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Kosick v. Hospital Service Corp.

DECEMBER 28, 1956.

JOHN KOSICK, APPELLEE,

v.

HOSPITAL SERVICE CORP., AN ILLINOIS NOT-FOR-PROFIT CORPORATION, APPELLANT.



Appeal from the Municipal Court of Chicago; the Hon. WILLIAM V. DALY, Judge, presiding. Reversed.

JUDGE LEWE DELIVERED THE OPINION OF THE COURT.

Defendant appeals from a judgment in favor of plaintiff in an action to recover certain hospital expenses under the terms of a certificate for hospital care known as "Blue Cross" issued by defendant. Defendant's motion at the close of the evidence for a finding in its favor was overruled.

Plaintiff was employed in the shop of one Fritz Muhlhauser as a pattern, molding and cabinet maker. While doing some work at his employer's residence, plaintiff suffered a back injury. As a result of this injury, he required hospital care.

Plaintiff filed a claim under the Illinois Workmen's Compensation Act. After a hearing the arbitrator found, inter alia, that Muhlhauser was operating under the provisions of the Illinois Workmen's Compensation Act; that the relationship of employee and employer existed between Kosick and Muhlhauser; and that Kosick sustained accidental injuries arising out of and in the course of the employment. Upon review the Industrial Commission reversed the decision of the arbitrator. On appeal, the Circuit Court of Cook County found that the decision on review by the Industrial Commission was erroneous and remanded the cause to the Commission with directions to confirm the decision of the arbitrator. There was no appeal from the order of the Circuit Court confirming the decision of the arbitrator.

After plaintiff had successfully prosecuted his claim for monies due him under the provisions of the Workmen's Compensation Act, including the sum of $1470.24 for necessary first aid, medical, surgical and hospital services, he petitioned the Industrial Commission in the same proceeding for a lump sum settlement of $5000. In accordance with the prayer of plaintiff's petition an order was entered by the Commission reciting that ". . . a proper showing having been made, it appears to the Commission to be to the best interest of the parties that compensation herein be paid in a lump sum." Plaintiff admits receiving the lump sum payment of $5000.

In the present case, the principal issue at the trial was whether plaintiff was barred from recovering his hospital expenses by an exclusionary clause in the certificate of insurance which reads,

"`Hospital service' does not include the following:

"Care of injuries or diseases for which the Member is entitled to hospital care, or for which he receives any award or settlement in any proceeding filed, under workmen's compensation or occupational diseases law." (Italics ours.)

The record shows that the trial judge rested his decision on the ground that the defendant had failed "to show that a portion of the settlement at least was in contemplation of the medical and hospital expenses."

Plaintiff says that it is a question of fact whether his injury arose out of and in the course of employment since the evidence shows that (1) plaintiff, "a pattern and model maker," was injured while helping his employer build his home, and (2) the "settlement contract" executed by defendant states as reasons for a lump sum settlement that

"there are disputed questions of law and fact, and respondents specifically deny that petitioner sustained an accidental injury arising out of and in the course of his employment and deny that petitioner's disability is related to any accidental injury sustained while in respondent's employment."

An examination of the pleadings shows that the question whether plaintiff's injuries arose out of or in the course of his employment was not raised in the statement of claim or defendant's answer. In plaintiff's reply he avers that the "settlement received pursuant to the Workmen's Compensation Act was solely for the purchase of peace, and did not entitle plaintiff to hospital care." (Italics ours.)

The denials in plaintiff's reply that hospital charges for which recovery is here sought were paid pursuant to the Workmen's Compensation Act and that the lump sum settlement was for the purchase of peace are legal conclusions.

A lump sum settlement merely provides for a different method of payment. It is a commutation of periodical payments into one single, all inclusive payment, thus enabling an employee to obtain the entire amount of compensation due at one and the same time as distinguished from weekly payments. The governing rules relating to lump sum petitions are stated in Volume 2 of ...


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