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09/13/94 RONNY S. CORLEY AND LAURA CORLEY v. JAMES

September 13, 1994

RONNY S. CORLEY AND LAURA CORLEY, PLAINTIFFS-APPELLANTS,
v.
JAMES MCHUGH CONSTRUCTION COMPANY, TURF CLUB OF ILLINOIS, INC., AND PITT-DES MOINES, INC., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County. Honorable Julia M. Nowicki, Judge Presiding.

Released for Publication October 14, 1994.

Hartman, Scariano, McCORMICK

The opinion of the court was delivered by: Hartman

JUSTICE HARTMAN delivered the opinion of the court:

Plaintiffs, Ronny S. Corley (Corley) and Laura Corley, appeal from an order granting defendants a setoff for the full amount of a workers' compensation lien that was waived by his third-party employer in a settlement agreement. The issues presented here are whether (1) Corley lacks standing; and (2) under section 5(b) of the Workers' Compensation Act (820 ILCS 305/5(b) (West 1992)), attorney fees and costs may be deducted from the setoff where the employer has waived its workers' compensation lien.

Corley was injured during the rebuilding of the Arlington Park Race Track. He and his wife filed suit against defendants, James McHugh Construction Company, the Turf Club of Illinois, Inc., and Pitt-Des Moines, Inc. (Pitt), alleging violations of the Structural Work Act (740 ILCS 150/0.01 et seq. (West 1992)). Thereafter, defendants filed a third-party action against Corley's employer, Broad, Vogt and Conant, seeking contribution under the Joint Tortfeasor Contribution Act (740 ILCS 100/0.01 et seq. (West 1992) (Contribution Act)).

Corley and his employer entered into a settlement agreement whereby the employer agreed to waive its $404,635 workers' compensation lien in exchange for a release from liability by Corley. A workers' compensation lien is statutorily imposed by section 5(b) of the Workers' Compensation Act (820 ILCS 305/5(b) (West 1992) (section 5(b))). It requires an employee who has received workers' compensation benefits to reimburse the employer for the full amount of benefits from any recovery the employee obtains from a third party legally liable for the employee's injuries. Wilson v. Hoffman Group, Inc. (1989), 131 Ill. 2d 308, 311, 546 N.E.2d 524, 137 Ill. Dec. 579.

The settlement agreement also extinguished defendants' claim for contribution against the employer. (740 ILCS 100/2(d) (West 1992).) The circuit court found that the settlement was made in good faith pursuant to the Contribution Act (740 ILCS 100/2(c) (West 1992)) and dismissed defendants' third-party action against the employer.

Following trial, a jury awarded Corley $2,909,535. *fn1 Pitt filed a motion to adjudicate the extent of the setoff allowed defendants under the Contribution Act due to the settlement agreement between Corley and his employer. Pitt maintained that defendants are entitled to a setoff of $404,635, the full amount of the workers' compensation lien that was waived. Corley's response averred that, under section 5(b), defendants' setoff must be reduced by (1) 25% for attorney fees and (2) $4,150 *fn2 for the employer's proportionate share of costs and expenses. This would result in a setoff of $299,327.

The circuit court held that defendants are entitled to a setoff of 100% of the amount of the waived workers' compensation lien. The court explained the basis for its ruling in a written order: first, the "Contribution Act states that any recovery obtained against other tortfeasors is reduced by the amount of the release of the settling defendant"; and, second, the 25% claimed by Corley "comes from the employer's right to reimbursement under the workers' compensation statute, which was waived." Plaintiffs timely appeal. A Supreme Court Rule 321 (134 Ill. 2d R. 321 (amended)) stipulation was filed, limiting the record on appeal to matters concerning only the setoff.

I.

Defendants first claim that we have no jurisdiction over this appeal because Corley lacks standing.

Standing is present where the person seeking to invoke the court's jurisdiction has some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy. ( Weihl v. Dixon (1977), 56 Ill. App. 3d 251, 253-54, 371 N.E.2d 881, 13 Ill. Dec. 789.) The present case involves the amount of the setoff to which defendants are entitled, which will directly ...


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