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Keefe: Effort to Slash Attorneys' Fees in Settlement Smoothly Rebuffed

By Eugene Keefe

Wednesday, October 11, 2017 | 325 | 0 | min read

This claim involved three of Illinois’ more prominent and successful claimant firms that Keefe, Campbell, Biery and Associates respects as solid advocates for the injured workers they diligently represent.

Eugene Keefe

Eugene Keefe

The firms handled the work comp aspect of a personal injury claim and at settlement, the claimant and current counsel tried to basically cut them all out of any fees for their work.

While we are a defense firm, we always struggle to see solid claimant firms do lots of work in claims with combined workers' comp and personal injury issues to then have claimants and plaintiff attorneys try to inappropriately strip them of even reasonable fees for their work.

Last week, in Joiner v. IWCC (Ceco Concrete Construction), No. 1-16-1866WC, Alfred Joiner filed a workers’ compensation claim in November 2008 with the assistance of attorney Neal Wishnick of Sostrin & Sostrin. After around two years of work by the attorney, in June 2010, Joiner discharged Wishnick and hired Andrew Leonard of the Leonard Law Group.

One week later, Wishnick and the Sostrin law firm filed a petition to protect their fees and costs. In such settings, adjudication of fees awaits the resolution of the claim via settlement or hearing/appeals.

Around four years later, in September 2014, Joiner again switched attorneys, discharging Leonard and hiring Fran Fishel of Brill & Fishel. Similar to the Wishnick/Sostrin fee/cost petition, Leonard filed his own petition for fees/costs.

In the middle of the next year, in July 2015, Ceco Construction offered Joiner $290,000 to settle the WC case. After Fishel conveyed the offer to Joiner, he summarily fired Fishel. That same day, Fishel filed her petition for attorney fees with the arbitrator.

Meanwhile, Joiner filed a civil action in the Circuit Court of Cook County, seeking damages for the injuries he sustained in the same work-related accident. Counsel for Joiner named his employer as a party defendant in the civil action.

Nine days after Joiner fired Fishel, he entered into a settlement agreement with his employer. The terms of the agreement provided that Joiner was accepting gross payment of $750,000, with $430,000 to be paid by a third-party defendant, and $320,000 to be paid by his employer in exchange for a dismissal of the civil action.

The Illinois Workers' Compensation computer indicates a fourth advocate who was a PI specialist represented Joiner.

The agreement outlined $1 settlement contracts for resolution of Joiner’s comp claim. Joiner and his counsel also agreed to hold his employer harmless for any claims brought by his various former attorneys in exchange for a waiver of the employer’s comp lien.

After Joiner agreed to the settlement, his attorney advised the prior attorneys of a hearing for an arbitrator’s approval of the deal. In the letter, Joiner's attorney appears to have offered  "20% of $1,” or 20 cents, under the terms of the IWCC fee agreement.

At the same time, the current counsel for Joiner offered to pay Fishel $10,000 for her services as a "professional courtesy,” if Fishel did not object to the WC or PI settlement. Fishel declined the offer.

At the hearing, an arbitrator determined fees due to each of Joiner’s comp attorneys would be calculated using the employer’s $320,000 contribution to the settlement. He further ruled that since Joiner entered into agreements with each of his comp attorneys providing for a 20% fee, the three were collectively entitled to $64,000, representing 20% of the employer’s $320,000 contribution.

The arbitrator divided that value into thirds and ordered Joiner and his counsel to pay Sostrin, Leonard and Fishel $21,333.33 each within 30 days of receipt of the settlement proceeds.

Joiner then fired attorney number four. He hired a new workers' compensation attorney, and they filed a petition for review of the arbitrator decision as to the fees owed to the three prior attorneys.

On review, the Illinois Workers’ Compensation Commission ordered the terms of the $1 settlement contract to be amended to indicate the workers’ compensation claim was settled for $320,000. The panel ordered Joiner and counsel pay Sostrin, Leonard and Fishel $21,333.33 each, for a total of $64,000 in fees.

Joiner and counsel appealed the IWCC ruling to the Circuit Court of Cook County, without filing an appeal bond. The three prior WC firms filed a motion to dismiss Joiner’s complaint, arguing that his failure to post the requisite appeal bond deprived the Circuit Court of jurisdiction to review the commission's order. The Circuit Court judge agreed and granted the motion.

Joiner filed yet another appeal. The Illinois Appellate Court, Workers' Compensation Division, said Section 19(f)(2) of the Workers’ Compensation Act provides that no summons authorizing a Circuit Court to review a decision issued by the commission can be issued “unless the one against whom the commission shall have rendered an award for the payment of money shall, upon the filing of his written request for such summons, file with the clerk of the court a bond conditioned that if he shall not successfully prosecute the review, he will pay the award and the costs of the proceedings in the courts.”

The Appellate Court said Illinois case law established that strict compliance with obtaining a statutory appeal bond is required to vest subject-matter jurisdiction in the Circuit Court (and reviewing courts thereafter).

If the bond is not obtained from an appropriate bonding company, the Appellate Court said, the Circuit Court had no jurisdiction to review a commission decision. The Appellate Court added that the language Section 19(f)(2) makes it clear that the appeal bond requirement applies to anyone the commission has found liable for the payment of money, not just employers.

“No rule of statutory construction authorizes us to declare that the legislature did not mean what the plain language of the statute imports, nor may we rewrite a statute to add provisions or limitations the legislature did not include,” the Appellate Court said.

The Appellate Court also said it was not persuaded by Joiner's argument the the commission lacked jurisdiction to award $64,000 in fees to his prior attorneys when he supposedly settled his workers’ compensation claim for $1.

The Appellate Court said the Circuit Court could not have considered this argument, since the Circuit Court lacked jurisdiction. The court’s members also agreed that they could not decide the issue, either, but suggested that the commission’s award was appropriate, since the it has statutory authority to fix the amount of any fee payable to an attorney in a workers’ compensation case.

We agree with this outcome and dislike these sorts of shenanigans.

Eugene Keefe is a founding partner of Keefe, Campbell, Biery and Associates, a Chicago-based workers' compensation defense firm. This column was reprinted with his permission from the firm's client newsletter.

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