There are many circumstances where an injury in the course of employment also results in two separate legal actions: a Worker’s Compensation claim and a civil personal injury case. One of the most common examples of this is where an employee is involved in a car accident while they are in the course of their employment. In that case, they may have a claim against both their employer as well as the driver who hit them. This is, essentially, what happened to Clifton Armstead in 2015. His case, however, was complicated by the terms of the Worker’s Compensation settlement agreement he signed, and the dispute is now awaiting decision before the Illinois Supreme Court in a potentially significant decision.
The basic facts of Armstead v. National Freight, Inc are straightforward: Armstead was a truck driver working for Manfredi Mushroom Company out of Pennsylvania. As he was driving through Grundy County, Illinois, he was struck by a driver working for National Freight. He filed a Worker’s Compensation claim in Pennsylvania claiming back, shoulder, and knee injuries. He then settled the WC claim, in a settlement contract that included, in pertinent part, that the agreement was
“appropriately approved as binding only on the signing Parties, and limited to their respective rights and obligations under the [Pennsylvania Workers’ Compensation Act].” The Agreement also states it “is not to alter rights or obligations of any third party not a signatory to the Agreement.” In the body of the Agreement, under “[s]tate the precise nature of the injury,” the description indicates “[r]ight knee strain. The parties agree that Claimant did not sustain any other injury or medical condition as a result of his 3/06/2015 work injury.”
Armstead v. Nat’l Freight, Inc., 2020 IL App (3d) 170777, ¶ 5, appeal allowed, 167 N.E.3d 636 (Ill. 2021)
This prompted National Freight to move for Partial Summary judgement in the civil case, arguing that Armstead had made a legally binding judicial admission that he had suffered no back or shoulder injury in the accident.
This argument succeeded in the circuit court. On Appeal, however, the court initially sided with Armstead, ruling that because the WC matter was a separate proceeding against a different party it could not constitute a judicial admission.
However, there are more than one type of admission, and upon rehearing the Court ruled against Armstead on the basis that his signing of the contract was an evidentiary admission, and that he was now barred from offering conflicting statements under the doctrine of collateral estoppel. This doctrine prevents the relitigation of issues where (1) the issue in the prior adjudication is identical, (2) there was a final judgment on the merits in the prior adjudication, and (3) the party is the same as was decided against in the prior adjudication. Although Armstead argued that the settlement agreement did not constitute a “final judgement on the merits,” that the “rights and obligations” language of the contract prevented third parties from asserting collateral estoppel, and that WC matter was not a full opportunity to litigate the issues due to Armstead’s incentive to settle that claim, the Appellate court still ruled that he was prevented from claiming the back and shoulder injury in the civil case. Armstead v. Nat’l Freight, Inc., 2020 IL App (3d) 170777, appeal allowed, 167 N.E.3d 636 (Ill. 2021)
Armstead appealed the court’s decision, and the matter is now before the Illinois Supreme Court, with oral arguments having occurred in September. His primary argument is that the settlement agreement, although approved by the Pennsylvania WC system, did not constitute an actual adjudication of the injury itself, because ultimately it wasn’t relevant to the approval itself. The matter has the potential to have a significant impact on the binding power of settlement contract language not only in Worker’s Compensation Settlements, but on the use of the doctrine of collateral estoppel in civil cases generally.
Attorney Travis Dunn