January 2021 Case Notes & Comments

"I'm a new day rising, I'm a brand new sky to hang the stars upon tonight" ~ Foo Fighters, "Times Like These"

MONTHLY QUIZ: Defendant-Trucker, while driving a semi-truck, collides with Plaintiff-Employee, who is also driving a semi-truck in Illinois for his Employer. Plaintiff-Employee files an Illinois civil suit against Trucker and a Pennsylvania workers' compensation (WC) claim against Employer. In discovery during the Illinois civil suit, Plaintiff-Employee claims he sustained injuries to his back, shoulder and knee. The independent medical examiner in his WC claim opines, however, that while Plaintiff-Employee sustained a right knee injury, there is no medical evidence of a back injury related to the collision. Plaintiff-Employee settles his WC claim and signs and certifies an Agreement which is "binding only on the signing parties" and describes the "precise nature of injury" as a "[r]ight knee strain." Defendant-Trucker moves for partial summary judgment, arguing that Plaintiff-Employee should be collaterally estopped from seeking damages for injuries beyond those identified in his Pennsylvania WC Agreement. Plaintiff-Employee argues that the Agreement, which is "only binding on the signing parties" controls and therefore, collateral estoppel does not apply. Can Plaintiff-Employee sue for his back and shoulder?  Who is right? You be the judge. (Answer below).

WORKERS' COMPENSATION: On January 13, 2021, the Illinois General Assembly passed House Bill 4276, which extends the application of rebuttable presumption legislation to June 30, 2021.  The Bill, which replaces House Bill 2455 (originally signed on June 5, 2020, by Illinois Governor Pritzker), provides that certain Illinois essential workers who contract COVID-19 shall be rebuttably presumed to have been exposed at work, and that such exposure is causally connected to said exposure. A summary of the original legislation and an outline of what is required for Employers to rebut the presumption can be found on our website (https://www.lefltd.com/publications/August_2020).  

SUBROGATION - MADE-WHOLE DOCTRINE DOES NOT APPLY TO A SELF-INSURED RETENTION POLICY: Employee-firefighter was injured and made a workers' compensation claim in which the Insured-City paid $400k, the full amount of its self-insured deductible under its workers' compensation policy, and Insurer paid almost $2.7M. Firefighter sued the third-party tortfeasor, settled for $2.7M and set aside $935,968 for City and Insurer. City claimed that under the "made-whole" doctrine, it was entitled to reimbursement of the $400k self-insured retention. Insurer took the position that the made-whole doctrine did not apply to self-insured retentions and thus, they were entitled to the entire set-aside. Under the made-whole doctrine, which is an equitable doctrine, an insurer generally cannot assert a subrogation right until the insured has been fully compensated for his or her injuries. While New Jersey courts recognize the "made-whole" doctrine and are guided by equitable principles, they must also "consider the contractual relevance of the specific subrogation agreement" between the parties. The subject policy provided that Insurer had "the right to substitute itself for the City and [wa]s subrogated to all of the City's rights of recovery." The New Jersey Supreme Court, "would not override the parties' agreement" and concluded that such unambiguous language meant that Insured have given its rights of recovery against third-party tortfeasors to Insurer. Thus the made-whole doctrine did not apply. City of Asbury Park v. Star Ins. Co., 242 N.J. 596, 233 A.3d 400 (S.Ct. N.J. Jun. 29, 2020).

ILLINOIS SUPREME COURT CLARIFIES APPLICATION OF "MECHANICAL DEVICE" EXCLUSION IN COMMERCIAL AUTO POLICY - Claimant was using a mechanical auger to transport grain from one vehicle to another on his father's farm when his leg became caught in the auger, ultimately requiring amputation. Claimant filed a suit against his father  which he ultimately settled, receiving, in part, an assignment of any claim under the commercial auto policy covering the truck to which the grain was being transferred at the time of the accident. The insurer filed a declaratory judgment action, asserting an exclusion for bodily injury caused by the "the movement of property by means of a mechanical device." After the trial court entered summary judgment in favor of the insurer, an appellate court overturned the ruling, finding that the "mechanical device" exclusion was ambiguous and, therefore, should be construed in favor of coverage. The Illinois Supreme Court reversed the appellate court's decision, noting that courts in a number of other jurisdictions had previously found the exclusion to be unambiguous and enforceable under similar circumstances. While the appellate court had distinguished those cases on the basis that they involved devices which were self-powered, while the auger was not, the Court found this distinction unavailing, as the exclusion itself did not include such a requirement. Finally, the Court rejected the argument that the exclusion conflicted with Illinois' mandatory insurance statute, as the exclusion applied equally to insureds and permissive users.  State Farm Mutual Auto. Ins. Co. v. Kent Elmore, et al. 2020 IL 125441 (Dec. 3, 2020). 

SIDEWALK DEFECT OBJECTIVELY OPEN AND OBVIOUS, PRECLUDING RECOVERY:  Plaintiff tripped on a "raised deviation" between two sidewalk slabs, fracturing his right wrist and left rib.  He brought a negligence action against the Village of LaGrange.  During discovery, Plaintiff estimated the height variance between slabs to be between two and three inches.  An employee of the Village measured the variance to be between 1.5 and 1.75 inches.  During Plaintiff's deposition, he conceded that if he were looking down at the particular sidewalk defect just prior to his fall he would have been able to see it.  The Village moved for summary judgment, arguing that the sidewalk deviation was a de minimis defect for which it owed no duty to repair, that the condition was open and obvious, and that it had no actual or constructive notice of the defect.  Plaintiff argued that a question of fact existed as to each issue, precluding summary judgment.  The trial court rejected the Village's de minimis argument, finding a question of fact as to the height variance.  However, the Court found that the condition was open and obvious as a matter of law, and that no fact had been presented indicating that the Village had requisite notice of the deviation; accordingly, the Court granted the motion for summary judgment, and the Plaintiff appealed.  The First District affirmed, finding that the defect was open and obvious.  The Court noted that there was no dispute that the sidewalk deviation was apparent, which any reasonable person could see.  The Court further noted that, although Plaintiff was not looking down at the sidewalk at the time, the standard is not based on his subjective knowledge, but an objective standard.  Further, the Court noted the miles of sidewalk in the Village when weighing the magnitude of the burden of guarding against the injury and the consequences of placing that burden on the defendant.  Foy v. Village of LaGrange, Illinois, 2020 IL App (1st) 191340 (Nov. 6, 2020). 

ANSWER TO QUIZ: Defendant-Trucker wins, Plaintiff-Employee loses. Plaintiff-Employee is estopped from asserting any back or shoulder injuries arising from the collision. Collateral estoppel is an equitable doctrine that precludes a party from relitigating an issue decided in a prior proceeding and requires: 1) prior adjudication of an identical issue; 2) a final judgment on the merits; and 3) estopped party's participation in the prior proceeding (or privity with those involved). On review, the appellate court determined that the Pennsylvania WC settlement was an "identical ... issue" that "resolved ... the extent of [Plaintiff-Employee's] injuries following the [collision]." Additionally, because the WC Agreement set the parties' rights and liabilities based upon an agreed set of facts, it qualified as a judgment on the merits. In this regard, the Court noted that Plaintiff-Employee had a full and fair opportunity to litigate the full extent of his injuries in the WC proceeding. Given that Plaintiff-Employee participated in the WC claim, the third element was met. Clifton Armstead v. National Frieght, Inc., et al., 2020 IL App (3d) 170777 (Nov. 20, 2020).

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