Illinois Supreme Court Holds for Injured Worker in Additional Lawsuit After Not Approved by Illinois Workers’ Compensation Commission

The Illinois Supreme Court recently affirmed a ruling by the Illinois Appellate Court in favor John Van Cleve, a Maxit employee, who was injured while working. Maxit, Inc. v. John Van Cleve, et al., No. 105532.

Van Cleve was driving during his working hours when he was injured in car accident. He filed both a claim under his employer’s underinsured-motorist policy and a workers’ compensation claim against his employer. In 2004 he settled the underinsured-motorist claim for $800,000, which was to compensate for his injuries. At that point Van Cleve signed a document releasing his employer from any future claims.

Then in 2005, Van Cleve and Maxit, his employer, agreed to a $200,000 settlement of Van Cleve’s workers’ compensation claim. The settlement agreement was approved by the Industrial Commission, which is the court that handles all workers’ compensation claims.

However, even though they had agreed to the workers’ compensation settlement, Maxit later filed a lawsuit against Van Cleve alleging that he was not entitled to the workers’ compensation payment because of his earlier underinsured-motorist settlement. The trial court ruled in favor of Maxit and agreed that the earlier release barred Van Cleve from further recovery under the Workers’ Compensation Act.

The trial court’s decision was appealed by Van Cleve, at which point the earlier decision was reversed by the Illinois Appellate Court. The court held that although Van Cleve had signed a release against all future claims from this incident it was never approved by the Industrial Commission. Under the Workers’ Compensation Act an employer cannot enter into a settlement without getting it approved by the commission. Because the Industrial Commission never approved the underinsured motorist release it does not apply to any settlements for Van Cleve’s workers’ compensation claim.

Maxit then appealed this decision to the Illinois Supreme Court, who affirmed the Appellate Court’s ruling. The Supreme Court reached this decision by reviewing the Workers’ Compensation Act, § 23, which reads:

No employee . . . shall have the power to waive any of the provisions of this Act in regard to the amount of compensation which may be payable to such employee . . . except after approval by the Commission and any employer . . . who shall enter into any payment purporting to compromise or settle the compensation rights . . . without first obtaining the approval of the Commission . . . shall be barred from raising the defense of limitation in any proceeding subsequently brought by such employee.

And because it was undisputed that the Industrial Commission had not approved the underinsured motorist release, the Illinois Supreme Court held that the release did not apply to the workers’ compensation claim and that Van Cleve was able to recover the additional settlement.

Kreisman Law Offices has been practicing Illinois workers’ compensation claims for over 30 years, serving areas in and around Cook County, including Buffalo Grove, Hazel Crest, Maywood, and Tinley Park.