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11/04/96 VIOLA SWETS v. ALFRED TOVAR

November 4, 1996

VIOLA SWETS, PLAINTIFF-APPELLEE, VILLAGE OF LANSING, INTERVENOR-APPELLANT,
v.
ALFRED TOVAR, DEFENDANT.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE E.J. RICHARDSON, JUDGE PRESIDING.

Released for Publication December 22, 1996.

Presiding Justice Campbell delivered the opinion of the court. Buckley, J., and Wolfson, J., concur.

The opinion of the court was delivered by: Campbell

PRESIDING JUSTICE CAMPBELL delivered the opinion of the court:

Intervenor the Village of Lansing (Village) appeals the January 18, 1995, order of the circuit court of Cook County adjudicating the amount of the Village's workers' compensation lien with regard to a personal injury lawsuit filed by plaintiff, Viola Swets, against defendant, Alfred Tovar. On appeal, the Village contends that the trial court erred in determining the distribution of a settlement between plaintiff and defendant. For the following reasons, we reverse the judgment of the trial court and remand this matter for further proceedings.

The record reveals the following relevant facts. On January 20, 1994, plaintiff was struck by an automobile driven by defendant while performing her employment duties as a school crossing guard for the Village. As a result, plaintiff suffered severe head injuries causing partial paralysis.

As of December 16, 1994, plaintiff had received medical benefits under the Illinois Worker's Compensation Act (the Act) in the amount of $268,659.37, and temporary total disability benefits in the amount of $1,936.40. As plaintiff's employer, the Village is required to pay for all reasonable and necessary medical care pursuant to section 8(a) of the Act. 820 ILCS 305/8(a) (West 1994). Under section 8(b) of the Act, the Village is also required to pay plaintiff temporary total disability benefits as long as she remains totally incapacitated. 820 ILCS 305/8(b) (West 1994).

On February 3, 1994, plaintiff filed a personal injury lawsuit against defendant alleging that defendant's negligence was the proximate cause of the injuries she sustained on January 20, 1994. Section 305/5 of the Act required that plaintiff or her attorney notify the Village of the filing of her civil lawsuit either by personal service or registered mail, and further required that proof of such notification be filed in the civil action. See 820 ILCS 305/5 (West 1994).

However, the record does not show that either the plaintiff or her attorney, James Lanting (Lanting), ever notified the Village of the filing of the lawsuit against defendant. Further, there is no indication that any notification was ever filed in the circuit court.

On March 22, 1994, Janet Hood, the Claims Supervisor responsible for payment of compensation benefits to plaintiff, had a telephone conversation with Lanting. At that time, Lanting failed to inform Hood that a civil lawsuit was pending on plaintiff's behalf against defendant.

Subsequently, Lanting and plaintiff settled the lawsuit against defendant in the amount of $100,000, the policy limit of defendant's automobile insurance. After the settlement, defendant's attorney, James Balog, contacted Lanting and inquired as to whether Lanting was aware of any liens on the settlement funds. Lanting replied that he knew of no such liens.

On December 7, 1994, plaintiff's civil lawsuit was dismissed pursuant to a settlement agreement. The consent of the Village was neither requested nor given with regard to the settlement agreement.

On December 15, 1994, John F. Donahue, the attorney for the Village, contacted Lanting and learned for the first time of the civil lawsuit against defendant and the related settlement. On December 19, 1994, the Village filed motions as follows: a petition to intervene; a motion to adjudicate its worker's compensation lien; a motion for a temporary restraining order; a preliminary injunction; and a motion to vacate the dismissal order previously entered in the case.

A hearing commenced on that same day. At the hearing, Lanting represented to the trial court that the settlement funds, a total of $100,000, were being held in his attorney escrow account. The trial court granted the Village leave to intervene, and ordered that the funds continue to be held in Lanting's escrow account without any disbursement, pending a hearing for adjudication of the amount of the Village's worker's compensation lien.

On January 18, 1995, the trial court entered an order distributing the $100,000 ...


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