Court Opinion

ID: 7016836
Source: CourtListenerOpinion
Date Created: 2022-07-24 04:23:44.276121+00
Date Added: 2024-06-11T16:10:25.589631
License: Public Domain

Mr. PRESIDING JUSTICE RECHENMACHER, dissenting: I respectfully dissent from the opinion of the majority. The opinion is bottomed squarely on the Ullman case and adopts its reasoning, disregarding the fact that the acknowledged basis of the Ullman case is missing from the case before us. : It is at once apparent in reading the Ullman case that it is based on the interaction between the workmen’s compensation subrogation provision and the insurance company’s policy provision reducing its liability under uninsured motorist coverage by the amount paid to the insured under workmen’s compensation law. The Ullman opinion sets out the insurance company’s position as follows: “Wolverine, in defense, says that the provision in its policy permitting the deduction of workmen’s compensation benefits does not reduce the amount of protection, financially considered, that would have been provided had the decedent been killed by an insured motorist who had met the minimum requirements of the Financial Responsibility Law by having *10,000 liability coverage. This results because any recovery the plaintiff would have received because of the negligence of an insured motorist would have been subject to the subrogation claims of the employer of the decedent for workmen’s compensation benefits paid. Therefore, here, Wolverine points out, a full recovery of *10,000 from a motorist would have been more than offset by the subrogation claims of the employer in the amount of *14,000.” 48 Ill. 2d 1, 3-4. The Ullman court adopts this reasoning, on page 7, saying: “In Illinois, if the deduction challenged here is permitted, the employee’s position is the same under the uninsured motorist’s coverage as it would be had the tortfeasor carried the minimum insurance. Where the tortfeasor is insured, the employee reimburses his employer in full from the recovery from the tortfeasor. Where the tortfeasor is uninsured, the benefits paid by the employer are deducted from the recovery.” 48 Ill. 2d 1, 7. Thus, the court in Ullman obviously felt it was faced with the prospect of invalidating the insurance company’s reduction of liability provision, without in effect benefiting the insured. Provisions such as that of the insurance carrier in the Ullman case, reducing the company’s liability by the amount of recovery received from another source, are not an attempt to reduce the company’s liability so much as a wish to avoid paying someone else’s claim. That is to say, where another party is liable, but has in turn exacted a subrogation right from its claimant, the insurance company, in its turn, feels justified in protecting itself by specifically avoiding the effect of the subrogation clause in the other transaction, by inserting a provision to that effect in its contract. Thus the provision involved in Ullman has become a standard part of many insurance policies to be invoked in cases where otherwise the insurance company would, in effect, be paying another person’s legal liability under the doctrine of subrogation. So viewed, the insurance company’s policy provision here involved is defensive in character and is not against public policy because in most instances it takes nothing from the public. But where the insured and the workmen’s compensation carrier or the employer have agreed that as part of their settlement with the injured employee, subrogation shall not be invoked against the employee, the basis of the Ullman decision disappears. Had the Ullman case merely held that regardless of any other consideration, the insurance company’s provision reducing its liability by the amount of workmen’s compensation benefits received, was a contractual limitation which must be enforced under contract law, we would have an entirely different legal situation. It would then not be a public policy question, but an ordinary case of enforcing the provisions of a contract. But, the background of the uninsured motorist coverage precluded such a narrow view. The coverage is required by statute and is obviously a public policy provision. The question that arose in the Ullman case, therefore, was decided on grounds of public policy and not merely as a matter of contract. The question was whether the policy provision reducing liability under such coverage below the statutory limits was in derogation of the announced public policy of protecting the public to a certain extent against the carelessness of uninsured motorists. The Supreme Court in answering the question in the negative was clearly influenced by the fact that the insured could not collect more than the workmen’s compensation award in any event, since anything the insured collected from the insurance company under the uninsured motorist coverage would go back to the workmen’s compensation carrier under its subrogation clause. It must be borne in mind that this case was decided on the pleadings, strictly on the basis of the Ullman case. Any significant difference between that case and the present one removes the necessity for following the Ullman case as a precedent. The majority opinion here, in summarizing the Ullman case, says: “ ° ° ° The majority concluded that if the deduction challenged were permitted, that the employee’s position would in fact be the same under the policy as where the tortfeasor carried minimum insurance. In such a case, if the injured employee recovered any money damages from a minimally insured tortfeasor he would be •required to fully reimburse the Workmen’s Compensation carrier to the extent of the *10,000 recovery. The effect is a wash of the funds through the employee’s hands and of no benefit to him. This has the same effect upon the injured employee as if the uninsured motorist coverage ‘Limits of Liability’ provision were enforced. Therefore, the court held that the provision in question did not violate public policy.” The majority opinion, however, after thus summing up the rationale of the Ullman case, in the next paragraph totally ignores the reason why the Supreme Court held as it did and states that since the court held the policy provision reducing its liability to be enforceable, there exists no right of subrogation against the insurance proceeds and therefore the question of waiver of the workmen’s compensation carrier’s right of subrogation is meaningless. In this reasoning I feel that the majority opinion is arguing in a circle, because it assumes the very thing to be decided — that the insurance company’s policy provision is not under any circumstances against public policy. Until we decide that we cannot say there is nothing for the workmen’s compensation carrier to be subrogated to. The Supreme Court did not so hold. It simply held that because of the effect of the subrogation clause of the workmen’s compensation statute, the policy provision in question was not against public policy. This much is clear from the majority opinion in the instant case quoted above. Thus, to ignore the subrogation provision of the workmen’s compensation statute is to ignore the relationship between it and the insurance policy provision in question, which relationship is, according to the majority opinion, the nub of the Ullman opinion. If, indeed, the majority opinion rests on the arbitrary holding that the provision reducing the insurance carrier’s liability is a matter of contract and enforceable without regard to public policy considerations, a couple of sentences would have sufficed for the opinion because on that basis there was nothing to be subrogated — the insurance company had no liability and nothing more need be said than that. Obviously, the majority opinion here, in explaining the rationale of the Ullman case, avoids this position and relates the Ullman decision to the effect of the subrogation clause in the workmen’s compensation statute. In so doing it opens the question raised by the waiver of that clause by the workmen’s compensation carrier, which clearly affects the present decision. The question of double recovery raised in the Ullman opinion and referred to by the majority in the case before us, is not in issue here. It is logical to assume that the injured employee gave up something for the waiver of subrogation by the workmen’s compensation carrier and the injuries may well have been more than he received in benefits. But, if he did strike a bargain with the workmen’s compensation carrier, he did not get the benefit of it — only the insurance company benefited. As Justice Ward remarked in his dissenting opinion in the Ullman case, “ ° ° ° What concerns me is the implicit construction by the majority that the legislature intended to permit an insurance carrier, by restricting its liability, as here, to financially advantage itself by the fortuitous circumstance that its insured when killed or injured was within the protection of the Workmen’s Compensation Act.” 48 Ill. 2d 1, 11. This comment applies with peculiar force to the circumstances of the case before us. I would reverse the trial court’s order dismissing the complaint.