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Arnold Lies Co. v. Legler

JUNE 9, 1960.

ARNOLD LIES COMPANY, FOR THE USE OF ZURICH INSURANCE COMPANY, PETITIONER-APPELLANT,

v.

WILLIAM LEGLER, RICHARD H. DOUGLAS, AND FOX VALLEY TRANSIT MIX, INC., RESPONDENT-APPELLEES.



Appeal from the Circuit Court of Kane county; the Hon. ROY J. SOLFISBURG, Judge, presiding. Affirmed in part, reversed in part, and remanded with instructions.

SPIVEY, P.J.

The plaintiff, William Legler, sustained personal injuries while he was in the course of his employment for the Arnold Lies Company, hereinafter styled "Lies." On June 8, 1956, he was injured when a truck, operated by the defendant, Richard H. Douglas, an employee of the defendant, Fox Valley Transit Mix, Inc., hereinafter referred to as "Fox Valley," rolled against him while he was working in construction.

Legler availed himself of the benefits of the Workmen's Compensation Act of Illinois in June of 1956, and on May 21, 1957, entered into a settlement with the approval of the Industrial Commission of Illinois for the total amount of $7,320.44, representing temporary total disability $1,054.; permanent disability $4,533.34; and medical expenses $1,733.10, which was paid to Legler on May 23, 1957.

On June 28, 1956, Zurich Insurance Company, hereinafter referred to as "Zurich," petitioner-appellant, notified Fox Valley and Legler by letter that Zurich was the compensation carrier for Lies and that they claimed a lien for all payments made to Legler by virtue of Section 5 of the Workmen's Compensation Act. A copy of this letter was mailed to Legler.

Iowa National Mutual Insurance Company, Fox Valley's carrier, acknowledged receipt of Zurich's letter to Fox Valley on June 11, 1956.

On June 11, 1957, Zurich notified Legler's attorneys of the compensation settlement of May 21, 1957, and stated they had asserted a lien on June 28, 1956, by letter to Fox Valley which was in turn acknowledged by their carrier, Iowa National Mutual Insurance Company. Request was further made that such lien in the amount of $7,320.44 be protected in any settlement.

Legler commenced a common law action in the Circuit Court of Kane County on August 22, 1956, against Douglas and Fox Valley as authorized by Section 5 (b) of the Workmen's Compensation Act, Chap. 48, Sect. 138.5 (b), Ill. Rev. Stat. 1955. The complaint was amended and defendants answered on March 21, 1957. This statute provided in part as follows:

"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 provisions of paragraph (a) of Section 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."

On January 9, 1958, more than sixteen months after the institution of the suit, plaintiff gave the statutory notice of the filing of the common law suit to his employer, Lies. Then, on February 3, 1958, the attorneys for Douglas and Fox Valley gave notice that on the 7th day of February, 1958, at 10:00 a.m., or as soon thereafter as counsel might be heard, a motion mailed under date of January 30, 1958, and erroneously set for hearing on February 3, 1958, would be presented for immediate hearing.

This motion filed on February 7, 1958, the date of the hearing, in substance, moved the court for authority to deposit with the Clerk of the Court the sum of $13,250 to be held by the Clerk pending a hearing before the court to determine the respective rights of Legler, Zurich, and Lies in and to said sum. Movant prayed that Douglas and Fox Valley, upon depositing the fund, be adjudged to be discharged of any liability to Legler, Zurich, and Lies. The motion advised the court that the case was "settled for a total consideration of $13,250.00" and that prior to such settlement Zurich on behalf of Lies, Legler's employer, had paid Legler $7,320.44 under the Workmen's Compensation Act and that a controversy has arisen between Legler, Zurich, and Lies in and to $7,320.44 of the fund to be deposited.

On February 5, 1958, Legler gave notice to Lies, Zurich, and the attorneys for Douglas and Fox Valley that on February 7, 1958, at the opening of court, or as soon thereafter as counsel may be heard, he would ask leave to file a petition, and secure an immediate order directing the clerk to pay the $13,250 to him. Proof of service was made that the notice and a copy of the petition were mailed to the parties before 6:00 p.m. on February 5, 1958, at Aurora, Illinois.

The verified petition recited that $13,250 had been or would be deposited with the Clerk, which sum had been agreed upon in settlement of the common law case; that the statutory notice required by Sect. 5 had been given; that neither Lies nor Zurich had petitioned to intervene; that the facts in the instant case precluded recovery by Lies and/or Zurich in any part of the amount of $5,587.34; and that neither Lies nor Zurich had any right to claim their interest in any portion of the settlement which was paid in reimbursement for medical and hospital expenses. The petition also contained a statement of Legler's theory of the accident ...


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