A&R Janitorial v. Pepper Construction Co.
2017 IL App (1st) 170385
| Ill. App. Ct. | 2018Background
- Teresa Mroczko (employee) was injured on August 17, 2012 while working for A&R Janitorial at a Blue Cross building; A&R paid over $342,000 in workers’ compensation benefits and pursued subrogation against third-party contractors under 820 ILCS 305/5(b).
- A&R (as subrogee) timely sued certain defendants on August 14, 2014 for indemnification and damages; some parties were later voluntarily dismissed, leaving three defendants.
- Mroczko filed her own personal-injury suit against some of the same defendants on June 15, 2015 (after the two-year statute of limitations); that suit was ultimately dismissed with prejudice for being time-barred, and she did not appeal.
- Mroczko then sought to intervene in A&R’s timely subrogation suit, claiming inadequate representation because A&R was pursuing only indemnification and might not seek full non-economic damages to which she was entitled.
- The trial court denied intervention, concluding res judicata barred her participation based on her earlier dismissal; the appellate court reversed, holding the trial court applied the wrong legal standard and remanded for consideration under the Code of Civil Procedure’s intervention rules.
Issues
| Issue | Plaintiff's Argument (A&R / Mroczko) | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata bars Mroczko from intervening in A&R’s timely subrogation suit after her own time-barred suit was dismissed | Mroczko: res judicata should not bar intervention because A&R timely sued seeking damages (including non-economic) and Mroczko retains rights to any recovery exceeding indemnification | Defendants: Mroczko’s prior dismissal is a final judgment on the merits and thus claim preclusion prevents her from asserting the same cause of action | Court: Res judicata does not automatically bar intervention here; the trial court erred by deciding solely on res judicata and must apply the intervention standards of 735 ILCS 5/2-408 on remand |
| Whether the trial court properly applied the law governing intervention | A&R/Mroczko: intervention governed by Code of Civil Procedure; employee’s interest exists because employer seeks non-economic damages and must pay excess recovery to the employee | Defendants: relied on Sankey and argued intervention should be barred where employee’s individual claim was time-barred | Court: Trial court abused its discretion by applying Sankey/res judicata without analyzing timeliness, adequacy of representation, and sufficiency of interest under section 2-408 |
| Whether Mroczko had a sufficient, inadequately represented interest to intervene as of right | Mroczko: employer may be incentivized to settle for amount just covering indemnity; she is entitled to excess recovery and thus has a protectable interest | A&R: has incentive to maximize recovery to be fully indemnified and its counsel does not represent Mroczko | Court: Fact-intensive questions (timeliness, adequacy, bound-by-judgment) were not decided; court must address them on remand under section 2-408 |
| Whether the trial court could limit an intervenor’s participation if intervention is allowed | A&R: if intervenor is permitted, court may restrict control of litigation to prevent prejudice | Defendants: N/A | Court: If intervention is granted, trial court may impose reasonable limits under 735 ILCS 5/2-408(f) to avoid delay or prejudice |
Key Cases Cited
- Rein v. David A. Noyes & Co., 172 Ill. 2d 325 (Ill. 1996) (elements required for res judicata/claim preclusion)
- Sankey Bros., Inc. v. Guilliams, 152 Ill. App. 3d 393 (Ill. App. Ct. 1987) (employee with time-barred tort claim denied intervention where employer sought only indemnification)
- DeLuna v. Treister, 185 Ill. 2d 565 (Ill. 1999) (dismissal for procedural noncompliance examined for preclusive effect)
- Madison Two Associates v. Pappas, 227 Ill. 2d 474 (Ill. 2008) (where a statute is silent, Code of Civil Procedure governs procedural matters like intervention)
- Bernardini v. Home & Automobile Ins. Co., 64 Ill. App. 2d 465 (Ill. App. Ct. 1965) (subrogation secures indemnity; employee retains right to recovery for pain and suffering)
- City of Chicago v. John Hancock Mut. Life Ins. Co., 127 Ill. App. 3d 140 (Ill. App. Ct. 1984) (statutory intervention as of right requires timeliness, inadequate representation, and that intervenor may be bound by judgment)
- Geneva Constr. Co. v. Martin Transfer & Storage Co., 4 Ill. 2d 273 (Ill. 1954) (relation-back/amendment issues in subrogation context)
- Echales v. Krasny, 12 Ill. App. 3d 530 (Ill. App. Ct. 1957) (permitting amendment/intervention in the context of workmen’s compensation provision invalidation)