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06/30/94 HECTOR GONZALEZ v. EVANSTON FUEL &

June 30, 1994

HECTOR GONZALEZ, PLAINTIFF-APPELLANT,
v.
EVANSTON FUEL & MATERIAL COMPANY AND KENNETH NELSON, DEFENDANTS-APPELLEES.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE JAMES BAILEY, JUDGE PRESIDING.

Hoffman, Johnson, Cahill

The opinion of the court was delivered by: Hoffman

PRESIDING JUSTICE HOFFMAN delivered the opinion of the court:

The plaintiff, Hector Gonzalez, appeals from an order of the circuit court of Cook County that allowed the defendants, Evanston Fuel & Material Company and Kenneth Nelson, to apply a workers' compensation lien against a jury verdict in the plaintiff's favor. The defendants were assigned the lien as part of a settlement of their contribution claim against the plaintiff's employer. We consider: (1) whether an employer's lien for workers' compensation benefits paid to an injured employee is assignable; and (2) whether the defendants could apply the lien against the jury verdict. For the following reasons, we affirm.

The plaintiff sustained serious injuries while acting in the course of his employment with Olga Adams Construction, Inc. (employer). As a result of those injuries, the plaintiff received approximately $73,000 in workers' compensation benefits from his employer.

The plaintiff filed an action on September 8, 1987, alleging that he sustained injuries as a result of the defendants' negligence. The defendants answered the plaintiff's complaint denying its material allegations and filed a third-party complaint for contribution against the plaintiff's employer.

Before trial, the defendants settled their contribution claim against the plaintiff's employer. Pursuant to the terms of the settlement, the defendants paid the plaintiff's employer $26,000 and dismissed their contribution claim in exchange for an assignment of the employer's $73,000 workers' compensation lien. An order dismissing the defendants' third-party complaint for contribution was entered on November 18, 1992.

The plaintiff's action against the defendants was tried before a jury which returned a verdict in favor of the plaintiff for $150,000 on November 24, 1992. After judgment was entered on the verdict, the defendants asserted that they would apply the workers' compensation lien assigned to them by the plaintiff's employer, less attorney's fees and expenses, in partial satisfaction of the plaintiff's judgment.

The plaintiff filed a motion on December 17, 1992, requesting the trial court to disallow what he termed a setoff of the lien against the verdict or, in the alternative, to limit the setoff to the $26,000 the defendants actually paid his employer. The trial Judge initially ruled that the defendants could only setoff the amount that they had paid for the lien against the verdict; however, on reconsideration, the Judge denied the plaintiff's motion, the effect of which was to allow the defendants to apply the full amount of the workers' compensation lien, less attorney's fees and expenses, in partial satisfaction of the judgment entered against them. The plaintiff filed a timely notice of appeal.

In urging reversal, the plaintiff argues that: (1) the Workers' Compensation Act (820 ILCS 305/1 et seq. (West 1992)), prohibits an employer from assigning its lien for workers' compensation benefits; and (2) the Contribution Act (740 ILCS 100/0.01 et seq. (West 1992)), precludes the defendants from applying the lien in partial satisfaction of the judgment entered against them. For the following reasons, we disagree with both arguments.

In support of his argument under the Workers' Compensation Act, the plaintiff relies upon section 21 of the act which provides in pertinent part:

"No payment, claim, award or decision under this Act shall be assignable or subject to any lien, attachment or garnishment, or be held liable in any way for any lien, debt, penalty or damages * * *." (820 ILCS 305/21 (West 1992).)

The plaintiff contends that section 21 prohibits an employer from assigning its lien for benefits paid to an injured employee.

When the employer in this case paid workers' compensation benefits to the plaintiff, a lien in the amount of the benefits paid arose in the employer's favor against any compensation which the plaintiff might receive from a third party liable in damages for the same injury. (See 820 ILCS 305/5(b) (West 1992).) The lien is intended to reimburse the employer for the compensation benefits paid to ...


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