Court of Appeals of Illinois, First District, First Division
from the Circuit Court of Cook County. No. 15 L 8626
Honorable John H. Ehrlich Judge Presiding.
GRIFFIN JUSTICE delivered the judgment of the court, with
opinion. Presiding Justice Pierce and Justice Harris
concurred in the judgment and opinion.
1 The trial court found that third-party defendant Reflection
Window Company LLC (Reflection Window) as an employer waived
its affirmative defense to limit its liability for an injury
sustained by its employee. The trial court also found that
Reflection Window waived its statutory workers'
compensation lien. We hold that Reflection Window waived its
limited liability status but not its lien rights.
Accordingly, we affirm in part and reverse in part.
3 Plaintiff Timothy Cooley was working as an employee of
third-party defendant Reflection Window on a construction
project in Chicago. Plaintiff was injured when he was
unloading a 600-pound window that Reflection Window was going
to install at the project. He filed a workers'
compensation claim and received benefits as a result.
4 Plaintiff also filed this case against defendant Power
Construction Company, LLC (Power Construction), for
negligence. Power Construction was the general contractor for
the project. Power Construction had retained Elston Window
and Wall, LLC (Elston Window), as a subcontractor, and Elston
Window retained Reflection Window as a sub-subcontractor.
5 Power Construction filed a third-party complaint for
contribution against Reflection Window. Power Construction
asserted that Reflection Window was the negligent party.
Appended to the third-party complaint are copies of the
master agreement between Power Construction and its
subcontractor Elston Window and also the sub-subcontract
agreement between Elston Window and Reflection Window.
6 Reflection Window filed an answer and affirmative defenses
to the third-party complaint brought against it by Power
Construction. Reflection Window denied any liability, and it
also asserted the "Kotecki cap" as an
affirmative defense. The Kotecki cap is derived from
the Illinois Supreme Court decision Kotecki v. Cyclops
Welding Corp., 146 Ill.2d 155 (1991), in which the court
held that an employer's liability for its employee's
injury is capped at an amount not greater than the
employer's workers' compensation liability to its
7 Power Construction responded with a motion to strike the
Kotecki cap affirmative defense on the basis that
Reflection Window had waived that defense under either the
master agreement, the subcontract agreement, or both. Both
the master agreement and subcontract agreement have
indemnification provisions. More relevant here is the
subcontract indemnification provision in which Reflection
Window agrees to indemnify both Elston Window and Power
Construction and which mentions workers' compensation.
"[Reflection Window] agrees to defend and indemnify
[Elston Window], [Power Construction] *** and such other
parties as [Elston Window] is required by the Contract
Documents to defend and indemnify, from and against any and
all claims *** which are caused by the negligence of [Elston
Window], [Power Construction] ***. [Reflection Window] hereby
expressly and specifically agrees that its obligations to
indemnify, defend and save harmless shall not in any way be
diminished by any statutory or constitutional immunity it
enjoys from suits by its own employees or from limitations of
liability or recovery under worker's compensation
8 The trial court granted Power Construction's motion to
strike Reflection Window's Kotecki cap
affirmative defense under that indemnity provision in the
contract. However, and this is the genesis of the issue on
appeal, the trial court also included a statement in its
order that, under the agreement, Reflection Window
"explicitly waived [its] workers' compensation
lien." That statement is the only one in the nine-page
order that discusses a waiver of the workers'
compensation lien. Power Construction did not move
to strike the lien, nor did it otherwise address the lien in
its motion to strike. Power Construction only moved the court
for an order that Reflection Window's cap on the amount
of the liability be found to be waived.
9 Reflection Window filed a motion to reconsider based on its
belief that the court's reference to a lien waiver must
have been a mistake, as it is not addressed in the rest of
the order and no one asked the court for such a ruling.
Reflection Window asked that the court modify its order by
removing the language regarding a "lien waiver."
The court did not order any additional briefing on the motion
to reconsider and denied Reflection Window's motion