McNamee v. Federated Equipment & Supply Co., Inc.

• Decision Date: 20 February 1998
• Docket Number: No. 82954,82954
• Citation: 692 N.E.2d 1157,229 Ill.Dec. 946,181 Ill.2d 415
• Parties: , 229 Ill.Dec. 946, Prod.Liab.Rep. (CCH) P 15,239 John McNAMEE, Independent Ex'r of the Estate of Steven McNamee, Deceased, Appellee, v. FEDERATED EQUIPMENT & SUPPLY COMPANY, INC., et al., Appellee (The City of Chicago, Appellant).
• Court: Illinois Supreme Court

Page 1157

692 N.E.2d 1157

181 Ill.2d 415, 229 Ill.Dec. 946,

Prod.Liab.Rep. (CCH) P 15,239

John McNAMEE, Independent Ex'r of the Estate of Steven McNamee, Deceased, Appellee, v. FEDERATED EQUIPMENT & SUPPLY COMPANY, INC., et al., Appellee (The City of Chicago, Appellant).

No. 82954.

Supreme Court of Illinois.

Feb. 20, 1998.

Rehearing Denied March 30, 1998.

[229 Ill.Dec. 947] [181 Ill.2d 416] Anne Berleman Kearney, Assistant Corporation Counsel, Chicago Corporation Counsel, Chicago, for City of Chicago.

Alan S. Zelkowitz, Landau, Omahana & Kopka, Chicago, for Federated Equipment and Supply Company.

James K. Toohey, Ross & Hardies, Chicago, for Deutsche Schlauchboot Fabrik Hans Scheibert GMBH.

Robert P. Sheridan, Chicago, for John McNamee.

John P. Fassola, Kubiesa, Power & Cronin, Ltd., Oakbrook Terrace, for amicus curiae, Illinois Governmental Association of Pools.

Beth Anne Janicki, Illinois Municipal League, Springfield, for amicus curiae, Illinois Municipal League.

Chief Justice FREEMAN delivered the opinion of the court:

In Kotecki v. Cyclops Welding Corp., 146 Ill.2d 155, 166 Ill.Dec. 1, 585 N.E.2d 1023 (1991), this court held that where an injured employee sues a third party who then brings a contribution action against the plaintiff's employer, the third party may obtain contribution from the employer. However, this court limited the contribution to the amount In this case, the question presented for review is whether the Kotecki cap limits a public employer's third-party contribution liability to the amount of benefits paid to an injured firefighter under article XXII, division 3, of the Illinois Pension Code (40 ILCS 5/22-301 et seq. (West 1996)). We hold that it does.

[229 Ill.Dec. 948] of the employer's liability to the employee under the Workers' Compensation Act (820 ILCS 305/1 et seq. (West 1996)). Kotecki involved a private employer.

BACKGROUND

The City of Chicago (the City) moved to dismiss this issue pursuant to section 2-619(a)(9) of the Code of Civil Procedure (735 ILCS 5/2-619(a)(9) (West 1996)). The motion admits all well-pled facts in the complaint and reasonable inferences drawn therefrom. Fireman's Fund Insurance Co. v. SEC Donohue, Inc., 176 Ill.2d 160, 161, 223 Ill.Dec. 424, 679 N.E.2d 1197 (1997).

The several complaints allege the following pertinent facts. In 1993, the Chicago fire department accepted a "Life Cube" from the product's American distributor, defendant Federated Equipment & Supply Company, Inc. (hereinafter, Federated, also referred to in the record as FEDESCO). The Life Cube's German manufacturer, defendant Deutsche Schlauchtboot Fabrik Hans Scheibert GmbH & Company, K.G. (hereinafter, DSB), had placed a German-language label on the product warning that it was to be used solely to catch jumping or falling persons in emergency rescue situations and was not to be used for exercise, training, or sport jumping.

Federated replaced the Life Cube's German-language warning label with a label, in English, warning that the product was to be used exclusively in emergency rescue situations. Federated also provided the fire department with literature containing various product information, instructions, and warnings. One warning repeated that the Life Cube was intended for use solely in emergency rescue operations in which there were no other means of egress and descent.

On November 22, 1993, Steven McNamee (decedent) was a fire department cadet firefighter at the Chicago Fire Academy. As part of a training exercise, decedent was ordered to jump from a height onto the Life Cube. Decedent jumped, but the product failed to properly support him, causing him to be fatally injured.

Decedent's estate eventually filed a fourth-amended complaint in the circuit court of Cook County against DSB, Federated, and other corporations related to Federated. The complaint contains survival and wrongful-death counts, alleging negligence and product liability.

Federated then brought a third-party contribution action against the City, pursuant to the Joint Tortfeasor Contribution Act (Contribution Act) (740 ILCS 100/5 (West 1996)). DSB brought, inter alia, a third-party contribution action against Federated and its related corporations, and the City. We note that DSB and Federated each sought from the City unlimited contribution and, alternatively, contribution limited by the Kotecki cap.

The City moved to dismiss the third-party claims for unlimited contribution. See 735 ILCS 5/2-619(a)(9) (West 1996). Relying on section 22-307 of the Pension Code (40 ILCS 5/22-307 (West 1996)) and Kotecki, the City argued that its contribution liability was limited to the benefits it had provided decedent's estate pursuant to article XXII, division 3, of the Pension Code (40 ILCS 5/22-301 et seq. (West 1996)).

The circuit court denied the City's motion to dismiss, holding that the Kotecki cap did not limit the City's third-party contribution liability to decedent's Pension Code benefits. The circuit court subsequently certified the following question for interlocutory review (see 155 Ill.2d R. 308):

"What limits on liability, if any, are there on the City of Chicago where it is sued as a third party defendant under the Contribution Act [citation], where the City paid and continues to pay benefits pursuant to the Pension Code [citations] to the plaintiff whose decedent was a firefighter."

The appellate court upheld the circuit court. The appellate court held that "there We allowed the City's petition for leave to appeal. 166 Ill.2d R. 315(a). We subsequently granted the Illinois Municipal League and the Illinois Governmental Association of Pools leave to file amicus curiae briefs in support of the City. 155 Ill.2d R. 345. We now reverse the judgments below and remand the cause to the circuit court for further proceedings.

[229 Ill.Dec. 949] are no limits" to the City's third-party contribution liability when a City employee is injured. 286 Ill.App.3d 806, 814, 222 Ill.Dec. 195, 677 N.E.2d 8.

DISCUSSION

The City argues that Pension Code section 22-307 limits its contribution liability to DSB and Federated to the medical and death benefits it provided to decedent's estate. The City contends that section 22-307 must be interpreted in accord with this court's interpretation of the Workers' Compensation Act in Kotecki. Thus, to better understand the certified question for review, we initially discuss the Workers' Compensation Act in relation to the Kotecki decision.

Workers' Compensation Act

Section 5(a) of the Workers' Compensation Act provides in pertinent part:

"No common law or statutory right to recover damages from the employer * * * 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 * * * or any one otherwise entitled to recover damages for such injury." 820 ILCS 305/5(a) (West 1996).

Section 11 of 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 * * * for accidental injuries sustained by any employee arising out of and in the course of the employment according to the provisions of this Act * * *." 820 ILCS 305/11 (West 1996).

This court has explained the purposes of the Workers' Compensation Act as follows:

" '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 and in 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 jurors 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.' " Mitsuuchi v. City of Chicago, 125 Ill.2d 489, 494, 127 Ill.Dec. 1, 532 N.E.2d 830 (1988), quoting Kelsay v. Motorola, Inc., 74 Ill.2d 172, 180-81, 23 Ill.Dec. 559, 384 N.E.2d 353 (1978); see M. Bilandic, Workers' Compensation, Strict Liability, and Contribution in Illinois: A Century of Legal Progress?, 83 Ill. B.J. 292 (1995); 1 T. Angerstein, Illinois Workmen's Compensation §§ 8, 9, 14, 15, 31 (rev. ed.1952); 2 T. Angerstein, Illinois Workmen's Compensation § 951 (rev. ed.1952).

We note that section 5(b) of the Act essentially provides that:

"an employee who has received compensation under the Act is required to reimburse the employer from any recovery the employee receives from a third party legally responsible for the employee's injuries. The obligation is to reimburse for the full amount of benefits paid or payable by the employer and a lien in favor of the employer is provided upon any recovery by the employee for the amount of the benefits. [820 ILCS 305/5(b) (West 1996).] The employee is entitled to retain only that portion of a recovery from the tortfeasor which exceeds the benefits received under the Act from the employer." Ullman v. Wolverine Insurance Co., 48 Ill.2d 1, 7, 269 N.E.2d 295 (1970).

Where an injured employee sues a third party, the plaintiff's employer and the third party have competing interests. Under the Workers' Compensation Act, the employer does not want to pay more than his or her workers' compensation liability. Indeed, the large majority of American jurisdictions do not allow the third party to seek contribution from the employer. Kotecki, 146 Ill.2d at 163, 166 Ill.Dec. 1, 585 N.E.2d 1023; accord 7 A. Larson & L. Larson, Larson's Workers' Compensation Laws §...