Illinois Construction Worker Entitled to Recover from Settlement and Judgment, But Insurer Entitled to ‘Set Off’

construction workerWhen you are injured in a workplace accident, there are potentially multiple ways to obtain compensation for the damages you suffered. You may be able to win a judgment, or you may choose to settle your case. In cases in which you are suing multiple defendants, you may settle with some defendants and take others to trial. In a recent case decided by the Second District Appellate Court, an injured worker was able to recover compensation from both a settlement and a judgment, but the insurance company obligated to pay the judgment was entitled to a reduction in the amount it owed that was equal to the amount of the settlement the victim struck with the other defendants.

The injured worker in this case was Eric Johnson, who worked for Liberty Bell Electric Company. Johnson was performing construction work for his employer on a project known as the Sundance Saloon when a steel rack fell on him and injured him. Johnson sued several defendants for his injuries, including Rhino Construction and Excavating Company, Inc. In total, Johnson sued 10 defendants. Eventually, Johnson settled with eight of them for $260,000.

Of the two defendants with whom Johnson didn’t settle, Rhino was one. Johnson secured a default judgment against that company. After a hearing on damages, the trial court issued a judgment against Rhino and in favor of Johnson in the amount of $900,000. After securing this judgment, the case proceeded after an insurance company, American Family Mutual Insurance Co., filed an action asking the court to decide whether it had an obligation to defend Rhino. The court decided that it did, and it issued a judgment against American Family in the $900,000 amount.

After the trial court made this ruling, the insurance company asked the court to reduce its amount by $260,000, the amount of the settlement Johnson had reached with the other defendants in his case. American Family argued that allowing Johnson to recover $260,000 from the defendants who settled and $900,000 from it would be improper, since it would mean that Johnson would take in $1.16 million for a case in which his total damages were only $900,000. In opposition, Johnson’s attorney filed a report with the court in which he outlined the damages proved at the default hearing, which he argued were between $1.29 and $2.08 million. Based upon these numbers, allowing Johnson to recover $1.16 million from the settlement and the judgment combined would not constitute an impermissible “double recovery.”

Despite this report, the trial court accepted American Family’s argument and ordered the $260,000 “set off,” or reduction, in the amount the insurer owed. Johnson appealed but was unsuccessful. The worker’s reliance on the report, which reflected that the amount of “provable damages” in the default case ranged from $1.29 to $2.08 million, didn’t work because “provable damages” from the hearing wasn’t the issue. Even though the injured worker may have asked for a damages award in that $1.2-2.1 million range, that’s not what the judge ordered. The trial judge entered an award of damages in the amount of $900,000. As a result, the appeals court decided that the only possible conclusion in this case was that the total damages were $900,000 and that the $260,000 from the settlement and the $900,000 from the judgment were compensation for the same damages. This meant that allowing Johnson the full benefit of both would constitute a double recovery, and the trial court was correct to order the reduction in the amount that American Family owed.

Pursuing your injury case involves may technical and tactical decisions regarding how to pursue your case, including when to settle and against whom. The hardworking Chicago construction accident attorneys at Katz, Friedman, Eagle, Eisenstein, Johnson & Bareck have many years of experience helping injured clients as they pursue recovery for their damages. To set up a free case evaluation, contact us at 800-444-1525 or through our website.

More Blog Posts:

Do Work Related Injuries Have an Impact on Future Earnings?, Chicago Injury Attorneys Blog, Jan. 31, 2016

Four common construction site injuries, Chicago Injury Attorneys Blog, March 22, 2015