Roberts v. Burdick

2021 IL App (5th) 190119

190 N.E.3d 261

454 Ill.Dec. 661

Britton L. ROBERTS, Plaintiff-Appellee and Cross-Appellant,

v.Edward Lee BURDICK and GDL Transport, Inc., Defendants

(State Employees’ Retirement System, Intervenor-Appellant and Cross-Appellee; The Department of Central Management Services, Intervenor and Cross-Appellee).

NO. 5-19-0119

Appellate Court of Illinois, Fifth District.

August 18, 2021

Kwame Raoul, Attorney General, of Chicago (Jane Elinor Notz, Solicitor General, and Richard S. Huszagh, Assistant Attorney General, of counsel), for appellant.

John Womick, of Womick Law Firm, Chtrd., of Carbondale, for appellee.

JUSTICE CATES delivered the judgment of the court, with opinion.

¶ 1 Plaintiff, Britton L. Roberts, brought suit against the defendants, Edward Lee Burdick and GDL Transport, Inc., for injuries Roberts sustained as a result of a motor vehicle accident. Roberts settled his claim against the defendants and brought a petition to adjudicate liens held by the Department of Central Management Services (CMS) and the State Employees’ Retirement System (SERS). SERS intervened, seeking to establish its right to reimbursement and a lien against the personal injury settlement proceeds for occupational disability benefits and retirement account contributions it made to, and on behalf of, Roberts. In adjudicating the liens, the circuit court of Union County entered an order reducing SERS's right to reimbursement by $150,000, to account for funds Roberts transferred to his ex-spouse pursuant to an order entered in his dissolution proceeding. SERS appeals the circuit court's order reducing SERS's reimbursement rights. Roberts cross-appeals asserting the circuit court erred by failing to find that SERS consented to the reduction of its lien rights and by failing to order any offsets of disability benefits taken by SERS to be backdated to the date of injury. We reverse in part and affirm in part.

¶ 2 BACKGROUND

¶ 3 On April 10, 2013, Roberts was injured in a motor vehicle accident while performing road maintenance for his employer, the Department of Transportation. The vehicle Roberts was driving was struck by a semi-trailer truck being driven by Burdick in the course of his employment with GDL Transport, Inc.

¶ 4 On April 19, 2013, CMS began paying Roberts temporary total disability (TTD) workers’ compensation benefits as a result of his injuries. Roberts's TTD benefits were equal to 66.66% of his average weekly wage. See 820 ILCS 305/8(b) (West 2012). That same date, SERS also began paying Roberts occupational disability benefits and making contributions to Roberts's state funded retirement account. As a State employee, Roberts was entitled to receive occupational disability benefits equal to 75% of his salary or average final compensation for the work-related injury. See 40 ILCS 5/14-123 (West 2012). In this case, Roberts was entitled to receive $3345 in monthly occupational disability benefits or 75% of his salary. Pursuant to section 14-129 of the Illinois Pension Code ( 40 ILCS 5/14-129 (West 2012) ), the SERS monthly occupational disability benefit obligation was offset by the amount of workers’ compensation benefits being paid to Roberts by CMS.¹ As such, Roberts began receiving $2973.06 in TTD benefits from CMS and $371.94 in occupational disability benefits from SERS, for a total of $3345 in monthly disability benefits. SERS also began contributing $379.10 to the retirement program on Roberts's behalf.

¶ 5 On February 27, 2015, Roberts filed suit in Union County against the defendants seeking recovery for his personal injuries. Roberts notified CMS, but not SERS, of his suit against the defendants. On March 20, 2015, the defendants removed the case to the federal district court for the Southern District of Illinois.

¶ 6 On April 6, 2015, Assistant Attorney General Paul Kmett, counsel for CMS, sent a notice of lien to Timothy Denny, Roberts's counsel, and to the defendants. The notice provided that CMS was claiming a lien pursuant to section 5(b) of the Workers’ Compensation Act (Act) ( 820 ILCS 305/5(b) (West 2012)) against the proceeds of any amounts Roberts recovered from the defendants for personal injuries arising from the April 10, 2013, accident.

¶ 7 On June 15, 2015, SERS sent Roberts and Denny a letter indicating SERS had received notice of a proposed settlement of Roberts's workers’ compensation case with CMS for $149,999. SERS indicated that, after deduction of attorney fees, costs, and future medical expenses, SERS would offset Roberts's future occupational disability benefits by $119,815.46, or $2676.01 per month for approximately 3½ years. On August 14, 2015, Roberts settled his workers’ compensation case with CMS for a lump-sum permanent partial disability (PPD) benefit payment of $149,999.

¶ 8 On March 10, 2016, Denny informed Kmett that the personal injury case was scheduled for a settlement conference on March 16, 2016. On March 16, 2016, a federal magistrate conducted a settlement conference between Roberts and the defendants. Kmett also attended the conference, at which time he provided an updated lien amount for CMS and advised the parties that CMS's lien was nonnegotiable. At the conference, Denny further informed Kmett of the possibility that SERS had a lien on any of the proceeds from the settlement. Prior to that time, Kmett was unaware of a possible interest held by SERS and had not held himself out to Roberts or Denny as representing SERS. After the conference, Kmett contacted SERS and informed it of the pendency of the personal injury case. Kmett believed this was SERS's first notice of the existence of the third-party proceeding. SERS subsequently contacted the Attorney General's office and requested representation, and Assistant Attorney General Josue Barba was assigned to represent SERS.

¶ 9 On April 8, 2016, Denny e-mailed Kmett requesting the "final work comp lien amount." Kmett responded later that day and attached two spreadsheets to the e-mail. The first attachment, titled "CMS Lien Calculation for Employee Britton Roberts," was an itemized list of expenditures made by CMS in relation to the accident demonstrating that CMS had expended $258,248.93 in medical payments and disability benefits. The second spreadsheet, titled "SERS Lien Calculation for Employee Britton Roberts," was an itemized list of monthly disability payments and retirement contributions made by SERS to, and on behalf of, Roberts. The spreadsheet indicated that SERS had made a total of $28,586.82 in disability and contributions between April 29, 2013, and March 17, 2016. In the body of the e-mail, Kmett stated:

"The CMS lien is not final due to one medical bill for $577.00. Please see the attached spreadsheet. The SERS lien is also not final since Mr. Roberts is still on disability. I am sure you would like to disburse settlement funds to your client, which I am okay with, as long as you hold enough money to cover lien amounts."

Kmett carbon copied Barba on the e-mail.

¶ 10 On April 20, 2016, Roberts settled his personal injury claim against the defendants for $625,000. In the settlement agreement, Roberts agreed to satisfy "any and all applicable subrogation interests or liens, including but not limited to workers’ compensation liens." Paragraph 18 of the agreement provided that, pursuant to section 5(b) of the Act ( 820 ILCS 305/5(b) (West 2012)), Roberts "must reimburse the State of Illinois $192,313.23 representing the amount to which the State of Illinois is entitled to Workers’ Compensation Benefits previously paid to, or on behalf of," Roberts. The settlement agreement was signed only by Roberts. Following Roberts's execution of the settlement agreement, Denny, Kmett, and Barba attempted to reach a settlement on the agencies’ liens, but these attempts were unsuccessful.

¶ 11 On May 4, 2016, Roberts filed in the federal court a motion for declaratory judgment and/or petition to adjudicate the liens of the State of Illinois. On May 13, 2016, the federal court denied the motion without prejudice, finding the motion was incomplete and undeveloped as to the procedural rules and mechanisms for adding the State of Illinois to the proceeding and the court's jurisdiction. On May 19, 2016, the defendants issued payment of the settlement funds, satisfying their obligations under the terms of the settlement agreement.

¶ 12 On June 3, 2016, Roberts filed an amended motion for declaratory judgment and/or petition to adjudicate the statutory liens in the federal court action. On June 27, 2016, CMS and SERS each filed a motion to intervene in the federal court proceedings. On July 1, 2016, the defendants filed a motion to dismiss, requesting that they be dismissed from the case.

¶ 13 On July 29, 2016, the federal district court judge conducted a telephone conference on the motion to dismiss the defendants and the motions to intervene filed by the state agencies. The conference was attended by counsel for the parties and the state agencies. During the conference, the court stated that at the time of the March 2016 settlement conference, "everyone was aware that [CMS and SERS] held liens on some of the funds *** as part of any recovery in the case because Roberts received both pension—or maybe disability payments—as well as workers’ compensation benefits from the State of Illinois after the accident." The defendants requested that they be dismissed from the case because they had transferred the settlement funds to Roberts and, pursuant to the terms of the settlement agreement, Roberts was responsible for satisfying any and all liens. Denny agreed, indicating that the amount of CMS's lien would remain "in trust pending the outcome of this issue" and that "the state retirement lien mostly will be what they want to take as an offset going forward, not money that will have to be paid to them at this point." The court asked if there was any objection to the dismissal of the defendants, and when no objection was made, the...