Supreme Court Summaries
Opinions filed August 9, 2007
No. 103522 Gallagher v. Lenart
Appellate citation: 367 Ill. App. 3d 293.
JUSTICE GARMAN delivered the judgment of the court, with opinion.
Justices Freeman, Fitzgerald, Kilbride, and Karmeier concurred in the judgment and opinion.
Chief Justice Thomas specially concurred, with opinion.
Justice Burke took no part in the decision.
In 2001, James Gallagher, the driver of a truck for Rail Terminal Services, was injured in a
collision with another vehicle being driven for Pacella Trucking Express. Gallagher and his wife
filed a negligence action against the driver of that other vehicle and his employer, and, ultimately,
obtained recovery by a settlement without a trial.
Meanwhile, Gallagher had received workers’ compensation benefits from his employer, Rail
Terminal. In this situation, the law allows an “employer’s lien” on the proceeds of the other
recovery obtained by the employee. Rail Terminal tried to assert such a claim on part of the tort
settlement proceeds, but the circuit court of Cook County held that the lien had been waived
pursuant to documents settling the workers’ compensation claim.
In this decision, the Illinois Supreme Court agreed with the appellate court that there had been
no waiver. Two documents were executed by the parties, but the employer’s lien was never
mentioned. The supreme court refused to hold that an employer who is contracting for settlement
of a workers’ compensation claim must specifically reserve the right to its lien in order to
preclude a waiver of it. The court held that, as a matter of contract law, the documents signed by
the parties here did not effectuate such a waiver.
The supreme court affirmed the appellate court’s judgment, which had remanded the cause to
the circuit court. Other issues, such as the validity of the allocation of the tort settlement proceeds
between Gallagher and his wife, remain to be considered.
http://www.state.il.us/court/Opinions/SupremeCourt/2007/August/Summaries/103522s.htm9/25/2007 3:50:47 PM