Court Opinion

ID: 9719788
Source: CourtListenerOpinion
Date Created: 2023-08-26 08:03:44.109472+00
Date Added: 2024-06-11T18:24:09.972243
License: Public Domain

MR. JUSTICE RYAN, dissenting: I cannot concur in the majority’s decision. I would follow the overwhelming weight of authority which confers immunity upon general contractors when they are required to pay benefits to an employee of an uninsured subcontractor. Virtually every State has included provisions similar to section 1(a)(3) within their workmen’s compensation statutes. (2A A. Larson, The Law of Workmen’s Compensation sec. 72.31, at 14 — 47.) In the vast majority of these jurisdictions, a general contractor is granted immunity from third-party suits when he is treated as the statutory employer and required to pay compensation benefits. (See, e.g., Georgia Power Co. v. Diamond (1973), 130 Ga. App. 268, 202 S.E.2d 704; Lopez-Correa v. Marine Navigation Co. (D.P.R. 1968), 289 F. Supp. 993; see also 2A A. Larson, The Law of Workmen’s Compensation sec. 72.31, at 14—47 n.47, and the cases cited therein.) The reason for this rule is simple fairness. As stated by Professor Larson: “Since the general contractor is thereby, in effect, made the employer for the purposes of the compensation statute, it is obvious that he should enjoy the regular immunity of an employer from third-party suit when the facts are such that he could be made liable for compensation; and the great majority of cases have so held.” 2A A. Larson, The Law of Workmen’s Compensation sec. 72.31, at 14-47. The majority avoids this “obvious” result by concluding that it would encourage the employment of uninsured subcontractors, and by finding a violation of equal protection in the application of the general rule. In my opinion, the first conclusion is merely an unwarranted assumption, while the latter conclusion results from a misinterpretation of the requirements of equal protection of the law. The majority assumes that a grant of immunity in the present cases would reward those contractors who hire uninsured subcontractors, and would, presumably, encourage such a practice. This assumption has vitality only when limited to a consideration of a single injury to a single employee. It is not unreasonable to assume that a general contractor would accept the lesser financial responsibility under the Workmen’s Compensation Act in exchange for immunity from common law and statutory liability in an isolated case. Under the above-mentioned rule, however, the contractor does not exchange immunity from a single personal injury action Tor responsibility for a single compensation claim. Rather, the general contractor is required to accept absolute compensation liability for all injuries of all employees of the uninsured subcontractor in order to gain this immunity. It is, in my opinion, unreasonable to assume that a general contractor would accept absolute liability for all compensation claims in order to gain immunity from the remote possibility of an adverse judgment in a personal injury suit. I, therefore, find little if any justification for the majority’s fear that a contrary decision would lead to the increased hiring of uninsured subcontractors. The true incentive for general contractors to hire insured subcontractors is the potential liability for compensation benefits which results from section 1(a)(3) when uninsured subcontractors are employed. Professor Larson, in fact, has contended that this potential liability is a sufficiently strong incentive to justify the allowance of immunity even when the subcontractor is insured and the general contractor is not called upon to pay compensation benefits. (2A A. Larson, The Law of Workmen’s Compensation sec. 72.31, at 14-55-56.) A significant number of jurisdictions have also taken this approach. (2A A. Larson, The Law of Workmen’s Compensation sec. 72.31, at 14 — 53 n.49, 14 — 55 n.50, and the cases cited therein.) The issue of whether our statute should extend immunity to all general contractors bound by section 1(a)(3) is clearly not present in this case. I do, however, find Professor Larson’s discussion of that issue to be an additional persuasive indication that the majority’s fear of general contractors cloaking themselves with common law immunity in exchange for absolute compensation liability is illusory. Realization of the objective of section 1(a)(3) would not be hindered by interpreting section 5(a) in accordance with the great weight of authority which is contrary to the majority’s position. I also disagree with the majority’s unique holding that to construe section 5(a) as providing immunity to the present defendants would result in a violation of equal protection of the law. I term this holding unique because it appears that we are the first court to adopt such a theory despite the numerous occasions on which the same question has been presented in other jurisdictions. In my opinion, no denial of equal protection would result from construing section 5(a) as granting immunity to general contractors who are treated as statutory employers under section 1(a)(3). The majority relies upon Grasse v. Dealer’s Transport Co. (1952), 412 Ill. 179, to support its finding of a denial of equal protection. In Grasse, we invalidated a provision of the Act (Ill. Rev. Stat. 1947, ch. 48, par. 166) which precluded an injured employee from recovering common law damages from a third-party tortfeasor who was also bound by the Act. Grasse, however, did not involve a general-contractor, job-site-injury situation, and the statute in question did not provide for the payment of compensation benefits by the alleged tortfeasor to the injured employee. 412 Ill. 179, 196. Grasse is readily distinguishable from the present case since the immunity which the defendants seek under section 5(a) is dependent upon the requirement of paying benefits under section 1(a)(3). The difference between Grasse and the instant appeals is that in Grasse the third-party tortfeasor, though generally bound by the Act, was not bound to pay compensation benefits to the injured employee. The statute at issue in Grasse gave the employee nothing in return for the loss of his common law rights. The third-party tortfeasor was not, in short, a statutory employer, and there was, therefore, no rational basis to support the classification which gave him an employer’s immunity. Here, the general contractor is placed in the position of the actual employer for compensation purposes. The same considerations which allow immunity to the immediate employer support a grant of immunity to a general contractor who is required to pay compensation benefits to an employee of an uninsured subcontractor. The classification resulting from such immunity is not arbitrary. The purpose of the Workmen’s Compensation Act is to provide financial support for all employees injured in the course of employment. A nonfault system of compensation was devised in order to eliminate the evil that existed under common law rules whereby the employee was seldom able to recover damages for his injuries. Employers were granted immunity from common law and statutory damage actions in return for the imposition of nonfault liability for compensation benefits. The Workmen’s Compensation Act thus created a quid pro quo which has been consistently upheld as a reasonable exercise of legislative power. Wright v. Central Du Page Hospital Association (1976), 63 Ill. 2d 313, 327; Moushon v. National Garages, Inc. (1956), 9 Ill. 2d 407, 412. It is no more a denial of equal protection to grant such immunity to general contractors bound by section 1(a)(3) than it is to grant immunity to the actual employer. In both cases, the employee benefits by the imposition of nonfault compensation liability upon the party deemed to be the statutory employer. The majority’s example of the two workmen on the beam, though superficially appealing, is, in fact, illustrative of this quid pro quo. The majority implies that the man employed by the uninsured contractor would be arbitrarily deprived of a cause of action by a grant of immunity to the general contractor. What the majority fails to realize is that absent the guarantee of compensation benefits from the general contractor the injured man would in all likelihood recover nothing. As both the majority and I have indicated, workmen’s compensation statutes were enacted to circumvent the common law principles which generally prevented recovery for work-related injuries. If it were not for section 1(a)(3) there would be no assurance that the employee would receive any compensation for his injuries. In exchange for this obvious benefit the employee should forfeit his right to a speculative recovery from the general contractor. It is not unreasonable or arbitrary to require the employee to relinquish his common law rights in return for the guarantee of compensation benefits whether those benefits are to be paid by his actual employer or a general contractor. In my view, there is no constitutional prohibition against interpreting section 5(a) as providing immunity from personal damage actions to general contractors bound by the provisions of section 1(a)(3). I would, therefore, affirm the judgments of the lower courts. MR. JUSTICE CREBS joins in this dissent.