Lake Motor Freight, Inc. v. Randy Trucking, Inc.

• Decision Date: 30 September 1983
• Docket Number: No. 82-2515,82-2515
• Citation: 118 Ill.App.3d 626,74 Ill.Dec. 192,455 N.E.2d 222
• Parties: , 74 Ill.Dec. 192 LAKE MOTOR FREIGHT, INC., a foreign corporation, Plaintiff-Appellant, v. RANDY TRUCKING, INC., an Illinois corporation, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 222

455 N.E.2d 222

118 Ill.App.3d 626, 74 Ill.Dec. 192

LAKE MOTOR FREIGHT, INC., a foreign corporation, Plaintiff-Appellant, v. RANDY TRUCKING, INC., an Illinois corporation, Defendant-Appellee.

No. 82-2515.

Appellate Court of Illinois,

First District, Fifth Division.

Sept. 30, 1983.

Arnold & Hennessy, Chicago (William L. Arnold, Randall F. Peters, Chicago, of counsel), for plaintiff-appellant.

Law Offices of William E. Phillips, Chicago, for defendant-appellee.

LORENZ, Justice:

Plaintiff appeals from a judgment which dismissed its cause of action for contribution from an alleged joint tortfeasor, and we are presented with two questions of law.

1. Can a tortfeasor who settles a claim filed against it by the employee of a third-party obtain contribution from the employer under "An Act in relation to contribution among joint tortfeasors" (the Contribution Act, Ill.Rev.Stat.1981, ch. 70, pars. 301, et seq.) even though the employer is immunized from common law and statutory liability to the employee under section 5(a) of the Workers' Compensation Act (Ill.Rev.Stat.1981, ch. 48, par. 138.5)?

2. Under sections 2(c) and (e) of the Contribution Act (Ill.Rev.Stat.1981, ch. 70, pars. 302(c) and (e)), is it possible for a release given to a named tortfeasor to extinguish the liability of an alleged tortfeasor who is not specifically named in the release?

The answer to the first question is no, and the answer to the second question is yes. We accordingly affirm in part and reverse in part.

The following allegations are taken from the complaint and are material to our decision.

On March 14, 1980, there was a multi-vehicle collision on the Dan Ryan Expressway involving trucks owned and operated by plaintiff (Lake Motor Freight, Inc.) and defendant (Randy Trucking, Inc.). Among the individuals injured by this accident were Martin R. McGovern, an employee of Randy Trucking, and Robert A. Brudnicki, the operator of a third vehicle. Brudnicki and McGovern filed negligence actions against plaintiff, and these claims were settled, respectively, for $7,500 and $24,500.

In settling their claims, Brudnicki and McGovern each signed a release which states, in part, that the sums listed above were paid by plaintiff "to the undersigned and their attorney by or on behalf of all other persons, firms or corporations liable or who might be claimed to be liable or who may have contributed as a cause to any injuries which are the subject matter of this release including Lake Motor Freight, Inc. * * *."

The complaint further alleges that one of the causes of the accident was defendant's negligence, and it seeks recovery "for all amounts paid in settlement above [plaintiff's] pro rata share of liability."

Ruling on a defense motion, the circuit court entered a judgment dismissing the cause of action on the ground that "Lake Motor Freight, Inc., does not have a right of contribution against Randy Trucking, Inc., since the releases executed by Martin McGovern and Robert Brudnicki do not extinguish the liability of Randy Trucking, Inc."

OPINION

Defendant initially argues that it is not liable to plaintiff under the Contribution Act for the settlement with its employee, McGovern, because, by operation of section 5(a) of the Workers' Compensation Act (Ill.Rev.Stat.1981, ch. 48, par. 138.5), it is not "subject to liability in tort" for McGovern's injuries--a precondition to liability under the Contribution Act. (See Ill.Rev.Stat.1981, ch. 70, par. 302(a).) For the reasons given below, we agree with defendant.

When an employee's injury is compensable under the Workers' Compensation Act, section 5(a) of the Act provides that the employee has "[n]o common law or statutory right to recover damages from the employer * * *." (Ill.Rev.Stat.1981, ch. 48, par. 138.5(a).) However, the supreme court held, in Skinner v. Reed-Prentice (1978), 70 Ill.2d 1, 15 Ill.Dec. 829, 374 N.E.2d 437, that when an employee is injured by joint tortfeasors and one of the tortfeasors files an action seeking contribution from the employer, "The fact that the employee's action against the employer is barred by the Workers' Compensation Act (Ill.Rev.Stat.1975, ch. 48, pars. 138.5, 138.11) would not preclude the [joint tortfeasor's] third party action against the employer for indemnification (Miller v. DeWitt (1967), 37 Ill.2d 273, 226 N.E.2d 630) and should not serve to bar its action for contribution." 70 Ill.2d 1, 15-16, 15 Ill.Dec. 829, 374 N.E.2d 437.

The General Assembly enacted the Contribution Act after Skinner was decided (P.A. 81-601; 1979 Ill. Laws 2347), and section 2(a) of the Act provides a right of contribution only in cases "where 2 or more persons are subject to liability in tort arising out of the same injury to person or property, or the same wrongful death * * *." (Ill.Rev.Stat.1981, ch. 70, par. 302(a).) Therefore, when an alleged tortfeasor settles a claim, the claimant's employer is not subject to liability under the Contribution Act unless the employer is "subject to liability [to the employee] in tort." Ill.Rev.Stat.1981, ch. 70, par. 302(a).

We find that when an injury is compensable under the Workers' Compensation Act, the employer is not "subject to liability in tort" for the employee's injury, and the employer is not liable for contribution under the Contribution Act. Not only does section 5(a) of the Workers' Compensation Act immunize an employer from common law and statutory liability for injuries which are covered by the Act, but when an injured employee seeks compensation under the Act, "The liability of the employer, instead of being a liability in tort, is a liability imposed by law, and is rather in the nature of an implied contract by reason of the relation of the parties or the existence of an obligation or duty." (Keller v. Industrial Commission (1932), 350 Ill. 390, 397, 183 N.E. 237.) In other words, as a result of this "statutory duty--this obligation imposed by law--there was implied in law a promise to perform it which was contractual in its nature." 350 Ill. 390, 398, 183 N.E. 237.

Since section 5(a) immunizes an employer from common law and statutory liability for a compensable injury, and proceedings under the Workers' Compensation Act are "contractual in its nature" (350 Ill. 390, 398), an employer is not "subject to liability in tort" for compensable injuries, and in such cases there is no right to contribution against an employer under the Contribution Act. Although the Illinois Contribution Act "makes no reference to the Skinner problem [of contribution against an employer for a compensable injury] its language clearly does not support contribution on the Skinner facts. It authorizes contribution where two or more persons are subject to liability in tort arising out of the same injury." (2A A. Larson, The Law of Workmen's Compensation (1982), § 76.39, at 14-624.) It therefore appears that the Contribution Act was intended to modify what has been called the Skinner decision's "almost complete failure to give any weight to the component of exclusiveness of the compensation remedy." (2A A. Larson, The Law of Workmen's Compensation (1982), § 76.39, at 14-625.) See also D. Horan, "Contribution in Illinois: Skinner v. Reed-Prentice and Senate Bill 308" (1980), 61 Chi.Bar Rec. 331, 332.

Our decision on this issue is reinforced by rulings in other jurisdictions. Section 2(a) of the Illinois Contribution Act is patterned on section 1(a) of the Uniform Contribution Among Tortfeasors Act (the "Uniform Contribution Act") which provides for contribution "where two or more persons become jointly or severally liable in tort for the same injury * * *." (Uniform Contribution Act (U.L.A.) (1955 version) § 1(a) (emphasis added).) The drafters of the Uniform Contribution Act acknowledged that, "the language used [in section 1(a), taken from the 1939 version of the Uniform Contribution Act] has been adequate to exclude cases where the person from whom contribution is sought was not liable to the injured person." 12 U.L.A., Civil Proc. & Rem. Laws (Master ed. 1975), Commissioners' Comment, at 64.

Furthermore, the nearly uniform rule is that an employer is not subject to contribution when an injury is covered by a Workers' Compensation Act and contribution is sought under a law which is patterned on the Uniform Contribution Act. Firestone Tire & Rubber Co. v. Thompson Aircraft Co. (Fla.App., 1978), 353 So.2d 137, 139, aff'd 382 So.2d 878. See e.g., Cacchillo v. H. Leach Machinery Co. (1973), 111 R.I. 593, 305 A.2d 541, 543; Diamond State Telephone Co. v. University of Delaware (Del.1970), 269 A.2d 52, 55; Baltimore Transit Co. v. State, to Use of Schriefer (1944), 183 Md. 674, 39 A.2d 858, 860. See also M. Purcell, "The Effect of Workers' Compensation Laws on the Right of a Third Party Liable to an Injured Employee to Recover Contribution or Indemnity From the Employer" 9 Seton Hall L. Rev. (1978), 238, 264.

Plaintiff argues that an employer would be unjustly enriched if it could recoup its compensation payments from the amount its employee recovers by settling a claim against a joint tortfeasor (see Ill.Rev.Stat.1981, ch. 48, par. 138.5) while, at the same time, using its immunity from common law and statutory liability to avoid having to pay its pro rata share of the settlement paid to its employee.

We agree that,

"The fact than an employer is allowed to avoid further liability may seem unfair to some, but the unfairness lives not in the law of contribution, but in the policy underlying the Workmen's Compensation Act, which provides strict liability and specialized benefits for all injuries to insured employees." Cacchillo v. H. Leach Machinery Co. (1973), 111 R.I. 593, 597, 305 A.2d 541.

Plaintiff also points out that in Doyle v. Rhodes (1982), 109 Ill.App.3d 590, 65 Ill.Dec. 40, 440 N.E.2d 895 (petition for leave to appeal allowed, January Term 1983, Docket Nos. 57540, 57554), the second district held that,...