Appeal from the Circuit Court of the 13th Judicial Circuit, La Salle County, Illinois and Circuit No. 09-D-478 Honorable Daniel J. Bute, Judge, Presiding.
The opinion of the court was delivered by: Presiding Justice Schmidt
PRESIDING JUSTICE SCHMIDT delivered the judgment of the court, with opinion. Justice Wright concurred in the judgment and opinion.
Justice McDade dissented, with opinion.
¶ 1 Petitioner, Christopher Washkowiak, appeals from the trial court's order awarding respondent, Rosana Washkowiak, $12,250, a figure which represents 17.5% of the portion of his workers' compensation settlement that was placed in a Medicare set-aside account. For the reasons that follow, we affirm.
¶ 3 Petitioner and respondent were married in 2004. In 2008, petitioner suffered a work-related injury while working for Northern Pipeline Construction (Pipeline). Petitioner subsequently filed a claim for workers' compensation.
¶ 4 In 2009, petitioner filed a petition for dissolution of the parties' marriage. On August 31, 2010, the trial court entered a judgment of dissolution of marriage, which incorporated the parties' settlement agreement. Paragraph 10 of the judgment provides, in pertinent part:
"10. The Respondent is awarded 17.5% of the net proceeds from the Petitioner's workers' compensation settlement as and for her interest in the same. Net proceeds are defined as the agreed award amount less workers' compensation attorneys' fees and usual and customary litigation fees and expenses. The Petitioner is ordered not to receive any funds from his settlement without first directing his attorney to provide a draft check to the Respondent for her portion herein. Net shall include any reimbursement for unemployment which he actually pays and medical payments he actually pays." (Emphasis added.)
¶ 5 On December 9, 2010, an arbitrator of the Illinois Workers' Compensation Commission approved a settlement agreement between petitioner and Pipeline. The agreement released Pipeline from "all past and future obligations for the payment of workers' compensation benefits, indemnity and/or medical benefits." The agreement included a "Workers' Compensation Medicare Set-aside Arrangement" (MSA). The agreement defined the MSA as "an interest bearing bank account funded solely by the Medicare Allocation and used solely to pay for future Medicare-covered medical and/or prescription drug expenses." The monetary terms of the agreement were listed as follows:
"THE ATTACHED TERMS OF THE SETTLEMENT Total amount of settlement $365,000 (does not include $70,000 MSA)
Deduction: Attorney's fees $67,903.35 Deduction: Medical reports, X-rays $766.60 Amount employee will receive $296,330"
The settlement agreement also contained the following provisions:
"4. The parties agree that *** Centers for Medicare Services approval of the MSA is not required under CMS policy.
5. The parties agree that of the total settlement amount of $435,000, the amount that is allocated to the MSA is $70,000.
14. In entering into this *** Agreement, it is not the intentions of the parties to shift responsibility of the Claimant's future medical treatment and/or prescription drug treatment to the Federal government. The allocation of $70,000 is intended directly for payment of Claimant's future treatment related to the work injury that would normally be covered by Medicare so that the parties are in compliance with the Medicare Secondary Payer Act (42 U.S.C. § 1395(b)) and applicable Medicare rules and regulations."
¶ 6 The parties agree that per the terms of the judgment of dissolution, respondent was entitled to 17.5% of the $296,330 petitioner received under the settlement agreement. A dispute, however, arose as to whether respondent was entitled to 17.5% of the $70,000 set aside in the MSA. Petitioner asserted that respondent was not entitled to 17.5% of the MSA funds as the funds were not part of the "net proceeds" of the settlement. Instead, petitioner argued that the funds were set aside solely to satisfy Medicare's interests. Respondent argued, inter alia, that she was entitled to 17.5% of the MSA funds as the $70,000 did not fall under the excluded category of "attorneys' fees and usual and customary litigation fees and expenses," as provided in paragraph 10 of the judgment of dissolution. The trial court held that the $70,000 set aside in ...