Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County, the Hon. Arthur A. Sullivan, Judge, presiding.
Rehearing Denied January 29, 1996.
The Honorable Justice Heiple delivered the opinion of the court: Justice Nickels, dissenting: Chief Justice Bilandic and Justice McMORROW join in this dissent.
The opinion of the court was delivered by: Heiple
JUSTICE HEIPLE delivered the opinion of the court:
This appeal arises from the dismissal of an assigned third-party complaint for contribution. Plaintiff, Barbara Claudy, filed a wrongful death action in the circuit court of Cook County against Commonwealth Edison and the City of Sycamore. Plaintiff and the City of Sycamore later settled the suit. As part of the settlement, the City of Sycamore assigned to the plaintiff its right of contribution against Larry Jones, the decedent's employer. When plaintiff sought to exercise this right of contribution, the circuit court held that the purported assignment was invalid and dismissed the third-party contribution complaint. The appellate court reversed the circuit court, reinstated the third-party complaint, and issued a certificate of importance. (255 Ill. App. 3d 714, 626 N.E.2d 1088, 193 Ill. Dec. 537.) This court has jurisdiction pursuant to Supreme Court Rule 316 (134 Ill. 2d R. 316). We reverse.
FACTUAL AND PROCEDURAL HISTORY
On July 24, 1979, plaintiff's husband, Keith Claudy, was electrocuted while removing a tree located near some power lines within the confines of the City of Sycamore (hereinafter, the city). At the time, Keith Claudy was working for Larry Jones (hereinafter, the employer), whom the city had engaged to remove the tree. After her husband's death, plaintiff filed a wrongful death action against the city and Commonwealth Edison. In response to plaintiff's suit, the city filed an amended third-party complaint for contribution against the employer, individually and doing business as AAA Tree Service.
Plaintiff also filed a workers' compensation claim against the employer. The employer was insured byAmerican Mutual Liability Insurance Company, and American Mutual paid $102,876.09 in satisfaction of the plaintiff's workers' compensation claim. Based on this payment, American Mutual acquired a potential workers' compensation lien against any settlement proceeds received by plaintiff from a third party. Subsequently, on March 9, 1989, American Mutual was declared insolvent, and the Illinois Insurance Guaranty Fund was substituted for American Mutual pursuant to statute. See 215 ILCS 5/532 et seq. (West 1992).
In 1989, plaintiff and the city agreed that $500,000 represented the damages suffered by the plaintiff and, based upon this figure, settled the wrongful death suit. By the terms of a subsequently amended settlement agreement, plaintiff released all direct claims she had against any party in connection with her husband's death, including the city, Commonwealth Edison and the employer. (Insofar as no third-party complaint for contribution had been filed against Commonwealth Edison, it was released from tort liability and dismissed from the action with prejudice after the settlement.) In return, the city paid plaintiff $400,000 and, additionally, assigned to the plaintiff its right of contribution against the employer. American Mutual's workers' compensation lien of $102,876.09, minus attorney fees, was satisfied from the $400,000 settlement amount.
On November 29, 1990, the employer moved to dismiss the third-party complaint for contribution and this motion was granted. On March 5, 1991, plaintiff filed a motion for reconsideration but that motion was denied. In denying the motion for reconsideration, the trial judge stated:
"In the instant case the purported assignment allows the plaintiff to retain the proceeds of a successful prosecution of the contribution action, thus increasing her total recovery. In the opinion of this court, this amounts to a perversion of the intent and purpose of the ContributionAct which was designed to apportion damages among the tortfeasors based upon relative degree of culpability, not to increase the total damages available to plaintiff."
The appellate court reversed and reinstated the third-party complaint for contribution, ruling that the assignment at issue did not violate the Joint Tortfeasors Contribution Act, the Workers' Compensation Act or the Illinois Insurance Code. (255 Ill. App. 3d 714.) Arguing that the assignment violates all three of these acts, the employer now appeals to this court.
The Joint Tortfeasor Contribution Act (Contribution Act) provides, ...