral agreement between Carriers and the Church and plaintiff did not prove an agency relationship between Carriers and the Church for the purpose of protecting the school buses.

In agreeing with the trial court’s ruling, the majority states: “The record does not establish a prima facie case that Reverend Jack Hyles was an agent with authority to bind defendant First Baptist Church.” I disagree. In my judgment, the trial court erred in excluding relevant testimony by Perez. Plainly, if that testimony had been admitted, then it would have been improper for the trial court to direct the verdict in favor of the Church. Thus, I believe the trial court erred in directing the verdict.

I believe that at the time Perez’ testimony was offered, reasonable persons could have concluded that Hyles had apparent authority to act for the Church with regard to the agreement with Carriers. Apparent authority is such authority as the principal knowingly permits the agent to assume or which the principal holds his agent out as possessing. It is the authority which a reasonable, prudent person, exercising diligence and discretion, would naturally suppose the agent to possess. See Barraia v. Donoghue (1977), 49 Ill. App. 3d 280, 283, 364 N.E.2d 952, 954.

Here, it was undisputed that Hyles was the senior pastor of the Church. Clearly, as senior pastor, he was an agent of the Church. Agency may be established and its nature and extent shown by parol evidence, whether direct or circumstantial, and reference may be had to the situations and acts of the parties, and other circumstances germane to the question, and if the evidence shows one acting for another under circumstances implying knowledge on the part of the supposed principal of such acts, a prima facie case of agency is established. (City of Evanston v. Piotrowicz (1960), 20 Ill. 2d 512, 518, 170 N.E.2d 569, 573.) In the present case, the record demonstrates that Hyles was acting for the Church as its senior pastor under circumstances implying knowledge on the part of the Church. Thus, a prima facie case of agency plainly existed.

Since Hyles was an agent of the Church, one could reasonably conclude that within the realm of that agency, as senior pastor of the Church, he had apparent authority to make the agreement involved in this case. It is hard to imagine how a church could function if its senior pastor did not have apparent authority to make such an agreement. It is unreasonable to presume that such agreements could only be made en masse by the congregation or by the Board of Deacons of the Church. In this regard, it must be kept in mind that we are dealing here with apparent and not actual authority. The extent' of Hyles’ actual authority is not involved here.

In my judgment, the difference I have with the majority on the issue of apparent authority is significant, and the ramifications of the majority opinion could substantially affect the operation of religious schools, churches and temples within Illinois. If a senior pastor, priest or rabbi does not have apparent authority to make the agreement involved here, he would likewise not have apparent authority to make agreements to have religious school buses repaired, to order basic supplies or food, or to place other orders and make other agreements that are necessary for the day-to-day operations of the religious school, church or temple. I fail to see how a religious school, church or temple could effectively operate under the restrictions that could develop by virtue of the majority opinion.

The majority seems to find it significant that Hyles stated during his voir dire examination that making such agreements was not part of his responsibilities. I find no significance in Hyles’ statements because here we are dealing with apparent authority and not actual authority. Moreover, Hyles’ statements that he did not make the agreement would only have gone to the weight to be given Perez’ testimony and not to its admissibility. The jury was not required to believe the Church’s evidence and disregard plaintiff’s evidence.

The majority’s conclusion regarding the exclusion of Perez’ testimony seems to be based on the premise that plaintiff was required to prove that the Board of Deacons expressly gave Hyles authority to make the agreement or that the Board of Deacons ratified the agreement. I know of no legal principle which supports that conclusion. In fact, the cases cited in the majority opinion seem to require an opposite conclusion, since they support the propositions that apparent authority is sufficient authority to establish an agency relationship and that the nature and extent of the apparent authority may be established by parol evidence, whether direct or circumstantial. (See Kapelski v. Alton & Southern R.R. (1976), 36 Ill. App. 3d 37, 343 N.E.2d 207; City of Evanston v. Piotrowicz (1960), 20 Ill. 2d 512, 170 N.E.2d 569; Schoenberger v. Chicago Transit Authority (1980), 84 Ill. App. 3d 1132, 405 N.E.2d 1076; Wing v. Lederer (1966), 77 Ill. App. 2d 413, 222 N.E.2d 535.) To illustrate, in Kapelski, the court stated: “Thus, in order to introduce a statement or act by an agent or employee as an admission it must first be shown (1) that he was such an agent or employee [citation], (2) that such statement or act was made or done in and about a matter over which he had actual or apparent authority [citation], and (3) that he spoke or acted under or by virtue of his authority as such agent or employee [citation].” (Kapelski v. Al ton & Southern R.R. (1976), 36 Ill. App. 3d 37, 42, 343 N.E.2d 207, 210.) Here, the record clearly evinces that at the time Perez testified (1) there was no question that Hyles was an agent of the Church, (2) a reasonable person could conclude that within that agency, as senior pastor of the Church, Hyles had apparent authority to make an agreement for security services for the Church’s school buses, and (3) that Hyles spoke or acted under or by virtue of his authority as such agent of the Church.

For the reasons stated, I believe the excluded testimony of Perez was admissible. It was relevant and was admissible as an admission as well as to prove a legally operative fact of plaintiff’s cause of action against the Church, i.e., that an oral agreement was made between Carriers and the Church to have Carriers protect the school buses from vandalism. (See D. Louisell, J. Kaplan & J. Waltz, Evidence 87, 88 (4th ed. 1981).) If the testimony had been admitted, it would have been improper for the trial court to direct a verdict in favor of the Church. Therefore, the trial court erred in directing the verdict.

Next, I will address the jury verdict in favor of the remaining defendants. I believe the judgment on the verdict must be reversed because of the trial court’s error in requiring plaintiff to prove as an essential element of his case that he was free from contributory negligence. The record manifests that defendants freely pounded away on the fact that freedom from contributory negligence was an essential element of plaintiff’s cause of action which plaintiff did not prove. The truth is, however, that freedom from contributory negligence was not an essential element of plaintiff’s cause of action. The unfairness of what occurred is obvious.

This entire occurrence took place in Indiana, all the factual witnesses lived in Indiana, and Indiana has the most significant contacts with the action. Therefore, the trial court correctly ruled that the substantive law of Indiana should apply. Under the law of Indiana, freedom from contributory negligence is not an essential element of a plaintiff’s cause of action based on negligence. Yet, throughout the trial the trial court adopted the position that plaintiff could not recover unless he proved that he was free from contributory negligence, and the court instructed the jury accordingly. Thus, to me, it is plain that the trial court committed reversible error because it changed the substantive law which is the basis of plaintiff’s cause of action.

In agreeing with the trial court, the majority is laboring under the misconception that the issue in this case merely involves a procedural aspect of the trial. However, the issue in this case really involves the essential elements of plaintiff’s cause of action. The issue must therefore be controlled by the substantive law of Indiana and not the procedural law of Illinois.

In Indiana, the requisite elements of a negligence action are (1) existence of a duty on the part of a defendant in relation to the plaintiff, (2) failure of the defendant to conform his conduct to a standard of care demanded by such duty, and (3) injury to the plaintiff proximately resulting from such failure. (Old Town Development Co. v. Langford (Ind. App. 1976), 349 N.E.2d 744, 781.) Plainly, freedom from contributory negligence is not an element of the cause of action, and it therefore cannot be grafted on as an element of the cause of action by an Illinois procedural rule dealing with burden of proof. Moreover, it is axiomatic that in Illinois, the party asserting a claim or defense has the burden of proving all the essential elements of the claim or defense. Here, the essential elements of plaintiff’s claim do not include freedom from contributory negligence. It was defendants who claimed that plaintiff was guilty of contributory negligence. If defendants had not raised it, contributory negligence would not have been an issue in the case. Thus, even under Illinois procedural rules, it was defendants who had the burden of proving that plaintiff was guilty of contributory negligence since they raised it as an issue. Common sense tells us that a party cannot raise an issue and then require the other party to disprove it.

The majority relies mainly on Babcock v. Chesapeake & Ohio Ry. Co. (1979), 83 Ill. App. 3d 919, 404 N.E.2d 265. In Babcock, the court held that under Michigan law the burden of proof on contributory negligence was a procedural law designed to regulate the conduct of the trial. Babcock did not involve the law of Indiana, and it did not involve the essential elements of a negligence action under Indiana law. Therefore, I do not find Babcock applicable. Moreover, to the extent that the rationale in Babcock is contrary to what is expressed here, I cannot accept the rationale in Babcock.

For the reasons stated, I believe the trial court erred when it required plaintiff to prove that he was free from contributory negligence before he could recover. Freedom from contributory negligence was not an essential element of plaintiff’s cause of action, and he should not have been required to prove that which was not part of his claim. Since it was defendants who claimed that plaintiff was guilty of contributory negligence, they should have been required to prove it.

Accordingly, I believe plaintiff in this case was denied a fair trial. I would reverse the judgments in favor of defendants and remand the case for a new trial as to all defendants.


author: JUSTICE McGILLICUDDY

text:
    BURNHAM & HAMMOND, INC., Plaintiff-Appellee and Cross-Appellant, v. CENTRAL BAPTIST HOME FOR THE AGED, Defendant-Appellant and Cross-Appellee—(Bilal Engineering Company et al., Defendants).
    First District (3rd Division)
    No. 81—1967
    Opinion filed September 28, 1983.
    Flynn, Galvin & Ryan, of Chicago (Edward J. Fitzsimons, Richard T. Ryan, and Emmett J. Galvin, of counsel), for appellant.
    William D. Serritella, of Chicago (Ross, Hardies, O’Keefe, Babcock & Parsons, of counsel), for appellee.
   JUSTICE McGILLICUDDY

delivered the opinion of the court:

The plaintiff, Burnham & Hammond, Inc. (Burnham & Hammond), an architectural and engineering firm, brought this action in chancery to foreclose a mechanic’s lien against the defendant, Central Baptist Home for the Aged (Central Baptist). Central Baptist filed an answer alleging breach of contract and a counterclaim alleging breach of duty. The trial court granted the plaintiff’s motion for summary judgment, entered a decree of foreclosure and sale, and stayed enforcement of the decree pending resolution of defendant’s counterclaim. The trial court further decreed, as follows: “This is a final order from which an appeal may be taken immediately.” The trial court also transferred the counterclaim to the law division of the circuit court of Cook County for trial on its merits. The counterclaim is still pending. Central Baptist appeals from the order granting summary judgment to the plaintiff, and Burnham & Hammond cross-appeals from the order staying enforcement of the summary judgment. The issues raised by the parties are whether genuine issues of material fact existed as to cost limitation or performance in accordance with professional standards, and whether the trial court erred in staying enforcement of the decree of foreclosure and sale.

Burnham & Hammond produced a feasibility study for Central Baptist containing recommendations and a $1,535,000 construction estimate for the development of a skilled care addition. Based on the study, Burnham & Hammond contracted to render architectural and engineering services for the project. The standard form agreement, which was signed on February 19, 1973, contained the following relevant provision:

“CONSTRUCTION COST *** 3.4 Statements of Probable Construction Cost and Detailed Cost Estimates prepared by the Architect represent his best judgment as a design professional familiar with the construction industry. It is recognized, however, that neither the Architect nor the Owner has any control over the cost of labor, materials or equipment, over the contractors’ methods of determining bid prices, or over competitive bidding or market conditions. Accordingly, the Architect cannot and does not guarantee that bids will not vary from any Statement of Probable Construction Cost or other cost estimate prepared by him.”

In May 1973, Burnham & Hammond submitted its initial design and a revised construction cost estimate of $2,203,780, increasing the cost of the new construction of a skilled care facility from $1,152,000 to $1,785,780. Central Baptist’s Board of Directors (the Board) approved the design and revision. On July 12, 1973, Central Baptist remitted $14,343.75 to Burnham & Hammond. Further modifications of the program, including a cost estimate of $2,370,000 for the skilled care addition, were approved by a letter dated October 2, 1973, from the Board. The letter authorized Burnham & Hammond to proceed, stating: “Preliminary drawings, for State review and construction estimates, are to be prepared as soon as possible.” On November 19, 1973, Burnham & Hammond produced the preliminary drawings and a revised total project budget of $2,789,975 for the skilled care addition. This amount included a construction estimate of $2,370,000 plus fees and furnishings of $419,975. Both were accepted and approved by Central Baptist.

On January 10, 1974, Burnham & Hammond sent Central Baptist an invoice for $57,570.15, based upon the $2,370,000 estimate for the skilled care addition and $673,975 for an apartment building or a total construction cost of $3,043,975. Central Baptist paid the invoice in full on January 28, 1974. A letter from Central Baptist dated April 22, 1974, authorized Burnham & Hammond to prepare construction documents for bidding on the skilled care addition and to prepare specifications for bidding on the apartment building, and stated that the Board understood there would be an adjustment in fee.

By letter dated August 27, 1974, Central Baptist directed Burnham & Hammond to “hold in abeyance work on the plans of the Skilled Care Addition until we have resolved the problem of State Comprehensive Plan Agency Authorization.” Accordingly, on October 21, 1974, Burnham & Hammond submitted to Central Baptist a final invoice in the amount of $20,472, based upon the $3,043,975 total construction cost estimate. Central Baptist paid the invoice in full on December 17,1974.

On January 3, 1975, Central Baptist advised Burnham & Hammond as follows:

“The Board of Directors of the Central Baptist Home for the Aged has voted to proceed with the building of the Skilled Care Addition. The motion reads, ‘to inform Burnham and Hammond, Inc. of our letter to Mr. William K. Ewing of the Illinois Health Facilities Planning Board requesting a review of the plans for our Skilled Care Addition’. The intent of this motion is to continue (or reactivate, if necessary) the contract with your firm for the Architectual [sic] and Engineering services of the Nursing Building project.”

In March 1975, the Health Facilities Planning Board in Springfield informed Central Baptist that health facilities whose construction contracts were signed before the Certificate of Need Law became effective would be permitted to build. Central Baptist called a “very urgent” meeting of its executive and building committees for April 7, 1975, stating that “we must investigate all possibilities to avoid further delays in the Home Developement [sic] program.” Central Baptist believed that if it failed to enter into a contract with a builder before July 1975, it would be necessary to request permission to build under the certificate-of-need law, and it was possible that such request would be denied.

On June 9, 1975, Central Baptist advised the Illinois Department of Public Health, Division of Geriatric & Long Term Care Programs, of its contract with Burnham & Hammond. On the same day, the Board authorized Central Baptist to enter into a contract with S.N. Nielsen (Nielsen) for the construction of the skilled care addition “at a guaranteed maximum cost *** not to exceed four million dollars.” On June 23, 1975, Burnham & Hammond submitted to Central Baptist an interim report covering a summary of contract negotiations with Nielsen indicating the current guaranteed maximum cost proposal of $3,964,771. The report indicated that this represented the maximum contract amount, and that competitive bidding was expected to result in a lower total construction cost. It also included a list of features which could be eliminated in order to reduce expenses. On June 25, 1975, Central Baptist entered into a contract with Nielsen for the construction of the skilled care facility at the maximum cost of $3,964,771.

By October 3, 1975, the project had reached the bidding or negotiation phase. Pursuant to the contract, the amount of the architect’s fee which would be due at this point would be calculated at 80% of 6.75% of the construction cost of $3,964,771, per the contract with Nielsen. Accordingly, Burnham & Hammond sent an invoice to Central Baptist stating the amount due as follows:

Construction cost $3,964,771.00
Architect’s fee at 6.75% $ 267,622.04
Fee now due 80% $ 214,097.63
Previous payments 55,991.25
Amount due $ 158,106.38
Add - Printing and reproduction 2,852.64
Travel 364.46
Amount due $ 161,323.48

On October 12, 1975, Central Baptist authorized Nielsen to begin construction immediately. On November 13, 1975, Central Baptist directed Burnham & Hammond to proceed with certain changes in the storm water retention system. In a letter dated December 30, 1975, Central Baptist remitted $30,000 to Burnham & Hammond and stated:

“Enclosed please find check #159 in the amount of $30,000.00 as part payment of amount due for the services rendered by your firm. We regret the problems we are encountering in the securing of long-term financing, so we can only ask for your patience in the matter of payment.”

Myron Dudek, the administrator of Central Baptist, sent a financial summary dated January 13, 1976, to the executive committee, building committee and pastors of Central Baptist which acknowledged the outstanding balance of $131,323.48 due to Burnham & Hammond. On January 20, 1976, Central Baptist was informed by the Continental Bank that its request for interim construction financing had been denied because “the substance of [Central Baptist’s] financial statements do [sic] not warrant a $4,000,000 project.” In a letter dated March 8, 1976, Central Baptist directed Burnham & Hammond to proceed with certain changes, and stated that it understood that there would be an extra cost for this additional work. On March 24, 1976, Dudek again calculated the amount owed to the architect for services rendered to that date as $131,323.48.

On April 9, 1976, Central Baptist advised Burnham & Hammond that construction would be halted on or about April 26, 1976, due to its inability to obtain financing. On June 21, 1976, the Board decided to terminate its contract with Burnham & Hammond and negotiate a settlement for the balance owed. By letter dated July 20, 1976, Central Baptist terminated the services of Burnham & Hammond.

On August 9, 1976, Burnham & Hammond filed a claim for a lien, in the amount of $141,375.93 for architectural and engineering services rendered on Central Baptist’s property, with the recorder of deeds of Cook County, Illinois.

On April 11, 1977, Burnham & Hammond filed a complaint in the circuit court of Cook County against Central Baptist to foreclose the mechanic’s lien. The complaint alleged that the value of the work performed was $255,881.09 plus extras of $7,040.31, and that after credit for partial payments there was a balance due Burnham & Hammond of $140,535.60, plus interest at 6% per annum from July 20,1976.

On October 6, 1977, Central Baptist filed an answer which alleged that the architectural fee was to be calculated at 6.75% of a construction cost of $2,125,000. Additionally, Central Baptist filed a counterclaim which alleged that Burnham & Hammond had not acted in accordance with the prevailing skills and abilities of architects in the community. The counterclaim is not at issue in this appeal.

On August 12, 1980, Burnham & Hammond filed a motion for summary judgment on its complaint. The motion was supported by 29 exhibits including the pretrial discovery deposition of Myron Dudek, the administrator of Central Baptist. In its response, Central Baptist argued that genuine issues of material fact existed as to whether Burnham & Hammond had breached the contract by not performing in accordance with professional standards, and whether Burnham & Hammond had breached the contract by not adhering to the cost limitation included in the contract. The response was supported by affidavits of Dudek and David Perez, the architect subsequently employed by Central Baptist to develop its present skilled care addition.

On January 28, 1981, the trial court granted Burnham & Hammond’s motion for summary judgment and entered a decree of foreclosure and sale, and stayed enforcement of the decree pending resolution of the counterclaim. The trial court found an amount of $139,062.10 to be due and owing to Burnham & Hammond from Central Baptist, computed as follows:

Architect’s fee:
80% of 6.75% of the $3,964,771 cost of construction
$214,097.63
Supervisory work through foundation
5,388.81
Additional work relative to plan revisions made at the request and instance of defendant
$ 2,349.81
Printing costs
2,852.64
Travel expense
364.46
$225,053.35
Less - payments
85,991.25
Net amount due
$139,062.10

The trial court further found that statutory interest on the above amount at the rate of 5% per annum was due and owing for the period July 20, 1976, to January 28, 1981. The trial court also stated: “This is a final order from which an appeal may be taken immediately.”

On July 10, 1981, when the trial court denied Central Baptist’s motion to vacate the decree of foreclosure and sale, it transferred the cause to the law division of the court for trial on the merits of the counterclaim.

Central Baptist appeals the granting of the motion for summary judgment. It contends that summary judgment was erroneously entered because there are genuine issues as to material fact. On cross-appeal, Burnham & Hammond contends that the trial court erroneously stayed enforcement of the decree of foreclosure and sale.

Before we discuss the issues presented by the parties, it is our duty to determine whether we have jurisdiction in the subject matter of this appeal, even though the question has not been raised by either party. The threshold question is whether the trial court’s order is final and appealable. Trizzino v. Kline Brothers Co. (1982), 106 Ill. App. 3d 230, 435 N.E.2d 958.

Supreme Court Rule 301 provides in pertinent part as follows: “Every final judgment of a circuit court in a civil case is appealable as of right.” (87 Ill. 2d R. 301.)

Rule 301 as to the appealability of final orders is qualified by Rule 304(a), which provides as follows:

“(a) Judgments As To Fewer Than All Parties or Claims - Ne cessity for Special Finding. If multiple parties or multiple claims for relief are involved in an action, an appeal may be taken from a final judgment as to one or more but fewer than all of the parties or claims only if the trial court has made an express written finding that there is no just reason for delaying enforcement or appeal. *** In the absence of such a finding, any judgment that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties is not enforceable or appealable and is subject to revision at any time before the entry of a judgment adjudicating all the claims, rights, and liabilities of all the parties.” (Emphasis added.) 87 Ill. 2d R 304(a).

The order which is the subject matter of this appeal provides that its enforcement is stayed pending resolution of defendant’s counterclaim. Therefore, even if we were to affirm the order, the plaintiff would not be able to thereby enforce or obtain an execution of the order. As a result, the order does not terminate the litigation between the parties in the initial action so that it is a final order from which an appeal can be taken. (See Havlen v. Waggoner (1981), 92 Ill. App. 3d 916, 918, 416 N.E.2d 684.) Of course, the inclusion of the special finding in the trial court’s order cannot confer appellate jurisdiction if the order is not in fact final. Crane Paper Stock Co. v. Chicago & Northwestern Ry. Co. (1976), 63 Ill. 2d 61, 66, 344 N.E.2d 461.

Accordingly, we are without jurisdiction to dispose of the matter on its merits and the appeal is dismissed.

Appeal dismissed.

RIZZI and WHITE, JJ., concur.