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J & R Carrozza Plumbing Co. v. Industrial Commission of Illinois

July 20, 1999

J & R CARROZZA PLUMBING CO. AND TRANSPORTATION INSURANCE CO., PLAINTIFFS-APPELLANTS,
v.
INDUSTRIAL COMMISSION OF ILLINOIS AND CARMELLA CARROZZA AND JUDY BAAR TOPINKA, STATE TREASURER, AS EX-OFFICIO GUARDIAN OF SPECIAL FUNDS, DEFENDANTS-APPELLEES.



Appeal from Circuit Court of Cook County No. 97L51267 Honorable John A. Ward, Judge Presiding.

The opinion of the court was delivered by: Presiding Justice McCULLOUGH

On February 7, 1989, John Carrozza, a plumbing contractor for J & R Carrozza Plumbing Company (J & R), respondent, was involved in a work- related automobile accident with an uninsured motorist in which he was struck in the chest. On November 25, 1989, John died while at work. After John's death, his wife, Carmella, claimant, filed a claim against Hanover Insurance Company (Hanover), J & R's uninsured motorist insurance carrier at the time of the February 7, 1989, accident, and a claim under the Workers' Compensation Act (Act) (Ill. Rev. Stat. 1991, ch. 48, par. 138.1 et seq. (now 820 ILCS 305/1 et seq. (West 1996))), alleging the car accident caused John's death. On January 31, 1992, the Commission accepted a settlement order in the workers' compensation claim, relieving J & R of all liability for injury, including death, stemming from the February 7, 1989 accident. On February 18, 1992, Carmella filed another claim under the Act against J & R, alleging John's death was caused by his work-related activities on November 25, 1989. The circuit court confirmed the Commission's determination the prior settlement was not a bar to this action, and awarded Carmella benefits. We reverse. The prior settlement bars the present claim.

According to medical reports compiled after the February 7, 1989, accident, John's test results suggested some myocardial damage. A stress test on February 15, 1989, revealed a subtle abnormality along the bottom of the heart. Dr. W. B. Buckingham believed the February 7, 1989, accident was responsible for a contusion affecting 6% of the heart muscle.

John died on Saturday, November 25, 1989, arguably while performing work for J & R. Medical reports and expert testimony conflicted on whether the cause of death was congestive heart failure, atherosclerosis, genetic fibrosis, a disease of the heart muscle, hypertension, a myocardial infarction, a dysrhythmia, or some combination thereof. Medical experts also disagreed on whether the prior automobile accident could have played a role in the death. At one point, Buckingham believed the accident had "to be considered as a significant factor in a patient with evidence of congestive failure at the time of death." Two other medical experts believed it was highly unlikely the accident had any effect.

An application for adjustment of the workers' compensation claim as to the February 7, 1989, accident was filed October 5, 1990, some 10 months after John's date of death, November 25, 1989. An uninsured motorist claim was also filed with respect to the February 7, 1989 accident. The uninsured motorist claim is not included in the appellate record, though interrogatories submitted in that action are. They are discussed in detail below. Hanover was both J & R's uninsured motorist insurer and its workers' compensation insurer.

On December 17, 1991, an arbitrator entered an award on the uninsured motorist claim whereby Hanover paid John's estate $473,000. Though the arbitrator's notice of award indicates the arbitrator heard evidence and made findings, a lump-sum settlement order entered on the workers' compensation case in January 31, 1992, indicates the uninsured motorist claim was settled.

The workers' compensation settlement order stated: "In consideration of the payment of $1.00 by Respondent and settlement payment by Uninsured Motorists Insurance Carrier to Petitioner in settlement of her claim against them, Petitioner agrees to settle out and release forever all claims which she may have against Respondent under the Workers' Compensation Act for accidental injuries, medical expenses and/or permanent disability and/or death, which stem from an accident which her husband sustained on February 7, 1989, which accident allegedly arose out of and in the course of his employment by Respondent."

Less than three weeks after the workers' compensation settlement, on February 18, 1992, Carmella filed another claim under the Act, alleging John's death was caused by his exertion at work on November 25, 1989. J & R's insurer for this workers' compensation claim was not Hanover, but Transportation Insurance Company (Transportation).

The arbitrator denied recovery, concluding the prior settlement was res judicata as to this claim. The arbitrator also found that, pursuant to section 5(b) of the Act (820 ILCS 305/5(b) (West 1992)), J & R was entitled to $354,750 credit against any death benefits awarded to Carmella. Finally, the arbitrator denied Carmella's claim for funeral expenses.

On November 17, 1997, the Commission reversed the arbitrator's decision. It concluded the fact the decedent's death is noted in the settlement agreement was not conclusive as to the cause of death. The Commission found John sustained accidental injuries arising out of and in the course of his employment on November 25, 1989, and this was a contributing cause to his death. The Commission found J & R was not entitled to credit under section 5(b) and awarded Carmella $1,750 in funeral expenses (820 ILCS 305/7(f) (West 1992)), interest (820 ILCS 305/19(n) (West 1992)), and $604.73 per week in death benefits (820 ILCS 305/7(a) (West 1992)), capped at $250,000 or 20 years. The circuit court confirmed the Commission's award.

Two closely related issues are presented when a party who has entered a settlement accepted by the Commission then attempts to bring another claim. First, as a matter of contract interpretation, the claimant may be barred from bringing suit by the terms of the prior settlement. Second, the prior settlement may be res judicata as to the claim. Because res judicata bars claimant's suit, we do not decide whether, as a matter of contract, the release from liability for injuries which "stem from" the February 7, 1989, accident extends to the present suit.

Under the doctrine of res judicata, a final judgment rendered by a court of competent jurisdiction on the merits is conclusive as to the rights of the parties and their privies, and, as to them, constitutes an absolute bar to a subsequent action involving the same claim, demand, or cause of action. Housing Authority v. YMCA, 101 Ill. 2d 246, 251, 461 N.E.2d 959, 961-62 (1984).

When a settlement is approved by the Commission, it becomes res judicata as to matters adjudicated and agreed upon. Industrial Commission of Wisconsin v. McCartin, 330 U.S. 622, 628-29, 91 L. Ed. 1140, 1144, 67 S. Ct. 886, 890 (1947) (interpreting Illinois law). It is conclusive as to every matter that could have been offered to sustain the same claim or demand. Housing Authority, 101 Ill. 2d at 251-52, 461 N.E.2d at 962. The settlement is a final adjudication upon all matters in dispute up to the time of the agreement. Stromberg Motor Device Co. v. Industrial Comm'n, 305 Ill. 619, 622, 137 N.E. 462, 464 (1922).

For purposes of res judicata, the apparent change in insurers for the two claims is irrelevant. The insurers are subrogated to the rights of the insured by the insured's receipt of payment under the policy. Country Mutual Insurance v. Regent Homes Corporation, 64 Ill. App. 3d 666, 670, 380 N.E.2d 516, 519 (1978). If res judicata bars a second claim against J & R, the insurer for ...


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