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Robertson v. Travelers Insurance Co.





APPEAL from the Circuit Court of St. Clair County; the Hon. PATRICK J. FLEMING, Judge, presiding.


On March 28, 1975, plaintiff, Elvin L. Robertson, filed a one-count complaint in the Circuit Court of St. Clair County against: (1) his employer, Kaskaskia Constructors (Kaskaskia); (2) Kaskaskia's workmen's compensation insurer, Travelers Insurance Company (Travelers); and (3) several employees of Travelers. The complaint alleged that defendants had caused plaintiff to suffer severe mental anguish, and that they had committed the tort of "outrage" against plaintiff by their handling of his workmen's compensation claim. An amended complaint, filed on April 16, 1979, dropped Kaskaskia as a defendant, and a jury trial commenced on April 30, 1979. At the conclusion of plaintiff's evidence the individual employees of Travelers were dismissed as defendants. A jury verdict in the amount of $150,000 compensatory damages and $2,000,000 punitive damages was returned against Travelers, and judgment was entered on the verdict. Travelers appeals that judgment.

The evidence presented was largely undisputed. It established that on June 25, 1971, plaintiff was a carpenter employed by Kaskaskia at the Fults Lock and Dam project. At that time plaintiff slipped and fell, and although an injury was sustained there was later a dispute as to whether one or both of his knees were injured. As a result of the injury plaintiff consulted several doctors for treatment, and Travelers paid for most of those expenses. The only benefit which plaintiff received directly was a temporary total disability payment which Travelers sent on March 22, 1972, and plaintiff received on March 30, 1972. Under the law as it then existed plaintiff was required to file his claim for workmen's compensation before the Industrial Commission no later than one year after the date upon which he last received direct benefits (Ill. Rev. Stat. 1969, ch. 48, pars. 138.6(c)(3) and 138.8(a)). In plaintiff's case the limitations period would therefore expire on March 30, 1973.

Plaintiff testified that on March 14, 1973, shortly before the statutory period would expire, he telephoned Travelers' agent Thomas Walz. Walz had been in charge of plaintiff's case and plaintiff had contacted him on several occasions. Plaintiff informed Walz that surgery on both knees would begin in the next month and Walz told plaintiff that Travelers' name could be put on the bill. Walz admitted telling plaintiff that Travelers' name could be placed on the bill, but Walz testified that in addition he told plaintiff that other agents were now in charge of the case and they would have to make the final decision on whether to pay for the surgery. Plaintiff testified that he did not recall that portion of the conversation, but stated Walz may have said that.

On March 16, 1973, supervisor James Balsiger wrote a memorandum to the claims representative, Rodger Nelson, who had been assigned to plaintiff's claim. Balsiger noted:

"On March 14, Mr. Walz of our office received a phone call from this man [plaintiff]. The man indicated that he was going in the hospital in April to have his knee operated on. * * * The man asked Mr. Walz who would pay for this operation and apparently Mr. Walz told the man `they can put our name on the bill if they want to.' What impression the man got from the statements I do not know."

In the memorandum, Balsiger stated his belief that the claim was questionable because a medical diagnosis indicated that plaintiff's condition may have been due to a degenerative health problem rather than caused by injury. He continued:

"As can be noted, the statute of limitations were run [sic] on this case on March 22, 1973. I would suggest that we contact this man and determine what doctor is going to do what to him and on what date. I would make it clear to him that we are accepting no responsibility for this and are not going to pay compensation. I think we are in such a position at this time that we cannot voluntarily accept this matter."

Acting under the misapprehension that the statute of limitations would run on March 22, rather than March 30, Travelers' employees made no attempt to contact the plaintiff before March 22. Claims representative Nelson conducted a lengthy interview of the plaintiff at his home on March 26. Nelson did not remind him of the running of the statute of limitations, but he did ask the plaintiff whether he had retained an attorney or filed a workmen's compensation claim. The plaintiff responded in the negative.

On March 29, Nelson wrote the plaintiff a letter which stated:

"On examination of all information available regarding the above workmen's compensation claim, we feel that your present complaints are not as a result of the above incident. Therefore, Travelers Insurance Company will not authorize or accept the responsibility of any additional medical treatment or temporary total disability benefits regarding the above incident. May I suggest you contact your Group Insurance carrier for possible Group Insurance Benefits?"

Plaintiff received this letter on April 2, 1973. Only then did he consult an attorney for the first time, and a formal application for adjustment of claim was sent to the Industrial Commission that same day.

Claims representative Nelson wrote a memorandum to the file on April 11, 1973. He remarked that, in his view, the statute of limitations had expired before his interview and subsequent correspondence with the plaintiff. He further detailed:

"On 4-3-73, this writer discussed the above case with Supervisor Balsiger and Claims Attorney Knobbe and both of these individuals agree with this writer that the statute of limitations has expired and unless Mr. Robertson lied about retaining an attorney or previously filing an application, for adjustment, The Travelers Insurance Company should be `home free.'"

Travelers defended against plaintiff's workmen's compensation claim by asserting the statute of limitations. The issue was litigated by the parties, and finally resolved by the supreme court in Kaskaskia Constructors v. Industrial Com. (1975), 61 Ill.2d 532, 337 N.E.2d 713. In that case the supreme court held that the Industrial Commission's ruling, that Travelers was estopped from asserting the statute of limitations, was not contrary to the manifest weight of the evidence. It was only after that ruling that Travelers paid plaintiff's claim plus accrued interest.

In the meantime the plaintiff, who was recovering from surgery, could not work. He was forced to borrow from relatives, go on public aid, and accept charity from the volunteer fire department of which he was a long-standing member, in order to provide for his family. This financial strain upset the plaintiff and caused him to become, in his own words, "highly nervous and forgetful."

On appeal, Travelers attacks the judgment against it by advancing a number of arguments, of varying degrees of merit. As its first block of arguments, Travelers contends that the plaintiff may not bring an outrage suit against it, for such a claim is barred by (1) the Illinois Insurance Code (Ill. Rev. Stat. 1979, ch. 73, par. 767), (2) the exclusivity provisions of Illinois' Workers' Compensation Act (Ill. Rev. Stat. 1979, ch. 48, par. 138.5(a)), and (3) the Illinois and Federal constitutions. It then urges us to find that the plaintiff did not plead or ...

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