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Dillon v. Nathan

MAY 17, 1956.

BEULAH SUTTON DILLON, AND JOAN MARIE DILLON, PLAINTIFFS-APPELLEES,

v.

MAURICE E. NATHAN, D/B/A ARROW LIQUOR STORE; EDWARD C. DORR, AND WILLIAM GERNIS, D/B/A SECOND AVENUE TAP; JOSEPH DIVERDI, AND SAM SALADINO, D/B/A 624 TAP; ROCKFORD MUTUAL BENEFIT ASSOCIATION; AND KEENE AND DAVIS, INC., DEFENDANTS-APPELLEES. ROBERT EAGER, D/B/A EASTMAN HOTEL, AND AUTO-OWNERS (MUTUAL) INSURANCE COMPANY, INTERVENING PETITIONERS AND SUBROGATION AND LIEN CLAIMANTS-APPELLANTS,

v.

BEULAH SUTTON DILLON AND JOAN MARIE DILLON, AND MAURICE E. NATHAN, D/B/A ARROW LIQUOR STORE; EDWARD C. DORR, AND WILLIAM GERNIS, D/B/A SECOND AVENUE TAP; JOSEPH DIVERDI, AND SAM SALADINO, D/B/A 624 TAP; ROCKFORD MUTUAL BENEFIT ASSOCIATION; AND KEENE AND DAVIS, INC., PLAINTIFFS AND DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Winnebago county; the Hon. WILLIAM R. DUSHER, Judge, presiding. Affirmed.

JUSTICE CROW DELIVERED THE OPINION OF THE COURT.

Rehearing denied June 20, 1956.

The plaintiffs, Beulah Sutton Dillon, individually, and Joan Marie Dillon, individually, brought suit October 22, 1954 under the Dram Shop Act (Ch. 43, Ill. Rev. Stats., 1953, par. 135) against certain defendant tavern operators for loss of means of support as a result of the fatal shooting on July 17, 1954 of James Dillon, husband and father, respectively, of the two plaintiffs, by one Carl Swenson, an intoxicated person, who allegedly was sold or given alcoholic liquor by the defendants, thereby rendering him intoxicated. All of the defendants answered the complaint. For the present purposes, the essential facts, as to which there seems to be no controversy, may be considered to be as follows: At the time of James Dillon's death, he was employed as a night clerk at the Eastman Hotel, Rockford, which was owned and operated by Robert Eager. Robert Eager carried workmen's compensation insurance covering his employees in the operation of the hotel with Auto Owners (Mutual) Insurance Company. James Dillon, by reason of his employment and the circumstances of his injury was covered by the Workmen's Compensation Act. His death arose out of and in the course of his employment by a pistol wound inflicted by Carl Swenson, the intoxicated person. Carl Swenson was not an employee of the Eastman Hotel or Auto Owners (Mutual) Insurance Company. The death of James Dillon was not proximately caused by any negligence of the employer, Robert Eager, or of any of his employees.

Prior to the filing of the Dram Shop suit, Robert Eager, d/b/a Eastman Hotel, entered into a lump sum settlement contract, through his foregoing workman's compensation insurer, providing for a lump sum settlement with Beulah Dillon only, the widow of James Dillon, which contract was approved by the Industrial Commission. Joan Dillon, the daughter of James Dillon, and one of the plaintiffs in the later Dram Shop suit, was not listed in the compensation case as a dependent of James Dillon, her father, or mentioned in the workmen's compensation lump sum settlement contract. By that settlement Robert Eager, d/b/a Eastman Hotel, or his compensation insurance carrier, paid Beulah Dillon only, the widow, $6375 workmen's compensation on September 3, 1954. It does not appear that there are any pending administration proceedings on the estate of the deceased employee, and, in any event, it does not appear that Beulah Dillon (or Joan Dillon) is the personal representative thereof.

Thereafter, following the institution of the Dram Shop suit, Robert Eager, d/b/a Eastman Hotel, and Auto Owners (Mutual) Insurance Company, sought leave to intervene as parties plaintiff in the Dram Shop suit, claiming a right to be subrogated to the extent of the $6375 workmen's compensation payment, and sought to impress a lien to that extent upon any judgment entered in that suit in favor of the plaintiffs. The appellants' procedure took the form of a Motion on April 18, 1955 to join in the suit and that all orders be made for their protection so that no release or settlement in the action or satisfaction of judgment be valid without their consent, and a Notice of Lien and Subrogation Interest of April 19, 1955 claiming a lien on any amounts recovered by the plaintiffs to the extent of the workmen's compensation paid. Subsequently, in the Dram Shop suit a series of judgments, agreed upon by the plaintiffs and defendants, were entered June 20, 1955 totaling $3,000 in favor of the plaintiff Beulah Dillon, and $3,000 in favor of the plaintiff Joan Dillon. The Court thereafter, on August 19, 1955, denied the Motion to Intervene of Robert Eager, d/b/a Eastman Hotel and Auto Owners (Mutual) Insurance Company, found that they had no right of subrogation, no right to a lien on the judgments in favor of the plaintiffs, and no right to intervene, and denied the motion to impress a lien on the judgments in favor of the plaintiffs. It is from this order that Robert Eager, d/b/a Eastman Hotel, and Auto Owners (Mutual) Insurance Company appeal. A subsequent order directed the Clerk to hold the money meanwhile paid on the judgments, pending the present appeal. The appellants here ask that the order of August 19, 1955, be reversed, their motion to intervene be granted, that they be found to have a right of subrogation and lien interest in the judgments of June 20, 1955, and that the Clerk be directed to pay the $6,000 to the appellants.

The appellants, Robert Eager, d/b/a Eastman Hotel and Auto Owners (Mutual) Insurance Company, the employer and his workmen's compensation insurer, claim the right to intervene in the Dram Shop suit of the widow and child of the employee, to be subrogated, and to have a lien on the judgments therein in favor of the plaintiffs by reason of the provisions of Ch. 48, Ill. Rev. Stats., 1953, par. 138.5.

Ch. 48, Ill. Rev. Stats., 1953, par. 138.5, being Section 5 of the Workmen's Compensation Act of 1951, as amended in 1953, provides, so far as material:

"Sec. 5. (a) . . .

"However, in any action now pending or hereafter begun to enforce a common law or statutory right to recover damages for negligently causing the injury or death of any employee it shall not be necessary to allege in the complaint that either the employee or the employer or both were not governed by the provisions of this Act or of any similar Act in force in this or any other State.

"(b) Where the injury or death for which compensation is payable under this Act was not proximately caused by the negligence of the employer or his employees and was caused under circumstances creating a legal liability for damages on the part of some person other than the employer to pay damages, then legal proceedings may be taken against such other person to recover damages notwithstanding such employer's payment of or liability to pay compensation under this Act. In such case, however, if the action against such other person is brought by the injured employee or his personal representative and judgment is obtained and paid, or settlement is made with such other person, either with or without suit, then from the amount received by such employee or personal representative there shall be paid to the employer the amount of compensation paid or to be paid by him to such employee or personal representative including amounts paid or to be paid pursuant to the provisons of paragraph (a) of Secton 8 of this Act.

"If the injured employee or his personal representative shall agree to receive compensation from the employer or accept from the employer any payment on account of such compensation, or to institute proceedings to recover the same, the said employer may have or claim a lien upon any award, judgment or fund out of which such employee might be compensated from such third party.

"In such actions brought by the employee or his personal representative, he shall forthwith notify his employer by personal service or registered mail, of such fact and of the name of the court in which such suit is brought, filing proof thereof in such action. The employer may, at any time thereafter join in said action upon his motion so that all orders of court after hearing and judgment shall be made for his protection. No release or settlement of claim for damages by reason of such injury or death, and no satisfaction of judgment in such proceedings, shall be valid without the written consent of both employer and employee or his personal representative, except in the case of the employers, such consent shall not be required where said employer has been fully indemnified or protected by Court Order.

"In the event the said employee or his personal representative shall fail to institute a proceeding against such third person at any time prior to 3 months before said action would be barred at law said employer may in his own name, or in the name of the employee, or his personal representative, commence a proceeding against such other person for the recovery of damages on account of such injury or death to the employee, and out of any amount recovered the employer shall pay over to the injured employee or his personal representative all sums collected from such other person by judgment or otherwise in excess of the amount of such compensation paid or to be paid under this Act, including amounts paid or to be paid pursuant to the provisions of paragraph (a) of Section 8 of the Act, and costs, attorney's fees and reasonable expenses as may be incurred by such employer in making such collection or in enforcing such liability."

Referring particularly to the provisions of subparagraph (b) of that section, the present Dram Shop suit of the widow and child of the employee, in which the employer and his workmen's compensation insurer seeks to intervene, to be subrogated, and to impress a lien on the plaintiffs' judgments is not an action "brought by the injured employee or his personal representative" in which a judgment has been obtained and paid or settlement made, within the language thereof. No amount has been or will be "received by such employee or personal representative" in this suit, within the language thereof, from which could be paid to the employer the amount of compensation paid by him. The "injured employee or his personal representative" have not here agreed to receive compensation from the employer or accepted from the employer any payment on account thereof or instituted proceedings to recover the same, and there is no "award, judgment or fund out of which such employee might be compensated from such third party" upon which the employer can possibly "have or claim a lien," within the language thereof. This not being an action "brought by the employee or his personal representative," the plaintiffs are not thereby required to notify the employer thereof; the employer is not entitled to join therein upon his motion; and the written consent of the ...


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