Illinois Supreme Court Rules On Illinois Workers’ Compensation Immunity Issue

April 12, 2022 / CM Reports / Writing and Speaking

By Melinda S. Kollross

In Munoz v. Bulley & Andrews, LLC, 2022 IL 127067, the Illinois Supreme Court ruled that the immunity provisions of the Illinois Workers’ Compensation Act do not extend beyond an injured worker’s direct employer, “under the facts of this case”.

Facts

Bulley & Andrews, LLC (Bulley & Andrews) is the sole owner of Bulley Concrete. Although a wholly owned subsidiary of Bulley & Andrews, Bulley Concrete operated as a separate corporation, distinct from Bulley & Andrews. Each company had separate tax I.D. numbers, different presidents, and different workers.

Bulley & Andrews contracted with a project owner to serve as general contractor for a construction project in downtown Chicago. Under the contract, Bulley & Andrews agreed to purchase insurance that would protect Bulley & Andrews from claims which could arise out of Bulley & Andrews’ operations under the contract and for which Bulley & Andrews could be legally liable whether such operations were by Bulley & Andrews or by a subcontractor. Bulley & Andrews used Bulley Concrete and its employees for the project’s concrete work as well as other subcontractors.

During the time of the project, Bulley Concrete was an insured under a workers’ compensation policy. Bulley & Andrews and other subsidiaries and affiliates of the company were insured under the same policy. Bulley & Andrews paid the premiums for the insurance.

Plaintiff was employed as worker by Bulley Concrete. He was hurt on the project and filed a workers’ compensation claim against Bulley Concrete for his medical bills and was also paid temporary disability benefits. Plaintiff then brought a personal injury action against the general contractor on the project, Bulley & Andrews, seeking damages for its failure to insure that all project work was performed safely. The trial court dismissed plaintiff’s action holding that the action was barred by the exclusivity provisions of the Workers’ Compensation Act because Bulley & Andrews was legally obligated under the project contract to pay for the workers’ compensation insurance and benefits that plaintiff received. The Appellate Court affirmed, but the Illinois Supreme Court in a unanimous decision reversed and remanded for further proceedings on plaintiff’s action.

Analysis

The Supreme Court ruled that the statutory language used in the Workers’ Compensation Act was clear and unambiguous: Workers’ Compensation Act immunity from an action for damages was conferred only on the immediate employer of an injured worker, regardless of who paid benefits or the premiums for the workers’ compensation coverage. In this case, it was undisputed that Bulley & Andrews was not plaintiff’s immediate employer. Thus, plaintiff was not barred from suing Bulley & Andrews by Workers’ Compensation Act immunity.

Moreover, the fact that plaintiff’s immediate employer, Bulley Concrete, was a subsidiary of Bulley and Andrews was irrelevant according to the Court. If a parent and a subsidiary are operated as two separate and distinct companies, then only the company who is the immediate employer gets immunity. Under the facts of this case, that company was Bulley Concrete and not Bulley & Andrews.

The Supreme Court further addressed and rejected the appellate court conclusion that its past decision in Ioerger v. Halverson Construction Co., 232 Ill. 2d 196 (2008), created a new test for immunity based on whether an entity paid compensation benefits to an injured worker pursuant to a preexisting legal obligation. Ioerger held that an employee could not sue a joint venture, which was contractually required to reimburse the workers’ compensation insurance premiums paid by one of its constituent entities which happened to be the direct employer. According to the Court, Ioerger did not abrogate prior Illinois Supreme Court decisional law holding that Workers’ Compensation Act immunity did not hinge on the payment of benefits, but only upon the identity of the injured worker’s immediate employer. Further, the Court found Bulley & Andrews did not have any preexisting legal obligation to pay benefits because its agreement with the project owner did not provide for Bulley & Andrews to provide workers’ compensation insurance for Bulley Concrete. According to the Court, its decision in Ioerger was limited to the facts of that case.

Learning Point: Although the Supreme Court’s decision here seems straightforward, the Court couched its holding by stating that it was reaching its decision “under the facts of this case”. Under the facts of this case, Bulley & Andrews and Bulley Concrete were distinct companies; Bulley & Andrews was not in a joint venture with Bulley Concrete; there was no agency relationship between Bulley & Andrews and Bulley Concrete, and there was no written contract between Bulley & Andrews and Bulley Concrete that required Bulley & Andrews to provide workers’ compensation insurance or benefits to Bulley Concrete employees. What all this means is that like Ioerger, Bulley & Andrews should be viewed in the context of its own facts, and with different facts in another case to distinguish Bulley & Andrews, there might be a different result

  • Chicago

    Illinois 60603

    10 South LaSalle Street

    Chicago, Illinois 60603

    T: 312.855.1010 TF: 800.826.3505 F: 312.606.7777 Office Managing Partner: Dennis D. Fitzpatrick

  • New York

    New York 10005

    28 Liberty Street 39th Floor

    New York, New York 10005

    T: 212.805.3900 TF: 800.826.3505 F: 212.805.3939 Office Managing Partner: Carl M. Perri

  • Mission Viejo

    California 92691

    27285 Las Ramblas

    Suite 200

    Mission Viejo, California 92691

    T: 949.260.3100 TF: 800.826.3505 F: 949.260.3190 Office Managing Partner: Ian R. Feldman

  • Florham Park

    New Jersey 07932

    100 Campus Drive

    Florham Park, New Jersey 07932

    T: 973.410.4130 TF: 800.826.3505 F: 973.410.4169 Office Managing Partner: Carl M. Perri

  • Michigan City

    Indiana 46360

    200 Commerce Square

    Michigan City, Indiana 46360

    T: 219.262.6106 TF: 800.826.3505 F: 312.606.7777 Office Managing Partners: Paige M. Neel, Kimbley A. Kearney

  • Appleton

    Wisconsin 54914

    4650 W. Spencer Street

    Appleton, Wisconsin 54914

    T: 920.560.4658 TF: 800.826.3505 F: 920.968.4650 Office Managing Partner: Patrick L. Breen

  • Stamford

    Connecticut 06902

    68 Southfield Avenue

    2 Stamford Landing Suite 100

    Stamford, Connecticut 06902

    T: 203.921.0303 TF: 800.826.3505 F: 212.805.3939 Office Managing Partner: Matthew J. Van Dusen

  • Tampa

    Florida 33609

    4830 West Kennedy Boulevard, One Urban Center

    Suite 600

    Tampa, Florida 33609

    T: 813.509.2578 TF: 800.826.3505 F: 312.606.7777 Office Managing Partner: Dennis D. Fitzpatrick

  • San Francisco

    California 94111

    100 Pine Street

    Suite 1250

    San Francisco, California 94111

    T: 415.745.3598 TF: 800.826.3505 F: 949.260.3190 Office Managing Partner: Ian R. Feldman