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06/08/95 WILLIAM CHANEY v. NATIONAL STEEL

June 8, 1995

WILLIAM CHANEY, PLAINTIFF,
v.
NATIONAL STEEL CORPORATION D/B/A GRANITE CITY STEEL, DEFENDANT. NATIONAL STEEL CORPORATION D/B/A GRANITE CITY STEEL, THIRD-PARTY PLAINTIFF-APPELLEE, V. GUARANTEE ELECTRIC COMPANY, THIRD-PARTY DEFENDANT-APPELLANT AND CROSS-APPELLEE (AMIEL CUETO, APPELLEE AND CROSS-APPELLANT).



Appeal from the Circuit Court of Madison County. No. 90-L-700. Honorable Gordon E. Maag, Judge, presiding.

The Honorable Justice Hopkins delivered the opinion of the court: Rarick, J., concurs. Justice Goldenhersh, concurring in all of the opinion publishable under Supreme Court Rule 23 and parts of the material nonpublishable under Supreme Court Rule 23; dissenting in part to material nonpublishable under Supreme Court Rule 23:

The opinion of the court was delivered by: Hopkins

JUSTICE HOPKINS delivered the opinion of the court:

Plaintiff, William Chaney (Chaney), was severely injured in an accident while employed by Guarantee Electric Company (Guarantee). The accident occurred at an industrial plant owned by National Steel Corporation, d/b/a Granite City Steel (Granite City Steel). Chaney sued Granite City Steel for damages but settled his case on September 25, 1991, for $7.5 million. Prior to the settlement, Granite City Steel filed a third-party complaint for contribution against Guarantee.

Thus, this case involves the interrelationship between the Joint Tortfeasor Contribution Act (Contribution Act) (740 ILCS 100/0.01 et seq. (West 1992)) and the Workers' Compensation Act (820 ILCS 305/1 et seq. (West 1992)), in light of the decision in Kotecki v. Cyclops Welding Corp. (1991), 146 Ill. 2d 155, 585 N.E.2d 1023, 166 Ill. Dec. 1, wherein the Illinois Supreme Court limited the contribution liability of employers sued as third-party defendants to the amount of their statutory workers' compensation liability.

The jury in the contribution case rendered a verdict in favor of Granite City Steel on the issue of contribution and assessed the present cash value of future workers' compensation owed by Guarantee to Chaney. The trial court entered judgment on the jury's verdict and assessed the attorney fees due plaintiff's attorney from Guarantee under section 5(b) of the Workers' Compensation Act. (820 ILCS 305/5(b) (West 1992).) Guarantee appeals from these orders. Amiel Cueto (Cueto), Chaney's lawyer in the personal injury action against Granite City Steel, cross-appeals from the trial court's order assessing his attorney fees due from Guarantee.

The issues we consider on appeal are: (1) whether the trial court had subject matter jurisdiction to determine the workers' compensation limitation on the amount Guarantee owed to Granite City Steel as contribution; (2) whether the trial court erred in using the $7.5 million settlement as the basis of the common liability between Guarantee and Granite City Steel; (3) whether the trial court erred in allowing Granite City Steel to amend its pleadings to conform to the proof by adding allegations of violations of the Health and Safety Act (820 ILCS 225/.01 et seq. (West 1992)); (4) whether the trial court properly assessed attorney fees under section 5(b) of the Workers' Compensation Act (820 ILCS 305/5(b) (West 1992)); (5) whether the trial court erred in excluding evidence concerning the change in Chaney's condition since the date of settlement; and (6) whether the trial court properly denied Guarantee's motions to dismiss Granite City Steel's contribution action. We affirm.

I. FACTS

On February 16, 1990, Chaney was working for Guarantee at the Cold Roll Mill owned by Granite City Steel when his head was crushed by an overhead crane. As a result of his injuries, Chaney underwent a lobotomy of the majority of the left side of his brain. Asa result, he is permanently and totally disabled. Chaney sued Granite City Steel, who then filed a third-party complaint for contribution against Guarantee. Guarantee moved to dismiss the third-party complaint on several grounds. The trial court denied the motions to dismiss on all grounds.

On September 25, 1991, after several days of trial in the personal injury case against Granite City Steel, Chaney entered into a settlement with Granite City Steel, releasing all claims against Granite City Steel and Guarantee. The terms of the settlement were announced in court on September 25, 1991, and were later set forth in a petition requesting the court to approve the settlement. Guarantee terminated all payments to Chaney as of the day of settlement. The trial court determined that the settlement was made in good faith and entered an order approving the settlement on October 31, 1991. On the same date, the trial court entered an order dismissing Chaney's complaint against Granite City Steel, but not the third-party complaint of Granite City Steel against Guarantee.

The $7.5 million settlement was distributed as follows: $2.5 million to Chaney's attorney pursuant to a retainer contract, $42,953.56 to Chaney's attorney for costs in prosecuting the lawsuit against Granite City Steel, $3.5 million to purchase an annuity for Chaney, $415,733.14 to Guarantee to satisfy its workers' compensation lien, and the balance, $1,041,313.30, to Chaney's parents, John and Judy Chaney, as individuals, for their own compensatory damages. Chaney's guardian ad litem filed an affidavit stating his approval of the settlement. Subsequently, Chaney's parents were appointed as the guardians of Chaney's estate.

On December 18, 1991, Cueto filed a motion to adjudicate his attorney fees due from Guarantee. Cueto's motion alleged that he was entitled to an award of fees from Guarantee under section 5(b) of the Workers' Compensation Act and under Zuber v. Illinois Power Co. (1990), 135 Ill. 2d 407, 553 N.E.2d 385, 142 Ill. Dec. 871, for the amount of compensation "to be paid," in other words, the future compensation which Guarantee was relieved from paying by virtue of Chaney's settlement with Granite City Steel. Guarantee filed an objection to Cueto's motion for attorney fees.

The trial of the third-party action commenced on June 9, 1992. The jury found Granite City Steel 63% at fault for Chaney's injuries and found Guarantee 37% at fault for Chaney's injuries. The jury, in an advisory capacity, determined that the present cash value of the caretaking expenses for Chaneyfrom the date of settlement through the remainder of his life amounted to $4 million and that the present cash value of the weekly workers' compensation benefits due Chaney from the date of settlement through the remainder of his life was $263,199. The trial court determined that the present cash value of the medical expenses Guarantee would have had to pay Chaney from the date of settlement through the remainder of his life was $1 million. The trial court added together the present cash values of the caretaking expenses, workers' compensation benefits, and medical expenses to arrive at a figure of $5,263,199 for the present cash value of all future compensation due to Chaney from Guarantee. The trial court then added the amount of workers' compensation paid by Guarantee up to the date of settlement, $415,733.34, to the $5,263,199 future compensation amount and arrived at a figure of $5,678,932.30 for the present cash value of Guarantee's total, past and future, workers' compensation liability to Chaney.

The trial court also determined that Cueto was entitled to an additional $622,049.77 in attorney fees from Guarantee. In assessing these attorney fees, the trial court relied upon section 5(b) of the Workers' Compensation Act, which requires employers to pay their "pro rata share of all costs and reasonably necessary expenses in connection with" third-party claims against employers. (820 ILCS 305/5(b) (West 1992).) The statute also provides that where the services of an attorney at law of the employee *** have resulted in or substantially contributed to the procurement by suit, settlement or otherwise of the proceeds out of which the employer is reimbursed, then, in the absence of other agreement, the employer shall pay such attorney 25% of the gross amount of such reimbursement." 820 ILCS 305/5 (West 1992).

After the trial court entered judgment against Guarantee and in favor of Cueto for $622,049.77 in attorney fees, the trial court granted Cueto's posttrial motion and increased Cueto's judgment for attorney fees from $622,049.77 to $790,498.58, according to one of several formulas set forth by Cueto in his posttrial motion. Guarantee appeals the trial court's judgments finding it liable in contribution to Granite City Steel and liable for attorney fees to Cueto. Cueto appeals the trial court's decision granting him ...


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