Fact Findings On Summary Judgment Get No Deference On Appeal

Two children died after they were trapped by a “quick” condition at an excavation pit. They became stuck in sand and clay at the pit, and died of hypothermia or drowning. The children’s estates sued the owner of the excavation pit, who tendered the claims to his insurer. The insurer offered the estates a policy limit settlement, but calculated the policy limit on the basis that there had been only one policy “occurrence.” The estates argued there were two separate “occurrences.” The insurer sued the estates, and asked for a declaration that there had been only one “occurrence.”

The trial court agreed with the estates, and on summary judgment ruled in their favor. The insurance company appealed, and a sympathetic appellate court reversed and ruled in favor of the insurer. The estates then appealed to the Illinois Supreme Court.

The first issue for the Illinois Supreme Court was the proper standard of review in the appellate court. The parties agreed that the construction of “occurrence” was a contract question that was subject to de novo (no deference to the trial court) review.

They disagreed about the standard to be applied to the trial court’s factual findings. The insurer argued that the appellate court should give no deference to the trial court’s factual findings. The estates asserted that the trial court’s fact findings should get some deference. They argued that the trial court’s fact findings should be reversed only if they were against the “manifest weight of the evidence.”

The supreme court ruled that the trial court’s fact findings get no deference. In this case, the trial court ruled exclusively on papers submitted on summary judgment motions. There was no live testimony, and thus no reason to give the trial court deference. Here’s what the supreme court said:

In this case, the trial court heard no live testimony. Both parties acknowledged at oral argument that all testimony was submitted by admitting discovery depositions into evidence. The trial court was not required to gauge the demeanor and credibility of witnesses. … Instead, the trial court made factual findings based upon the exact record presented to
both the appellate court and to this court. Without having heard live testimony, the trial court was in no superior position than any reviewing court to make findings, and so a more deferential standard of review is not warranted. Thus, although this court has not done so recently, we reiterate that where the evidence before a trial court consists of depositions, transcripts, or evidence otherwise documentary in nature, a reviewing court is not bound by the trial court’s findings and may review the record de novo.

In the end, the Illinois Supreme Court ruled in favor of the children’s estates, and found there had been two “occurrences.” Read the whole case, Addison Insurance Co. v. Fay, No. 105752 (1/23/09), by clicking here.