James Gallagher injured his back in a truck collision. James settled his workers’ compensation claim with his employer, Terminal. He also sued the driver of the other truck and that driver’s employer. After the lawsuit settled, Terminal attempted to enforce its workers’ compensation lien against the settlement proceeds. The trial court ruled that Terminal had waived its lien when it settled the comp claim with James.
Terminal appealed the trial court’s ruling. The court of appeals reversed the trial court, and held that Terminal had not waived the lien. James then appealed to the Illinois Supreme Court, which affirmed the appellate court.
As part of the worker’s comp settlement, James signed a resignation agreement. Terminal argued that James forfeited an argument that relied on the resignation agreement. James had not raised that argument either in the trial or appellate courts.
The Illinois Supreme Court ruled that James had not waived the argument. Here is the court’s rationale: “It is well established that where the appellate court reverses the judgment of the circuit court, and the appellee in that court brings the case before this court as an appellant, that party may raise any issues properly presented by the record to sustain the judgment of the circuit court, even if the issues were not raised before the appellate court.”
The Illinois Supreme Court also seized the occasion to clear up the distinction between “waive” and “forfeit,” commonly used interchangeably. “As this court has stated, ‘[w]aiver arises from an affirmative act, is consensual, and consists of an intentional relinquishment of a known right.’ … Forfeiture, strictly defined, is different from waiver, as we have noted in the criminal context … Rather than an intentional relinquishment of a known right, forfeiture is the ‘failure to make the timely assertion of the right.’”
Get the whole case, Gallagher v. Lenart, No. 103522 (8/9/07), by clicking here.