W. Bend Mut. Ins. Co. v. TRRS Corp.
| Decision Date | 01 March 2019 |
| Docket Number | Nos. 2-18-0934 & 2-18-1009 cons.,s. 2-18-0934 & 2-18-1009 cons. |
| Citation | 440 Ill.Dec. 421,153 N.E.3d 997,2019 IL App (2d) 180934 |
| Parties | WEST BEND MUTUAL INSURANCE COMPANY, Plaintiff-Appellee, v. TRRS CORPORATION, Commercial Tire Services, Inc., and Gary Bernardino, Defendants (Gary Bernardino, Defendant-Appellant). |
| Court | United States Appellate Court of Illinois |
Robert T. Edens, of Robert T. Edens, P.C., of Antioch, for appellant.
Thomas F. Lucas and Kristin D. Tauras, of McKenna Storer, of Chicago, for appellee.
¶ 1 This consolidated interlocutory appeal concerns the propriety of a circuit court's order staying the proceedings on a claim filed before the Illinois Workers' Compensation Commission (IWCC). Plaintiff, West Bend Mutual Insurance Company (West Bend), filed a declaratory judgment action in the circuit court of McHenry County, seeking a ruling that it had no duty to defend or indemnify defendants TRRS Corporation (TRRS) and Commercial Tire Services, Inc. (Commercial Tire), against an IWCC claim filed by defendant Gary Bernardino. Shortly thereafter, West Bend filed an emergency motion in the circuit court, requesting a stay of the IWCC proceedings pending the resolution of the declaratory judgment action. Relying on the doctrine of primary jurisdiction, and over Bernardino's objection, the circuit court granted West Bend's motion and entered an order staying the IWCC proceedings. Pursuant to Illinois Supreme Court Rule 307(a)(1) (eff. Nov. 1, 2017), Bernardino filed an interlocutory appeal in case No. 2-18-0934. Bernardino subsequently filed a motion to vacate the circuit court's stay order. When the circuit court continued the hearing on the motion, Bernardino filed another Rule 307(a)(1) interlocutory appeal in case No. 2-18-1009. We granted Bernardino's motion to consolidate the two appeals. We now reverse the circuit court's stay order in appeal No. 2-18-0934, and we dismiss appeal No. 2-18-1009 for lack of jurisdiction.1
¶ 3 The record reflects that Bernardino sustained an injury from a forklift accident in April 2017, during the course of his employment with TRRS and Commercial Tire (collectively the employers), which required him to undergo rotator cuff surgery. The accident occurred at the employers' facility located in Lake in the Hills, one of several such facilities that the employers operated throughout the state. According to West Bend, the employers chose to cover Bernardino's lost wages and medical expenses relating to his surgery without ever reporting the injury to West Bend. However, Bernardino later learned that he needed a follow-up surgery, prompting him to file an "Application for Adjustment of Claim" in the IWCC on March 29, 2018. More than five months later, on September 12, 2018, Bernardino filed a petition before the IWCC for an immediate hearing under section 19(b) of the Workers' Compensation Act (Act) ( 820 ILCS 305/19(b) (West 2016) ) and for penalties for unreasonable and vexatious delay under sections 16 and 19(k) of the Act (id. §§ 16, 19(k) ).
¶ 4 On October 2, 2018, West Bend filed a complaint for declaratory judgment in the circuit court of McHenry County. The employers and Bernardino were each named as defendants. West Bend alleged that it had written a workers' compensation insurance policy for the employers that would have covered Bernardino's IWCC claim if the employers had not violated the terms of the policy. West Bend alleged that, by failing to provide proper notice of Bernardino's injury and paying for the expenses related to the first surgery, the employers voluntarily decided to forgo coverage. Accordingly, West Bend sought a declaration that it had no duty to defend or indemnify the employers in connection with Bernardino's IWCC claim.
¶ 5 On October 5, 2018, the IWCC scheduled a hearing on Bernardino's petition, to take place on November 19, 2018. However, on October 9, 2018, West Bend filed an emergency motion in the circuit court to stay the IWCC proceedings until the declaratory judgment action was resolved. On October 12, 2018, before Bernardino filed a response and apparently without Bernardino's counsel present, the circuit court granted West Bend's emergency motion to stay the IWCC proceedings.
¶ 6 On October 25, 2018, Bernardino filed an emergency motion in the circuit court to vacate the stay order, arguing that the IWCC was the proper venue for a ruling on the coverage issue raised in West Bend's declaratory judgment action. West Bend filed a response relying largely on Employers Mutual Cos. v. Skilling , 163 Ill. 2d 284, 206 Ill.Dec. 110, 644 N.E.2d 1163 (1994), and Hastings Mutual Insurance Co. v. Ultimate Backyard, LLC , 2012 IL App (1st) 101751, 358 Ill.Dec. 585, 965 N.E.2d 656. West Bend argued that, pursuant to Skilling , the circuit court had primary jurisdiction to rule on the legal issues raised in the declaratory judgment action. Furthermore, West Bend argued, Ultimate Backyard established that the circuit court should stay the IWCC proceedings until such a ruling was entered. In his reply, Bernardino asserted for the first time that West Bend's declaratory judgment action might be rendered moot, as he had reason to believe that the policy in question did not provide any coverage for the employers' Lake in the Hills location.
¶ 7 On November 1, 2018, the circuit court conducted a hearing and explained at the outset that it was vacating the stay order for the purpose of considering the arguments raised by Bernardino and West Bend. The court rejected Bernardino's argument that the IWCC was the proper venue for West Bend's insurance coverage dispute. Thus, the court ruled as follows:
The court proceeded to enter an order granting West Bend's emergency motion to stay the IWCC proceedings and scheduling a hearing for January 7, 2019, for status on the completion of written discovery.
¶ 8 On November 6, 2018, Bernardino filed a motion in the circuit court to vacate the stay order dated November 1, 2018. Aside from arguing that the stay was altogether improper, Bernardino stressed his theory that the late notice issue raised by West Bend was moot because the disputed policy did not cover the employers' Lake in the Hills location. Bernardino observed that, although the policy covered the employers' other Illinois locations, it did not specifically list the Lake in the Hills location. Bernardino argued that, at the very least, the stay should be "limited to the issue of determination of coverage based on notice, specifically [authorizing] the IWCC to make threshold determinations regarding the existence of coverage, but not to make findings of fact regarding notice being given to [West Bend]."
¶ 9 On November 8, 2018, Bernardino filed his notice of a Rule 307(a)(1) interlocutory appeal from the stay order dated November 1, 2018, in appellate case No. 2-18-0934.
¶ 10 Also on November 8, 2018, the circuit court conducted a hearing on Bernardino's motion to vacate the stay order dated November 1, 2018. West Bend refuted Bernardino's theory and maintained that, but for the late notice, coverage would indeed apply based on the "Locations" provision in the policy, which established that it applied to each of the employers' locations in Illinois. Undeterred, Bernardino asserted that he anticipated obtaining a certificate from the National Council on Compensation Insurance (NCCI), stating that its database contained no record of insurance being provided for the work site where he was injured. Bernardino argued that this would violate certain technical requirements under the Act for establishing the existence of insurance coverage and asserted that the issue should be decided by the IWCC. The court noted the conundrum of West Bend contesting an opponent's argument that furthered West Bend's own interests. The court indicated that, even if Bernardino obtained the aforementioned certificate, greater weight would likely be given to West Bend's position; i.e. , if West Bend did not prevail on its argument regarding the late notice, then coverage would indeed apply. The court was also reluctant to limit the terms of the stay, per Bernardino's alternative request, reasoning that West Bend would be placed "in limbo" if the IWCC proceedings continued before there was a ruling on the issue of coverage. The court decided that it was appropriate to continue Bernardino's motion to vacate the stay order dated November 1, 2018, stating as follows:
¶ 11 On December 10, 2018, Bernardino filed his notice of a Rule 307(a)(1) interlocutory appeal from the continuance order dated November 8, 2018, in appellate case No. 2-18-1009. On December 12, 2018, Bernardino filed a motion to consolidate the two appeals, which we granted.
¶ 13 We begin with our independent duty to examine our own jurisdiction. State Farm Mutual Automobile Insurance Co. v. Hayek , 349 Ill. App. 3d 890, 892, 286 Ill.Dec. 20, 812 N.E.2d 1035 (2004). Rule 307(a)(1) provides that an appeal may be taken from an interlocutory order "granting, modifying, refusing, dissolving, or refusing to dissolve or modify an injunction." Ill. S. Ct. R. 307(a)(1) (eff. Nov. 1, 2017). Our supreme...
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W. Bend Mut. Ins. Co. v. TRRS Corp.
...656, that relied on the primary jurisdiction doctrine to direct the circuit court to enter an order staying an IWCC proceeding. 2019 IL App (2d) 180934, ¶ 29, 440 Ill.Dec. 421, 153 N.E.3d 997. Accordingly, the appellate court reversed the circuit court's stay order in this case and remanded......