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A&R Janitorial v. Pepper Construction Co.

Court of Appeals of Illinois, First District

December 27, 2017

A&R JANITORIAL, as Subrogee of Teresa Mroczko, Plaintiff-Appellee,
v.
PEPPER CONSTRUCTION CO.; PEPPER CONSTRUCTION GROUP, LLC; PEREZ & ASSOCIATES, INC.; PEREZ CARPET; CBRE, INC.; and BLUE CROSS AND BLUE SHIELD ASSOCIATION, Defendants-Appellees (Teresa Mroczko, Individually, Intervenor-Appellant).

         Appeal from the Circuit Court of Cook County.No. 14 L 8396 Honorable William Edward Gomolinski, Judge Presiding.

          JUSTICE HOWSE delivered the judgment of the court, with opinion. Presiding Justice Cobbs and Justice Fitzgerald Smith concurred in the judgment and opinion.

          OPINION

          HOWSE JUSTICE

         ¶ 1 This is an appeal from an order of the circuit court of Cook County denying Teresa Mroczko's (appellant) petition to intervene in an action filed by her employer, A&R Janitorial (plaintiff) against defendants. Plaintiff, Teresa's employer at the time of her injury, filed its action against the named defendants as the subrogee of Teresa pursuant to section 5(b) of the Illinois Workers' Compensation Act (Act). 820 ILCS 305/5(b) (West 2016). Section 5(b) of the Act allows injured employees to file a lawsuit against a third-party defendant legally liable for an employee's injury and provides that the employer be indemnified for any payments it made under the Workers' Compensation Act to the employee from any recovery made from the lawsuit. If the injured employee does not file a claim against the third-party defendant prior to three months before the expiration of the statute of limitations, section 5(b) also allows the employer to file a claim against the third-party defendant to indemnify itself for benefits paid to its employee and to recover damages, as subrogee, for damages suffered by the injured employee. Under the Act, all money recovered over and above the amounts the employer has already paid to the employee shall be paid to the employee. On June 11, 2015, after the expiration of the two-year statute of limitations, and after the employer timely filed its suit for damages as subrogee, appellant filed her complaint in the circuit court of Cook County seeking damages against defendants for negligence. The court dismissed her complaint for failure to file within the statute of limitations. Teresa did not appeal this dismissal. She then sought to intervene in plaintiff's suit against defendants. The trial court denied appellant's petition to intervene, finding her claim was barred by the doctrine of res judicata. The issue presented in this case is whether the dismissal of appellant's untimely filed suit for damages acts to bar, on res judicata grounds, her intervention in the employer's timely filed case. We hold it does not and, for the following reasons, the judgment of the circuit court is reversed and the cause remanded.

         ¶ 2 BACKGROUND

         ¶ 3 Appellant, Teresa, was injured on August 17, 2012 at a Blue Cross and Blue Shield building in Chicago while she was employed by plaintiff, A&R Janitorial. Blue Cross and Blue Shield had hired A&R Janitorial to perform custodial services, and appellant was one of plaintiff's employees. Blue Cross and Blue Shield was performing renovations to that building and contracted Pepper Construction Co. to replace carpeting, among other work. Pepper Construction subcontracted the task of replacing carpets to Perez & Associates. While appellant was cleaning, she was injured when a desk fell on her. The desk had been moved by Perez in the course of replacing the carpets.

         ¶ 4 Appellant filed a workers' compensation claim against plaintiff and was awarded relief. That claim is currently under appeal. To date plaintiff has paid appellant over $342, 000 in workers' compensation benefits. Illinois' Workers' Compensation Act also allows an employer to seek indemnification from a third-party who may be a cause of the injury for the sums it is required to pay its employee. The Act allows for an injured employee whose injuries are covered under the Act to also file a claim against a third party for common law damages, and the employer is entitled to a portion of those damages recovered by the employee equal to the amount paid by the employer to the employee for that claim:

"Where the injury or death for which compensation is payable under this Act was caused under circumstances creating a legal liability for damages on the part of some person other than his employer to pay damages, then legal proceedings may be taken against such other person to recover damages notwithstanding such employer's payment of or liability to pay compensation under this Act." 820 ILCS 305/5(b) (West 2016).

         The employer is entitled to a portion of those damages equal to the amount paid by the employer to the employee for that claim. Id. ("from the amount received by such employee or personal representative there shall be paid to the employer the amount of compensation paid or to be paid by him to such employee").

         ¶ 5 A party in Illinois may commence a personal injury action "within 2 years next after the cause of action accrued." 735 ILCS 5/13-202 (West 2016). As of May 17, 2014, appellant failed to file a claim against defendants. If the employee fails to file a claim three months prior to the expiration of the statute of limitations, the Act allows an employer to step into the employee's shoes to file a claim for indemnification for the payments it is liable for under the Act and a claim for the employee's common law damages. The Act provides that if an

"employee or his personal representative fails to institute a proceeding against such third person at any time prior to 3 months before such action would be barred, the employer may in his own name or in the name of the employee, or his personal representative, commence a proceeding against such other person for the recovery of damages on account of such injury or death to the employee, and out of any amount recovered the employer shall pay over to the injured employee or his personal representatives all sums collected from such other person by judgment or otherwise in excess of the amount of such compensation paid or to be paid under this Act, including amounts paid or to be paid pursuant to paragraph (a) of Section 8 of this Act, and costs, attorney's fees and reasonable expenses as may be incurred by such employer in making such collection or in enforcing such liability." 820 ILCS 305/5(b) (West 2016).

         Plaintiff, as subrogee of appellant's claim, timely filed its complaint against all of the named defendants on August 14, 2014. In November 2014 Blue Cross and Blue Shield Association was voluntarily dismissed from plaintiff's subrogation action. In December 2014, Pepper Construction Group, LLC, and CBRE, Inc. were also voluntarily dismissed from the subrogation action. This left Pepper Construction Co., Perez & Associates, Inc., and Perez Carpet as the only remaining defendants (collectively defendants).

         ¶ 6 On June 15, 2015, more than two years after her injury, appellant filed her own personal injury action against Pepper Construction Co., Perez & Associates, Inc., Interface America, Inc., and Blue Cross and Blue Shield Association. Appellant claimed her injuries resulted from the construction of an improvement to real property, which would be subject to a four year statute of limitations period. See 735 ILCS 5/13-214 (West 2016) ("Actions based upon tort *** against any person for an act or omission of such person in the *** construction of an improvement to real property shall be commenced within 4 years from the time the person bringing an action, or his or her privity, knew or should reasonably have known of such act or omission."). The trial court dismissed appellant's claim without prejudice on December 18, 2015. Appellant subsequently filed her first amended complaint on April 28, 2016. On September 12, 2016, the court dismissed this claim with prejudice for failure to file within the statute of limitations, finding appellant's injury was not the result of construction work and therefore subject to a two year statute of limitations. The court entered a finding under Supreme Court Rule 304(a) there was no just reason to delay enforcement or appeal of its decision to dismiss appellant's claim. Ill. S.Ct. R. 304(a) (eff. Mar. 8, 2016). No appeal was taken from this dismissal.

         ¶ 7 On November 10, 2016, appellant filed a petition to intervene in this case filed by her employer. In her petition appellant claims she would not be adequately represented by plaintiff. Appellant's ability to intervene in the present case turns on the Illinois Code of Civil Procedure's requirements for intervention as of right and permissive intervention:

"Upon timely application anyone shall be permitted as of right to intervene in an action: *** when the representation of the applicant's interest by existing parties is or may be inadequate and the applicant will or may be bound by an order or judgment in the action." 735 ILCS 5/2-408(a) (West 2016).
"Upon timely application anyone may in the discretion of the court be permitted to intervene in an action: (1) when a statute confers a conditional right to intervene; or (2) when an applicant's claim or defense and the main action have

          a question of law or fact in common." 735 ILCS 5/2-408(b) (West 2016). Here appellant sought to intervene as of right claiming she was not being adequately represented because plaintiff was only pursuing enough damages for indemnification and not the maximum amount recoverable for her injuries. Appellant attached a proposed amended complaint for plaintiff's subrogation suit with ...


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