Dead Man Walking

Wednesday, December 24, 2008 | 0

By Eugene F. Keefe and Shawn R. Biery

Synopsis: We report one of the more bizarre appellate rulings of our legal careers as defense lawyers, court watchers and law professors.

Editor’s comment: The lead case we report this week is incredible. Like the ruling in Ming Auto Body v. IWCC we reported last week, the Illinois Appellate Court is strictly adhering to a 1941 Supreme Court ruling and won’t allow the Commission to remedy clear evidence of workers' compensation fraud first discovered after a decision is final. With respect to defense counsel, it appears they missed one important issue that doesn’t appear to have been raised. And as we explain below, unless the insurance carrier makes a colossal mistake and voluntarily pays this award to the wrong guy, we think the Appellate Court decision might have the diametrically opposite outcome from what the court appears to be ruling.

For that matter, we wonder if all the judges, justices, Commissioners, attorneys and parties on both sides missed one major problem that may or may not need to be remedied. It is fascinating and unprecedented to consider the Court may have affirmed an award of benefits for a claimant who has appeared before the Commission, Circuit Court of Lake County and the Appellate Court fraudulently using the name of a dead person. While you, as a living person may be able to fraudulently appear using another living person’s name before the Commission if you aren’t caught before their decision is final, for reasons we will outline, we don’t think you can do it in the name of a dead person. We will let you, as our readers, comment as to whether the Arbitrators and attorneys on both sides should starting asking for ID’s and fingerprints before starting hearings.

Who’s on First, What’s on Second?

The Commission’s two rulings awarded benefits to a person named Harry Diaz—claimant’s real name isn’t Harry Diaz! The Appellate Court decision is listed on the web as Smalley Steel Ring, Appellant v. Illinois Workers’ Compensation Commission, et. al., Harry Diaz, Appellee. The decision of the Appellate Court indicates, and we have no reason to believe they wouldn’t get it correct, an individual named Harry Diaz died in New York State on Sept. 1, 2003. Mr. Diaz's identity appears to have been conveniently used as a fraudulent part of the employment process. For reference, the injuries in this claim occurred July 9, 2004! From the majority ruling, it appears claimant’s real name isn’t Harry Diaz, deceased; it is Alejandro Atilano. The decision from the Commission below and in the Appellate Court doesn’t have the moniker Alejandro Atilano on it. Any current claim by Alejandro Atilano for a 2004 injury is well outside the applicable statute of limitations and his attorney may have malpractice concerns for not filing a new claim in Atilano’s real name or amending the existing application.

We wonder if and when someone is going to point out Alejandro Atilano can’t collect workers’ compensation benefits from a ruling that is locked by this court in the name of the departed, Harry Diaz. Mr. Atilano doesn’t have proper legal standing to do so. The irony of this ruling is the Court repeatedly makes it clear the ruling is final and can’t be changed. This technical finality should render it impossible to now file a motion to change the name of petitioner from Diaz to Atilano. We also point out the insurance carrier could make a mistake and voluntarily pay monies to Mr. Atilano and not actually "satisfy" the Commission’s ruling monies from the ruling will still be owed to Mr. Diaz through his estate.

From a purely academic perspective and not to sound silly, there are lots of Illinois rulings which find it is not technically possible to maintain a lawsuit in Illinois when you are dead. Once a person has passed, their estate is the entity legally created to take over a claim due to one’s passing. Unless and until the estate takes over for the deceased, dead people are considered a legal nullity; they don’t have standing to do anything. For example, dead people can’t sue you. A judgment solely in the name of a dead person can’t be collected; there is no one to pay it to. In pending common law claims brought by a living person who passes during the pendency of the action, you have a short period of time to substitute the decedent’s estate for the recently passed plaintiff. In workers’ comp claims, when claimant passes, the Commission is somewhat more liberal to allow the estate to come in but they shouldn’t be that liberal when the claim is brought in the name of a decedent having read both the Commission and appellate opinion, we assert this whole claim should have been a nullity from its inception. In deference to the Commission and reviewing courts, it wasn’t up to them to figure that out for counsels.

As it currently is written, the ruling of the Appellate Court requires respondent and its carrier to pay benefits to a dead guy and not the person who appeared and testified and got the award. The tone of the award may imply respondent is getting an unhappy legal outcome we truly feel the opposite is true; neither party can be happy with this crazy result. As we indicate above, it is not possible to pay monies to a dead person. The insurance carrier does not and should not have to pay the Commission’s award of benefits to Alejandro Atilano on behalf of Harry Diaz, deceased. the Appellate Court ruling patently requires payment to Harry Diaz. If Mr. Diaz has an estate, that entity would have to seek such payments, if there is anyone around who qualifies or wants them. We also point out to the insurance carrier that, if they make the mistake of voluntarily sending monies to Alejandro Atilano and his attorney, they will not have satisfied the award of the Commission and the monies from the ruling may still be owed to decedent Diaz’ estate.

If the insurance company doesn’t pay Alejandro Atilano, in order to collect this award, the attorney who is proceeding for what we feel may be a scam artist will have to file suit to get a judgment on the award of the Commission under Section 19(g) of the Act in the name of the dead person. Having round-tabled this ruling among the members of our firm, we feel confident a circuit court judge can provide a judgment to the estate of Harry Diaz if one is created by his heirs, relatives or friends. We cannot conceive any scenario in which a circuit court could give a judgment on an IWCC decision that only names Harry Diaz to a random person named Alejandro Atilano. We also invite your thoughts and comments as to whether claimant’s attorney has a binding legal fee agreement with Harry Diaz, if the IWCC Attorney Representation form was fraudulently signed by Mr. Atilano.

Therefore, if a 19(g) proceeding is filed; we suggest the insurance carrier make certain a motion to dismiss be filed because Alejandro Atilano has no standing to seek a judgment on a final decision for workers’ compensation benefits in the name of Harry Diaz, deceased. We don’t think Mr. Atilano or his counsel can appear before a Lake County Circuit Court judge with a decision solely in the name of Harry Diaz and say “they didn’t mean him; they meant me, so make the check payable to me.” We also wonder whether the employer/insurance carrier could file a cross-complaint for fraud in response to a 19(g) action to obtain a judgment against Mr. Atilano for his apparent fraud in obtaining the Commission’s award. We assure our readers if we were handling, we would be certain to do so.

In Smalley Steel Ring Company v. Illinois Workers' Compensation Commission (No. 2-07-1050WC Dec. 12, 2008) the Illinois Appellate Court, Workers’ Compensation Division held that even with strong evidence of claimant fraud, the arbitrator lacked authority, after his decision had become final, to recall the decision and conduct a new hearing for any purpose except correcting technical or clerical errors. On Aug. 31, 2004, claimant sought workers' compensation benefits from his employer. After a hearing over the objection of the employer—specifically due to their request to confirm petitioner’s identity an award was made with decision issued April 7, 2005. The decision was not appealed by either party and instead an “emergency motion to recall the arbitrator's decision and reopen proofs” was presented by respondent and was granted absent appearance by petitioner or his counsel. At the second hearing, again without petitioner or his counsel present, the Arbitrator issued a second decision denying benefits based upon evidence petitioner’s identity was fraudulent. petitioner appealed the second decision and the IWCC reversed and reinstated the initial award. This was affirmed by the Lake County Circuit Court and employer appealed, arguing the Commission erred by finding the arbitrator did not have the statutory authority to recall his first decision, reopen proofs, and issue a second decision.

A brief review of the facts confirms claimant filed an application stating an apparently phony name and alleging he injured his left upper extremity pulling a rack at work. On Jan. 31, 2005, an arbitration hearing was conducted. The employer requested a 30-day continuance, in part to obtain verification of claimant's identity, asserting claimant provided a social security number which belonged to a dead person. Claimant objected and the Arbitrator denied the employer's motion and proceeded with hearing and issued an award for Harry Diaz on April 7, 2005. As we indicate above, more than 30 days then elapsed, at which time, a coworker confirmed claimant Atilano previously worked for a different company and while employed at the other company, he suffered a work-related injury to his left shoulder and underwent left-shoulder surgery. He also sought benefits and the earlier claim was settled for 25% loss of use of his left arm.
 

In the unanimous ruling, the Appellate Court again noted unless a party files a petition for review of the arbitrator's decision within 30 days after the party's receipt of a copy of the decision and notification of when it was filed, the arbitrator's decision "shall become the decision of the Commission and in the absence of fraud shall be conclusive." They further noted Section 19(f) of the Act permits the Arbitrator and the Commission to recall their respective decisions to correct clerical or computational errors. The Court noted in Wilson-Raymond Constructors Co. v. Industrial Commission, the employer filed a petition to recall the Commission's decision and requested reconsideration of the merits and to present further evidence due to evidence of fraud. Its petition was filed prior to the expiration of the time frame within which it could seek judicial review of the Commission's decision. The Supreme Court noted the Act contained no authorization for the filing of such a petition and stated, although section 19(f) provided for petitions to recall in the event of clerical or computational errors, no such error was involved. The Court again noted fraud was not a basis for extending the statutory authority of the arbitrator or the Commission. In Michelson v. Industrial Commission, the Supreme Court declined to find the legislature intended the "in the absence of fraud" language to give the Commission the authority to set aside its orders on the ground of fraud. It also noted, without express authority, the Commission was without jurisdiction to so act and the parties were "relegated to a court of equity for relief under a charge of fraud."
 

This Court also noted their recent decision in Ming Auto Body v. Industrial Commission confirmed a party may maintain an action before the circuit court to procure relief from a judgment of the Commission based on fraud and also directed readers to Roadside Auto Body, Inc. v. Miller where a declaratory judgment action sought to vacate, as fraudulent, a settlement agreement approved by the Commission. The Court noted in certain circumstances, a court can review an otherwise conclusive decision by the Commission, even if the procedures and time limitations set forth in section 19(f)(1) have not been followed. This Court also specifically noted Section 25 of the Act expressly provides for criminal penalties and civil liability in the event of fraudulent workers' compensation claims and noted deficiencies in the Act should be addressed by the legislature. We point out Section 25.5 of the Act was one of the hollow legislative reforms provided in the 2005 Amendments to the Act—it only allows for damages due to fraud if claimant has been criminally convicted of such fraud. It is hard to file suit against someone convicted of WC fraud when most of Illinois’ state’s attorneys refuse to prosecute even the clearest cases of WC fraud.

We also point out to all of our readers this Court doesn’t say clear evidence of fraud is to be ignored or rewardedthey simply require the defrauded employer/insurance carrier to sue the con artist in circuit court. We assure everyone our firm has a number of such fraud claims pending under theories of common law fraud and under the Illinois Insurance Fraud Act. The Fraud Act allows for treble damages, costs and attorney’s fees to be recovered. We remain fascinated that more self-insured employers and insurance carriers don’t bring such claims—we feel there may be something of a fatalist mentality among claims handlers who lose too many workers’ comp claims. The deck isn’t as clearly stacked against you in a common law action, as some folks feel it is in the Illinois workers’ compensation arena.

We like strict adherence to the statute and hope this ruling will signal a trend that both sides’ WC rights + duties will be measured by following the "English language" version of the act.

Please also note it is difficult for us to argue with the reviewing courts of this state when they closely adhere to the statute as it appears they have done in this ruling and Ming Auto Body. In writing the majority ruling indicating workers' compensation fraud cannot be addressed by the Commission, Justice McCullough wrote "[s]uch deficiencies in the act should be addressed by the legislature." However, we wish a similar adherence to the letter of the law should also apply to the other side of the workers' compensation matrix in this state. We point to numerous “language-bending” rulings to benefit claimants such as:

    Durand v. Industrial Commission, where the Illinois Supreme Court effectively stripped out the statute of limitations in workers’ compensation claims—we are not aware the legislature meant the statute of limitations in Section 6(c) should be a guideline or suggestion to be followed when convenient to claimant but actual limiting legislation that was intended by the legislature to be binding on both sides;
    General Tire and Rubber Co. v. Industrial Commission and a secret unnamed Rule 23 ruling from this current year where the reviewing courts awarded mileage expense for a injured worker to attend medical care with treating physicians we assure our readers there is no provision in the Illinois act or rules that provides this benefit and will donate $1,000 to the favorite charity of anyone who can point to an actual legislative or administrative provision that supports either of these rulings
    First Assist v. Industrial Commission, where the reviewing court noted Section 8(d)(1) of the act would only apply to award wage-loss differential benefits where a claimant could no longer work in their “usual and customary line of employment but still awarded such benefits to a nurse who obtained a lower paying wage as a nurse. Following the plain "English language" view of the Act, we think a nurse who, after suffering injury returns to working as a nurse is in the same “line of employment” and therefore shouldn’t qualify for such benefits.

We aren’t certain of what the courts may do if Mr. Atilano and his counsel comes for a judgment on the award in Mr. Diaz’ name. It is possible they may bend over backwards to find some new and unusual legal device to change the “unchangeable” award. We certainly hope they don’t do that. The Smalley Steel Ring Co. ruling again highlights the need for early defense preparations to ensure you have all evidence in place before any hearing in a claim. KC&A performs background research on every case to determine all potential evidence which may aid in defense of a claim. It is unclear why the case was not immediately appealed after an apparent forced hearing over defense objections based upon the fraud suspicions. Respondent may have realized the presence of fraud before the decision became final (as you have 30 days from the receipt of a decision to appeal and decisions are rarely received the within 3 days after they are issued). Instead of an appeal, an “emergency motion to recall the decision” was presented 33 days after the decision was issued. Although we have no access to defense strategy notes, this writer always strongly recommends an immediate appeal after being forced to hearing in such a manner.

To read the Smalley Ring decision, click here: http:www.workcompcentral.com/pdf/2008/misc/diazx121708.pdf

To read the Ming decision, click here: http://www.workcompcentral.com/pdf/2008/misc/Ming-v-IndustrialCommission-12-10-2008.pdf

This article was researched and written by attorneys Eugene F. Keefe and Shawn R. Biery, founding partners of Keefe, Campbell & Associates in Chicago.