Appeal from the Circuit Court of St. Clair County. No. 97-P-464 Honorable Robert L. Craig, Judge, presiding.
The opinion of the court was delivered by: Justice Goldenhersh
IN THE COURT OF APPEALS OF THE STATE OF ILLINOIS
This is an action arising out of the administration of the estate of Herman J. Dierkes (decedent), who at the time of his death was an employee of claimant-appellant, the Department of Transportation (the Department). The Department appeals from an order of the circuit court of St. Clair County distributing the settlement proceeds from the estate of decedent. The order appealed from was entered following a hearing on the settlement and distributions of the proceeds of the estate. On appeal the Department contends that the circuit court erred in reducing the Department's recovery under its workers' compensation lien by awarding attorney fees to the estate's attorney in excess of the 25% allowed under section 5(b) of the Workers' Compensation Act (the Act) (820 ILCS 305/5(b) (West 1996)). We affirm.
Decedent was employed by the Department as a highway maintenance worker. On April 30, 1997, decedent was walking behind a Department maintenance truck along the shoulder of westbound highway 15 in Belleville, when he was struck from the rear by a pickup truck driven by Brian Russell. Decedent died from his injuries as a result of the accident.
Deborah Dierkes, decedent's widow and the administrator of the estate, retained the law firm of Wimmer & Stiehl to prosecute or settle all claims against Russell for personal injuries and wrongful death arising out of decedent's death. In the contract for legal services, Dierkes agreed to pay Wimmer & Stiehl a sum equal to one-third of all amounts recovered from the estate's claim against Russell.
Dierkes and her attorney also inquired about obtaining workers' compensation benefits from the Department. The Department and Dierkes signed a settlement-contract lump-sum petition and order (settlement contract) according to which the Department agreed to pay Dierkes $2,176.11 per month for 20 years. In September 1997, an Industrial Commission arbitrator issued a decision approving the settlement contract.
Prior to the Industrial Commission's approval of the settlement contract, Dierkes entered into a settlement agreement with Russell's insurer with respect to her wrongful-death claim. Under this agreement, Russell's insurer conceded Russell's liability for decedent's death and agreed to pay Dierkes the limits of Russell's insurance policy, $100,000.
On July 29, 1997, Dierkes filed a petition for letters of administration regarding her husband's estate. The petition indicated that the estate consisted of approximately $100,000 in personal property and $50,000 in real property. On August 4, 1997, Dierkes, as administrator, petitioned the court to approve the settlement agreement with Russell and to distribute the settlement proceeds. The petition contained the terms of the proposed settlement agreement and the terms of the settlement contract with the Department. The petition also contained the following charges against the proceeds of the proposed settlement: (1) one-third of the proposed settlement ($33,333.33) to Wimmer & Stiehl for attorney fees, (2) 25% of the remainder of the proposed settlement ($16,666.67) to Wimmer & Stiehl for statutory attorney fees under the Act, and (3) $49,999.99 to the Department as partial reimbursement of its workers' compensation lien.
On August 20, 1997, the trial court held a hearing on the petition. Dierkes' attorney argued that he was entitled to a statutory fee under section 5(b) of the Act amounting to 25% of the amount reimbursed to the Department. He further argued that he was also entitled to the fee in his contract for legal services with the estate, amounting to one-third of the settlement. The Department objected to the proposed distribution of the settlement, arguing that the estate's attorney was limited to the 25% statutory fee permitted under section 5(b) of the Act.
On that same day, the trial Judge, relying on Chaney v. National Steel Corp., 272 Ill. App. 3d 850, 651 N.E.2d 731 (1995), issued an order approving the settlement and authorizing the distribution of the settlement proceeds as proposed in the petition. The Department moved to stay the distribution of the disputed portion of the settlement proceeds. The trial court denied the Department's motion to stay.
On September 15, 1997, the Department filed its notice of appeal by mail. The Department also moved for a partial stay. On October 10, 1997, this court denied the Department's motion.
The Department argues that the trial court erred in reducing the Department's recovery under its workers' compensation lien by awarding attorney fees to the estate's attorney in excess of the 25% allowed under section 5(b) of the Act. Specifically, the Department argues that the allocation of the settlement proceeds in this case impaired the employer's recovery under its statutory ...