Fredericks v. Liberty Mut. Ins. Co.

Decision Date28 January 1994
Docket NumberNo. 5-93-0081,5-93-0081
Citation627 N.E.2d 782,255 Ill.App.3d 1029,194 Ill.Dec. 445
Parties, 194 Ill.Dec. 445 David FREDERICKS, Plaintiff-Appellant, v. LIBERTY MUTUAL INSURANCE CO., and McCarthy Brothers Construction Company, Defendants-Appellees.
CourtUnited States Appellate Court of Illinois

Law Offices of William W. Schooley by William W. Schooley, III, Granite City, for plaintiff-appellant.

Keefe and De Pauli, P.C. by William L. Hanks, Fairview Heights, for defendants-appellees.

Justice CHAPMAN delivered the opinion of the court:

David Fredericks was employed by McCarthy Brothers Construction Company (McCarthy Brothers) as an ironworker on a project to renovate the Eads Bridge which spans the Mississippi River between Illinois and Missouri. Fredericks was injured on the job and brought this action alleging that at a prejob meeting between representatives of various trade unions, including the plaintiff's representatives from Ironworker's Locals 396 and 392 and representatives from McCarthy Brothers Construction Company, a binding contractual agreement was reached providing that any employee injury occurring during McCarthy Brothers' renovation of the bridge would fall within the scope of the Illinois Workers' Compensation Act (the Act) (820 ILCS 305/1 et seq. (West 1992)). Plaintiff alleged that he is a third-party beneficiary of this agreement and that McCarthy Brothers and its insurer, Liberty Mutual Insurance Company, wilfully breached the agreement by refusing to apply the provisions of the Illinois Act to his injury. Plaintiff requested the circuit court to order the defendants to apply the Illinois Act to the plaintiff's injury pursuant to the alleged agreement between plaintiff's union and McCarthy Brothers. Defendants filed a motion to dismiss the complaint based on the exclusivity provision of the Act. The circuit court ruled that it did not have subject matter jurisdiction to hear a dispute involving worker's compensation benefits, and the court granted defendant's motion to dismiss with prejudice. Fredericks appeals. We reverse.

The determinative issue on appeal is whether a common law action alleging a wilful breach of a contractual agreement is barred by the exclusivity provisions of the Illinois Workers' Compensation Act (820 ILCS 305/5(a), 305/11 (West 1992)).

The Act generally provides the exclusive remedy for work-related injuries. Section 5(a) of the Act states, in pertinent part, 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." (Emphasis added.) (820 ILCS 305/5(a) (West 1992).)

The Act further provides in pertinent part:

"The compensation herein provided, together with the provisions of this Act, shall be the measure of the responsibility of any employer engaged in any of the enterprises or businesses enumerated in Section 3 of this Act, or of any employer who is not engaged in any such enterprises or businesses, but who has elected to provide and pay compensation for accidental injuries sustained by any employee arising out of and in the course of the employment according to the provisions of this Act * * *." (Emphasis added.) 820 ILCS 305/11 (West 1992).

It is well established in Illinois that to escape the exclusivity-of-remedy rule, plaintiff must prove the injury (1) was not accidental, (2) did not arise from his or her employment, (3) was not received during the course of employment, or (4) was noncompensable under the Act. (Meerbrey v. Marshall Field & Co. (1990), 139 Ill.2d 455, 463, 151 Ill.Dec. 560, 564, 564 N.E.2d 1222, 1226; Collier v. Wagner Castings Co. (1980), 81 Ill.2d 229, 41 Ill.Dec. 776, 408 N.E.2d 198.) In addition, the broad immunity granted by the exclusive remedy rule may be overcome in actions involving intentional torts by the employer (see Meerbrey v. Marshall Field & Co. (1990), 139 Ill.2d 455, 151 Ill.Dec. 560, 564 N.E.2d 1222) or claims for retaliatory discharge (see Kelsay v. Motorola, Inc. (1978), 74 Ill.2d 172, 23 Ill.Dec. 559, 384 N.E.2d 353). Why are these factual scenarios treated differently than those coming under the exclusive remedy protections of The Act? An examination of cases noting these exceptions provides some insight.

The Illinois Supreme Court has determined that the term "accidental" in the Act is not a technical legal term but encompasses anything that happens without design or an event which is unforeseen by the person to whom it happens. (Meerbrey v. Marshall Field & Co. (1990), 139 Ill.2d 455, 463, 151 Ill.Dec. 560, 564, 564 N.E.2d 1222, 1226.) Thus, one rationale given in support of the rule that claims for intentional torts are not barred by the exclusive remedy provision is that the employer should not be permitted to assert that the injury was "accidental," and therefore fall under the exclusive provisions of the Act, when it intentionally committed the act. (Meerbrey, 139 Ill.2d at 464, 151 Ill.Dec. at 564, 564 N.E.2d at 1226; 2 A. Larson, Law of Workmen's Compensation § 68.11 (1993).) The socially beneficial purpose of the worker's compensation law was not meant to permit a person who commits an intentional tort to use the compensation law as a shield against liability. (Jablonski v. Multack (1978), 63 Ill.App.3d 908, 915, 20 Ill.Dec. 715, 719, 380 N.E.2d 924, 928.) In addition, it has been theorized that because benefits under the Act are paid from employers' premiums as a means of spreading the cost of hazards of the work place, the legislature did not intend that an intentional tortfeasor shift his liability for his acts to such a fund. Jablonski, 63 Ill.App.3d at 915, 20 Ill.Dec. at 719, 380 N.E.2d at 928.

Another exception to the exclusive remedy rule is recognized if an employer takes retaliatory action against employees for availing themselves of benefits under the Workers' Compensation Act. To illustrate, in La Porte v. Jostens, Inc. (1991), 213 Ill.App.3d 1089, 157 Ill.Dec. 745, 572 N.E.2d 1209, a former at-will employee filed suit against her employer alleging that she was discharged because of her work-related injury. The court rejected the defendant's claim that plaintiff's suit was barred by the exclusive remedy provision of the Act. Relying on Kelsay v. Motorola, Inc. (1978), 74 Ill.2d 172, 23 Ill.Dec. 559, 384 N.E.2d 353, the court reasoned,

"Our supreme court held that to allow an employer to terminate an employee for filing a claim would seriously undermine the intended policy of the Workers' Compensation Act to provide employees the protection of prompt and equitable compensation for their injuries." La Porte, 213 Ill.App.3d at 1092, 157 Ill.Dec. at 747, 572 N.E.2d at 1211.

In Kelsay, the supreme court set forth the equities balanced under the Act:

"Pursuant to the statutory scheme implemented by The Act, the employee gave up his common law rights to sue his employer in tort, but recovery for injuries arising out of the course of his employment became automatic without regard to any fault on his part. The employer, who gave up the right to plead the numerous common law defenses, was compelled to pay, but his liability became fixed under a strict and comprehensive statutory scheme, and was not subjected to the sympathies of juries whose compassion for fellow employees often led to high recovery. [Citation.] This trade-off between employer and employee promoted the fundamental purpose of the Act, which was to afford protection to employees by providing them with prompt and equitable compensation for their injuries." (Kelsay, 74 Ill.2d at 180, 23 Ill.Dec. at 562, 384 N.E.2d at 356.)

The court found that to uphold and implement this public policy, a cause of action should exist for retaliatory discharge. Kelsay, 74 Ill.2d at 181, 23 Ill.Dec. at 563, 384 N.E.2d at 357.

To justify the intentional tort and the retaliatory discharge exceptions to the exclusive remedy rule, the courts draw upon the policy reasons behind the Illinois Workers' Compensation Act. It appears the paramount purpose behind the intentional tort exception is to prevent persons who commit intentional torts from using the compensation law as a shield against liability. (See Meerbrey v. Marshall Field & Co. (1990), 139 Ill.2d 455, 151 Ill.Dec. 560, 564 N.E.2d 1222; Jablonski v. Multack (1978), 63 Ill.App.3d 908, 20 Ill.Dec. 715, 380 N.E.2d 924.) The retaliatory discharge exception to the exclusive remedy rule is justified as necessary to curb the potential undermining of the Act's policy to provide employees the protection of prompt and equitable compensation for their injuries. See Kelsay v. Motorola, Inc. (1978), 74 Ill.2d 172, 23 Ill.Dec. 559, 384 N.E.2d 353.

Aside from the policies supporting the recognized exceptions to the exclusive remedy rule, we need to ask whether the legislature's intent as to the statutory scheme at bar supports a common law breach-of-contract-action exception to the exclusivity provision. The starting point for determining legislative intent is the language of the statute itself. (People v. NL Industries (1992), 152 Ill.2d 82, 97, 178 Ill.Dec. 93, 99, 604 N.E.2d 349, 355.) As noted previously, the express language of the Act provides no exception to the exclusive remedy provision. However, the statute does not expressly preclude the operation of the basic tenets of contract law where a worker's compensation claim is involved. With this observation in mind, we turn to the case of Board of...

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