Enter. Leasing Co. of St. Louis v. Hardin

• Decision Date: 08 September 2011
• Docket Number: No. 5–10–0201.,5–10–0201.
• Citation: 2011 IL App (5th) 100201,956 N.E.2d 1059,353 Ill.Dec. 931
• Parties: ENTERPRISE LEASING COMPANY OF ST. LOUIS, Plaintiff–Appellant,v.Linda HARDIN, Defendant–Appellee.
• Court: United States Appellate Court of Illinois

2011 IL App (5th) 100,201

956 N.E.2d 1059

353 Ill.Dec. 931

ENTERPRISE LEASING COMPANY OF ST. LOUIS, Plaintiff–Appellant,

v.Linda HARDIN, Defendant–Appellee.

No. 5–10–0201.

Appellate Court of Illinois, Fifth District.

Sept. 8, 2011.

Jeffrey S. Deutschman, Deutschman & Associates, P.C., Chicago, IL, for Appellant.James B. Bleyer, Bleyer & Bleyer, Marion, IL, for Appellee.

OPINION

Presiding Justice CHAPMAN delivered the judgment of the court, with opinion.

¶ 1 The defendant, Linda Hardin, rented a vehicle from the plaintiff, Enterprise Leasing Company of St. Louis, for a business trip. Two of her coworkers were passengers in the vehicle. Both passengers were injured in an accident while Hardin was driving in Kentucky. The plaintiff paid claims to the two passengers and then sought indemnification from the defendant pursuant to the rental contract. The trial court granted the defendant's motion for summary judgment, finding that (1) once the plaintiff paid the coworker/passengers' claims, it “stepped into [their] shoes” and (2) their claims against the defendant would be barred under the Workers' Compensation Act (820 ILCS 305/1 et seq. (West 2006)). The plaintiff appeals that ruling, arguing that (1) its claim is not barred by the Workers' Compensation Act because it is a claim for indemnification, not subrogation, and (2) the voluntary-payment doctrine is not applicable. We affirm.

¶ 2 The defendant rented a car from the plaintiff for a business trip. She was driving in Kentucky when she collided with a median, injuring her two passengers. Both passengers were the defendant's coworkers, and all three were acting in the course of their employment when the collision occurred. The passengers, Christopher Cagle and Jeremy Hess, filed workers' compensation claims for their injuries. They also submitted personal injury claims to the plaintiff. The plaintiff paid Cagle and Hess $16,250 in settlement of those claims.

¶ 3 The plaintiff subsequently filed a complaint against the defendant seeking to recover the $16,250 it paid on her behalf. The complaint alleged that the defendant had breached the contract by driving the vehicle outside the State of Illinois and that she had driven negligently. The complaint further alleged that the plaintiff paid claims of $16,250 as a result of the defendant's negligence. Attached to the complaint was the rental contract. In relevant part, the contract provided that the defendant was to indemnify and hold harmless the plaintiff for any losses it sustained as a result of her use of the car, including claims of third parties.

¶ 4 The defendant filed a motion for summary judgment, arguing that (1) the plaintiff's claimed right to payment from the defendant was derivative of Cagle and Hess's cause of action against her and (2) the exclusivity provision of the Workers' Compensation Act bars claims against a coworker for injuries sustained in the course of employment due to the negligence of the coworker. See 820 ILCS 305/5(a) (West 2006); Ramsey v. Morrison, 175 Ill.2d 218, 224, 222 Ill.Dec. 100, 676 N.E.2d 1304, 1307 (1997).

¶ 5 The plaintiff filed a response to the defendant's motion. In the response, the plaintiff alleged that the rental agreement required the defendant to indemnify it for any losses it sustained as a result of her negligence. The plaintiff further alleged that the defendant declined supplemental liability coverage, which would have paid for the claims, and that she had not submitted the claims to her own car insurance company. It also alleged that its representative did not know that the accident was work-related or that Cagle and Hess were the defendant's coworkers. The plaintiff argued that it was required to settle Cagle's and Hess's claims under the mandatory insurance law (625 ILCS 5/9–101 et seq. (West 2006)) and that the Workers' Compensation Act was not relevant because there was no employment relationship between the plaintiff and the defendant or her injured coworkers.

¶ 6 The defendant filed a reply to the plaintiff's response in which she argued that Hess and Cagle did not have common law claims against the defendant due to the exclusivity provision of the Workers' Compensation Act. See 820 ILCS 305/5(a) (West 2006). As a result, she argued, the plaintiff was not obliged to pay their claims on her behalf. Thus, she argued, payment of the claims was a voluntary payment for which she had no obligation to indemnify the plaintiff.

¶ 7 The plaintiff responded, repeating its allegations that the representative who handled Cagle and Hess's claims did not know that the passengers were the defendant's coworkers or that the accident occurred in the course of their employment. The plaintiff argued that, as such, the mistake-of-fact exception to the voluntary-payment doctrine applied. Finally, the defendant responded with an affidavit from the attorney who represented Cagle and Hess. He averred that the medical records he submitted in support of their claims clearly indicated that it was a work-related accident. As previously mentioned, the court granted the defendant's motion for summary judgment. This appeal followed.

¶ 8 Our review of a ruling on a motion for summary judgment is de novo. Summary judgment is appropriate when the pleadings, depositions, and affidavits on file, viewed in the light most favorable to the nonmoving party, show that there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. Home Insurance Co. v. Cincinnati Insurance Co., 213 Ill.2d 307, 315, 290 Ill.Dec. 218, 821 N.E.2d 269, 275 (2004). We may affirm the trial court's decision to grant or deny a motion for summary judgment on any basis appearing in the record, even if it is not the basis the trial court gave for its ruling. Home Insurance Co., 213 Ill.2d at 315, 290 Ill.Dec. 218, 821 N.E.2d at 275–76.

¶ 9 The plaintiff first argues that the trial court erred in finding its claim barred by the Workers' Compensation Act. We disagree.

¶ 10 Section 5(a) of the Workers' Compensation Act provides, in relevant part:

“No common law or statutory right to recover damages from the employer * * * or the agents or employees of [the employer] for injury * * * 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 * * *.” 820 ILCS 305/5(a) (West 2006).

This provision gives employees immunity from liability for negligence that injures their coworkers. Ramsey, 175 Ill.2d at 224, 222 Ill.Dec. 100, 676 N.E.2d at 1307.

¶ 11 As previously noted, the plaintiff argued to the trial court that this statutory provision was inapplicable because it did not have an employer-employee relationship with the defendant or the injured passengers. However, courts that have considered this provision in the context of third-party claims have generally concluded that the rights of third parties yield to this provision where it is necessary to promote the goals of the Workers' Compensation Act.

¶ 12 In Kotecki v. Cyclops Welding Corp., 146 Ill.2d 155, 166 Ill.Dec. 1, 585 N.E.2d 1023 (1991), our supreme court considered to what extent an employer could be liable to a third party where both the third party and the employer are responsible for an employee's injury. There, the employee was injured operating a machine in the course of his employment. He brought a products-liability claim against the manufacturer of the machine. Kotecki, 146 Ill.2d at 156, 166 Ill.Dec. 1, 585 N.E.2d at 1023. The manufacturer in turn brought a third-party claim against the plaintiff's employer. Kotecki, 146 Ill.2d at 156, 166 Ill.Dec. 1, 585 N.E.2d at 1023–24.

¶ 13 There, as here, the third party had no employment relationship with the injured worker. However, this did not mean that the Workers' Compensation Act was irrelevant to the issue of the employer's potential liability to the third party, the manufacturer of the machine. Instead, the court had to balance the interest of the employer, as a participant in the workers' compensation system, and the interest of the manufacturer in not paying more than its proportionate share of the liability for the plaintiff's injuries. Kotecki, 146 Ill.2d at 164, 166 Ill.Dec. 1, 585 N.E.2d at 1027.

¶ 14 In determining how best to strike this balance, the court considered that one of the key purposes of the workers' compensation system is that both employees and employers “ ‘receive the benefits of a guaranteed, fixed-schedule, nonfault recovery system.’ ” Kotecki, 146 Ill.2d at 162–63, 166 Ill.Dec. 1, 585 N.E.2d at 1026 (quoting Lambertson v. Cincinnati Welding Corp., 312 Minn. 114, 120, 257 N.W.2d 679, 684 (1977)). The court ultimately adopted a rule previously promulgated by the Minnesota Supreme Court that the third party's right to seek contribution from the employer was limited to the amount of the employer's liability to the injured employee under the Workers' Compensation Act. Kotecki, 146 Ill.2d at 164, 166 Ill.Dec. 1, 585 N.E.2d at 1027 (citing Lambertson, 312 Minn. at 130, 257 N.W.2d at 689). The reason for this rule is that requiring the employer to contribute more than that amount to the employee “ ‘through the conduit of the third-party tortfeasor’ ” would be at odds with the limitation on employer liability, a key provision of the workers' compensation system. Kotecki, 146 Ill.2d at 162–63, 166 Ill.Dec. 1, 585 N.E.2d at 1026 (quoting Lambertson, 312 Minn. at 120, 257 N.W.2d at 684).

¶ 15 In Ramsey v. Morrison, the court again considered the tension between the right to contribution from joint tortfeasors and the workers' compensation system, this time in a context closer to the facts of the case before us. There, the plaintiff was a passenger in a truck driven by his coworker when they were involved in a collision with another vehicle. Both the plaintiff and his coworker were acting...