The opinion of the court was delivered by: Justice Kilbride
This case involves the distribution and allocation of funds received in a third-party settlement pursuant to a wrongful-death action brought by the decedent's personal representative. We are asked to consider: (1) the effect that an employer's right to reimbursement from third-party settlements under the Workers' Compensation Act (Act) (820 ILCS 305/1 et seq. (West 2000)) has on the allocation of attorney fees; (2) the employer's credit for future benefit payments under the Act, and the distribution of the funds, as well as (3) the propriety of allocating a portion of the funds for loss of consortium where the surviving spouse has not filed an individual claim.
After reviewing the parties' arguments, we hold that there is insufficient evidence in the record to support a proper analysis on the merits of these questions. Thus, we reverse the judgments of the appellate court and the circuit court of St. Clair County and remand the cause for further proceedings consistent with this opinion.
In 1996, the decedent, William E. Glenn, was killed while working for his employer, Herschel Johnson, when the John Deere tractor he was operating overturned. Johnson subsequently began paying workers' compensation benefits pursuant to the Act (820 ILCS 305/1 et seq. (West 2000)).
As special administratrix of the estate, the decedent's wife, Mary Ann Glenn (Glenn), filed a complaint under the Wrongful Death Act (740 ILCS 180/1, 2 (West 1996)) against several defendants, including Johnson, Herschel Johnson Real Estate and Development Corporation (development company), and John Deere Company (John Deere). The development company settled the case for $25,000. Johnson agreed that this settlement would not be subject to his statutory right as the decedent's employer to a workers' compensation reimbursement lien (lien). See 820 ILCS 305/5(b) (West 2000).
Later, the case against John Deere was settled for $225,000, and Glenn filed a petition as special administratrix to approve the settlement. She subsequently petitioned the probate court to be appointed the guardian of the estate and person of her minor son. Next, Johnson intervened in the proceedings to assert his lien against the settlement proceeds. Glenn subsequently filed a petition nominating herself as the decedent's independent administratrix under article 28 of the Probate Act of 1975 (755 ILCS 5/28-1 et seq. (West 2000)), and a petition seeking approval and distribution of the settlement. The probate court granted letters of administration and appointed Glenn independent administratrix. Glenn's probate court case wrongful-death action were consolidated, and Glenn was appointed the guardian of the estate and person of her minor son for purposes of the litigation.
The parties agreed that Johnson could seek a lien only on the $225,000 settlement obtained from John Deere. After hearing the parties' arguments, the trial court calculated the amount of Johnson's lien using the following method. First, it deducted approximately one-third, or $74,992.50, of the settlement for the plaintiff's private contractual attorney fee, and $24,776.68 for costs. This left a net settlement recovery of $125,230.82. Next, the court found that Johnson was entitled to a $51,000 workers' compensation lien, apparently based on the workers' compensation benefits he had already paid. The court then determined that Johnson was responsible for 40.7% of the total costs, or $10,084.15, because $51,000 was 40.7% of the net settlement recovery. The trial court also charged Johnson with an additional 25% of his $51,000 lien as the mandatory 25% attorney fee provided in the Act (see 820 ILCS 305/5(b) (West 2000)). These deductions left Johnson with a net reimbursement lien of $28,165.85.
The trial court next ordered that Glenn and her minor son share the remaining $84,314.97 *fn1 from the settlement. The court allocated half this amount, or $42,157.49, to Glenn for her loss of consortium, society, and companionship and the other half to her minor son. Since awards for loss of consortium are not subject to an employer's lien under the Act, Johnson was eligible for a credit toward his future benefit payments for only the $42,157.49 allocated to the minor child. The trial court then determined that Johnson was entitled to a moratorium period of 146.44 weeks ($42,157.49 ö $287.89 per week = 146.44 weeks) on future payments since he was making benefit payments of $287.89 per week. He was, however, required to make weekly payments of $71.97 on the 25% statutory attorney fee during this period.
The appellate court affirmed, but modified the trial court's judgment. 319 Ill. App. 3d 625. The court found that the trial court erred by awarding fees for both one-third of the full settlement under the plaintiff's private fee agreement and 25% of the employer's lien under the statutory fee provisions in the Act (820 ILCS 305/5(b) (West 2000)). 319 Ill. App. 3d at 631. The court stated that the total attorney fees should be limited to one-third of the $225,000 settlement, or $75,000, and that the employer's share of this amount should be 25% of its $51,000 lien, or $12,750. The appellate court also reduced Johnson's share of the costs from 40.7% to 23% because his $51,000 lien represented only 23% of the $225,000 settlement. 319 Ill. App. 3d at 631-32.
The appellate court also rejected Johnson's argument that the trial court erred by allocating half of the net recovery for Glenn's loss of consortium. 319 Ill. App. 3d at 632. The court found that the pleadings and transcripts adequately demonstrated that this claim was made in the original complaint Glenn filed, even though it was not set out as a separate count. In a footnote, the court stated that even though the statute of limitations had run on Glenn's consortium claim at the time of the settlement, it believed that the "relation back" doctrine would have permitted her to amend "her complaint" to separate out this claim. 319 Ill. App. 3d at 632 n.1.
The appellate court then recalculated the net recovery for purposes of the lien calculation to be $92,671.96 by subtracting from the $225,000 settlement Johnson's net lien recovery of $32,551.36, total attorney fees of $75,000, and costs of $24,776.68. It allocated half of this net recovery ($46,335.98) for loss of consortium. This yielded a moratorium period on benefit payments of 160.95 weeks ($46,335.98 ö $287.89 per week = 160.95 weeks). During this time, Johnson was still obligated to pay $71.97 per week for his share of the attorney fees. 319 Ill. App. 3d at 634. Johnson filed a petition for leave to appeal, and this court granted the petition. 177 Ill. 2d R. 315(a).
The parties in this case present three issues for consideration by this court: (1) the proper allocation of attorney fees when an employer seeks reimbursement of amounts payable under the Act from a third-party settlement; (2) the availability of an employer's credit for future workers' compensation benefit payments; and (3) the propriety of allocating a portion of a third-party ...