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Padgett v. Industrial Comm'n
State: Illinois
Court: 1st District Appellate
Docket No: 1-01-0148WC Rel
Case Date: 01/24/2002

Notice

Decision filed 01/24/02. The text of this decision may be changed or corrected prior to the filing of a Petition for Rehearing or the disposition of the same.

NO. 1-01-0148WC

IN THE APPELLATE COURT OF ILLINOIS

FIRST DISTRICT

Industrial Commission Division

 

BRIAN J. PADGETT, as a minor child and ) Appeal from
unempancipated minor of JOSEPH PADGETT,  ) Circuit Court of
Deceased, ) Cook County
                      Plaintiff-Appellant, ) No. 99L50976
                      v. )
INDUSTRIAL COMMISSION OF ILLINOIS and ) Honorable
AMERICAN PRESIDENTIAL TRUCKING, ) Joanne L. Lanigan,
Defendant-Appellee). ) Judge Presiding.
 

PRESIDING JUSTICE McCULLOUGH delivered the opinion of thecourt:

Claimant, Brian J. Padgett, as a minor child andunemancipated minor child of Joseph Padgett, deceased, appeals fromthe order of the circuit court of Cook County confirming thedecision of the Illinois Industrial Commission (Commission). Respondent is American Presidential Trucking. The arbitratordenied claimant benefits, and the Commission affirmed. The issuesare whether (1) the respondent may assert a lien against claimant'sbenefits because of a settlement of a wrongful death action, and(2) the Commission decision that claimant was not entitled tobenefits beyond the amount of the settlement is against themanifest weight of the evidence. We affirm.

On October 3, 1997, claimant's mother, Shirley M. Padgett(Shirley), filed an application for adjustment of claim seekingbenefits for the death of her husband Joseph E. Padgett as a resultof an accidental injury on July 17, 1991 (97WC53008). On thatapplication for adjustment of claim, Shirley listed claimant as adependent of Joseph. On July 15, 1998, clamant filed a separateapplication for adjustment of claim seeking death benefits(98WC37111). The July 15, 1998, application showed only claimantas a dependent and did not list any other party as dependent. Bothapplications show the same counsel. The matters were consolidatedbefore the arbitrator.

Shirley Padgett Gollmer testified that she was married toJoseph Padgett at the time of the accidental injury on July 17,1991, and his subsequent death. On the date of the accident,claimant was 15 years old. Joseph died on July 18, 1991, due to anadverse reaction to the anesthesia given at the time of thesurgical repair of his fingers that were injured on July 17, 1991. There was a settlement in a third-party litigation. She understoodthat, as a result of the settlement, she would not receive anyadditional death benefits. She was not seeking additionalbenefits. There was an order of the trial court allowing thesettlement to be introduced in this case. On her federal incometax returns for 1994 through 1997, she claimed claimant as adependent, and she continued to provide more than 50% of hissupport, including his school and tuition, room and board. Priorto Joseph's death, she and her husband provided more than 50% ofclaimant's support. Claimant was a beneficiary of the estate. Atthe time of the settlement, two checks were cut. She did notreceive claimant's share. After completing high school, claimantenrolled at the University of Southern Indiana and began studiesthere in August 1995 on a full-time basis. At the time of thearbitration hearing, he was a full-time student. Claimant wasJoseph's only child. While the wrongful death proceeding waspending, Shirley received workers' compensation benefits. Shetestified she was not making a claim for additional funeralexpenses. Claimant remarried on October 1, 1994.

Claimant (born November 27, 1975) testified he was 23years old at the time of the arbitration hearing. His mother andstepfather paid for his tuition, room and board. In 1995, heearned $1,934; in 1996, he earned $3,100; and in 1997, he earned$4,234. During the summers, he went to his mother's home. Hereceived a structured settlement. He was not sure what he couldand could not disclose about the settlement. An order of confidentiality was placed on the settlement. He anticipated graduatingfrom college in May 2000.

As a result of the settlement of the third-partylitigation, the amount of that settlement was not to be disclosedoutside of the hearing. The arbitrator reviewed the documents, butthey were kept out of the record in this workers' compensation casefollowing a discussion off the record precipitated by claimant'sobjections. Claimant did not want to disclose the wrongful deathsettlement terms.

As to the claim of the widow (97WC53008), the arbitratorfound that, in Cook County case No. 92-L-690, an action by ShirleyPadgett, widow and administrator of the estate of Joseph Padgett,Jr., deceased, the wrongful death action was settled in November1996 for an amount that was subject to a confidentiality order. The arbitrator found that the settlement exceeded the value of 20years of death benefits at a rate of $350.60 per week which is thetotal amount of benefits to which she would be entitled. Thearbitrator further found that respondent was entitled to a creditfor all of its financial liability on account of the death ofdecedent by reason of the settlement in 92-L-690 and further foundthat Shirley Padgett had expressly waived her claim for anybenefits under the Workers' Compensation Act (Act) (820 ILCS 305/1et seq. (West 1998)). The arbitrator's determination of thewidow's award was not appealed, and no issue is presented in thiscase regarding the claim of the widow.

As to claimant, the arbitrator found that, although theorder of settlement was silent as to any claim claimant had againstrespondent, claimant did testify that he received a separate checkas part of the estate settlement and opened a separate bankaccount. Shirley, as representative of the estate, filed awrongful death action against Cook County Hospital for the death ofher husband. Noting that the amount recovered in the wrongfuldeath action was for the exclusive benefit of the surviving spouseand next of kin of the decedent and that claimant is a next of kinunder the Wrongful Death Act (740 ILCS 180/0.01 et seq. (West1998)), the arbitrator found that section 5(b) of the Act (820 ILCS305/5(b) (West 1998)) authorized a workers' compensation lien toattach to the payment of the wrongful death settlement. Thearbitrator found that respondent was entitled to a credit againstthe amount of its liability to claimant up to the full amount ofthe civil settlement and that the civil settlement amount exceededthe maximum amount for which respondent would be liable to claimantunder the Act. The arbitration decision explained that the maximumamount to which claimant would be entitled would be $350.60 perweek for the period that he was enrolled as a student until hereached age 25. The arbitrator denied benefits to claimant. Witha minor modification not relevant to the issues in this appeal, theCommission affirmed and adopted the arbitrator's decision.

We initially address whether the respondent may assert alien against claimant's benefits because of a settlement of awrongful death action. Claimant disagrees with the interpretationplaced on section 5(b) of the Act and section 2 of the WrongfulDeath Act by Borden v. Servicemaster Management Services, 278 Ill.App. 3d 924, 663 N.E.2d 153 (1996). Borden relied on Esin v.Liberty Mutual Insurance Co., 99 Ill. App. 3d 75, 424 N.E.2d 1307(1981), and Page v. Hibbard, 119 Ill. 2d 41, 518 N.E.2d 69 (1988). The language of the first paragraph of section 2 of the WrongfulDeath Act (740 ILCS 180/2 (West 1998)) and section 5(b) of the Actis the same as it was at the time of the decision in Borden. Borden concluded that, despite the allocation of settlementproceeds, an employer has a lien against the proceeds of a wrongfuldeath action for the amounts paid by the employer to the employeeor personal representative on account of the accidental injury. Borden, 278 Ill. App. 3d at 931-32, 663 N.E.2d at 158.

Claimant attempts to avoid this result by distinguishingthe terms "dependent" of the employee from the "legal representative" of the estate, utilizing the language of the first paragraphof section 5(a) of the Act as follows:

"No common law or statutory right torecover damages from the employer, his insurer, his broker, any service organizationretained by the employer, his insurer or hisbroker to provide safety service, advice orrecommendations for the employer or the agentsor employees of any of them for injury ordeath sustained by any employee while engagedin the line of his duty as such employee,other than the compensation herein provided,is available to any employee who is covered bythe provisions of this Act, to any one whollyor partially dependent upon him, the legalrepresentatives of his estate, or any oneotherwise entitled to recover damages for suchinjury." 820 ILCS 305/5(a) (West 1998).

Claimant argues that, although section 5(a) of the Act refers to adependent's ability to receive benefits, section 5(b) of the Actdoes not refer to a dependent.

Section 5(b) refers to liens against recoveries inactions by the employee or the personal representative of theemployee. In this case, it is undisputed that Cook County case No.92-L-690 was an action by the representative of the employee. Thus, regardless of the apportionment of the recovered amounts tothe beneficiaries of the estate, respondent was entitled to a lienfor all compensation paid and to be paid. Claimant does notsuggest what type of action he could maintain without becoming apersonal representative of the estate. In essence, under Borden,respondent was entitled to a lien against the wrongful deathsettlement for any workers' compensation benefits "paid or to bepaid" by it "to such employee or personal representative." 820ILCS 305/5(b) (West 1998).

Claimant argues that, since he is entitled to receivebenefits under section 7 of the Act (820 ILCS 305/7 (West 1998)) asa dependent, benefits paid to him would not be paid to the employeeor the personal representative, within the context of section 5(b). However, a "widow" is also entitled to an award under section 7 ofthe Act, may also not be the personal representative, and still maynot make a double recovery.

In Scott v. Industrial Comm'n, 184 Ill. 2d 202, 703N.E.2d 81 (1998), both the widow and the administrator of theestate filed workers' compensation claims; the claim of theadministrator was dismissed because no award to the estate waspermitted when the surviving spouse has filed a claim. See Scott,184 Ill. 2d at 205, 703 N.E.2d at 82-83. In Scott, the administrator of the estate pursued a third-party wrongful death action thatwas settled. Scott, 184 Ill. 2d at 207, 703 N.E.2d at 83-84. Travelers Insurance Company, the employer's workers' compensationcarrier, asked the Commission to determine the amount of credit towhich it was entitled as a result of the third-party settlement. Scott, 184 Ill. 2d at 209, 703 N.E.2d at 85. Although in ScottTravelers had waived its ability to obtain a section 5(b) lien, ithad not waived its ability to claim a credit under section 5(b).

"Were the rule to be otherwise, as suggested by Scott, an employee would be able toreceive and retain a double recovery. Thiswould be inconsistent with the general principle that an employee is not entitled to adouble recovery. See Malatesta v. MitsubishiAircraft International, Inc., 275 Ill. App. 3d370, 380 (1995); see also 6 A. Larson & L.Larson, Larson's Workers' Compensation Law

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