COA: Lake County court overstepped in awarding fees in Illinois case

A Lake County court lacked jurisdiction to award nearly $2 million in attorney fees arising from a permanently injured man’s Illinois worker’s compensation case. The Indiana Court of Appeals on Wednesday vacated the judge’s order on fees entered in the man’s guardianship case.

An appellate panel vacated Lake Superior Judge Marissa McDermott’s order for Hartford Insurance Co. to pay $1.9 million to the guardianship estate in In the Matter of the Guardianship of Christopher Lindroth, a Disabled Adult; Hartford Underwriters Insurance Company v. Marcia Dempe, as Guardian of the Person and Co-Guardian of the Estate of Christopher Lindroth, et al., 45A04-1711-GU-2685.

The underlying case involves the long-term care of Christopher Lindroth, who was paralyzed below the waist after he was involved in a motorized cart accident while working for his employer, Coastal International, in Cook County, Illinois. An Illinois jury found damages of $34 million, and after determining Lindroth was 35 percent at fault, jurors awarded him $22 million, of which lawyers received $9 million.

A guardianship for Lindroth was opened in Lake County, Indiana, and guardians were ordered to put $3.5 million of the judgment proceeds in a segregated account to pay Hartford’s statutory lien compensating for Lindroth’s medical expenses. The court eventually ordered the release of $3 million Hartford was entitled to.

But when Hartford moved the court to release most of the remainder, the guardians filed a motion alleging Hartford owed the estate $2.3 million for attorney fees on future medial expenses. The guardians moved the court for an order for Hartford to pay the estate $1.9 million, which the court granted.

Hartford filed an emergency motion for the court to reconsider, which was denied. The insurance company argued that “the Illinois Worker’s Compensation Commission was to issue a decision about when Hartford would pay attorney fees for future medical expenses that would be covered by the civil judgment proceeds. On November 30, 2017, the Worker’s Compensation Arbitrator issued an order that found the Lake Circuit Court ‘has no jurisdiction over the issue of adjudicating the Illinois workers’ compensation lien,’” Judge Melissa May wrote for the appellate panel, which agreed.

“As the Lake Circuit Court noted, it has jurisdiction over the Guardianship and the funds being managed therein for Lindroth. We presume this is why Hartford brought its request for payment of the statutory lien to the Lake Circuit Court. Nevertheless, the Lake Circuit Court’s jurisdiction to release funds to pay Hartford’s statutory lien against Lindroth’s civil judgment proceeds does not also grant the Lake Circuit Court jurisdiction to recalculate the attorney fees due in the Illinois Worker’s Compensation proceedings,” May wrote.

“Because the Lake Circuit Court did not have jurisdiction to decide when and how attorney fees would be paid in an ongoing worker’s compensation proceeding from Illinois, we reverse the order denying Hartford’s motion to reconsider, vacate the order for Hartford to pay $1.9 million in attorney fees, and remand for the Lake Circuit Court to disburse Estate funds in accordance with any unappealed final order from the Worker’s Compensation Arbitrator or Worker’s Compensation Commission,” the panel concluded.

The COA also rejected Hartford’s request for appellate attorney fees in this case for alleged “forum shopping,” noting the guardians’ motion for fees was in response to an action initiated in Lake Superior Court by Hartford.

This article was first published by The Indiana Lawyer.

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