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06/30/97 ATLANTIC MUTUAL INSURANCE COMPANY v.

June 30, 1997

ATLANTIC MUTUAL INSURANCE COMPANY, PLAINTIFF-APPELLEE,
v.
PHALLON PAYTON, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Cook County. No. 94 CH 07761. Honorable Lester D. Foreman, Judge Presiding.

Released for Publication August 5, 1997. As Corrected August 22, 1997.

The Honorable Justice Cerda delivered the opinion of the court. Burke, J., concurs. Wolfson, P.j., dissents.

The opinion of the court was delivered by: Cerda

The Honorable Justice CERDA delivered the opinion of the court:

This appeal involves a claim for uninsured motorist benefits. Phallon Payton, defendant in this declaratory judgment action, was injured while riding as a passenger in a van owned by his employer and driven by a co-employee. Defendant received workers' compensation benefits. Defendant then made a claim for uninsured motorist benefits under a policy issued by plaintiff, Atlantic Mutual Insurance Company, to defendant's employer. In the declaratory action filed by plaintiff, the circuit court of Cook County granted plaintiff's motion for judgment on the pleadings.

Defendant appeals from the judgment that found that defendant could not recover uninsured motorist benefits under the policy issued by plaintiff on the basis that Payton, who had received workers' compensation benefits for his injury, was not legally entitled to recover damages from his co-employee. Because Payton was injured while in the course of his employment, Payton claimed that his driver, a co-employee, was immune from suit under the Workers' Compensation Act and therefore was uninsured under the uninsured motorist provision of Atlantic's automobile policy.

Payton argues on appeal that the exclusive-remedy provision of the Workers' Compensation Act (820 ILCS 305/1 et seq. (West 1994)) did not make him ineligible for benefits under the insurance policy, which stated that the amount payable was only what the insured was "legally entitled to recover as compensatory damages from the owner or driver of an uninsured motor vehicle." On the other hand, Atlantic believes that, because workers' compensation recovery is the exclusive remedy provided under the Workers' Compensation Act, defendant is barred from seeking damages from his employer and co-employee. Atlantic states that, if Payton is not legally entitled to recover damages from his co-employee, he cannot recover damages from the owner of the vehicle, his employer. Defendant was not "legally entitled to recover" damages and therefore was not entitled to coverage under the uninsured motorist provision of the employer's insurance policy.

Payton recognizes Williams v. Country Mutual Insurance Co., 28 Ill. App. 3d 274, 276-79, 328 N.E.2d 117 (1975), which upheld the denial of uninsured motorist coverage on the basis that the injuries arose out of employment. In that case, there was an uninsured motorist provision that provided that uninsured motorist coverage extended only in instances where the insured or his representative had a legal right to recover damages from the uninsured motorist. The court in Williams held that the Workers Compensation Act precludes a common law action by an employee, for accidental injury sustained by such employee, against a co-employee, if the parties are covered by the provisions of the Act and the injury arose out of and in the course of their employment. Williams, 28 Ill. App. 3d at 276-77. Defendant argues that Williams was contrary to the Illinois Supreme Court's interpretation of the language "legally entitled to recover" in Allstate Insurance Co. v. Elkins, 77 Ill. 2d 384, 396 N.E.2d 528, 33 Ill. Dec. 139 (1979).

In Elkins, 77 Ill. 2d at 390-91, the court held that the existence of interspousal immunity did not bar recovery by a wife under an uninsured motorist policy for damages sustained while riding as a passenger in a vehicle driven by her husband. At that time, the interspousal immunity statute provided that "neither husband nor wife may sue the other for a tort to the person committed during coverture." Ill. Rev. Stat. 1973, ch. 68, par. 1. The court noted that the effect of the interspousal immunity doctrine was not to destroy the cause of action of the injured spouse but was to confer immunity on the tort-feasor spouse. Elkins, 77 Ill. 2d at 384. The court also noted that the immunity was like a defense because it could be waived by the defendant spouse. Elkins, 77 Ill. 2d at 384.

The court in Elkins interpreted the policy's phrase "legally entitled to recover" as meaning that the claimant must be able to prove the elements of her claim necessary to entitle her to recover damages. Elkins, 77 Ill. 2d at 390. The fact that statutory immunity might be invoked by an uninsured motorist was relevant to the question of the right to enforce payment but that did not affect the claimant's legal entitlement to recovery. Elkins, 77 Ill. 2d at 390.

Payton argues that the workers' compensation exclusivity provision was similar to interspousal immunity in being an affirmative defense that did not negate the essential elements of plaintiff's cause of action and argues that the immunity could be waived by the employer.

We find that Elkins is distinguishable because the Workers' Compensation Act does not just provide the employer with a defense of exclusivity but takes away from the employee the right to recover damages from his employer and co-employee. The Act provides:

"No common law or statutory right to recover damages from the employer, his insurer *** or employees or any of them for injury or death sustained by any employee while engaged in the line of his duty as such employee, other than the compensation herein provided, is available to any employee who is covered by the provision of this Act." 820 ILCS 305/5(a) (West 1994).

The case before us differs from third-party cases, which do not involve employee, co-employee and employer relationships. Third-party cases dealing with spousal immunity or parental immunity deal with different policies and different approaches. The Workers' Compensation Act provides a remedy for injuries inflicted by negligent or intentional acts upon an employee Fregeau v. Gillespie, 96 Ill. 2d 479, 483-86, 451 N.E.2d 870, 71 Ill. Dec. 716 (1983). When the legislature created spousal immunity, it did not create a remedy for an injured spouse. When the legislature took away common law tort actions between employers and employees and between co-employees, in return, as a trade off, it provided a no-fault system of workers' compensation. In Illinois the legislature created this exclusive remedy not only for employers and co-employees but also specifically and expressly for insurers.

We agree with the court in Gray v. Margot, Inc., 408 So. 2d 436 (1981), which pointed out that interspousal immunity is a personal defense that merely cuts off a right of action and conversely that the tort immunity provided under Louisiana's workers' compensation scheme denies a plaintiff a cause of action. In Gray the action would have been against a coemployee. The Gray court also believed that, unlike interspousal immunity, tort immunity under its workers' compensation statute is not personal to an employer and may be invoked by his insurer. Gray v. Margot, 408 So. 2d at 438.

In Doyle v. Rhodes, 101 Ill. 2d 1, 14, 461 N.E.2d 382, 77 Ill. Dec. 759 (1984), the supreme court held that an employer remains "subject to liability in tort" to an employee in spite of section 5(a) of the Act. The court reasoned that the Act provided an affirmative defense that must be established and that is waived if not asserted by the employer. Doyle, 101 Ill. 2d at 11. The supreme court held that the circuit court should not have dismissed the third-party complaint seeking contribution from the employer. Doyle, 101 Ill. 2d at 14. The case was decided under the Contribution Act. Defendant argues that Doyle is binding authority to hold that he is legally entitled to recover compensatory damages from his employer and that an affirmative defense admits the legal sufficiency of a cause of action.

We find Doyle distinguishable from this case. In Doyle the court had to decide between two public policies--one under the Workers' Compensation Act and the other under the Contribution Act. The supreme court decided that the public policy to allocate liability in proportion to fault was a stronger public policy and permitted contribution against the employer. We see no strong public policy in the provision in the Illinois Insurance Code on uninsured motor vehicle coverage (215 ILCS 5/143a (West 1994)) to override the exclusive remedy under the Workers' Compensation Act, which provides damages for injuries suffered. Also, in this case we have an insurance policy and the Uninsured Motor Vehicle Coverage Act whose wording is similar to the language in the Workers' Compensation Act (820 ILCS 305/5(a) (West 1994)): "No common law or statutory right to recover damages. " This indicates that the Workers' Compensation Act provides the exclusive remedy.

In contrast to Doyle v. Rhodes, wherein the court refused to dismiss a third-party complaint against the employer because an affirmative defense could be waived, the supreme court in the case of Ramsey v. Morrison, 175 Ill. 2d 218, 676 N.E.2d 1304, 222 Ill. Dec. 100 (1997), held that the circuit court properly ...


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