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01/11/88 Eldrige Murray Et Al., v. Lincolnshire Group

January 11, 1988

ELDRIGE MURRAY ET AL., PLAINTIFFS-APPELLEES

v.

LINCOLNSHIRE GROUP, LTD., ET AL., DEFENDANTS AND INTERVENING DEFENDANTS (LINCOLNSHIRE GROUP, LTD., THIRD-PARTY PLAINTIFF; ENTERPRISE READY MIX ET



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIRST DIVISION

al., Third-Party Defendants; Travelers

Insurance Company, Intervening, Plaintiff-Appellant)

522 N.E.2d 96, 167 Ill. App. 3d 978, 118 Ill. Dec. 641 1988.IL.11

Appeal from the Circuit Court of Cook County; the Hon. Edwin M. Berman, Judge, presiding.

APPELLATE Judges:

JUSTICE O'CONNOR delivered the opinion of the court. QUINLAN and MANNING, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE O'CONNOR

Intervenor, Travelers Insurance Company (Travelers), appeals from the order of the circuit court of Cook County granting fees to the law firm of Grubman and Nathan (Grubman and Nathan), which represented the plaintiff, Eldridge Murray (Murray), and granting costs to Murray.

On appeal, Travelers contends that (1) Grubman and Nathan was not entitled to 25% fees pursuant to section 5(b) of the Workers' Compensation Act (Ill. Rev. Stat. 1985, ch. 48, par. 138.5(b)) out of the reimbursement Travelers received in the settlement reached with the third-party tortfeasor; and (2) Murray was not entitled to a pro rata share of costs out of that reimbursement. For the following reasons, we affirm.

On December 4, 1979, Murray was injured during the scope and course of his employment with the Dominion Concrete Company (Dominion). Travelers insured Dominion, and under the Workers' Compensation Act (Ill. Rev. Stat. 1985, ch. 48, par. 138.1 et seq.), commenced payment of benefits to Murray.

Murray sued the Lincolnshire Group (Lincolnshire Group), the contractor at the jobsite where he was injured, while his application for adjustment of claim was pending before the Industrial Commission. Lincolnshire Group, in separate third-party complaints, sued Dominion and Enterprise Ready Mix Company (Enterprise), the owner of a cement mix truck on the jobsite at the time of Murray's injury. Enterprise then counterclaimed against Dominion. Thereafter, Travelers intervened to protect its right of subrogation. (Travelers' lien)

The law firm of Arnold Grubman and Associates (now Grubman and Nathan) represented Murray in both the Industrial Commission proceeding and the common law litigation. The law firm of O'Connor and Schiff, which represented Travelers, sent Grubman and Nathan a letter on November 26, 1986, suggesting that Grubman and Nathan owed Travelers a fiduciary duty to protect Travelers' lien. In the letter, O'Connor and Schiff requested that Grubman and Nathan clarify whether it was claiming a 25% fee pursuant to statute (Ill. Rev. Stat. 1985, ch. 48, par. 138.5(b)), and further stated that if Grubman and Nathan was going to settle the case requesting a waiver of Travelers' lien, then a conflict of interest existed.

On December 2, 1985, Grubman and Nathan responded, clarifying that it did not represent Travelers, only Murray, and that it owed Travelers no fiduciary duty. Grubman and Nathan further stated that the firm was requesting, as part of an overall settlement package, a waiver of Travelers' lien. Furthermore, the firm would waive its right to statutory fees to the benefit of Murray, assuming the firm was "fully, fairly and reasonably compensated for [its] services based on [its] contract with [Murray] from the present cash value of any structured settlement which might be entered into by the [parties.]" In addition, Grubman and Nathan noted ...


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