5-21-2018; Holy Subro! IL Appellate Court Rules IL WC Lien Recovery is Absolute!; Illinois Hospitals Now Have to Search All Patients for Weapons, analysis by John Karis and more

Synopsis: Holy Subro! IL Appellate Court Rules IL WC Lien Recovery is Absolute! This Ruling is Required Reading for All IL WC Insurance Subro Departments.


Editor’s comment: Throughout my legal career, I faced circuit court judges who fought to cut and cut IL WC lien recovery. The judges usually treat workers’ comp payments as being “insurance” and therefore have little value when trying to get a self-insured employer or insurance carrier their money back, regardless of the statutory imprimatur. The judges always feel and would argue insurance companies don’t need their money back, as they were paid premiums and could therefore afford the “loss.”


Now, in a very recent ruling In re Estate of Rexroad, 2018 IL App (5th) 170342 (issued May 15, 2018), the IL Appellate Court, in the most liberal District in this state, ruled a workers' compensation lien, pursuant to Section 5(b) of the Workers' Compensation Act, cannot be subject to reduction or elimination due to


·        Conduct on the part of the insurer in its handling of the workers' compensation claim itself,

·        Or in its cooperation with an investigation of 3rd-party causes of the injury, or

·        In its negotiations with the employee as to satisfaction of its lien.


Under Section 5(b) of the IL WC Act, they found an employer's right to reimbursement of full amount of benefits paid or to be paid to worker is absolute. They further found there was no basis in Illinois law to hold that alleged conduct on part of lienholder (workers' compensation insurer of employer) outweighs absolute right that it has to reimbursement of its IL WC lien.


In this claim, the worker sadly was killed. His widow applied for and is receiving IL WC death benefits. The claim is still pending on arbitration.


The third party claim was pending in Indiana. An action appears to have been started to adjudicate the WC lien to end or otherwise be blocked from enforcement, despite the continuing payment of death benefits. On October 26, 2016, the Estate filed a motion to adjudicate the workers’ compensation lien, in which it requested the remainder of the employer’s workers’ compensation lien be stricken in its entirety. The Estate argued the employer was not entitled to the remainder of its lien due to the following allegations of wrongdoing on the part of the employer:


(1)   Direct communications with the family of Decedent despite knowing the Estate was represented by counsel;

(2)   Obstructing the Estate’s counsel in investigating the wrongful death action by prohibiting the Estate from interviewing its employees, refusing to produce the truck and trailer the decedent was driving for inspection, and providing its inaccurate “alive and well” investigative reports to the defense;

(3)   Supposedly failing to pay Decedent’s widow the full amount of workers’ compensation benefits owed;

(4)   Demanding a distribution toward its lien from the interim settlement;

(5)   Objecting to an unspecified amount of court costs claimed by the Estate as required to effect a settlement of the remainder of the Indiana action; and

(6)   Seeking to recalculate its pro rata share of costs in light of the settlement of the remainder of the Indiana action, which the Estate characterized as a “reneg” of its prior agreement to pay its share of costs at the time of the interim settlement.


After complete briefing was filed by both sides, the Circuit Court struck the workers’ comp lien in its entirety. The appeal followed.


The IL Appellate Court unanimously ruled:


According to this plain language of section 5(b), an employer’s right to reimbursement of the full amount of benefits paid or to be paid to the injured or deceased worker is absolute. This is because the workers’ compensation lien is a crucial foundation of workers’ compensation law in Illinois. See, e.g., Taylor v. Pekin Insurance Co., 231 Ill. 2d 390, 397 (2008); Harder v. Kelly, 369 Ill. App. 3d 937, 942 (2007). This important public policy, that an employer, even if it is not negligent, should compensate the employee for an injury incurred on the job, is predicated upon there being no other recovery available. Denius v. Robertson, 98 Ill. App. 3d 83, 87 (1981). However, when recovery is obtained from the parties actually responsible for the employee’s injury, fairness and justice require that the employer be reimbursed for the workers’ compensation benefits he has paid or will pay. Id. There is no basis under Illinois law to hold that the alleged conduct on the part of [the employer], even if true, outweighs the absolute right, pursuant to statute, that [employer] has to reimbursement of its lien and the public policy underlying that right.


I assure all my readers on both sides the language in the paragraph above should be required reading and part of any IL WC law school course on the issue of subrogation recovery of IL WC liens. If a motion is made attacking an IL WC lien, this most recent ruling is crystal clear—our IL WC Act provides no discretion in cutting or evading WC lien recovery. Click on the link above if you want to read the Appellate ruling.


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Synopsis: Illinois Hospitals Now Have to Search All Patients for Weapons. Analysis by John Karis, J.D.

Editor’s Comment: The IL Appellate Court finds it was reasonably foreseeable to find liability upon a hospital if it did not search patient before being admitted, as the patient or others might be harmed. On May 14, 2018, the Appellate Court of Illinois ruled for viability of a wrongful death action, alleging Defendant hospital was arguably negligent in not searching Decedent for weapons on day of his admission was sufficiently established. The Court ruled a hospital owed decedent a duty to protect him from harming himself or someone else.

In the case of Coleman v. Provena Hospitals, a patient named Russell was admitted to defendant, Provena Hospital, doing business as Provena Mercy Medical Center. The day after patient Russell was admitted, a nurse discovered he had a gun. It appears police were called. Shortly thereafter, during a confrontation with the Aurora Police Department, Russell was shot to death. Plaintiff Coleman, Russell’s sister and the administrator of his estate, filed a wrongful-death action against Defendant, alleging it was negligent in not searching Russell for weapons on the day he was admitted. The Circuit Court of Kane County subsequently granted Defendant’s motion for summary judgment, finding Plaintiff could not establish Defendant had proximately caused Russell’s death, because there was no evidence Russell had a gun when he was admitted. The matter was appealed to the IL Appellate Court.

On appeal, Plaintiff argued the trial court erred in granting the defendant’s motion for summary judgment, because a question of fact remained as to whether the gun would have been recovered had a proper search been conducted. In response, Defendant maintained summary judgment in its favor was proper because, not only did its actions not proximately cause Russell’s death, it owed no duty to Russell to protect him from his own criminal acts. Defendant Hospital further argued summary judgment was proper because Plaintiff cannot recover any damages based on Russell’s criminal acts

In order to succeed in a negligence action, Plaintiff must prove three elements:

(1) Defendant owed a duty of care;

(2) Defendant breached that duty;

(3) Plaintiff’s resulting injury was proximately caused by the breach.

Whether Defendant owed a duty to Plaintiff is a question of law, to be decided by the court. Whether Defendant breached its duty and whether the breach was the proximate cause of the injury are factual questions, for a jury to decide, as long as there is a genuine issue of material fact about breach and causation.

A court will find a duty where a plaintiff and a defendant stand in such a relationship to one another that the law imposes upon the defendant an obligation of reasonable conduct for the benefit of the plaintiff. The “relationship” referred to in this context acts as a shorthand description for the sum of four factors:

(1) the reasonable foreseeability of the injury;

(2) the likelihood of the injury;

(3) the magnitude of the burden of guarding against the injury;

(4) the consequences of placing that burden on the defendant.

The Appellate Court noted it has long been recognized, hospitals are under a duty to exercise reasonable care to protect their patrons from harm. In their pleadings, Defendant insisted it owed no legal duty to Russell, because the harm that befell him was not reasonably foreseeable. Defendant maintained it was not foreseeable that a patient would engage in a series of bizarre acts that would ultimately result in his being shot and killed by police officers. The Appellate Court noted Defendant’s argument was undermined by its policy to search people going into its behavioral health unit. The apparent purpose of this policy is to prevent patients who are possibly mentally ill from harming themselves or others. Based on the existence of this policy, it was reasonably foreseeable someone would be injured if the policy were not adhered to. Plaintiff asserted there was no reason why the policy should not exist throughout the hospital. Therefore the court found allegations of their complaint sufficiently established Defendant owed the patient a duty to protect him from harming himself or someone else.

It is hard to wrap your head around this ruling as common sense would say the hospital owed no duty for someone who engaged in criminal acts. It is unclear what the result of this matter will as it is in the early stages of litigation. However the one take-away from the court ruling is that hospitals owe a duty to their patients to prevent them from harm.  Included in these duties is to search patients for anything that could harm them or others. From this ruling, we feel IL hospitals now have to search any patient regardless of whether they have a mental condition for weapons.

This article was researched and written by John Karis, JD. You can reach John 24/7/365 for questions about general liability, employment law and workers’ compensation at jkaris@keefe-law.com.

Synopsis: Marge (Keefe) Madden Kottcamp, Rest in Peace.

Editor’s comment: My Dear Aunt Marge passed away this past weekend. She was three weeks shy of her 95th birthday. She was an inspiration to me for always being healthy and athletic, well into her 90’s. Marge had 12 children and about one zillion grandkids and great-grandkids.

If you are someone who says prayers, please say a prayer for the passing of this wonderful person. There will always be a twinkle at the end of every rainbow when I think of her.