APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SECOND DIVISION
520 N.E.2d 743, 165 Ill. App. 3d 759, 117 Ill. Dec. 392 1987.IL.1926
Appeal from the Circuit Court of Cook County; the Hon. Harry S. Stark, Judge, presiding.
JUSTICE BILANDIC delivered the opinion of the court. SCARIANO, P.J., and HARTMAN, J., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE BILANDIC
Plaintiff was employed by the Joseph Triner Corporation. On January 12, 1982, plaintiff was injured in the course of his employment while making a delivery to the defendant restaurant. Triner was insured for worker's compensation coverage by the U.S. Insurance Group. Plaintiff received $6,983.56 in worker's compensation benefits from U.S. Insurance Group.
On June 20, 1983, plaintiff filed this third-party action against the defendant, charging negligence. Thereafter, an intervening petition was filed by plaintiff's employer "for the use of U.S. Insurance Group" to recover the $6,983.56 it paid to the plaintiff based on its lien under the Workers' Compensation Act (Ill. Rev. Stat. 1985, ch. 48, par. 138.1 et seq.).
At the time plaintiff filed suit, defendant restaurant was insured against general liability claims under a policy issued by Kent Insurance Company. Thereafter, Kent Insurance became insolvent and the defense against plaintiff's claim was undertaken by the Illinois Insurance Guaranty Fund. Ill. Rev. Stat. 1985, ch. 73, par. 1065.82 et seq.
After a jury verdict, judgment was entered in favor of the plaintiff and against the defendant restaurant in the sum $6,000 plus costs of $141.60.
Defendant filed a post-trial motion wherein it urged that the judgment be deemed satisfied under the "covered claim" and "non-duplication of recovery" provisions of the Illinois Insurance Guaranty Fund. Defendant contends that the Fund prevents plaintiff from recovering the judgment because the entire judgment would be due from the fund to U.S. Insurance Group for the $6,986.56 worker's compensation payment it made to plaintiff. The trial court denied defendant's motion and this appeal followed.
The Illinois Insurance Guaranty Fund is a not-for-profit association created by the Illinois legislature to limit the impact on the public, "claimants and policyholders," of losses arising out of insurer insolvencies. (Lucas v. Illinois Insurance Guaranty Fund (1977), 52 Ill. App. 3d 237, 239, 367 N.E.2d 469, later appeal (1978), 67 Ill. App. 3d 398, 384 N.E.2d 938.) The Fund limits its obligations only to those claims falling within the statutory definition of a "covered claim." (Ill. Rev. Stat. 1985, ch. 73, par. 1065.84-3.) Since all Illinois licensed insurers contribute to the Illinois Guaranty Fund, the philosophy of the Fund is to have all potential claims against the Fund's assets reduced by a solvent insurer, not the fund, wherever possible. Ill. Rev. Stat. 1985, ch. 73, par. 1065.96.
The "Covered claim" provisions provide in pertinent part:
"(b) 'Covered claim' does not include:
(ii) any claim for any amount due any . . . insurer . . . as subrogated recoveries or otherwise. No such claim held by [an] . . . insurer . . ., based on subrogation rights, may be asserted in any legal action against a person insured under a policy issued by an insolvent company other than to the extent such claim exceeds the Fund obligation ...