NO. 1-01-0148WC
IN THE APPELLATE COURT OF ILLINOIS
FIRST DISTRICT
Industrial Commission Division
BRIAN J. PADGETT, as a minor child and ) Appeal from
unempancipated minor of JOSEPH PADGETT, ) Circuit Court of
Deceased, ) Cook County
Plaintiff-Appellant, ) No. 99L50976
v. )
INDUSTRIAL COMMISSION OF ILLINOIS and ) Honorable
AMERICAN PRESIDENTIAL TRUCKING, ) Joanne L. Lanigan,
Defendant-Appellee). ) Judge Presiding.
_________________________________________________________________
PRESIDING JUSTICE McCULLOUGH delivered the opinion of the court:
Claimant, Brian J. Padgett, as a minor child and unemancipated
minor child of Joseph Padgett, deceased, appeals from the order of the
circuit court of Cook County confirming the decision of the Illinois
Industrial Commission (Commission). Respondent is American
Presidential Trucking. The arbitrator denied claimant benefits, and
the Commission affirmed. The issues are whether (1) the respondent
may assert a lien against claimant's benefits because of a settlement
of a wrongful death action, and (2) the Commission decision that
claimant was not entitled to benefits beyond the amount of the
settlement is against the manifest weight of the evidence. We affirm.
On October 3, 1997, claimant's mother, Shirley M. Padgett
(Shirley), filed an application for adjustment of claim seeking
benefits for the death of her husband Joseph E. Padgett as a result of
an accidental injury on July 17, 1991 (97WC53008). On that
application for adjustment of claim, Shirley listed claimant as a
dependent of Joseph. On July 15, 1998, clamant filed a separate
application for adjustment of claim seeking death benefits
(98WC37111). The July 15, 1998, application showed only claimant as a
dependent and did not list any other party as dependent. Both
applications show the same counsel. The matters were consolidated
before the arbitrator.
Shirley Padgett Gollmer testified that she was married to Joseph
Padgett at the time of the accidental injury on July 17, 1991, and his
subsequent death. On the date of the accident, claimant was 15 years
old. Joseph died on July 18, 1991, due to an adverse reaction to the
anesthesia given at the time of the surgical repair of his fingers
that were injured on July 17, 1991. There was a settlement in a third-
party litigation. She understood that, as a result of the settlement,
she would not receive any additional death benefits. She was not
seeking additional benefits. There was an order of the trial court
allowing the settlement to be introduced in this case. On her federal
income tax returns for 1994 through 1997, she claimed claimant as a
dependent, and she continued to provide more than 50% of his support,
including his school and tuition, room and board. Prior to Joseph's
death, she and her husband provided more than 50% of claimant's
support. Claimant was a beneficiary of the estate. At the time of
the settlement, two checks were cut. She did not receive claimant's
share. After completing high school, claimant enrolled at the
University of Southern Indiana and began studies there in August 1995
on a full-time basis. At the time of the arbitration hearing, he was
a full-time student. Claimant was Joseph's only child. While the
wrongful death proceeding was pending, Shirley received workers'
compensation benefits. She testified she was not making a claim for
additional funeral expenses. Claimant remarried on October 1, 1994.
Claimant (born November 27, 1975) testified he was 23 years old
at the time of the arbitration hearing. His mother and stepfather
paid for his tuition, room and board. In 1995, he earned $1,934; in
1996, he earned $3,100; and in 1997, he earned $4,234. During the
summers, he went to his mother's home. He received a structured
settlement. He was not sure what he could and could not disclose
about the settlement. An order of confidentiality was placed on the
settlement. He anticipated graduating from college in May 2000.
As a result of the settlement of the third-party litigation, the
amount of that settlement was not to be disclosed outside of the
hearing. The arbitrator reviewed the documents, but they were kept
out of the record in this workers' compensation case following a
discussion off the record precipitated by claimant's objections.
Claimant did not want to disclose the wrongful death settlement terms.
As to the claim of the widow (97WC53008), the arbitrator found
that, in Cook County case No. 92-L-690, an action by Shirley Padgett,
widow and administrator of the estate of Joseph Padgett, Jr.,
deceased, the wrongful death action was settled in November 1996 for
an amount that was subject to a confidentiality order. The arbitrator
found that the settlement exceeded the value of 20 years of death
benefits at a rate of $350.60 per week which is the total amount of
benefits to which she would be entitled. The arbitrator further found
that respondent was entitled to a credit for all of its financial
liability on account of the death of decedent by reason of the
settlement in 92-L-690 and further found that Shirley Padgett had
expressly waived her claim for any benefits under the Workers'
Compensation Act (Act) (820 ILCS 305/1 et seq. (West 1998)). The
arbitrator's determination of the widow's award was not appealed, and
no issue is presented in this case regarding the claim of the widow.
As to claimant, the arbitrator found that, although the order of
settlement was silent as to any claim claimant had against respondent,
claimant did testify that he received a separate check as part of the
estate settlement and opened a separate bank account. Shirley, as
representative of the estate, filed a wrongful death action against
Cook County Hospital for the death of her husband. Noting that the
amount recovered in the wrongful death action was for the exclusive
benefit of the surviving spouse and next of kin of the decedent and
that claimant is a next of kin under the Wrongful Death Act (740 ILCS
180/0.01 et seq. (West 1998)), the arbitrator found that section 5(b)
of the Act (820 ILCS 305/5(b) (West 1998)) authorized a workers'
compensation lien to attach to the payment of the wrongful death
settlement. The arbitrator found that respondent was entitled to a
credit against the amount of its liability to claimant up to the full
amount of the civil settlement and that the civil settlement amount
exceeded the maximum amount for which respondent would be liable to
claimant under the Act. The arbitration decision explained that the
maximum amount to which claimant would be entitled would be $350.60
per week for the period that he was enrolled as a student until he
reached age 25. The arbitrator denied benefits to claimant. With a
minor modification not relevant to the issues in this appeal, the
Commission affirmed and adopted the arbitrator's decision.
We initially address whether the respondent may assert a lien
against claimant's benefits because of a settlement of a wrongful
death action. Claimant disagrees with the interpretation placed on
section 5(b) of the Act and section 2 of the Wrongful Death Act by
Borden v. Servicemaster Management Services, 278 Ill. App. 3d 924, 663
N.E.2d 153 (1996). Borden relied on Esin v. Liberty Mutual Insurance
Co., 99 Ill. App. 3d 75, 424 N.E.2d 1307 (1981), and Page v. Hibbard,
119 Ill. 2d 41, 518 N.E.2d 69 (1988). The language of the first
paragraph of section 2 of the Wrongful Death Act (740 ILCS 180/2 (West
1998)) and section 5(b) of the Act is the same as it was at the time
of the decision in Borden. Borden concluded that, despite the
allocation of settlement proceeds, an employer has a lien against the
proceeds of a wrongful death action for the amounts paid by the
employer to the employee or personal representative on account of the
accidental injury. Borden, 278 Ill. App. 3d at 931-32, 663 N.E.2d at
158.
Claimant attempts to avoid this result by distinguishing the
terms "dependent" of the employee from the "legal representative" of
the estate, utilizing the language of the first paragraph of section
5(a) of the Act as follows:
"No common law or statutory right to recover damages
from the employer, his insurer, his broker, any service
organization retained by the employer, his insurer or his
broker to provide safety service, advice or recommendations
for the employer or the agents or employees of any of them
for injury or death sustained by any employee while engaged
in the line of his duty as such employee, other than the
compensation herein provided, is available to any employee
who is covered by the provisions of this Act, to any one
wholly or partially dependent upon him, the legal
representatives of his estate, or any one otherwise
entitled to recover damages for such injury." 820 ILCS
305/5(a) (West 1998).
Claimant argues that, although section 5(a) of the Act refers to a
dependent's ability to receive benefits, section 5(b) of the Act does
not refer to a dependent.
Section 5(b) refers to liens against recoveries in actions by
the employee or the personal representative of the employee. In this
case, it is undisputed that Cook County case No. 92-L-690 was an
action by the representative of the employee. Thus, regardless of the
apportionment of the recovered amounts to the beneficiaries of the
estate, respondent was entitled to a lien for all compensation paid
and to be paid. Claimant does not suggest what type of action he
could maintain without becoming a personal representative of the
estate. In essence, under Borden, respondent was entitled to a lien
against the wrongful death settlement for any workers' compensation
benefits "paid or to be paid" by it "to such employee or personal
representative." 820 ILCS 305/5(b) (West 1998).
Claimant argues that, since he is entitled to receive benefits
under section 7 of the Act (820 ILCS 305/7 (West 1998)) as a
dependent, benefits paid to him would not be paid to the employee or
the personal representative, within the context of section 5(b).
However, a "widow" is also entitled to an award under section 7 of the
Act, may also not be the personal representative, and still may not
make a double recovery.
In Scott v. Industrial Comm'n, 184 Ill. 2d 202, 703 N.E.2d 81
(1998), both the widow and the administrator of the estate filed
workers' compensation claims; the claim of the administrator was
dismissed because no award to the estate was permitted when the
surviving spouse has filed a claim. See Scott, 184 Ill. 2d at 205,
703 N.E.2d at 82-83. In Scott, the administrator of the estate
pursued a third-party wrongful death action that was settled. Scott,
184 Ill. 2d at 207, 703 N.E.2d at 83-84. Travelers Insurance Company,
the employer's workers' compensation carrier, asked the Commission to
determine the amount of credit to which it was entitled as a result of
the third-party settlement. Scott, 184 Ill. 2d at 209, 703 N.E.2d at
85. Although in Scott Travelers had waived its ability to obtain a
section 5(b) lien, it had not waived its ability to claim a credit
under section 5(b).
"Were the rule to be otherwise, as suggested by
Scott, an employee would be able to receive and retain a
double recovery. This would be inconsistent with the
general principle that an employee is not entitled to a
double recovery. See Malatesta v. Mitsubishi Aircraft
International, Inc., 275 Ill. App. 3d 370, 380 (1995); see
also 6 A. Larson & L. Larson, Larson's Workers'
Compensation Law §71.20, at 14-5 (1998) ('It is equally
elementary that the claimant should not be allowed to keep
the entire amount both of his compensation award and of his
common-law damage recovery').
* * *
Accordingly, we believe that the Commission, which
entered the original compensation award, is the proper
place to determine whether an employer or its insurer is
entitled to credits for amounts received by an employee in
a third-party proceeding when lien rights have not been
adjudicated by the circuit court. See Selleck v.
Industrial Comm'n, 233 Ill. App. 3d 17, 19-20 (1992)
(finding Industrial Commission to be a proper forum for
determining employer creditors when third-party action
ended prior to a determination that employee was entitled
to compensation). Scott, 184 Ill. 2d at 217-18, 703 N.E.2d
at 88-89.
As Travelers was entitled to a credit against the widow's award
in Scott for payments made in a third-party wrongful death action
initiated by a personal representative other than the widow,
respondent would be entitled to a lien in this case. Claimant is not
entitled to a double recovery. See also Price v. Atchison, Topeka &
Santa Fe Ry. Co., 76 Ill. App. 3d 898, 908, 395 N.E.2d 592, 599-600
(1979) ("personal representative" and "surviving spouse" are not
synonymous and the workers' compensation lien applies to the entire
third-party judgment, not just the portion distributed to the
surviving spouse).
We next consider whether the Commission determination that
claimant was not entitled to benefits beyond the amount of the
settlement is against the manifest weight of the evidence. Before the
arbitrator, claimant's counsel said that he was not going to introduce
the settlement agreement and suggested that Shirley had violated the
confidentiality provision of the settlement agreement by disclosing
the amount of the settlement. Claimant, as appellant, has the burden
of providing a record sufficient for review, and any doubts arising
from the insufficiency of the record are resolved against the
claimant. Foutch v. O'Bryant, 99 Ill. 2d 389, 392, 459 N.E.2d 958,
959 (1984).
Here, the arbitrator had the opportunity to review the
settlement documents. The record discloses that claimant received a
structured settlement in the third-party wrongful death action. The
arbitrator found that claimant was entitled to workers' compensation
benefits in the amount of $350.60 "for the period that he is enrolled
as a student until he reaches age 25." 820 ILCS 305/7(a) (West 1998).
This finding is not challenged by claimant. Shirley testified that
claimant started college in August 1995. His anticipated graduation
date was in May 2000, and he will turn 25 on November 27, 2000.
Although the settlement documents were not included in the record in
this appeal, the testimony and discussion before the arbitrator
suggests that there was a gross settlement in the amount of $950,000
of which Shirley received a net amount of $360,000. The arbitrator,
on the basis of the records before him, also found "The maximum
benefits Petitioner could receive over the course of his compensation
case is less than his recovery on the wrongful death case."
Claimant now argues that the Commission's decision is
speculative because the full terms of the settlement, including
claimant's portion, were not before it. Claimant frustrated the
respondent's ability to present such evidence. Nothing in the record
on appeal suggests the Commission's findings were against the manifest
weight of the evidence.
The order of the circuit court of Cook County confirming the
Commission's decision is affirmed.
Circuit court affirmed.
HOFFMAN, O'MALLEY, HOLDRIDGE, and RARICK, JJ., concur.
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NOTICE
Decision filed 01/24/02. The text of this decision may be changed or
corrected prior to the filing of a Petition for Rehearing or the
disposition of the same.