Illinois’ Contribution Act Interpreted by Seventh Circuit Court of Appeals

An Illinois worker was crushed by a tractor-trailer at a loading dock while working for his employer. He collected Illinois workers’ compensation benefits from his employer, Ensign, and then he and his wife sued three companies in strict tort liability. Baltzell v. R&R Trucking Co..

The three defendants were R&R Trucking Company, owner of the tractor-trailer; Freightliner Corp., the tractor manufacturer, and Lufkin Industries, which was the trailer manufacturer. All of the defendants in the Illinois liability case filed third party contribution claims against the employer, Ensign, which means that Ensign could be held liable for the injury, too.

Ensign became involved because the other defendants were acting on the theory of joint and several liability, which states that a defendant who has paid more than its share of damages may seek contribution from other parties. The idea behind joint and several liability is that those parties who are most at fault should pay their share, regardless of whether they had settled prior to the verdict, or if they were not named in the lawsuit.

After a Chicago federal district court jury trial, a verdict in favor of the plaintiffs was entered in the total sum of $13,980,120. The jury apportioned fault as follows: The plaintiff was not at fault; Freightliner was liable for 20% of the fault; Lufkin 10%; R&R 40%; and Ensign 30%. Under this verdict Ensign would be liable for $4,194,036.

However, Ensign attempted to reduce this amount by presenting evidence that its cap as set out according to a precedent set in Kotecki v. Cyclops Welding Corp. was $4,085,571.21 and that it had paid $873,953.31 already under the Illinois worker’s compensation claim. Under Illinois law an employer’s contribution liability is capped to an amount not greater than the employer’s workers’ compensation liability. This value which is generally referred to as the ‘Kotecki cap’ represents the maximum amount that an employer has to pay in contribution.

Ensign moved to waive its workers’ compensation lien seeking dismissal of the third-party contribution claims. The district court denied Ensign’s motion. The district court then reduced the judgment by Ensign’s Kotecki cap of $4,085,471.21 which left $9,894,548 shared by the liability defendants according to their percentages at fault.

Next, the court addressed the issue of the employer waiving its workers’ compensation lien and having the contribution actions dismissed. The precedent for such an act is in the Illinois Supreme Court’s decision LaFever v. Kemlite Co., 185 Ill.2d 380 (1998).

In LaFever, the plaintiff suffered workplace injuries and sued a third-party, who in turn sued his employer for contribution. The jury found that both the third-party defendant and employer were liable for damages. In that case, the trial court permitted the employer to waive its workers’ compensation lien and have the contribution claim against it dismissed. The Illinois Supreme Court approved the trial court’s decision and held that an employer can wait and see how the jury verdict goes before deciding whether to waive its lien.

The Seventh Circuit followed the LaFever ruling by allowing the employer Ensign to waive its lien and see how the verdict turned out, just as in LaFever. Accordingly, the Seventh Circuit vacated the judgment and remanded the case for dismissal of the third-party contribution claims against Ensign and resolution of the set offs.

Chicago’s Kreisman Law Offices has been handling Illinois personal injury cases for over 30 years, serving areas of Cook County such as Elmhurst, Naperville, Evanston, and Oak Lawn.