{ "id": 5396489, "name": "Ernest C. Erickson, d/b/a Carl E. Erickson Company, Plaintiff-Appellee, v. Bituminous Casualty Corporation, Defendant-Appellant", "name_abbreviation": "Erickson v. Bituminous Casualty Corp.", "decision_date": "1973-02-01", "docket_number": "No. 56561", "first_page": "19", "last_page": "23", "citations": [ { "type": "official", "cite": "10 Ill. App. 3d 19" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "192 F.Supp. 574", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 1420897 ], "opinion_index": 0, "case_paths": [ "/f-supp/192/0574-01" ] }, { "cite": "231 N.E.2d 112", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "87 Ill.App.2d 432", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 2548012 ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/87/0432-01" ] }, { "cite": "184 N.E.2d 882", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "25 Ill.2d 241", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5352660 ], "opinion_index": 0, "case_paths": [ "/ill-2d/25/0241-01" ] }, { "cite": "273 N.E.2d 505", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "133 Ill.App.2d 655", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 2474723 ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/133/0655-01" ] }, { "cite": "251 N.E.2d 65", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1971, "opinion_index": 0 }, { "cite": "113 Ill.App.2d 423", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 1589981 ], "year": 1971, "opinion_index": 0, "case_paths": [ "/ill-app-2d/113/0423-01" ] } ], "analysis": { "cardinality": 501, "char_count": 10580, "ocr_confidence": 0.753, "pagerank": { "raw": 6.087085966315723e-08, "percentile": 0.37798999092225066 }, "sha256": "3af3a3e6eae662d0e74fbac5ff372be4f932ce9894478ce6c330059d8229c211", "simhash": "1:63ed6cc5b0264676", "word_count": 1680 }, "last_updated": "2023-07-14T20:49:00.166365+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "Ernest C. Erickson, d/b/a Carl E. Erickson Company, Plaintiff-Appellee, v. Bituminous Casualty Corporation, Defendant-Appellant." ], "opinions": [ { "text": "Mr. PRESIDING JUSTICE DEMPSEY\ndelivered the opinion of the court:\nThis appeal arises from a dispute between an insurance company and its insured.\nMartin Conroy, an employee of the Carl E. Erickson Company, a general .contractor, was injured while working on a building being constructed by Erickson for E. J. Brach & Sons. Conroy sued Brach for damages and Brach filed a third-party complaint against Erickson for indemnification. Conroy obtained a judgment against Brach for $85,000 and Brach obtained one against Erickson for a like amount. The judgments were appealed.\nErickson was defended in the Brach suit by the Bituminous Casualty Corporation pursuant to a policy which contained these provisions:\n\u201cCoverage A \u2014 Workmen\u2019s Compensation: To pay promptly when due all compensation and other benefits required of the insured by the workmen\u2019s compensation law. Coverage B \u2014 Employer\u2019s Liability: To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury by accident * * * sustained # * by any employee of the insured arising out of and in the course of his employment * #\nDuring the pendency of the appeal, the litigation was settled by paying Conroy $50,000 in addition to $12,000 he had received in compensation benefits \u2014 for which subrogation rights were waived. During the settlement negotiations a controversy developed between Erickson and Bituminous. The maximum protection afforded by coverage B was $25,000 and Erickson demanded that Bituminous pay this amount. Bituminous refused to contribute more than $13,000. It contended that its total liability for one accident was $25,000 and that it had paid $12,000 of this sum to Conroy in compensation benefits under coverage A of the policy. As finally agreed, Bituminous contributed $13,000 toward the $50,000 settlement, Erickson $24,000 and Brach $13,000. Erickson\u2019s $24,000 payment was made without prejudice to its right to recover $12,000 from Bituminous.\nBituminous maintained its position and Erickson filed a complaint in the Circuit Court. In its answer, Bituminous denied that it had a duty to pay $25,000 under coverage B. It asserted that its $13,000 contribution to the Conroy settlement was sufficient because Erickson had a $12,000 workmens compensation hen on the money Conroy recovered from Brach; that Bituminous was subrogated to Erickson\u2019s hen and was, therefore, entitled to deduct the amount of the hen from whatever sum it owed Erickson by reason of coverage B.\nErickson moved to strike this defense. Its motion was sustained and a judgment on the pleadings for $12,000 plus interest was entered against Bituminous. Bituminous contends that the trial court erred in allowing the motion to strike and in entering judgment. Its contention is premised on section 5(b) of the Workmen\u2019s Compensation Act, on the subrogation provision of the policy, and on two opinions of this court: Continental Casualty Co. v. Sweda (1969), 113 Ill.App.2d 423, 251 N.E.2d 65, and Daly v. W. E. O\u2019Neil Construction Co. (1971), 133 Ill.App.2d 655, 273 N.E.2d 505.\nSection 5(b) of the compensation act (Ill. Rev. Stat. 1967, ch. 48, par. 138.5(b)), provides that if an employee\u2019s injuries are caused by someone other than his employer and he recovers damages from this party, the employer may recover whatever compensation benefits it paid to the employee and that it shall have a hen for this purpose upon the money received by the employee. The subrogation clause of the Erickson-Bituminous insurance policy transferred this right to Bituminous: \u201cIn the event of any payment under this pohcy, the company shall be subrogated to all rights of recovery therefor of the insured * * * against any person or organization # The Sweda case interpreted section 5(b) and the right of an insurance carrier to recover its compensation payments to an injured employee. A sum had been paid by a third party in settlement which was less than the judgment against it and less than the compensation payments. The trial court divided this sum between the employee\u2019s conservator and the carrier. In reversing the trial court, the Appellate Court held that section 5(b) called for full indemnification and that the carrier was entitled to reimbursement insofar as the tim'd party payment would allow. The court said that where an injury had been caused by a third party and where recovery could be had from the third party, the law contemplated that the employer should be reimbursed out of this recovery since the employer did not cause the workman\u2019s injury.\nThe court made it clear, however, that the purpose of section 5(b) is to provide protection for a non-negligent employer. In the present case it has been legally established that the employer \u2014 Erickson\u2014was negligent. Although Conroy obtained a judgment against a third party \u2014 Brach \u2014for his injuries, Brach in its action-over obtained one against Erickson on the theory that its negligence was passive while Erickson\u2019s was active.\u2019 Erickson\u2019s primary fault was thus established in law. Since Brach\u2019s judgment was, in effect, an adjudication that Erickson was the active tortfeasor, responsible for Conroy\u2019s injuries and liable for his damages, Erickson could not recover from Conroy the amount paid to him in compensation benefits. Bituminous has no greater standing than Erickson. (McCormick v. Zander Reum Co. (1962), 25 Ill.2d 241, 184 N.E.2d 882.) If Erickson has no right to reimbursement, Bituminous has no such right; if Erickson has no lien, its subrogee has none. To permit Bituminous to recover the $12,000 compensation payment it made to Conroy under coverage A of the policy (by reducing its settlement contribution $12,000, thus compelling Erickson to contribute this additional amount) would be allowing Bituminous to impose its loss not on Conroy but on Erickson, its own insured. This is not sanctioned by section 5(b) nor authorized by tire policy.\nThe Sioeda case does not aid Bituminous and neither does Daly v. W. E. O\u2019Neil Construction Co. which it cites to support its argument that a purchaser of workmen\u2019s compensation insurance cannot defeat an insurer\u2019s right of subrogation even when indemnification means recovery from an insured who was at fault. O\u2019Neil interpreted a subrogation clause identical to the one in the Erickson policy. Bethlehem Steel Corporation entered into a contract with the City of Chicago for viaduct construction and it agreed to procure two workmen\u2019s compensation insurance policies for the protection of itself and the City. Instead, a policy was purchased which named only the City as the insured. Daly, an employee of Bethlehem, was injured when he fell from a scaffold and he sued O\u2019Neil, the general contractor, and the City. The City filed a third-party action against Bethlehem charging that Bethlehem\u2019s active negligence caused Daly\u2019s injuries. Daly obtained a judgment against the City and the City obtained one against Bethlehem. Bethlehem paid the judgment and filed a fourth-party complaint against its insurance company, the City\u2019s subrogee, on the theory that it had paid for the City\u2019s liability insurance. A judgment was entered for the insurer and on appeal the judgment was affirmed. The insurance Company was permitted to recover from the purchaser of the policy and not from its own insured as Bituminous attempts to do in this case. The O\u2019Neil court recognized the distinction. It acknowledged that subrogation would not be permitted against a carrier\u2019s own insured.\nThe trial court did not err in striking Bituminous\u2019 defense.\nThe court was also correct in entering judgment on the pleadings. An insurance contract is to be interpreted from an examination of the complete document. (Nationwide Insurance Co. v. Ervin (1967), 87 Ill.App.2d 432, 231 N.E.2d 112.) An examination of the Erickson-Bituminous policy leads to the conviction that the parties contracted for two coverages that were independent of each other: workmens compensation (A) and employers\u2019 liability (B). Provisions pertinent to coverage B are: the Insuring Agreements under which the insurer agrees to pay all sums the insured was legally obligated to pay as damages because of bodily injury; item 5 of the Declarations which fixes the insurer\u2019s limit of liability for coverage B at $25,000 \u201csubject to all the terms of this policy having reference thereto\u201d; item 9 of the Conditions which states that $25,000 is the total limit of the insurer\u2019s liability \u201cfor all damages because of bodily injury by accident * * * sustained by one or more employees in any one accident\u201d; Exclusions (c) and (f) which state that the policy does not apply to liability assumed by the insured under any contract or agreement, nor to any obligation for which the insured, or any carrier as his insurer, may be held under the workmen\u2019s compensation of Illinois. Other statements in the policy relating to Bituminous\u2019 reimbursement for workmen\u2019s compensation payments are unrelated to coverage B because they apply to benefits in excess of those provided by law either because of willful misconduct of Erickson or the employment of a person in violation of the law. Nowhere in the policy is it said or intimated that what Bituminous might have to pay under coverage B would be reduced by what it might have paid under coverage A. There is no limitation on the amount of Bituminous\u2019 liability under coverage A. If the construction of the policy which Bituminous advocates were to be accepted, its compensation payments under A up to or in excess of $25,000 would be subject to subrogation recovery. In such an event Erickson would be entirely deprived of employers\u2019 liability protection.\nThis was neither tire intention nor fire purpose of the policy. In Keys Engineering Co. v. Boston Insurance Co. (S.D. Fla. 1961) 192 F.Supp. 574, a case construing a comparable policy, the court expressed our view: \u201cThe policy of insurance * * * was composed of two distinct coverages: (1) Workmen\u2019s Compensation Coverage, and (2) Employers\u2019 Liability Coverage; each being exclusive of the other and each indemnifying the Plaintiff against liabilities not included in the other coverage # # # \u201d\nThe judgment is affirmed.\nAffirmed.\nMcNAMARA and McGLOON, JJ., concur.", "type": "majority", "author": "Mr. PRESIDING JUSTICE DEMPSEY" } ], "attorneys": [ "Nolan, O\u2019Malley and Dunne, of Chicago, for appellant.", "Dent, Hampton & McNella, of Chicago, (John P. Hampton, of counsel,) for appellee." ], "corrections": "", "head_matter": "Ernest C. Erickson, d/b/a Carl E. Erickson Company, Plaintiff-Appellee, v. Bituminous Casualty Corporation, Defendant-Appellant.\n(No. 56561;\nFirst District (3rd Division)\nFebruary 1, 1973.\nNolan, O\u2019Malley and Dunne, of Chicago, for appellant.\nDent, Hampton & McNella, of Chicago, (John P. Hampton, of counsel,) for appellee." }, "file_name": "0019-01", "first_page_order": 43, "last_page_order": 47 }