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02/19/87 Sankey Brothers, Inc., Et v. Norman R. Guilliams Et Al.

February 19, 1987

SANKEY BROTHERS, INC., ET AL., PLAINTIFFS-APPELLEES

v.

NORMAN R. GUILLIAMS ET AL., DEFENDANTS (WILLIAM OSBORNE, PETITIONER-APPELLANT)



APPELLATE COURT OF ILLINOIS, THIRD DISTRICT

504 N.E.2d 534, 152 Ill. App. 3d 393, 105 Ill. Dec. 434

Appeal from the Circuit Court of McDonough County; the Hon. Maxwell Stewart, Judge, presiding. 1987.IL.183

APPELLATE Judges:

JUSTICE McCULLOUGH delivered the opinion of the court. KNECHT, J., concurs. JUSTICE LUND, specially Concurring.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE MCCULLOUGH

This appeal involves a request by the petitioner, William Osborne (Osborne), that he be permitted to intervene in an action filed by his employers, Sankey Brothers, Inc. (Sankey), and Iroquois Paving Corporation (Iroquois) against Norman R. Guilliams (Guilliams) and Midwest Control Products Corporation (Midwest). This litigation arose from an accident which occurred on October 20, 1981, while Osborne was employed in road construction and repair work. Sankey was the general contractor for the project and Iroquois was a subcontractor. Osborne was directly employed by Iroquois at the time of the accident. On that date, a truck owned by defendant Midwest and driven by Guilliams, a Midwest employee, allegedly struck Osborne, causing him severe injuries.

Following Osborne's submission of a workers' compensation claim, an Industrial Commission arbitrator, in an order entered December 20, 1983, found Osborne completely disabled and ordered Iroquois to pay him $373.30 per week for life. According to Osborne, this decision is presently being appealed.

On October 19, 1983, Osborne filed a negligence action in the Cook County circuit court seeking damages for the injuries which he allegedly sustained in the October 20, 1981, accident. He apparently intended to sue Midwest, but another corporation was named in the complaint and served with process. On September 4, 1984, Osborne filed an amended complaint which named Midwest as a defendant, and thereafter Midwest apparently was served with process. The action was, however, dismissed on Midwest's motion on July 23, 1985, on the grounds that Midwest was not served with process within the relevant limitations period and Osborne initially suing the wrong defendant did not provide a basis for avoidance of application of the statute of limitations. The record contains no indication that Osborne appealed this order of dismissal.

On October 14, 1983, Sankey filed suit against Midwest and Guilliams for the use of its insurer, seeking damages in excess of $15,000 as indemnification for workers' compensation benefits which it had paid and would be required to pay to Osborne on the basis of the injuries which he allegedly received in the October 1981 accident. Per an order entered December 5, 1984, Iroquois was permitted to intervene in this action as a party-plaintiff for the use of its insurer, also on the basis of amounts which it had paid and would be required to pay as workers' compensation for the injuries which Osborne allegedly sustained in the October 1981 accident.

On October 11, 1985, Osborne filed a petition for leave to intervene in Midwest's lawsuit for the purpose of asserting his purported rights under section 5(b) of the Workers Compensation Act (Ill. Rev. Stat. 1985, ch. 48, par. 138.5(b)). The circuit court denied Osborne's petition in an order entered April 10, 1986. The principal bases for the court's decision were that Osborne filed his petition for leave to intervene almost four years after the cause of action accrued and that Osborne's participation in the present action is barred by the res judicata effect of the judgment entered in the prior Cook County suit involving Osborne and Midwest.

Osborne appeals the denial of his petition for leave to intervene, asserting that he has not had a chance to present all of the pertinent facts relating to defendants' alleged negligence and that the policies underlying the doctrine of res judicata do not preclude him from intervening in this cause. Also, Osborne maintains that under the circumstances of this case, we should relax strict application of the doctrine of res judicata because otherwise, he will be in the position of appearing only as a witness in an action involving his own claim for damages. Furthermore, Osborne asserts that under section 5(b) of the Workers' Compensation Act (Ill. Rev. Stat. 1985, ch. 48, par. 138.5(b)), he should be deemed a necessary party to this action in order that he may protect his right to recover an amount in excess of the workers' compensation which was awarded him. He notes that the above statutory provision specifically confers upon employers the right to join in an action by an employee against a third-party tortfeasor and contends that employees should be granted the same right with respect to actions against third-party tortfeasors brought by employers.

The plaintiffs and defendants argue that the circuit court properly denied Osborne's petition for leave to intervene, because any further legal action by him against the defendants is barred by the res judicata effect of the judgment in the prior Cook County lawsuit filed by Osborne against Midwest. Also, the plaintiffs assert that the statutory right of employers to bring suit against third-party tortfeasors in order to protect their interests would be rendered meaningless if employees were permitted to intervene under facts similar to those involved in this case and point out that Osborne's request for leave to intervene was not filed until after the statute of limitations had run with respect to his claims against the defendants. Sankey and Iroquois also assert that Osborne's being permitted to intervene would prejudice them unless the order permitting intervention would provide that Osborne's attorneys not be allowed to claim any fees, expenses, or costs of collecting any amounts which they recover from defendants and that Sankey and Iroquois can deduct their workers' compensation payments to Osborne, attorney fees, and costs from any recovery against the defendants before Osborne receives anything.

In reply to the arguments of the plaintiffs and defendants, Osborne contends that it is possible to infer from Sankey's and Iroquois' filing of a joint appellate brief that they would like to keep Osborne out of this action so that they can settle the matter by recovering only the amount of compensation awarded Osborne. Also, Osborne asserts that the fact that Iroquois was allowed to intervene several months after the statute of limitations had run provides a basis for holding that the present action is a "unique and nonrecurring situation" within the meaning of the decision in Adams v. Pearson (1952), 411 Ill. 431, 442, 104 N.E.2d 267, 273. Furthermore, Osborne maintains that it is by no means certain that he will receive any amount of workers' compensation (in view of the pendency of an appeal of his workers' compensation award) and that the defendants are going to incur legal expenses to defend this action regardless of whether Osborne is a party. Finally, Osborne states that he does not yet claim entitlement to attorney fees in this action and requests that that matter be left to the determination of the trial court if his petition for leave to intervene is allowed.

At the outset, we note that section 5(b) of the Workers' Compensation Act (Ill. Rev. Stat. 1985, ch. 48, par. 138.5(b)) governs the right of employers to obtain indemnification for workers' compensation payments from third-party tortfeasors who cause on-the-job injuries to their employees. That section does require that any amount obtained in an action by an employer against a third-party tortfeasor which exceeds the amount of workers' compensation which the employer must pay, plus its attorney fees, costs, and expenses, be turned over to the injured employee. It does ...


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