Kozak v. Moiduddin

FIRST DIVISION
December 22, 1997


No. 1-96-0756

RICHARD KOZAK and KATHY KOZAK,

Plaintiffs-Appellees,

v.

SHAKIR MOIDUDDIN and STEPHEN REMBOS,

Defendants

(Stephen Rembos,

Third-Party Plaintiff;


Yellow Freight System, Inc.,

Intervenor and Third-Party
Defendant-Appellant).)
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Appeal from the
Circuit Court of
Cook County

Honorable
Alfred J. Paul,
Judge Presiding.

MODIFIED UPON DENIAL OF REHEARING
JUSTICE GALLAGHER delivered the opinion of the court:
In June of 1994, plaintiffs, Richard and Kathy Kozak, filed
suit against defendants Shakir Moiduddin (a medical doctor) and
Stephen Rembos (a podiatrist) for damages resulting from
negligent medical treatment Richard received after he incurred a
foot injury while at work in 1992. Richard Kozak's employer,
Yellow Freight System, Inc., intervened in the action and claimed
a lien, pursuant to the Workers' Compensation Act (820 ILCS 305/1
et seq. (West 1992)), against any recovery the Kozaks ultimately
obtained. Before plaintiffs filed their suit, Yellow Freight had
settled Mr. Kozak's workers' compensation claim for over
$290,000. Once Yellow Freight intervened, defendant Dr.
Rembos[fn1] filed a third-party contribution action against
Yellow Freight. Yellow Freight successfully moved to dismiss the
third-party complaint pursuant to section 2-615 of the Code of
Civil Procedure (725 ILCS 5/2-615 (West 1992)), asserting that
the negligent treatment of Kozak's preexisting injury was not the
same injury for contribution purposes. Plaintiffs then filed a
motion to dismiss Yellow Freight's intervention pursuant to
section 2-619 of the Code of Civil Procedure (725 ILCS 5/2-619
(West 1992)), charging that Yellow Freight's position in the
third-party action judicially estopped Yellow Freight from
asserting its lien in the present litigation. The trial court
agreed and granted plaintiffs' motion. Third-party defendant
Yellow Freight brings this appeal, contending that the trial
court's holding--that Yellow Freight is not a joint tortfeasor
for contribution purposes--does not preclude Yellow Freight from
asserting its lien for payments it previously made under the
Workers' Compensation Act.
On June 6, 1992, Mr. Kozak sustained a crushing injury to
his left foot and ankle during the course of his employment at
Yellow Freight. Medical personnel at Palos Community Hospital
treated and released plaintiff later that day. Defendant
Moiduddin treated plaintiff on June 8 and 11, 1992. Plaintiff
then received further treatment from defendant Rembos on June 13,
1992, and at other times thereafter. According to plaintiffs,
Rembos negligently performed several surgical procedures on
plaintiff's foot and ankle. Allegedly, the treatment of his
injured foot and ankle caused Kozak to develop reflexive
sympathetic dystrophy (RSD), which manifests itself through
extreme pain and loss of mobility.
On April 8, 1994, Yellow Freight agreed to settle
plaintiff's workers' compensation claim for $297,955.01,
including $66,587.87 for medical expenses, $36,052.14 for
plaintiff's temporary total disability and $190,000 for
plaintiff's permanent partial disability. Shortly after Mr.
Kozak settled his workers' compensation claim, plaintiffs filed
the present medical malpractice suit against the defendant
doctors. Plaintiff Richard Kozak seeks to recover damages for
pain and suffering, loss of mobility, disability, disfigurement,
loss of earnings and earning capacity, as well as past and future
medical expenses. Plaintiff Kathy Kozak seeks to recover damages
for the loss of consortium she sustained as a result of the
defendant doctors' allegedly negligent treatment.
Yellow Freight first sought to intervene in this action on
October 5, 1994, claiming a lien against any funds recovered by
Mr. Kozak in his medical malpractice suit. In May 1995, Dr.
Rembos attempted to join Yellow Freight as a third-party
defendant under the Joint Tortfeasor Contribution Act (740 ILCS
100/2 (West 1992)). Yellow Freight subsequently filed its
section 2-615 motion to dismiss the third-party complaint,
arguing that, for purposes of the Joint Tortfeasor Contribution
Act, the initial injury Mr. Kozak received while employed at
Yellow Freight was separate and distinct from the injury caused
by the doctors' negligent treatment. The trial court granted
Yellow Freight's motion and dismissed the third-party complaint
on June 30, 1995.
On August 23, 1995, plaintiffs filed a motion seeking to
dismiss Yellow Freight as an intervenor. In their motion,
plaintiffs asserted that if Kozak's workplace injury was separate
and distinct from his malpractice injury, then Yellow Freight had
no right to maintain a workers' compensation lien on his
malpractice recovery. The trial court granted plaintiffs' motion
and held that, in light of Yellow Freight's response to Dr.
Rembos' third-party action, the doctrine of judicial estoppel
applied to bar Yellow Freight from asserting its workers'
compensation lien against any recovery Kozak obtained as a result
of his medical malpractice injury.
Third-party defendant Yellow Freight argues on appeal that
the trial court erred when it concluded that the doctrine of
judicial estoppel applied to the present case. Our review of a
dismissal pursuant to section 2-619 is de novo. Lohman v. Bemis,
289 Ill. App. 3d 139, 140, 680 N.E.2d 819, 820 (1997). In
general, the following five elements are necessary to justify
application of the judicial estoppel doctrine: (1) two positions
must be taken by the same party; (2) the positions must be taken
in separate judicial or quasi-judicial proceedings; (3) the party
must intend the trier of fact to accept the truth of the facts
alleged in support of the positions; (4) the party must have
successfully maintained the first position and received some
benefit in the first proceeding; and (5) the positions must be
totally inconsistent. Bidani v. Lewis, 285 Ill. App. 3d 545,
550, 675 N.E.2d 647, 650 (1996); Galena Park Home v. Krughoff,
183 Ill. App. 3d 206, 208, 538 N.E.2d 1366, 1367 (1989). Because
Yellow Freight did not intend for the trier of fact to rely upon
any factual allegations in support of its motion to dismiss the
third-party action, we hold that the trial court erred in
dismissing Yellow Freight as an intervenor in the present case.
Initially, we note that Yellow Freight moved to dismiss the
third-party complaint against it pursuant to section 2-615 of the
Code of Civil Procedure. Dismissal under section 2-615 is
appropriate only when it clearly appears that no set of facts
could ever be proved under the pleadings that would entitle the
plaintiff (here, third-party plaintiff Dr. Rembos) to recover.
Lockwood v. Standard & Poor's Corp., 289 Ill. App. 3d 194, 195-
96, 680 N.E.2d 131, 132 (1997). It is axiomatic that, when
ruling upon such a motion, the court must take as true all well-
pled facts of the complaint and draw all reasonable inferences
therefrom in favor of the nonmovant. Douglas Theater v. Chicago
Title & Trust, 288 Ill. App. 3d 880, 883, 681 N.E.2d 564, 566
(1997).
In its motion to dismiss, Yellow Freight correctly argued
that, as a matter of law, if a doctor negligently treats a
preexisting injury, he has committed a tort that is separate and
distinct from the tort allegedly committed by the first
wrongdoer, and they are not joint tortfeasors. Patton v.
Carbondale Clinic, S.C., 161 Ill. 2d 357, 366, 641 N.E.2d 427,
432 (1994), rev'g 241 Ill. App. 3d 149, 608 N.E.2d 688 (1993);
Cram v. Showalter, 140 Ill. App. 3d 1068, 1072, 489 N.E.2d 892,
895 (1986); Borowski v. Von Solbrig, 14 Ill. App. 3d 672, 683,
303 N.E.2d 146, 154 (1973), aff'd, 60 Ill. 2d 418, 328 N.E.2d 301
(1975); but cf. O'Keefe v. Greenwald, 214 Ill. App. 3d 926, 933-
34, 574 N.E.2d 136, 140 (1991) (outside of the joint tortfeasor
context, a release of the original tortfeasor may operate to
release subsequent medical malpractice defendants). Yellow
Freight further argued that the Joint Tortfeasor Contribution Act
provides for a right of contribution only "where 2 or more
persons are subject to liability in tort arising out of the same
injury" (emphasis added). 740 ILCS 100/2(a) (West 1992). This
argument was incorrect. Patton, 161 Ill. 2d at 368, 641 N.E.2d
at 432 (Joint Tortfeasor Contribution Act "applies not only to
joint tortfeasors, but to concurrent and successive tortfeasors
as well"). Nevertheless, the trial court agreed with Yellow
Freight and held that Rembos could prove no set of facts
entitling him to recover. Therefore, Yellow Freight offered no
factual allegations to the trier of fact in its motion to
dismiss; instead, the third-party defendant merely argued that,
even accepting as true all of Rembos' well-pled facts, the third-
party complaint was insufficient at law.
Unhappily, it appears as if the trial court may have erred
in dismissing the third-party plaintiff's contribution action.
However, neither party has placed the propriety of that order
before this court. Moreover, the record demonstrates that Yellow
Freight never relied upon any factual allegations in support of
its section 2-615 motion. Thus, one condition generally
necessary to establish judicial estoppel--that a party must
intend the trier of fact to accept the truth of the facts it
alleges in support of its positions--does not obtain in the
present case.
In our decision today, we are mindful of the fact that
Yellow Freight intervened in this case pursuant to section 5(b)
of the Workers' Compensation Act. That section provides in
pertinent part:
"Where the injury or death for which compensation
is payable under this Act was caused under
circumstances creating a legal liability for damages on
the part of some person other than his employer to pay
damages, then legal proceedings may be taken against
such other person to recover damages notwithstanding
such employer's payment of or liability to pay
compensation under this Act. In such case, however, if
the action against such other person is brought by the
injured employee or his personal representative and
judgment is obtained and paid, or settlement is made
with such other person, either with or without suit,
then from the amount received by such employee or
personal representative there shall be paid to the
employer the amount of compensation paid or to be paid
by him to such employee or personal representative
including amounts paid or to be paid pursuant to
paragraph (a) of Section 8 of this Act.

***

If the injured employee or his personal
representative agrees to receive compensation from the
employer or accept from the employer any payment on
account of such compensation, or to institute
proceedings to recover the same, the employer may have
or claim a lien upon any award, judgment or fund out of
which such employee might be compensated from such
third party." 820 ILCS 305/5(b) (West 1992).

One of the purposes of section 5(b) is to prevent the employee
from obtaining a double recovery. J.L. Simmons Co., Inc. ex rel.
Hartford Insurance Group v. Firestone Tire & Rubber Co., 108 Ill. 2d 106, 112, 483 N.E.2d 273, 276 (1985); see also Ullman v.
Wolverine Insurance Co., 48 Ill. 2d 1, 7, 269 N.E.2d 295, 298
(1970)(an employee may not retain both compensation from his
employer and identical damages from the tortfeasor). In the
present case, Mr. Kozak was injured during the course of his
employ at Yellow Freight, an injury that he alleges Dr. Rembos
exacerbated by his negligent treatment. Before Yellow Freight
knew of the plaintiffs' medical malpractice claims, it agreed to
pay compensation for Mr. Kozak's medical expenses, temporary
total disability and permanent partial disability--as required by
section 8 of the Workers' Compensation Act (820 ILCS 305/8 (West
1992)). Shortly after the settlement, plaintiffs filed the
present action seeking compensation for, among other things,
medical expenses, loss of mobility and disability, as well as
loss of earnings and earning capacity. In our opinion, these
damages translate roughly into medical expenses, temporary total
disability and permanent partial disability caused by the
malpractice. Under these facts, the distinct possibility exists
that Yellow Freight already paid compensation benefits to Kozak
for damages that actually arose from Dr. Rembos' alleged medical
malpractice; thus, Yellow Freight paid compensation for an injury
(the negligent treatment) "caused under circumstances creating a
legal liability for damages on the part of [Dr. Rembos] to pay
damages." Accordingly, Yellow Freight should remain free to
assert its lien under section 5(b), in order to prevent Mr. Kozak
from securing a double recovery.
Although it is not binding upon this court, we find
instructive the decision of the United States Court of Appeals
for the Seventh Circuit in Williams v. Katz, 23 F.3d 190 (7th
Cir. 1994). The plaintiff in that case, an employee injured on
the job, filed a diversity action against the attorneys who
represented him in his workers' compensation proceeding, charging
them with legal malpractice. The attorneys allegedly "dithered"
away while the limitations period expired on a medical
malpractice action that the plaintiff sought to assert against
the physicians who treated his employment injury. 23 F.3d at
191. United Airlines, the plaintiff's employer, moved to
intervene in the legal malpractice action pursuant to section
5(b) of Illinois' Workers' Compensation Act. The district court
denied United's motion to intervene, but the court of appeals
reversed. 23 F.3d at 191, 194. Judge Posner, writing for the
court, stressed that section 5(b) of the Act recognizes an
employer's lien whenever the injury occurs "'under circumstances
creating a legal liability for damages on the part of some person
other than his employer to pay damages.'" 23 F.3d at 192,
quoting 820 ILCS 305/5(b) (West 1992). Without discussion, the
court interpreted section 5(b) as entitling United to bring suit
against the doctors; therefore, since the only damages the
plaintiff sought from the lawyers were those he would have
recovered in a timely action against the doctors, United--the
employer which had already given the plaintiff benefits for
damages allegedly caused by the doctors--was also entitled to a
lien against any recovery for legal malpractice. 23 F.3d at 193.
Of course, Williams is distinguishable from the present case
to the extent that, in Williams, United (successfully) attempted
to assert a lien on the recovery for an injury twice removed from
the original workplace injury for which it gave its employee
workers' compensation benefits. In contrast, here we consider
only whether an employer who paid compensation benefits may
intervene or assert a lien against any subsequent recovery on a
medical malpractice injury (an injury only once removed from the
original workplace injury).
In their brief, plaintiffs argue that Yellow Freight was not
liable under the Workers' Compensation Act for the injury that
resulted from Dr. Rembos' malpractice. In support of this
contention, plaintiffs rely on Zick v. Industrial Commission, 93 Ill. 2d 353, 444 N.E.2d 164 (1982). In that case, the plaintiff
sustained a foot injury at work and sought recovery for her
subsequent disability and related medical problems, which
included reflex sympathetic dystrophy. 93 Ill. 2d at 354, 356,
444 N.E.2d at 165. Her employer responded with evidence that the
plaintiff's disability had been caused by overtreatment. 93 Ill. 2d at 357, 444 N.E.2d at 166. The Industrial Commission denied
compensation and determined that the disability did not result
from the trauma of the workplace injury but, rather, was due to a
congenital anomaly aggravated by medical mistreatment. 93 Ill. 2d at 359, 444 N.E.2d at 167. The supreme court affirmed the
Commission's decision. 93 Ill. 2d at 362, 444 N.E.2d at 168.
The authorities relied upon by plaintiffs are inapposite to
the present case. Zick, 93 Ill. 2d 353, 444 N.E.2d 164 (employer
contested payment of workers' compensation disability benefits
before the Industrial Commission); Reynolds v. Danz, 172 Ill.
App. 3d 907, 527 N.E.2d 169 (1988) (same). In the case sub
judice, Yellow Freight agreed to pay Kozak benefits for his
medical expenses, temporary total disability, and permanent
partial disability. In the absence of malpractice, section 8 of
the Workers' Compensation Act clearly required this. Nothing in
the record suggests that Yellow Freight knew, prior to the filing
of this lawsuit, of the possibility that Dr. Rembos' malpractice
caused Kozak's disability and part of his medical expenses. If
Kozak ultimately establishes that Dr. Rembos malpracticed upon
him, then Yellow Freight will have overcompensated its employee.
To paraphrase the seventh circuit in Williams, Dr. Rembos'
negligence will have claimed two victims: Yellow Freight, to the
extent that it had to pay extra workers' compensation benefits,
and Kozak, to the extent that those benefits fell short of his
total loss. 23 F.3d at 193. Because Yellow Freight previously
settled Kozak's claim for disability benefits before it had any
knowledge of Kozak's potential malpractice recovery against
Rembos, we hold that Zick and Reynolds do not control our
decision in this case.
This court has recognized that an employer may exercise a
lien against an employee's subsequent malpractice recovery,
although that lien "should extend to only those expenses
attributable to the medical aggravation of the injury, i.e., that
the amount of the lien should be limited to the amount that the
employer is required to pay because of the malpractice."
Robinson v. Liberty Mutual Insurance Co., 222 Ill. App. 3d 443,
447, 584 N.E.2d 182, 184 (1991). In this case, defendant Rembos'
alleged malpractice commenced only six days after the original
trauma; therefore, any award for medical expenses incurred after
Rembos' initial treatment of Kozak may be subject to Yellow
Freight's lien. Similarly, to the extent that Mr. Kozak's
temporary and permanent disability was in fact caused by the
medical mistreatment he received, any award for such disability
may also be subject to a workers' compensation lien by Yellow
Freight.
We believe our holding today conforms with the legislature's
intent when it adopted the workers' compensation scheme. "'The
object of the act is the allowance of compensation for accidental
injuries to employees as promptly and cheaply as may be.'" J.L.
Simmons Co., Inc. ex rel. Hartford Insurance Group v. Firestone
Tire & Rubber Co., 108 Ill. 2d at 112, 483 N.E.2d at 276, quoting
Liquid Carbonic Co. v. Industrial Comm'n, 352 Ill. 405, 410, 186 N.E. 140 (1933). Section 5(b) enables an employer to pay
compensation benefits to an injured employee quickly; if the
employee's damages are attributable to the conduct of a third
party, the employer may then reach the true offender, either by
filing its own cause of action against that third party or by
asserting a lien on any subsequent recovery obtained by the
employee. J.L. Simmons, 108 Ill. 2d at 112, 483 N.E.2d at 276,
citing Ullman, 48 Ill. 2d at 7, 269 N.E.2d at 295. Should this
court adopt plaintiffs' position and bar Yellow Freight from
intervening and/or asserting its lien in the present action, we
would essentially penalize Yellow Freight for expeditiously
settling Mr. Kozak's workers' compensation claim before it became
aware of the facts regarding Rembos' alleged negligence. Such an
outcome would offer a powerful incentive for employers to delay
paying out workers' compensation benefits until after it had been
established that malpractice played no part in exacerbating a
claimant's injuries. Because we choose not to frustrate the
system's goal of swift, certain, and efficient settlement of
employment injury claims, we reject plaintiffs' arguments and
hold that Yellow Freight is entitled to assert its workers'
compensation lien.
For the foregoing reasons, we reverse the decision of the
trial court and remand this cause to that court with instructions
that it reinstate Yellow Freight's petition to intervene.
Reversed and remanded with instructions.
CAMPBELL, P.J., and BUCKLEY, P.J., concur.
[fn1]The trial court ultimately entered summary judgment in
favor of Dr. Moiduddin, thus removing him from the present
litigation.