January 2019 Case Notes & Comments

"It is better to have less thunder in the mouth
and more lightning in the hand." ~ Apache

MONTHLY QUIZ: Building Owner hires General Contractor (GC) to perform maintenance work at its building and GC hires Subcontractor (Sub) to replace carpets. While Custodian is cleaning at the building, a desk that was placed upright falls and injures Custodian. Custodian files a successful workers' compensation claim, but fails to file a timely personal injury action against the alleged tortfeasors, GC and Sub. Employer, a janitorial service, exercises its right under the Workers' Compensation Act to file a subrogation suit against GC and Sub pursuant to Section 5(b) of the Workers' Compensation Act (820 ILCS 305/5(b)(Act). Custodian later files her own personal injury action against the same defendants, but the trial court dismisses the action as beyond the statute of limitations. Custodian then files a petition to intervene in Employer's subrogation action, which trial court denies on grounds that Custodian's petition to intervene is the same cause of action as Custodian's untimely personal injury action, which was already litigated and dismissed (i.e. res judicata). The doctrine of res judicata provides that a final judgment on the merits rendered by a court of competent jurisdiction bars any subsequent actions between the same parties on the same cause of action. The appellate court reverses and remands, however, holding that res judicata does not apply. Now the action is before the Supreme Court of Illinois. Is Custodian's intervention in her Employer's lawsuit the same cause of action Custodian previously filed? Should Custodian be allowed to intervene in Employer's lawsuit? You be the judge. (Answer below).

"SIDEWALK" IS NARROWLY DEFINED FOR PURPOSES OF THE SNOW AND ICE REMOVAL ACT:  Plaintiff slipped and fell on a patch of ice in the rear of her condominium building, and sued the condo association and property manager.  The area of the fall was what the court referred to as a "parking-lot pathway", which was used by the building's tenants as part of a parking lot, and as an area sometimes used by tenants as a walking path to the rear entrance.  Plaintiff alleged that defendants were negligent in piling snow in a location uphill of this parking-lot pathway which, upon melting and refreezing, formed the subject ice patch.  Defendants moved for and were granted summary judgment, arguing that the Snow and Ice Removal Act provided for immunity for "remov[ing] or attempt[ing] to remove snow or ice from sidewalks abutting the property."  745 ILCS 75/2.  The First District Appellate Court reversed, holding that an informal pathway behind the condominium building, through and beyond a parking area to the rear entrance of the building, was not a "sidewalk" under the Snow and Ice Removal Act's immunity provision.  The Court explained that the term "sidewalk" should be strictly and narrowly defined and is limited to the municipal right-of-way, the part of the public street reserved for pedestrian use that abuts / borders private residential property.  Hussey v. Chase Manor Condo. Ass'n, 2018 IL App (1st) 170437 (Jun. 14, 2018).

INSURANCE COVERAGE - NAMED DRIVER EXCLUSIONS IN AN AUTO POLICY ARE AGAINST ILLINOIS PUBLIC POLICY WHERE THE EXCLUSION BARS COVERAGE FOR THE NAMED INSURED: Passenger was injured in an automobile accident while riding in a vehicle being operated by Driver. Passenger made a claim under Driver's policy, which paid Passenger the policy limits. Passenger subsequently filed an underinsured motorist (UIM) claim with her automobile Insurer. Insurer denied the claim based on a "named driver exclusion" in the policy that identified Driver, by name, and precluded coverage for any vehicle being operated by Driver. Passenger filed a declaratory action against her Insurer, contending that because the exclusion as applied barred coverage for the named insured, it violated Illinois' mandatory insurance laws and was, therefore, against public policy. On cross-motions for summary judgment, the trial court ruled in favor of Passenger and the appellate court affirmed. The Illinois Supreme Court granted the Insurer's petition for leave to appeal. The Supreme Court held that an insurance policy cannot circumvent the purpose of a statute, and since the purpose of Illinois' mandatory insurance statutes as relates to UIM coverage is to protect the named insured from underinsured motorists, an insurance provision which precludes coverage for the sole named insured under the policy is unenforceable as against public policy. Importantly, the Court found that it did not matter that Passenger had agreed to the inclusion of the named driver exclusion in her policy, or that the passenger chose to ride in a vehicle with a driver she knew was excluded under her policy. What mattered was that Passenger had no control over the amount of liability insurance Driver chose to purchase, and the purpose of mandatory UM/UIM motorist coverage was to protect the public from that very risk.Thounsavath v. State Farm Mutual Automobile Insurance Company, 2018 IL 122558 (Aug. 21, 2018).

RIGHT TO WORKERS' COMPENSATION LIEN IS ABSOLUTE:  Mid-West Truckers Risk Management Association (MTRMA), a self-insured pool association, intervened in a probate action, seeking recovery of its workers' compensation lien from proceeds obtained by the estate in a wrongful-death action related to decedent's death. The estate moved to adjudicate the workers' compensation lien on the basis of  various alleged wrongdoings on the part of MTRMA in handling the underlying workers' compensation claim, in failing to cooperate with an investigation of the cause of injury, or in negotiations with the employee regarding the satisfaction of the lien. The trial court ultimately struck MTRMA's lien in its entirety, and MTRMA appealed.  In reversing the trial court's order, the Fifth District Appellate Court noted that the plain language of §5(b) of the Workers' Compensation Act, which establishes the lien rights, provides that the employer's right to reimbursement is absolute. The Court stated: "There is no basis under Illinois law to hold that the alleged conduct on the part of MTRMA, even if true, outweighs the absolute right, pursuant to statute, that MTRMA has to reimbursement of its lien and the public policy underlying that right."  Accordingly, MTRMA was entitled to recovery of its lien subject to calculation pursuant to the statue.  Estate of Rexroad v. Mid-West Truckers Risk Mgmt. Ass'n., 2018 IL App (5th) 170342 (May 15, 2018). 

ANSWER TO QUIZ: Custodian loses. For res judicata to apply, three requirements must be met: (1) a final judgment on the merits rendered by a court of competent jurisdiction, (2) an identity of cause of action, and (3) an identity of parties or their privies. The involuntary dismissal of Custodian's action based on the applicable statute of limitations was a judgment "on the merits" for purposes of res judicata. Further, there was "identity" between Custodian's personal injury action and Custodian's attempted intervention in Employer's subrogation suit because both lawsuits arose from the same set of operative facts - namely, Custodian's workplace injury and the defendants' alleged negligence. With regard to "identity of parties" the Illinois Supreme Court noted that "the parties need not be identical to be considered the same." Here, the court found the fact that Custodian was seeking to sue GC in both her personal injury action and in Custodian's petition to intervene in Employer's suit satisfied the "identity of parties" requirement. A&R Janitorial v. Pepper Construction Company, et al., 2018 IL 123220 (Nov. 29, 2018).


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