Burhmester v. Steve Spiess Construction, Inc.

2016 IL App (3d) 140794, 53 N.E.3d 1048

• Court: Appellate Court of Illinois
• Decided: April 28, 2016
• Docket: 3-14-0794
• Status: Unpublished

Opinion

2016 IL App (3d) 140794

Opinion filed April 28, 2016 ______________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

2016 ______________________________________________________________________________

NACIN R. BURHMESTER, ) Appeal from the Circuit Court ) of the Thirteenth Judicial Circuit, Plaintiff, ) LaSalle County, Illinois ) v. ) ) ) STEVE SPIESS CONSTRUCTION, INC., ) Appeal No. 3-14-0794 ) Circuit No. 08-L-185 Defendant-Appellant and ) Third-Party Plaintiff and ) Appellant, ) ) Honorable (L.J. Keefe Company, Third-Party Defendant ) Eugene P. Daugherity, and Appellee). ) Judge, Presiding. ______________________________________________________________________________

JUSTICE HOLDRIDGE delivered the judgment of the court, with opinion. Presiding Justice O’Brien and Justice McDade concurred in the judgment and opinion. ______________________________________________________________________________

OPINION

¶1 Defendant and third-party plaintiff, Steve Spiess Construction Company (Spiess) appeals

from an order of the circuit court of La Salle County denying its motion for a directed verdict

against third-party defendant L.J. Keefe Co. (Keefe). Spiess’s motion sought to direct a verdict

denying Keefe’s affirmative defense against Spiess’s third-party claim based upon the Kotecki doctrine. Kotecki v. Cyclops Welding Corp., 146 Ill. 2d 155 (1991). On appeal, Spiess

maintains that it was error for the circuit court to deny its motion for a directed verdict on the

Kotecki claim since Keefe had offered no evidence at trial to prove that it had a right to assert a

Kotecki claim. As an alternative argument, Spiess maintains that the trial court erred in vacating

its judgement against Keefe pursuant to Kotecki as no evidence had been presented regarding the

past of future value of the underlying workers’ compensation claim.

¶2 BACKGROUND

¶3 Nacin Burhmester was severely injured by an electrical shock while on the job on March

15, 2007. At the time of his injury he was employed by Keefe. Keefe was the electrical

subcontractor on a construction site where Spiess was the general contractor. Burhmester filed a

workers’ compensation claim under the Workers’ Compensation Act (820 ILCS 305/1 et seq.

(West 2004)) which was pending at the time of trial in the instant matter. In addition to his

workers’ compensation claim, Burhmester also filed a negligence action against Spiess. Spiess,

in turn, filed a third-party action against Keefe seeking contribution on any judgment that

Burhmester might obtain against it. Keefe filed an answer and an affirmative defense in which it

asserted that any contribution that may recovered against it would be limited to the amount paid

or payable in workers’ compensation benefits pursuant to the so-called Kotecki doctrine.

¶4 All claims were tried before a jury. Burhmester’s claim against Spiess was tried first and

the jury returned a verdict against Spiess in the amount of $534,608.82. The trial court entered

judgment for Burhmester and against Spiess in that amount. After the judgment was entered,

Spiess proceeded with its trial against Keefe. At the close of evidence, counsel for Spiess made

an oral motion for a directed verdict against Keefe, arguing that Keefe had failed to present

evidence to establish its Kotecki claim as an affirmative defense. The trial court denied the

-2- motion, ruling that Kotecki automatically applies in contribution claims, and the claim under

Kotecki does not need to be raised as an affirmative defense or proven at trial. The trial court

explained that its ruling was in accord with the holding in Kim v. Alvey, Inc., 322 Ill. App. 3d

657, 662-68 (2001), and the proposition that Kotecki, being more in the nature of a set-off than

an affirmative defense, applies as a matter of law.

¶5 The jury then returned a verdict finding that Burhmester was 30% at fault, Spiess 20% at

fault and Keefe 50% at fault. The trial court then entered a contribution judgment in favor of

Spiess and against Keefe in the amount of $374,720.58. Spiess filed a posttrial motion which

renewed its request for a directed verdict against Keefe. The judgment was denied.

¶6 Keefe then filed its own posttrial motion seeking to waive its workers’ compensation lien

and dismiss Spiess’s contribution action against it. Attached to its motion was an affidavit from

the Keefe’s workers’ compensation insurance adjuster stating that Burhmester had received

$95,487.23 in workers’ compensation benefits. Keefe asserted that it could choose to waive its

worker’s compensation lien after trial. Spiess objected, arguing that if its motion for a directed

verdict had been properly granted, it would prevent Keefe from being able to waive its lien post-

trial. Spiess maintained that an employer can only waive its lien posttrial if its affirmative

defense asserting Kotecki and the amount of the lien had been proven at trial, or were not in

dispute. Spiess also objected to the affidavit on evidentiary grounds. The trial court denied

those evidentiary objections.

¶7 The trial court granted Keefe’s motion to dismiss Spiess’s third-party complaint and

vacated the judgment against Keefe. The court then adopted Keefe’s calculation of its workers’

compensation lien and entered an order granting Spiess as set-off of $95,487.23. Spiess

subsequently filed this appeal.

-3- ¶8 ANALYSIS

¶9 1. Is Kotecki an Affirmative Defense That Must be Plead or a Posttrial Claim for Set-

off?

¶ 10 Spiess first maintains that the trial court erred in denying its motion for a directed verdict.

We review the denial of a motion for directed verdict de novo. Hamilton v. Hastings, 2014 IL

App (4th) 131021, ¶ 24.

¶ 11 In denying Spiess’s motion for a directed verdict, the trial court held that Kotecki is not a

traditional affirmative defense which must be proven at trial by the defendant. Instead, it held

that Kotecki was more properly viewed as a set-off which the defendant merely had to show it

was entitled to take against the judgment already entered against it. In support of its holding, the

trial court relied upon Kim v. Alvey, Inc., 322 Ill. App. 3d 657 (2001). The Kim court relied, in

turn, upon our supreme court’s holding in LaFever v. Kemlite Co., 185 Ill. 2d 380 (1998).

Specifically, the Kim court determined: “LaFever clearly allows an employer to raise its lien in a

posttrial motion. Alvey’s argument that the Kotecki setoff limit is as an affirmative defense that

must be raised prior to trial is not supported by existing case law.” Kim, 322 Ill. App. 3d at 668.

The Kim court further held that, under LeFever, “an employer is not required to raise its Kotecki

setoff limit or workers’ compensation lien as an affirmative defense or even before a trial.” Id. at

668 n. 5.

¶ 12 Spiess argues that the holding in Kim is an “aberrant” decision which is in conflict with

several other cases and that the Kim court misapplied the holding in LeFever. Spiess maintains

that the right to waive a workers’ compensation lien after trial is separate and distinct from the

need to prove the lien and its amount at trial. It further maintains that, at best, LeFever stands for

the proposition that an employer who has proven it can assert a workers’ compensation set-off

-4- pursuant to Kotecki can waive that set-off after a judgment has been entered. Additionally,

Spiess suggests that any prior cases allowing an employer to assert a set-off pursuant to Kotecki

implicitly did so only where the party seeking contribution stipulated to the lien or at least did

not oppose the existence of the lien or its amount. Spiess maintains that its motion to dismiss the

affirmative defense precludes Keefe from asserting its lien at any time, including post-trial.

¶ 13 Keefe maintains that the trial court properly relied upon the holding in Kim, which, in

turn, properly followed our supreme court’s holding in LaFever. In LaFever, our supreme court

clearly held that “[a]n employer can waive the lien it holds on the worker’s recovery in his

personal injury action” and “by waiving its section 5(b) lien, the employer may avoid liability for

contribution to the other tortfeasors allegedly responsible for the worker’s injury.” LaFever, 182

Ill. 2d at 399. The Kim court further noted that LaFever was directly on point, holding that “an

employer is not required to raise its Kotecki setoff limit or workers’ compensation lien as an

affirmative defense or even before trial.” Kim, 322 Ill. App. 3d at 668 n.5.

¶ 14 Our analysis of the holding in LaFever supports Keefe’s position. In LaFever, the

injured worker instituted a tort action and a premises liability action against the owner of the

property where the injury occurred. The defendant/landowner in turn filed a third-party action

against the injured worker’s employer seeking contribution. The employer waited until after the

jury verdict was rendered and only then sought to impose the set off right under Kotecki. The

trial court then dismissed the contribution action against the employer. The appellate court

reversed, holding that the employer was not permitted to wait until after the verdict was returned

before asserting its Kotecki set off. Our supreme court reversed the appellate court, and on the

issue of the impact of Kotecki on the contribution action, the court noted that “regardless of when

[employer] waived its lien, its contribution liability was always capped at the same amount.”

-5- LaFever, 185 Ill. 2d at 403-04. The court further noted that “[w]hether [employer] waived its

lien before or after the verdict, Kotecki and its progeny limited the maximum contribution

liability for [employer] to the amount paid by [employer] in workers’ compensation.” Id. at 404.

While the specific issue in LaFever was not whether a Kotecki set-off had to be plead as an

affirmative defense in order to block a contribution action against the employer, it is implicit

under LaFever that Kotecki is not an affirmative defense to a contribution action since the court

held that Kotecki can be raised “before or after the verdict.” Id.

¶ 15 Spiess cites several decisions in support of the proposition that a Kotecki set-off must be

plead and proven as an affirmative defense. However, a review of those cases establish that they

were either decided before LaFever, such as Braye v. Archer-Daniels-Midland Co., 175 Ill. 2d

201 (1997) and Herington v. J.S. Alberici Construction Co., 266 Ill. App. 3d 489 (1994), or they

do not stand for the proposition that Kotecki must be raised as an affirmative defense in order to

limit an employer’s contribution liability. For example, Spiess refers to the fact that Kotecki is

referred to as an “affirmative defense” in Christy-Foltz, Inc. v. Safety Mutual Casualty Corp.,

309 Ill. App. 3d 686, 691-93 (2000). We find that this reference to an “affirmative defense” is

not controlling. While the court in Christy-Foltz, refers to the Kotecki right to set-off as an

“affirmative defense,” the holding in that case addressed whether an employer can contractually

waive Kotecki. Id. at 692. It is clear from the holding in Christy-Foltz that the court is using the

term “affirmative defense” in a generic sense, not in the context of pleading and proofs at trial.

As such, it is of no assistance to Spiess in the instant matter.

¶ 16 Spiess relies heavily upon Doyle v. Rhodes, 101 Ill. 2d 1 (1984), in support of its

proposition that Kotecki must be specifically plead as an affirmative defense. Spiess draws our

attention to the Doyle court’s statement:

-6- “The Workers’ Compensation Act provides employers with a defense against any action

that may be asserted against them in tort, but that defense is an affirmative one whose

elements -- the employment relationship and the nexus between the employment and the

injury-- must be established by the employer, and which is waived if not asserted by him

in the trial court.” Id. at 10. (citing Robertson v. Travelers Insurance Co., 95 Ill. 2d 441,

451 (1983).)

¶ 17 We find the Doyle court’s favorable citation to Robertson to be instructive in this matter.

While Doyle certainly referred to “an affirmative” defense which “is waived if not asserted” in

the trial court, Doyle does not address whether the defense must be plead. Id. For the answer to

that question, we can look to the Doyle court’s citation to Robertson, where the court held:

“Robertson argues that inasmuch as the instant case was tried before a jury it was

incumbent upon Travelers to plead and prove the statutory bar of the [Workers’]

Compensation Act [citation], and its failure to do so could not be cured by raising the

issue in the trial court in a posttrial motion as Travelers did. Although we do not dispute

the general rule that a defense resting on the exclusivity provision of the Act is

affirmative in nature, we do not believe Travelers’ omission was fatal in this case. This

court has held the failure to plead and prove such a defense decisive only where there was

a factual question as to whether the injury alleged arose out of and in the course of the

work, so that a verdict for the defendant despite failure to prove coverage was an

impermissible shifting of the burden of proof. [Citations.] *** The question of whether

the Workers’ Compensation Act applied to the plaintiff’s injuries was therefore purely a

legal one, and no purpose would have been served by requiring its pleading before the

jury as long as it came to the attention of the trial judge and Robertson was given a

-7- chance to respond. [Citations.] The trial court had the discretion to entertain the issue in

a posttrial motion ***.” Robertson, 95 Ill. 2d at 451-52.

¶ 18 We find the court’s reasoning in Robertson that a defense under the Act does not need to

be plead before the matter is tried before a jury to be controlling. Here, as in Robertson, the fact

that the plaintiff was an injured employee receiving compensation under the Act from Keefe was

not in dispute. Thus, there was no need for Keefe to place the issue before the jury by pleading

an affirmative defense. Rather, the trial court could effectively address the issue by means of a

posttrial motion. Id. Moreover, the holding in LaFever that Kotecki can be raised “before or

after the verdict” also requires us to reject Spiess’s argument that Keefer was required to plead

and prove its Kotecki set-off as an affirmative defense.

¶ 19 2. Did the Trial Court Properly Calculate the Amount of the Kotecki Set-off?

¶ 20 Spiess next argues that, if this court upholds Keefe’s right to assert its Kotecki set-off

after trial, it is still entitled to contribution from Keefe for the full amount of its pro rata share of

the judgment because Keefe failed to prove the amount of the Kotecki set-off. Essentially, the

argument is that the affidavit supplied by Keefe when it moved to dismiss was insufficient to

prove the amount of workers’ compensation benefits actually paid to Burhmester.

¶ 21 This is an issue regarding the sufficiency of an affidavit and is governed by Illinois

Supreme Court Rule 191 (eff. Jan. 4, 2013). Generally, a trial court’s evidentiary ruling will not

be overturned on appeal unless it constitutes an abuse of discretion. Mache v. Mache, 218 Ill.

App. 3d 1069, 1077 (1991). However, where the affidavit supports a summary judgment motion

or a motion to dismiss a complaint, this court will review the court’s finding regarding the

sufficiency of an affidavit de novo. Outboard Marine Corp. v. Liberty Mutual Insurance Co.,

154 Ill. 2d 90, 102 (1992).

-8- ¶ 22 Here, the affidavit submitted by the agent of Keefe’s workers’ compensation carrier was

sufficient to establish that the affiant had personal knowledge of the facts contained in the

affidavit and could competently testified to those facts at trial. Id. at 99. Additionally, the

affidavit included documentary evidence including a settlement contract and a “payout screen”

exhibit, which showed specific details of amounts paid in compensation and medical benefits.

We find that the affidavit and the supporting documentation were sufficient to establish the

amount of compensation paid by Keefe to which it was entitled to a set-off under Kotecki.

¶ 23 Spiess lastly suggests that the proper remedy would be to remand this cause for an

evidentiary hearing on the full value of Burhmester’s claim under the theory that future

compensation is still owed. This argument is based upon the fact that there was a potential future

medical benefit as much as $50,000 for which Burhmester appears to have executed a settlement

agreement with Keefe for $1. Spiess cites Sands v. J.I. Case Co., 239 Ill. App. 3d 19, 28 (1992)

for the proposition that “an employer is subject to contribution to the extent of its reasonably

projected liability for future medical payments under the [Workers’ Compensation] Act, limited

only by the amount of settlement and the percentage of fault apportioned to it.” Since we

affirmed the trial court’s dismissal of Speiss’s contribution claim, this argument is moot. See

LaFever, 185 Ill. 2d at 404.

¶ 24 CONCLUSION

¶ 25 For the foregoing reasons, the judgment of the circuit court of LaSalle County is

affirmed.

¶ 26 Affirmed.

-9-