The Illinois Supreme Court case of Kotecki v. Cyclops Welding, 146 Ill.2d 155 (1991) is the decision by the court that stands for the law that an employer may avoid contribution liability by waiving its lien under Section 5(b) of the Workers’ Compensation Act. This is in reference to the so-called “Kotecki cap” and affirmative defense that an employer has pleaded and then proved at trial. The question is: Can the employer invoke Kotecki with a post-judgment motion supported by affidavits specifying the amount of benefits it paid to the injured employee?
This is the issue that was taken up by the Illinois Appellate Court for the 3rd District in this Illinois case. Nacin Burhmester was injured while he was working for L.J. Keefe Co. Burhmester prevailed in a trial and received a verdict of $534,608 against Steve Spiess Construction Co.
Spiess in turn sued Keefe for contribution in a third-party action. The answer to the contribution claim by Keefe included an affirmative defense based on Kotecki. Although Keefe paid benefits to Burhmester totaling $95,487 under the workers’ compensation policy of insurance, it did not present any evidence on this defense during the contribution trial.
Spiess requested judgment as a matter of law on this affirmative defense. The motion was denied. The verdict against Keefe on the contribution claim was $374,720. In turn and in response, Keefe waived its workers’ compensation lien and presented a post-judgment motion supported by an affidavit from its insurer on the amount of benefits paid to Burhmester. Keefe asked the trial judge to vacate the contribution judgment and dismiss Spiess’s complaint. The trial judge ruled in favor of Keefe and the Illinois Appellate Court affirmed concluding that “Kotecki is not an affirmative defense to a contribution action.”
In denying Spiess’s motion for a directed verdict, the trial court held that Kotecki is not a traditional affirmative defense that must be proven at trial by the defendants. Instead, it held that Kotecki was more properly viewed as a set-off that the defendant merely had to show it was entitled to take against the judgment already entered against it.
In support of the decision in favor of Keefe, the trial court relied on the case of Kim v. Alvey, Inc., 322 Ill.App.3d 657 (2001). The Kim court relied on the Illinois Supreme Court’s decision in LaFever v. Kemlite Co., 185 Ill.2d 380 (1998).
“LaFever clearly allows an employer to raise its lien in a post-trial motion. Alvey’s argument that the Kotecki set-off limit is as an affirmative defense but must be raised prior to trial is not supported by existing case law.” The appellate court noted that “whether [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.” The court has held 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.”
In this case, there was an argument about whether the set-off at the trial was calculated correctly. Spiess argued that if the 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 that Kotecki set-off.
The argument was 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. The court held that 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 testify to those facts at trial. In addition, 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. The court found that the affidavit and the supporting documentation were sufficient to establish the amount of compensation by Keefe to which it was entitled to a set-off under Kotecki.
Burhmester v. Steve Spiess Construction Inc., 2016 IL App (3d) 140794 (April 28, 2016).
Kreisman Law Offices has been handling workers’ injury cases, construction site injury cases, car crash cases, bicycle accident cases, motorcycle injury cases and truck crash cases for individuals and families who have been injured or killed by the negligence of another for more than 40 years, in and around Chicago, Cook County and surrounding areas, including Mundelein, Naperville, New Lenox, Northbrook, Algonquin, Arlington Heights, Matteson, Crete, Steger, Rosemont, Crestwood, Forest Park, River Grove and Lincolnshire, Ill.
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