First District Allows Waiver Of Workers' Compensation Lien And Denies Petition For Attorneys' Fees

March 2016

By Andrew R. Makauskas

In Cozzone v. GARDA GL Great Lakes, Inc. et al., 2016 IL App (1st) 151479, the First District presided over a very interesting case. The matter involved a settlement between the plaintiff and direct defendants and an assignment of the defendants' contribution claims against the employer.

The decedent, Anthony Cozzone, was a roofer employed by Fellows Roofing, Ltd. ("Fellows"). He tripped and fell through a skylight on a commercial rooftop in Broadview, Illinois and died the same day. He is survived by two sons. He was not married to the children's mother. The Estate filed a wrongful death and survival action against the owner and tenant of the building. The mother filed a workers' compensation claim against the employer. The Illinois Workers' Compensation Commission found the case compensable and ordered weekly benefits in the amount of $466.13 to be paid for the benefit of the sons until they reach adulthood. Fellows asserted a workers' compensation lien against the corresponding civil litigation case. The estate entered into settlement negotiations with the tenant and building owner in the civil case. A settlement was reached and as part of the settlement, the defendants assigned their contribution claims against Fellows to the estate.

The Estate proceeded to trial against Fellows and obtained a verdict with Fellows 100% at fault. After the verdict, Fellows waived the workers' compensation lien and moved to dismiss the contribution claims based upon the waiver. The Estate objected and asked that Fellows pay the full amount from its contribution liability. The Trial Court denied the Motion and granted the dismissal, finding that Fellows could waive its lien even after the unfavorable jury verdict. The Court entered judgment against Fellows for only $35,892.01, representing the difference between what had been paid in the workers' compensation case at the time of the settlement in the civil case and the amount of additional workers' compensation liability Fellows had incurred up to the end of the civil trial.

Two issues were raised on appeal. First, the Estate argued first that the lien waiver should not have been allowed. Although acknowledging cases stating that a lien could be waived after verdict in exchange for a dismissal, the Estate said that its case was different because the underlying tort action was not tried concurrently with the contribution action. The Appellate Court did not find this to be a sufficient reason to deviate from the analysis set forth in the prior decisions.

The Estate's attorneys also argued that they were entitled to additional attorneys' fees relating to the contribution action. Specifically, the employer had waived its workers' compensation lien as a result of its prosecution of the contribution claims. The attorneys were looking for these attorneys' fees to be paid by the Estate, not by the employer, under Section 5(b) of the Workers' Compensation Act. The Court noted that this section provides for fees to be paid by an employer based on the actual reimbursement of workers' compensation payments, not by the Estate of a deceased employee. It stated that Section 5(b) does not authorize the payment of fees by anyone other than the employer. The Court went on to say that the brief contained no reference to any contract between the Estate and the attorneys for the payment of additional fees for prosecuting the contribution claims. The argument section of the attorneys' brief stated that the fees should have been awarded based upon unspecified "legal and equitable bases" and "for policy reasons and in the best interests of the minor heirs." No authority was cited for these assertions. The Court found that the issue was forfeited by failing to cite authority in support of the position.