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Employers Mut. Cas. Co. v. Trimon Elevator Co.

MAY 20, 1966.




Appeal from the Circuit Court of Cook County; the Hon. DAVID LEFKOVITZ, Judge, presiding. Reversed and remanded.


This is a consolidated appeal from two adverse judgments entered against Employers Mutual Casualty Company, subrogee of Clark-Maple Chevrolet Company, plaintiff, in an action brought to enforce payment on employer's lien created by section 5(b) of the Workmen's Compensation Act of Illinois (Ill Rev Stats 1955, c 48, § 138.5(b)). Separate judgments in favor of the two defendants were entered by the trial court on different days.

The defendant, Richard Moore, was injured on March 15, 1956, while in the employ of Clark-Maple. The plaintiff, Employers Mutual Casualty Company, as workmen's compensation carrier of Clark-Maple, paid $1,150 to Moore by reason of the injury and expenses incurred by him. Thereafter, Moore brought a lawsuit against Trimon Elevator Company as a third party tort-feasor. On June 29, 1956, the plaintiff sent a registered letter to Trimon Elevator advising of plaintiff's rights and claim to a lien pursuant to the provisions of the Workmen's Compensation Act. On November 19, 1957, the plaintiff sent a letter to Trimon Elevator setting forth that plaintiff had expended the sum of $1,500, and making a demand for reimbursement. The record indicates that Trimon Elevator, through its agent, acknowledged receipt of the second letter. Plaintiff did not intervene in the lawsuit between Moore and Trimon Elevator but depended upon the Workmen's Compensation Act and the plaintiff's lien filed with Trimon Elevator to protect its rights. On February 8, 1963, the trial court, by agreement of the parties, entered a judgment order setting forth the following findings: that Trimon Elevator was guilty of negligence; that Moore had exercised due care and caution for his own safety; and that the employer, Clark-Maple Chevrolet, was guilty of negligence. The court ordered that Moore be awarded $4,000 and costs. Trimon Elevator then paid Moore $4,000, but neither Moore nor Trimon Elevator notified plaintiff of the settlement or judgment. On February 8, 1963, the court entered a satisfaction of judgment order.

On December 23, 1963, Clark-Maple Chevrolet, having entered no appearance in the case, petitioned the court for relief under section 72 of the Illinois Civil Practice Act. On January 17, 1964, the court found that Clark-Maple Chevrolet could not maintain an action under section 72 since the court had no jurisdiction of the petitioner, and the petitioner did not intervene, participate in any way or submit itself to the jurisdiction of the court. The court struck the petition of Clark-Maple Chevrolet and further ordered that the striking of the petition was without prejudice to Clark-Maple Chevrolet's filing a separate action against Moore or Trimon Elevator or either. The court further stated in the order that it was not ruling or indicating any view on the validity of any asserted claim of Clark-Maple Chevrolet against either or both. The court further found that the previous findings as to Clark-Maple Chevrolet (that Clark-Maple Chevrolet was negligent) are not to be considered and were not made as any formal adjudication of the rights, if any, of Clark-Maple Chevrolet.

On February 25, 1964 — a year and 17 days after the day on which the consent judgment in the case of Moore against Trimon Elevator was entered — the plaintiff, Employers Mutual Casualty Company, as subrogee of Clark-Maple Chevrolet Company, brought a suit against Moore and Trimon Elevator in the Municipal Court of Chicago to enforce payment in satisfaction of plaintiff's statutory lien on the judgment, award or settlement between Moore and Trimon Elevator. An amended complaint asking for the same relief was thereafter filed on July 3, 1964. Moore filed an answer; Trimon Elevator moved to dismiss, and set up the statute of limitations as a special defense. The trial court sustained Trimon Elevator's motion and dismissed the amended complaint as to Trimon Elevator only. The court further ordered that the plaintiff take nothing by its amended complaint and that the defendant go hence without day. Subsequently, Moore withdrew his answer and moved to dismiss, setting up the statute of limitations, which motion was sustained in the trial court. The plaintiff appeals from the judgment orders of dismissal both as to Trimon and Moore. Trimon Elevator has appeared in this court and has filed briefs; Moore has neither appeared nor filed briefs.

In this court plaintiff contends that Trimon and Moore made a settlement without paying any attention to plaintiff's lien; that plaintiff had given proper notice of its lien interest and had made proper demands thereunder; that the purported settlement made between Moore and Trimon was in violation of plaintiff's rights; and that plaintiff's cause of action against Moore and Trimon arose at the time of the improper settlement. Trimon argues that the trial court was correct in dismissing plaintiff's suit against Trimon and says that while it is acknowledged that plaintiff had a lien, plaintiff's action thereon should have been commenced within two years from the date of Moore's injury, and that this action is therefore barred by the statute of limitations.

Section 5(b) of the Workmen's Compensation Act of Illinois (Ill Rev Stats 1963, c 48, § 138.5(b)) provides inter alia that if the employee brings an action against the third party tort-feasor, and if judgment is obtained or settlement made, whether with or without suit, ". . . then from the amount received by such employee . . . there shall be paid to the employer the amount of compensation paid or to be paid by him to such employee. . . ." The act continues:

"If the injured employee . . . 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 . . ., 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 . . ., 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 . . . 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, . . . 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 . . . 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, . . . and costs, attorney's fees and reasonable expenses as may be incurred by such employer in making such collection or in enforcing such liability." (Emphasis supplied.)

It is necessary for us to interpret the Workmen's Compensation Act with reference to liens. In an article in University of Illinois Law Forum, 1957, page 253, George T. Frampton, a professor of law at the University of Illinois, makes the following statement:

"Sir John Salmond described case-law as `gold in the mine' and statute-law as `coin of the realm ready for use . . . brief, clear, easily accessible and knowable. . . .' He had never read the Illinois Workmen's Compensation Act.

"The lawyer who consults that act before first reading it from beginning to end will likely be caught in its Minotauran labyrinths and devoured. The more careful approach of reading it, however, is an alternative no less grim. True, it does offer some competition with other bedside reading. Like the Bible, it is an authoritative work of many minds that have made their contributions to it in different eras, and it is provocative in the variety of plausible interpretations suggested by some of its critical passages. An element of suspense exists, as in those mystery books where the significance of what one reads cannot be grasped until the very end, if then."

In an interpretation of the statute the court must supply that which is missing from the statute in a manner consistent with the overall purpose of ...

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