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Gramse v. Royal Crest Enterprises

OPINION FILED SEPTEMBER 17, 1981.

DORIS GRAMSE ET AL., PLAINTIFFS-APPELLEES,

v.

ROYAL CREST ENTERPRISES, INC., ET AL., DEFENDANTS AND THIRD-PARTY PLAINTIFFS. — (CARDINAL ENTERPRISES, INC., ET AL., THIRD-PARTY DEFENDANTS-APPELLANTS; RELIANCE INSURANCE COMPANY, PETITIONER-APPELLANT.)



APPEAL from the Circuit Court of Will County; the Hon. CHARLES P. CONNOR, Judge, presiding.

MR. PRESIDING JUSTICE SCOTT DELIVERED THE OPINION OF THE COURT:

This action was brought by Doris Gramse, a widow and administrator of the estate of Paul Gramse, deceased, and as mother and next friend of their three minor children, to recover damages for the death of her husband, Paul Gramse, under the Structural Work Act and survival provisions of the Probate Act. Gramse was severely injured in a construction accident on May 1, 1975, and died without regaining consciousness on September 27, 1975. The decedent was employed by Cardinal Enterprises, Inc. (Cardinal), which in turn was employed as a subcontractor in the construction of a home in a new subdivision in Will County. Named as defendants were Timberview Development Company (Timberview), the developer of the subdivision; Link Construction Company, a contractor; and Royal Crest Enterprises, Inc. (Royal Crest), the general contractor and the equitable owner of the property where the accident occurred.

Timberview and Royal Crest subsequently filed a third-party complaint for implied indemnity on an active-passive basis against the decedent's employer, Cardinal Enterprises, Inc., and his supervisor, Stanley Eugene Koren. Summary judgment was thereafter granted to defendants Timberview and Link Construction, and the cause proceeded as to the remaining defendants.

After discovery procedures had commenced, negotiations were conducted by the parties which resulted in a settlement of the action. Royal Crest paid $200,000 towards the settlement and Cardinal Enterprises contributed $100,000, for a total package of $300,000. The $100,000 contributed by Cardinal was covered by liability insurance issued by Reliance Insurance Company. Reliance Insurance also was the workmen's compensation carrier for the decedent's employer and had paid a total amount of $43,615.36 in workmen's compensation benefits to the decedent's spouse and surviving children; it claimed a lien in that amount pursuant to section 5(b) of the Workmen's Compensation Act (Ill. Rev. Stat. 1975, ch. 48, par. 138.5(b)). The plaintiff disputed the applicability of the lien provision and the settlement and stipulation to dismiss accordingly specifically excluded the dispute over the lien from the settlement. The cause proceeded as to the determination of Reliance Insurance Company's lien rights, with the trial court ruling that no workmen's compensation lien attached to the settlement proceeds.

Cardinal Enterprises, Inc., Stanley Eugene Koren, and Reliance Insurance Company have appealed.

The portion of the Workmen's Compensation Act at issue here is found in section 5(b):

"Where the injury or death for which compensation is payable under this Act was caused under circumstances creating a legal liability for damages on the part of some person other than his 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 paragraph (a) of Section 8 of this Act." (Emphasis added.) Ill. Rev. Stat. 1975, ch. 48, par. 138.5(b).

As is clear from the emphasized language, the legislature has explicitly limited the employer's lien to third-party actions in which the employee or his personal representative is the plaintiff. Under the express statement of the lien provision in question, it plays no part in actions brought by the employee's widow as a person in her own right and based on a cause of action accruing to her.

The first three counts of the amended complaint were brought by plaintiff in her capacity as widow of the decedent and as next friend of the three minor children. Those counts sought recovery under the Structural Work Act (Ill. Rev. Stat. 1975, ch. 48, par. 64). The Structural Work Act creates a distinct cause of action in the dependents of a deceased in their individual capacities. They do not recover through the personal representative of the decedent's estate, nor through the decedent's estate. (Bryntesen v. Carroll Construction Co. (1963), 27 Ill.2d 566, 190 N.E.2d 315.) The applicable provision states:

"* * * [A] right of action shall accrue to the party injured, for any direct damages sustained thereby; and in case of loss of life by reason of such wilful violation or wilful failure as aforesaid, a right of action shall accrue to the widow of the person so killed, his lineal heirs or adopted children; or to any other person or persons who were, before such loss of life, dependent for support on the person or persons so killed, for a like recovery of damages for the injuries sustained by reason of such loss of life or lives." (Emphasis added.) Ill. Rev. Stat. 1975, ch. 48, par. 69.

In an analogous situation it has been held that a suit by a deceased employee's widow and daughter, in their individual capacities, was not one in which the employer's lien attached. (Dillon v. Nathan (1956), 10 Ill. App.2d 289, 135 N.E.2d 136.) In Dillon the decedent-employee was shot and killed by an intoxicated man while working as a hotel clerk. The decedent's employer made a workmen's compensation settlement. The surviving spouse and daughter subsequently brought a Dramshop action against the owners of the tavern where the liquor had been purchased. The employer sought to intervene in the Dramshop action asserting a lien under section 5(b) of the Workmen's Compensation Act. The court affirmed the trial court, finding the employer had no lien rights because the Dramshop action accrued not to the decedent's estate, but rather to the "surviving spouse and children." The Dramshop action was not subject to the lien asserted by the employer because, in the language of section 5(b), it was not an action "brought by the injured employee or his personal representative," and no amount was or would be "received by [the] employee or personal representative." 10 Ill. App.3d 289, 296.

Notwithstanding the existence of this precedent, the material language of section 5(b) had never been changed or modified by the legislature. Graham v. General U.S. Grant Post No. 2665 (1969), 43 Ill.2d 1, 248 N.E.2d 657.

• 1 Precisely the same reasoning applies to and is controlling in the case of this plaintiff's Structural Work Act claims. It is not an action "brought by the injured employee or his representative" and no amount has been or will be "received by the employee or personal representative" under the Structural Work Act claims. The Structural Work Act death claim can only be maintained by the widow and children in their individual capacities. Bryntesen v. Carroll Construction Co. (1963), 27 Ill.2d 566, 190 N.E.2d 315.

Defendants are unable to distinguish Dillon from the instant cause and have argued that it should be overturned in part because section 5(b) was amended to eliminate the earlier requirement that the employer be nonnegligent in order to assert its lien in a subsequent third-party action. This change in section 5 is unrelated to the legislature's limitation of lien rights to cases where the employee himself or his personal representative is the plaintiff. This latter requirement is, as defendants have noted, intended to prevent a double recovery by the same party for the same injuries, a purpose which is ...


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