APPEAL from the Circuit Court of La Salle County; the Hon.
THOMAS R. FLOOD, Judge, presiding.
MR. JUSTICE HEIPLE DELIVERED THE OPINION OF THE COURT:
This appeal involves an employer's right under the Workmen's Compensation Act (Ill. Rev. Stat. 1975, ch. 48, par. 138.5(b)) to reimbursement from any recovery an employee receives from a third-party tortfeasor actually responsible for the employee's injury. Specifically, we are confronted with the manner in which the employer's insurer is to be reimbursed and the employee's attorney's fees paid. Presented for review is the procedure for such calculations as set out in the declaratory judgment order of the La Salle County Circuit Court.
Charles V. Denius was severely injured in a motor vehicle accident while driving a bakery truck for his employer, Haas Baking Company (Haas). Denius subsequently died from those injuries. In accordance with the Illinois Workmen's Compensation Act, the Home Insurance Company (Home), who was the Workmen's Compensation carrier for Haas, paid medical, surgical and burial expenses for the deceased and temporary compensation benefits while he was alive. After the death of Denius, the Illinois Industrial Commission ordered Home to pay $160 per week to Denius' widow for life.
On March 17, 1978, the plaintiff, Michael Denius, administrator of the estate of the deceased, filed a common-law suit against the third-party tortfeasors for personal injuries and the wrongful death of the deceased. Haas and Home intervened in order to protect their lien and right to reimbursement out of the proceeds of any judgment or settlement in favor of the plaintiff.
After intervention was granted, the plaintiff filed an additional count in which he requested that the court declare the manner in which the proceeds of any settlement would be used to reimburse Home, and the manner in which the statutory 25 percent attorney fee was to be applied. The plaintiff, among other things, requested that the court determine that the 25 percent fee be applied to the total amount of settlement and not just to the compensation paid to the date of settlement, that the obligation of Home to the widow to pay $160 per week continue irrespective of any judgment or settlement, and that Home have a lien to the extent of 75 percent of its payments to the widow. Haas and Home, in their answer, requested among other things, that after expenses and attorneys' fees were paid, Home was to receive credit for the remainder of the settlement, and its obligation to pay the widow was to be suspended until the amount of future compensation payments exceeded the net amount of the employee's settlement.
On August 20, 1980, Judge Thomas Flood of the La Salle County Circuit Court, entered a declaratory judgment granting a portion of the relief requested by the plaintiff. The judgment provided as follows:
"THEREFORE, this Court enters a declaratory judgment in accordance with the said Section 57.1 of the Civil Practice Act;
A. That the statutory 25% attorney fee for the plaintiff's attorney be applied against or to the total settlement or judgment and not the money paid by THE HOME INSURANCE COMPANY to the date of settlement on or at any future date;
B. That the plaintiff's entire costs be applied to the total settlement or judgment;
C. That the plaintiff's 25% attorney fee be paid to them at the time of settlement or payment of judgment, whichever event, if either, occurs out of the moneys being reimbursed to HOME INSURANCE COMPANY;
D. That the obligation of the HOME INSURANCE COMPANY to the widow Maxine Denius continues for the balance of her life at $160.00 per week, irrespective of a collectible settlement agreement or entry of judgment, and that HOME INSURANCE COMPANY have a lien to the extent of 75% of its payments to said widow for attorney fees not previously paid to the plaintiff's attorney;
E. The Court therefore establishes the following formula for payment:
1. If there is a settlement or judgment, the HOME INSURANCE COMPANY will receive 75% of its total provable workmen's compensation lien as of the date ...