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Shelby v. Sun Express

OPINION FILED JUNE 7, 1982.

JEROME SHELBY, PLAINTIFF-APPELLEE,

v.

SUN EXPRESS, INC., ET AL., DEFENDANTS. — (THE DEPARTMENT OF TRANSPORTATION, INTERVENOR-APPELLANT.)



APPEAL from the Circuit Court of Cook County; the Hon. JAMES E. MURPHY, Judge, presiding.

JUSTICE O'CONNOR DELIVERED THE OPINION OF THE COURT:

The Illinois Department of Transportation appeals from a portion of an order of the circuit court of Cook County denying immediate reimbursement from the settlement of a personal injury claim of the amount of workmen's compensation paid by it to its employee and also denying it interest on the amount of that compensation. We affirm.

Plaintiff Jerome Shelby, an employee of the Illinois Department of Transportation (Department), while working on a highway resurfacing crew, was struck by a vehicle driven by defendant Gene Aikman, an agent of defendant Sun Express. Plaintiff sustained severe personal injuries for which he sued defendants. Subsequently he settled his claim for $900,000. The Department intervened to secure reimbursement from the settlement of the amount of workmen's compensation benefits it had paid up to that time. These totaled $126,987.11. The Department also sought interest thereon.

After several hearings and modifications of prior orders, the circuit court ordered:

"It is therefore ordered that the Defendants, SUN EXPRESS, INC. and GENE AIKMAN, shall pay the gross amount of $900,000.00 in the form of two separate checks, one check in the sum of $773,012.89 payable to Jerome Shelby and Gladys Shelby, his wife, and their attorney, Fred Lambruschi. The second check in the sum of $126,987.11 payable to Jerome Shelby and Gladys Shelby, his wife, their attorney, Fred Lambruschi and the State of Illinois, Department of Transportation. Said sums shall be deposited into two Court Approved Restricted Trust Accounts at the LaSalle National Bank of Chicago and the beneficiaries of said trusts shall be designated as Jerome Shelby and Gladys Shelby, his wife, Attorney Fred Lambruschi, and the State of Illinois, Department of Transportation.

The interest that accrues from said trust account in the principal sum of $773,012.89 is to be paid directly to Jerome Shelby and Gladys Shelby, his wife, on demand without further order of this Court during the pendency of this cause of action. The interest in the second account in the principal sum of $126,987.11 shall accrue and not be subject to any distribution to any of the parties until a determination is made by the Appellate Court of Illinois as to which of the parties is entitled to the funds that are created by virtue of said interest payments.

As previously stated by these court orders, this Court does retain full and complete jurisdiction of this matter and of the said trust accounts until such time as the Workmen's Compensation claim has been terminated and at that time upon application to this Court the Court will order such sums be distributed to the plaintiff, Jerome Shelby and Gladys Shelby, his wife, and their attorney, Fred Lambruschi, and the Department of Transportation of the State of Illinois in full and final discharge of the rights of all parties as is then determined by this Court."

The Department contends that it is entitled to immediate reimbursement from the settlement fund for the amount of workmen's compensation it has paid to its employee and that it is entitled also to interest on that portion of the settlement representing the amount of those workmen's compensation benefits paid, where the settlement fund has been invested and before payment has been disbursed.

Section 5(b) of the Workmen's *fn1 Compensation Act (Ill. Rev. Stat. 1979, ch. 48, par. 138.5(b)) provides in pertinent part:

"(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.

Out of any reimbursement received by the employer pursuant to this Section, the employer shall pay his pro rata share of all costs and reasonably necessary expenses in connection with such third-party claim, action or suit and where the services of an attorney at law of the employee or dependents have resulted in or substantially contributed to the procurement by suit, settlement or otherwise of the proceeds out of which the employer is reimbursed, then, in the absence of other agreement, the employer shall pay such attorney 25% of the gross amount of such reimbursement.

If the injured employee or his personal representative agrees 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 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."

The Department argues that the language of this section with reference to a suit brought by an injured employee against a third person for the injuries sustained, "[i]n such case, however, if * * * judgment is obtained and paid, or settlement is made * * *, 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 * * *," requires that there be immediately paid to the Department from the settlement fund the amount it had already expended at the time of intervention, less its pro rata share of all costs and reasonably necessary expenses and attorney fees. We disagree.

We agree with the Department that the word "then" following "in such case" in the above-quoted provision is an adverb of time and not a reference to a preceding event. Strain v. Sweeny (1896), 163 Ill. 603, 608, 45 N.E. 201; Tolley v. Wilson (1939), 371 Ill. 124, 133-34, 20 ...


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