Supreme Court Summaries
Opinions filed October 18, 2013
Skokie Castings, Inc. v. Illinois Insurance Guaranty Fund, 2013 IL 113873
Appellate citation: 2012 IL App (1st) 111533.
JUSTICE KARMEIER delivered the judgment of the court, with opinion.
Justices Freeman, Garman, Burke, and Theis concurred in the judgment and opinion.
Chief Justice Kilbride dissented, with opinion.
Justice Thomas dissented, with opinion.
Skokie Castings, Inc., the named plaintiff in this Cook County litigation, is the successor by purchase to Wells Manufacturing Company, a manufacturer of alloy castings and iron. In 1985, a Wells employee was seriously injured on the job, and, in 1993, the Illinois Industrial Commission ordered weekly lifetime benefits for total and permanent disability. Wells began to make the payments ordered by the Commission directly to the employee.
Wells was self-insured, meaning it had elected, pursuant to statute, to take full financial responsibility for its employees’ workers’ compensation claims. To limit its liability, Wells had obtained excess insurance from Home Insurance Company. When Wells’ payments to the injured employee reached $200,000, it began to seek reimbursement under this excess-liability coverage. Home paid benefits to the employee over the $200,000 “retention” limit in the policy until Home became insolvent in 2003 and was liquidated. At that point, the Illinois Insurance Guaranty Fund, the defendant here, took over the insolvent excess insurer’s obligations. The supreme court said that the question at issue here is a matter of insurance rather than workers’ compensation law.
There is a statutory cap of $300,000 on the amount the Fund must pay, but an exemption to this cap is provided for “any workers’ compensation claims.” Wells did not see any reason why the Fund should stop paying when this amount was reached, but the Fund stopped payment in 2005, arguing that payments to an excess, rather than a primary, insurer were not payments of “workers’ compensation claims” within the meaning of this statutory provision, and, thus, could not be exempted from the cap. The Fund argued that the exempting language “workers’ compensation claims” meant only claims brought directly by injured employees. Wells continued paying the employee and, in 2010, filed this action in the circuit court of Cook County, seeking a declaration that the Fund’s reimbursement payments should continue. The circuit court agreed with Wells, awarding summary judgment to it, and the appellate court affirmed. In this decision, the supreme court agreed with both lower courts, rejecting the distinctions made by the Fund between excess and primary coverage and between payments made directly or indirectly to employees.