Employer in Illinois is Entitled to Wait Until Verdict Establishes Liability and Employer's Degree of Fault Before Deciding Whether to Waive Its Workers' Compensation Lien on Employee's Recovery
BALTZELL v. R&R TRUCKING (February 4, 2009)
"Skeeter" Baltzell worked for Ensign-Bickford Company (“Ensign”) as a truck loader. R&R Trucking (“R&R”) had a contract with Ensign to provide specialized tractor-trailers and drivers. Baltzell was the victim of an unfortunate accident in May 2000, when one of his Ensign co-workers backed up and crushed him between the trailer and the dock. Baltzell was severely injured in the accident and still requires constant care. Baltzell filed a claim with the Illinois Workers’ Compensation Commission and he and his wife filed this lawsuit. The Baltzells claimed damages arising from Baltzell’s injuries and his wife’s loss of consortium, naming R&R and the manufacturers of the tractor and trailer. The defendants brought contribution claims against Ensign. The jury awarded almost $14 million dollars and allocated fault 30% to Ensign and 70% to the other three defendants. Ensign moved to waive its workers’ compensation lien and to dismiss the contribution claims. The court denied its motion. Ensign appeals.
In their opinion, Judges Bauer, Evans and Williams reversed and remanded. The Court first reviewed Illinois’ workers compensation scheme (in relevant part): a) an employer compensates an employee for injuries on the job regardless of fault, b) an employee cannot sue an employer for the injuries, c) an employee can sure a third party who may be at fault, d) the third party can seek contribution from an employer, e) an employer has a lien on third party recovery, and f) the lien is the amount of recovery less the amount equal to the employer’s pro rata share of the common liability (up to its workers’ compensation obligation). It is possible under this scheme for the employer to be liable for more than its workers compensation obligation, a result disfavored by the workers’ compensation policy. Illinois has provided two safeguards. First, the Illinois Supreme Court in Kotecki v. Cyclops Welding Corp. capped an employer’s contribution liability at its workers’ compensation liability. Second, to allow for the possibility that an employer would rather be liable under the workers’ compensation statute than for contribution, even if the amount is the same, Illinois allows an employer to waive its lien on third party recovery and be protected from contribution. Here, the court below did not allow Ensign to waive its lien. The court believed that Ensign’s delay in waiving until it knew the amount of the verdict and the jury’s assessment of its share frustrated the purposes of the Contribution Act. Ensign could have decided not to waive if the jury found its share of fault low or non-existent. The Court appreciated the lower court’s concern but noted that the Illinois Supreme Court in LaFever v. Kemlite Co. had approved the very strategy employed by Ensign. The Court also rejected the distinction that LaFever dealt with a situation where the employer had completed its compensation payments. The court should have allowed the waiver. The Court did agree with defendants that they are entitled, vis-a-vis Baltzell, to a setoff for the payments already received by Baltzell from Ensign. It declined, however, to either grant a setoff for estimated future payments or to order some form of trust to distribute the future payments. It did recommend that the parties voluntarily set up a mechanism to distribute future payments to the defendants according to their shares of liability
Michael Rigney practices in the law offices of GVC Ltd. in Chicago. In this blog, he reports on select