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In re Guardianship of Lindroth

Court of Appeals of Indiana

December 5, 2018

In the Matter of the Guardianship of Christopher Lindroth, a Disabled Adult; Hartford Underwriters Insurance Company, Appellant-Respondent,
v.
Marcia Dempe, as Guardian of the Person and Co-Guardian of the Estate of Christopher Lindroth, and First Midwest Bank, as Co-Guardian of the Estate of Christopher Lindroth, a Disabled Adult, Appellee-Claimants

          Appeal from the Lake Circuit Court Trial Court Cause No. 45C01-0708-GU-87 The Honorable Marissa McDermott, Judge

          Attorneys for Appellant Karl L. Mulvaney Margaret M. Christensen Nana Quay-Smith Bingham Greenebaum Doll LLP Indianapolis, Indiana Trenton W. Gill Katherine M. Haire Reminger Co., LPA Indianapolis, Indiana

          Attorneys for Appellee Libby Y. Goodnight Krieg DeVault LLP Indianapolis, Indiana Ann Marie Woolwine Krieg DeVault LLP Merrillville, Indiana

          May, Judge.

         [¶1] Hartford Underwriters Insurance Company (hereinafter "Hartford") appeals an order entered by the Lake Circuit Court in the Guardianship of Christopher Lindroth. On appeal, Hartford asserts the following restated issues:

(1) whether the Lake Circuit Court had jurisdiction to order Hartford to pay attorney fees arising from the Worker's Compensation action;
(2) whether, if the Lake Circuit Court had jurisdiction, it should have deferred to the Arbitrator's continuing jurisdiction over the fees to be paid in the Worker's Compensation action;
(3) whether the Lake Circuit Court's order for Hartford to pay attorney fees is wrong under Illinois Worker's Compensation Law; and
(4) whether the Guardians should pay attorney fees to Hartford because Guardians engaged in improper forum shopping.

         We reverse the Lake Circuit Court's order as to attorney fees and remand.

         Facts and Procedural History

         [¶2] Lindroth was severely injured in a motorized cart accident while working for his employer, Coastal International, in Cook County, Illinois. He spent extended time in a coma and the lower half of his body is permanently paralyzed. Soon after the accident, a guardianship was opened in the Circuit Court of Lake County, Indiana, with Lindroth's mother, Marcia Dempe, named as guardian of his person, and Dempe and First Midwest Bank named as guardians of his estate (hereinafter "Guardians" and "the Estate").

         [¶3] Guardians filed a claim for worker's compensation benefits in Cook County, Illinois. Hartford is the worker's compensation insurer for Lindroth's employer and thus is a party in Lindroth's worker's compensation action. There appears to have been no dispute that Lindroth was entitled to worker's compensation benefits, and Hartford began paying for Lindroth's medical expenses and lost wages.

         [¶4] Guardians also filed a civil tort action in Cook County, Illinois, against the manufacturer of the cart Lindroth had been driving and various other parties. That case proceeded to a jury, which found the damages were $34 million[1] but Lindroth was 35% at fault, such that Lindroth was awarded a judgment of $22 million. Of that, Lindroth's lawyers for the tort case received $9 million for fees and costs.

         [¶5] Pursuant to an Illinois statute, 820 ILCS 305/5, a worker's compensation insurer is entitled to reimbursement from any civil judgment proceeds collected by an employee from third parties responsible for the workplace accident, so Hartford sought reimbursement from the civil judgment proceeds of the $5.7 million that Hartford had already paid out for Lindroth's medical expenses and lost wages. Pursuant to that same statute, insurers that are reimbursed from such civil judgment proceeds must return 25% of such reimbursement to cover the insurer's portion of attorney fees from the civil action that produced the proceeds. The parties agreed Hartford's statutory lien (reimbursement amount minus 25% attorney fees) was $3.5 million.

         [¶6] The guardianship judge in Lake Circuit Court initially ordered Guardians to put $3.5 million of the civil judgment proceeds into a segregated account earmarked for paying Hartford's statutory lien. After time, the Lake Circuit Court ordered Guardians to release $3 million to Hartford. On November 10, 2016, Hartford filed a motion requesting the ...


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