Andrews v. Norfolk S. R.R. Corp.

• Citation: 2017 IL App (1st) 153007,77 N.E.3d 1028
• Decision Date: 29 March 2017
• Docket Number: No. 1-15-3007,1-15-3007
• Parties: Wesley ANDREWS, Plaintiff-Appellant, v. NORFOLK SOUTHERN RAILROAD CORP., Defendant-Appellee.
• Court: United States Appellate Court of Illinois

2017 IL App (1st) 153007
77 N.E.3d 1028

Wesley ANDREWS, Plaintiff-Appellant,
v.
NORFOLK SOUTHERN RAILROAD CORP., Defendant-Appellee.

No. 1-15-3007

Appellate Court of Illinois, First District, THIRD DIVISION.

March 29, 2017

Richard A. Haydu and Steven P. Garmisa, of Hoey & Farina, P.C., of Chicago, for appellant.

Evan B. Karnes II and Everado Martinez, of Karnes Law Chtrd., of Chicago, for appellee.

OPINION

JUSTICE LAVIN delivered the judgment of the court.

¶ 1 Plaintiff, Wesley L. Andrews, sued his employer, defendant Norfolk Southern Railway Corporation (Norfolk Southern), under the Federal Employers' Liability Act (45 U.S.C. § 51 et seq . (2006) ) (FELA), alleging an injury due to his employer's negligence. A jury rendered a verdict in favor of plaintiff, finding that plaintiff's injuries resulted from his employment. The final judgment following a reduction for plaintiff's contributory fault was $37,500. This appeal relates to a posttrial dispute about how to satisfy the monetary judgment. Specifically, plaintiff's attorneys contend the final judgment of $37,500 should have been used to satisfy their fees and costs in the negligence lawsuit. The trial court, however, sided with Norfolk Southern and determined the $37,500 was appropriately used to repay the railroad money it had given plaintiff for his injury before the lawsuit. Plaintiff now challenges that determination.

¶ 2 BACKGROUND

¶ 3 Plaintiff was a conductor who suffered a spinal injury while operating a mechanical track switch lever. Unbeknownst to him, Norfolk Southern had installed a new locking device, which allegedly caused his injury in May 2006. Following his injury, plaintiff was unable to work, so pursuant to section 55 of FELA (45 U.S.C. § 55 (West 2006) ), Norfolk Southern paid plaintiff 38 separate advances, totaling some $75,000,¹ from June 2006 through October 2008 to compensate plaintiff for his lost time. Plaintiff signed a form whenever he received an advance, stating "I agree that the total amount of advance shall be credited against any settlement made with or any judgment rendered against my said employer or others on account of this accident."

¶ 4 In November 2008, counsel for plaintiff notified Norfolk Southern that the firm had been retained on plaintiff's negligence claim and provided a notice of an attorney's lien. Norfolk Southern suspended the advance payments, and several months later, in April 2009, plaintiff filed suit.

¶ 5 On April 28, 2014, following trial, the jury assessed 75% of the fault to plaintiff, and 25% to Norfolk Southern resulting in a net judgment of $37,500.²

¶ 6 Norfolk Southern filed a posttrial motion seeking a setoff for its advances under section 55 of FELA and ultimately filed a petition to satisfy and release the judgment under section 12183(b) of the Illinois Code of Civil Procedure (Code)

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(735 ILCS 5/12-183(b) (West 2006)).³ Norfolk Southern asserted both a statutory and contractual right to setoff, claiming that in accepting the advances, plaintiff had agreed to repay Norfolk Southern from any judgment against his employer related to the accident. Norfolk Southern argued that there were no sums due plaintiff, and asked that the judgment be declared satisfied or fully paid. See Klier v. Siegel , 200 Ill.App.3d 121, 124, 146 Ill.Dec. 620, 558 N.E.2d 583 (1990) (noting, that is the essential purpose of section 12-183 ).

¶ 7 The legal expenses incurred in representing plaintiff were some $58,000, exceeding the judgment. In particular, plaintiff's attorneys claimed a 25% contingency fee lien on the judgment with the rest being litigation expenses.

¶ 8 Plaintiff also received about $23,000 in benefits from the Railroad Retirement Board while he was off work for his May 2006 injury. See 45 U.S.C. § 362(o) (West 2006). In a written letter, plaintiff's attorney requested that the Retirement Board relinquish its lien under section 341.5 of the Code of Federal Regulations (20 CFR 341.5 (eff. Jan. 5, 1984)) (CFR) in light of the pending legal expenses and attorneys fees. Section 341.5 explicitly states the Retirement Board is to be reimbursed by the "damages paid to the employee for the infirmity," but only after subtracting litigation costs, including the attorney-client fee. See also 45 U.S.C. § 362(o) (West 2006). Given the amount due the attorneys in this case, the Retirement Board responded by letter that it would have no claim for reimbursement.

¶ 9 Norfolk Southern, on the other hand, did not relinquish its right to setoff, and the posttrial issue that developed was whether to use the $37,500 judgment as a setoff against Norfolk Southern's advances or to cover the litigation expenses and fees of plaintiff's attorneys. In the first scenario, Norfolk Southern would be able to deduct the $37,500 judgment from its $75,000 advanced, resulting in a loss to Norfolk Southern of $37,500. Plaintiff's attorneys would then be out $67,000. In the second scenario, plaintiff would turn over his $37,500 judgment to his attorneys, resulting in a loss to the attorneys of $20,500 and to Norfolk Southern of $75,000. In either scenario, plaintiff himself wouldn't get any additional funds.

¶ 10 On February 23, 2015, following a hearing in the matter, the trial court granted Norfolk Southern's petition, ruling the railway was entitled to a full credit or to set off of the advances it made to plaintiff up to the amount of the judgment. The court ruled the judgment for $37,500 and costs was fully satisfied and all liens released. Plaintiff filed a motion to reconsider, which was denied.

¶ 11 This appeal followed.

¶ 12 ANALYSIS

¶ 13 Plaintiff now challenges the court's determination. As this case must be analyzed under the guise of FELA, we begin with some background. Congress enacted FELA in 1908 in response to the rising toll of serious injuries and death to railroad workers. Norfolk Southern Railroad Co. v. Sorrell , 549 U.S. 158, 165, 127 S.Ct. 799, 166 L.Ed.2d 638 (2007) ; Harris-Scaggs v. Soo Line Railroad Co. , 2 F.Supp.2d 1179, 1181 (1998). FELA generally provides the exclusive federal tort remedy for railroad employees seeking to

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recover for personal injury sustained in the course of employment. Id . ; Erie Railroad Co. v. Winfield , 244 U.S. 170, 172, 37 S.Ct. 556, 61 L.Ed. 1057 (1917). The Act retains a humanitarian purpose and is to be liberally construed in favor of injured railroad workers in order to accomplish that object. Consolidated Rail Corporation v. Gottshall , 512 U.S. 532, 543, 114 S.Ct. 2396, 129 L.Ed.2d 427 (1994) ; Urie v. Thompson , 337 U.S. 163, 181-82, 69 S.Ct. 1018, 93 L.Ed. 1282 (1949). State and federal courts share concurrent jurisdiction over FELA actions. 45 U.S.C. § 56 (West 2006). Where, as here, a FELA action is adjudicated in state court, it's governed by state procedural law, but federal substantive law. St. Louis Southwestern Railway Co. v. Dickerson , 470 U.S. 409, 411, 105 S.Ct. 1347, 84 L.Ed.2d 303 (1985).

¶ 14 Plaintiff now contends section 12-178(5) of the Code (735 ILCS 5/12-178(5) (West 2006)), mandates that his attorneys be paid first before any other creditor such as Norfolk Southern and argues this is a procedural matter controlled by state law.⁴ Section 12-178 states that "set-off shall not be allowed * * * as to so much of the first judgment as is due to the attorney in that action for his or her fees and disbursements therein." Id . Plaintiff maintains that under this statute, his claim for attorney's fees and expenses should take primacy over any federal provision to the contrary, including section 55 of FELA, which says:

"Any contract, rule, regulation, or device whatsoever, the purpose or intent of which shall be to enable any common carrier to exempt itself from any liability created by this chapter, shall to that extent be void: Provided, That in any action brought against any such common carrier under or by virtue of any of the provisions of this chapter, such common carrier may set off therein any sum it has contributed or paid to any insurance, relief benefit, or indemnity that may have been paid to the injured employee or the person entitled thereto on account of the injury or death for which said action was brought ." 45 U.S.C. § 55 (West 2014) (emphasis added).

¶ 15 In interpreting section 55, Norfolk Southern responds that FELA explicitly grants a federal right to setoff by railroad employers against any judgment obtained by the employee for employer-paid sums towards the injury. State courts therefore must first apply the federal setoff provision in a case like the present. We agree.

¶ 16 Section 55 allows employers to set off money paid to an injured employee because of his injury as long as the employer is not seeking to totally avoid liability. Clark v. Burlington Northern, Inc. , 726 F.2d 448, 451 (1984). The purpose of the FELA setoff provision is to prevent

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the imposition upon an employer of double liability, as the employer need not pay twice for the same damages. Welsh v. Burlington Northern, Inc., Employee Benefits Plan , 54 F.3d 1331, 1337 (1995). It has also long been settled that questions concerning the measure of damages in FELA actions are federal in character. Norfolk & Western Railway Co. v. Liepelt , 444 U.S. 490, 493, 100 S.Ct. 755, 62 L.Ed.2d 689 (1980) ; see also Black's Law Dictionary, 10th ed. 2014 (defining "damages" as "Money claimed by, or ordered to be paid to, a person as compensation for loss or injury."). This is true even if the action is brought in state court given the congressional intent to encourage uniformity between federal and state court FELA cases. Id . 493, n. 5, 100 S.Ct. 755. Moreover, a federal statute, such as FELA, overrides state law when the scope of the statute indicates that Congress intended to "occupy the field" or when the state law is in actual conflict with the federal statute. Starks, III, v. Northeast Illinois Regional Commuter Railroad Corporation , 245 F.Supp.2d...