Rusin's Review of Good, Bad and Ugly Court Decisions

Saturday, November 4, 2006 | 0

By Michael E. Rusin

Before the Supreme Court of Illinois

Claim for Carpal Tunnel Syndrome Held to be Timely Even Though Petitioner Knew of Condition and Did Not File a Claim Within Three Years, Deana Durand v. Industrial Commission and RLI Insurance Company, Docket No. 101109, filed Oct. 19, 2006.

In 1990, petitioner was hired by respondent as a clerical worker. In 1993 she became a policy administrator. Her job required her to scan insurance policies into a computer and she typed on a computer keyboard several hours a day. She claimed that she suffered from repetitive trauma and developed carpal tunnel syndrome. She filed a claim with the Commission on Jan. 12, 2001. She claimed an accident date of Sept. 8, 2000.

Petitioner testified at trial that her problems began in 2000. She first saw a doctor August 15, 2000. She complained of hand and wrist pain along with numbness and tingling. She had an EMG/NCV Sept. 8, 2000. It showed early right carpal tunnel syndrome. A neurologist felt petitioner's condition was work-related. Petitioner started treating with Dr. Conner, an orthopedic surgeon, Nov. 29, 2000. Petitioner reported developing problems with her arms and hands six to seven months earlier. Dr. Conner concluded that petitioner's condition was work-related based on her history. The employer retained Dr. Pomerance. He reviewed petitioner's job duties and examined petitioner. He concluded that petitioner's condition was not work-related. Petitioner's attorney retained Dr. Robert Martin. He concluded that petitioner's condition was work-related. The case was tried before an arbitrator. On cross-examination, petitioner admitted that she first began having problems with her hands and wrists in September or October of 1997. Petitioner admitted that she reported to her supervisor on Jan. 29, 1998 that she was having problems with her hands and wrists. Petitioner stated that in her opinion her condition was carpal tunnel syndrome and that it was related to her work. After hearing all of the evidence, the arbitrator ruled that petitioner's condition was work related. The arbitrator ruled that petitioner's application was timely because she filed her claim within three years of being officially diagnosed with carpal tunnel syndrome on Sep. 8, 2000.

The employer appealed and the Commission in a 2-1 decision reversed and ruled that the claim was not timely. The Commission relied on petitioner's testimony wherein she specifically stated on multiple occasions that her problems began in September or October of 1997 and she knew that her condition was work-related. However, she didn't file a claim until more than 3 years later in January of 2001.

Petitioner appealed to the circuit court and the circuit court affirmed the denial. Petitioner appealed to the appellate court and the appellate court in a 3-2 decision also confirmed the denial citing sufficient evidence to support the Commission's ruling. Petitioner then appealed to the Supreme Court, and the Supreme Court in a split decision reversed.

The Supreme Court exhaustively analyzed prior decisions involving repetitive trauma cases and cases involving the issue of how to define the "date of manifestation" in repetitive trauma cases. The court stated that the date of manifestation for repetitive trauma claims is the date on which the injury and its causal link to work become plainly apparent to a reasonable employee. The court specifically noted that the manifestation date is NOT the date on which the injury and its causal relation to work become plainly apparent to a reasonable physician. Nevertheless, the Supreme Court reversed the Commission and found that the Commission's finding that petitioner's date of manifestation was in 1997 or 1998 was erroneous. The court concluded that petitioner's own admission that she knew she had carpal tunnel syndrome and that she knew it was work-related was insufficient to form the date of manifestation. The Supreme Court based its decision primarily on statements by petitioner that her symptoms were intermittent and the fact that she didn't seek any medical treatment. The court ruled that petitioner's claim was timely. The court remanded to the Commission to determine whether or not there was a causal relationship between petitioner's work duties and her carpal tunnel syndrome.

The decision was not unanimous. Four justices signed with the majority decision. One justice did not participate, and two justices dissented. The dissenting justices agreed with the Commission and the appellate court. The dissenting justices pointed out that petitioner's testimony more than adequately supported the Commission's decision that the date of manifestation in this case was September or October of 1997. The dissenting opinion notes that the majority simply substituted its decision for that of the Commission, even though past court decisions clearly state that the court is to give deference to the Commission's factual findings. In this case there was more than sufficient evidence to support the Commission's decision. The dissent is well reasoned.

It states, "The majority declares that the claimant's injury did not manifest itself until sometime in 2000, when claimant's pain necessitated medical treatment. Thus, the de facto rule established by this case seems to be that, regardless of a claimant's actual and reasonable awareness of an injury's manifestation, corroborative medical treatment is necessary before it can be said that a reasonable person would plainly recognize the injury and its causal relationship to his or her employment. This rule creates a puzzling inconsistency, because while the majority claims to maintain a totality of circumstances approach to determining a repetitive-trauma injury's manifestation date, it seems to have made the medical diagnosis of such an injury the determinative factor in that inquiry."

Comment: This is a bad decision for employers from the Supreme Court. As the dissent points out, the court essentially contradicts itself by claiming that the manifestation date is premised on an employee's knowledge of a work-related injury but doesn't require the employee to actually file a claim until the employee goes to a doctor and gets a medical diagnosis. That's essentially contrary to all prior case decisions.

John Maciorowski of our office handled this case. The case was a close one. Although the arbitrator ruled in favor of the petitioner, the Commission, circuit court and appellate court all ruled in the employer's favor. The evidence that we adduced at trial was convincing. This was a factual dispute. The Commission made its decision and the court claims that it will give deference to Commission decisions. However, the court improperly substituted its own factual determinations for that of the Commission. The court denied the Commission the right to make its own factual determinations because there was clearly evidence in the record to support the Commission's decision. This decision makes it all the more difficult for employers to defend repetitive trauma cases based on statute of limitations defenses. The court has been chipping away at limitations defenses raised by employers for years. This decision essentially eliminates the employer's right to dispute a case based on statute of limitations unless a claimant knows about the injury, its causal relationship to work, and gets a medical opinion that it's causally related to work but still doesn't file an application for more than three years. We plan a petition for rehearing in the Supreme Court -- all we need to do is have one justice change his vote.

Before the Appellate Court of Illinois -- Workers' Compensation Commission Division

Injury at Company Picnic Held Not Compensable Where Petitioner Given a Choice of Going to Company Picnic or Going to WorkWilliam Gooden v. Industrial Commission and Allstate Insurance, No. 1-05-3756WC, filed 7-12-06.

Petitioner was employed by Allstate Insurance Company as a senior business machine operator. On July 21, 2000, the employer held a company picnic. During the first four hours of the day, petitioner attended the company picnic, and the second four hours he was required to work at his machine. He was paid his regular salary for the whole day. He had a choice. He could go to the picnic for half the day and work half the day or he could work the whole day. Either way, he was going to be paid his full salary. While attending the company picnic, petitioner injured his back while playing volleyball. The employer presented a witness to testify that the picnic was not mandatory. No one was punished for choosing not to attend. The employer's representative testified that no employees were ordered, assigned, or pressured to attend the picnic. They were simply given the choice of attending the picnic for half a day and working the other half or working a full day. All employees received their full wages for the day regardless of whether they chose to attend the picnic or not.

After hearing the evidence, the arbitrator ruled the case non-compensable. Petitioner appealed to the Commission and circuit court and the denial was affirmed. Petitioner appealed to the appellate court and the appellate court affirmed the denial also.

The appellate court cited Sec. 11 of the Workers' Compensation Act which states, "Accidental injuries incurred while participating in voluntary recreational programs including but not limited to athletic events, parties and picnics do not arise out of and in the course of the employment even though the employer pays some or all of the costs thereof. This exclusion shall not apply in the event that the injured employee was ordered or assigned by his employer to participate in the program."

The court found that the Commission's decision finding that petitioner was neither ordered nor assigned to attend was not contrary to the manifest weight of the evidence and therefore they sustained the denial. The court distinguished this case from a similar case, Woodrum v. Industrial Commission. In that case, the claimant had a choice of attending the picnic or else taking a personal day or vacation day in order to be paid. The court ruled that case compensable because the option of having to take a personal or vacation day instead of going to the picnic constituted an order or assignment to attend.

Comment: This is a good case for employers, reinforcing the rule that employers can hold company picnics without fear of having to pay compensation unless the employer pressures employees to attend. I am glad that the court decided to publish this case. I am rather surprised that petitioner pursued the case all the way to the appellate court since the evidence was not favorable to petitioner. However, the claimant's attorney likely read the Woodrum decision and felt that he had a chance to obtain a reversal. The court likely decided to publish the decision so that the Commission would not improperly misread its holding in the Woodrum case.

Slip and Fall by Waitress Resulting in Knee Surgery Held Compensable  Wage Differential Award Upheld Based on Earnings of Similar Waitresses, Morton's of Chicago v. Industrial Commission and Jane Rooch, No. 1-05-2461WC, filed 7-12-06.

Petitioner was employed by Morton's, a steakhouse, as a waitress. On April 24, 1999, she slipped and fell, injuring her left knee. She had arthroscopic knee surgery for an acute dislocation of her patella. In December 1999, her doctor stated that she would be physically unable to resume her job as a waitress. Prior to the accident, petitioner had a bachelor's degree and a certificate of paralegal studies. In March of 2000 she began a self-directed job search. She obtained a position as a paralegal earning $34,000.00 a year.

Prior to the accident, in 1998 petitioner proved that she earned approximately $44,000.00 a year. She also proved that a similar waitress earned $44,000.00 per year. In the year 2000, petitioner showed that the same waitress co-worker earned $50,000.00 per year.

Petitioner sought an award for wage differential. The arbitrator didn't award wage differential, but instead granted petitioner 60% loss of use of her left leg. Petitioner appealed and a split Commission ruled in her favor and awarded wage differential based on the difference between what petitioner was currently earning and the amount that the co-worker was earning in the year 2000.

The Commission's final decision was issued on several different occasions because of changes at the Commission level and because of several typographical and computational errors made by the Commission. The employer appealed to the circuit court, which affirmed. The employer appealed to the appellate court, and the appellate court also affirmed.

The appellate court ruled that it was not improper for the Commission to calculate the wage differential based on what the co-worker was able to earn in the year 2000. The court noted that petitioner and the co-worker earned similar wages in 1998. Therefore, it was reasonable to infer that petitioner would have earned approximately the same amount of money as did the co-worker in the year 2000. The court found that it was reasonable for the Commission to use a co-worker's wages since it could not use petitioner's wages as petitioner was no longer employed by respondent. Petitioner testified that she and the co-worker had similar shifts, were given similar assignments and had the same seniority.

Comment: Based on the evidence summarized by the court, this decision appears to be correct. The nature of petitioner's employment is somewhat unusual from an earnings standpoint since a waitress' salary can vary significantly among co-workers. The fact that petitioner proved that her co-worker earned approximately the same as she did in 1998 gave the Commission some justification to rely on the earnings of the co-worker in the year 2000. Petitioner also offered the yearly wages for other unnamed servers. A comparison of the wages of various employees from 1998 to 2000 showed increases which the court stated justified the Commission's determination.

The employer was clearly frustrated here with the Commission's actions because the Commission issued several conflicting decisions, there were changes in personnel, and the decisions had numerous typographical and computational errors. All Commission decisions should be read carefully. A petition to correct clerical error can be filed within 15 days from receipt of a decision. The filing of a timely petition to correct clerical error stays the obligation to file an appeal until a ruling is made on the petition to correct the errors.

Claimant Granted an Award in Illinois Where Contract of Hire Is in Illinois -- Agreement to be Bound by Law of Different State Held Unenforceable, P.I .& I Motor Express/For U, LLC v. Industrial Commission and Tony Faulkenberry, No. 5-05-0450WC, filed 5-21-06.

Petitioner was hired by respondent as a truck driver in the state of Illinois. He drove interstate and was injured in a motor vehicle accident in Pennsylvania. Petitioner hired an attorney and filed a claim for benefits in the state of Ohio. He received payments pursuant to the Ohio workers' compensation statute.

In addition, petitioner filed a claim for Illinois workers' compensation benefits. A dispute arose as to whether petitioner needed additional treatment for his neck and back injury. The issue was set for hearing before the Ohio Industrial Commission, but no ruling was ever made.

Prior to the accident, petitioner signed a form given to him by his employer wherein he agreed to be bound by the workers' compensation laws of the state of Ohio and that the Ohio workers' compensation statute would be the exclusive remedy for any injuries arising out of his employment.

The employer challenged the Illinois workers' compensation claim stating that petitioner's exclusive remedy was under the Ohio workers' compensation statute. The employer noted that petitioner agreed to Ohio benefits, applied for and received Ohio benefits. Therefore, the Illinois claim should be barred. The arbitrator overruled this argument and awarded benefits to petitioner. The employer appealed to the Commission and the Commission affirmed the award. The employer appealed to the circuit court and the circuit court also confirmed the award of benefits.

Employer appealed to the appellate court and this appeal was rejected as well. The court ruled that the agreement wherein petitioner agreed to accept only Ohio workers' compensation benefit was invalid and unenforceable. The court ruled that such an agreement was contrary to public policy. The court held, "We believe, therefore, that any agreement between an employer and an employee which purports to divest the Commission of jurisdiction where it otherwise exists is contrary to the public policy of this State and is, therefore, unenforceable."

The court further rejected the employer's argument that the claimant was not entitled to Illinois benefits because he had already filed for and received Ohio benefits. The court noted that there was no argument that petitioner was receiving a double recovery. The court ruled that it was permissible for petitioner to receive benefits under Ohio law and Illinois law. The court held, "Generally, receipt of workers' compensation benefits in one state does not bar a subsequent award in a second state with concurrent jurisdiction."

Comment: The court's ruling in this case is not surprising. I had always expected that the court would rule that an employer and an employee could not make an agreement to divest the Commission of jurisdiction. The Act is written to prohibit such a situation. If such an agreement were enforceable, employers would as a matter of course try to get an agreement with their employees to apply the law of a different state. Our statute does not provide such a remedy for employers. Our statute provides that if there is a justifiable basis for jurisdiction, the court will allow a claim to be made irrespective of an employee's waiver of his rights under state law.

The award was made here because the employer couldn't prove that petitioner would have a double recovery. The result might have been different if petitioner had engaged in a lump sum settlement under Ohio law. Such a settlement might have barred his right to file an Illinois claim. The employer is certainly entitled to offset any benefits paid under Ohio law as against any award made in the Illinois workers' compensation claim.

Sheet Metal Worker Granted Benefits for Alleged Injury While Descending Ladder Despite Evidence That He Had a Pre-Existing Condition and No New Accident, Certified Testing v. Industrial Commission and Michael Nixon, No. 4-06-0039WC, filed 9-28-06.

Petitioner was a 51-year-old sheet metal worker. He had been employed through the sheet metal workers union for over 29 years. He was hired on Nov. 22, 2002 by the employer to work on a high school. Petitioner claimed that he injured his knee that same day while climbing down a ladder with 70-80 pounds of gear on his shoulders. The evidence showed that petitioner weighed 380 pounds. He had a long history of right knee pain. He had treated with his family doctor in January 2001 with complaints of right knee pain. He was seen again in February 2002 and was prescribed a right knee brace.

On Nov. 22, 2002, petitioner called Dr. Wall and scheduled an immediate appointment. Dr. Wall's records showed that petitioner had complaints of right knee pain, which petitioner reported as a chronic problem, for three years. Petitioner reported that he injured it three years ago and had occasional flare-ups of knee pain since that time. Petitioner reported that in the past week he had done a lot of ladder climbing and over this week had increased pain and swelling in his knee. Petitioner denied any specific new injury to the knee.

The family doctor referred petitioner to Dr. Trice, an orthopedic surgeon. Petitioner told Dr. Trice that on Nov. 22, 2002 he felt sharp pain going up a ladder and worse pain going down the ladder. Dr. Trice recommended surgery. Petitioner had surgery for internal derangement. Dr. Trice found a torn medial meniscus, patellofemoral and medial femoral chondromalacia, and a 50% tear of the ACL. Petitioner was never given a full duty release. Petitioner's co-worker testified that he saw petitioner limping prior to the November 22, 2002 job. Petitioner told the co-worker that he had knee problems but had neglected to have them treated. The co-worker noticed petitioner had trouble getting up and down ladders before the accident.

After a hearing, the arbitrator found petitioner sustained an accident and found his condition causally related to the accident. The Commission affirmed the award as did the trial court.

The employer appealed and sought a reversal on the issues of accident and causation. However, the appellate court confirmed the award. The appellate court granted deference to the Commission in determining witness credibility. The court found that the Commission's decision was supported by petitioner's testimony and also the testimony of the operating surgeon and the examining doctor. The court simply rejected the unbiased testimony of petitioner's co-worker who contradicted petitioner's testimony that he suffered a specific accident. The court simply rejected the contemporaneous treating doctor's records wherein petitioner denied a new injury.

Comment: The evidence in this case strongly supported a denial. Although petitioner worked 29 years as a sheet metal worker, he only worked one day for this employer before claiming that he suffered a knee injury. The knee injury was not witnessed. A coworker specifically stated that no accident was reported. Petitioner contacted his family doctor and reported that he had a chronic problem for three years. Petitioner specifically denied any new injury to the knee. Based on this evidence, the Commission should have denied the case. Petitioner weighed 380 pounds and had a long history of knee problems. I can certainly understand why the employer took this case all the way to the appellate court even though they lost. The employer never should have lost the case before the arbitrator. This is a frustrating loss for this employer.

Before the Appellate Court OF Illinois, Non-Workers' Compensation Division

Lawsuit Against Employer Dismissed -- Case Barred by Approved Settlement Contract, Roy Kinn v. Prairie Farms/Muller Pinehurst, No. 2-06-0106, filed Oct. 13, 2006 -- Second District.

This case was handled by Randy Stark in our office. Petitioner filed a claim for workers' compensation benefits. We defended the case and we negotiated a settlement with petitioner. On Nov. 13, 2003, the arbitrator approved the settlement contract. The front of the settlement contract stated that the employer had not paid all medical bills. The settlement terms on the back of the settlement contract provided that petitioner was responsible for all past and future medical bills.

Sometime after the settlement contract was approved, petitioner found that a $2,000 medical bill was unpaid. Petitioner filed a civil action against the employer in the circuit court to rescind the settlement contract. The complaint alleged unilateral mistake, mutual mistake, and fraud. We filed a motion to dismiss on the basis that the circuit court didn't have subject matter jurisdiction. We argued that subject matter jurisdiction was solely limited to the Illinois Workers' Compensation Commission. The trial judge ruled in our favor and dismissed the complaint.

Petitioner appealed, and the appellate court also ruled in our favor. The appellate court ruled that the Illinois Workers' Compensation Commission is the exclusive forum for adjudicating disputes arising out of work-related injuries. The court found no reason to change that general rule in this case. The court found that the approved settlement contract was a final document in that it couldn't be reviewed by the court. The court found that there was no time left to review the matter before the Commission.

Additionally, the court found that petitioner failed to sufficiently allege fraud. Petitioner alleged that he submitted all medical bills to the respondent and they weren't all paid, even though petitioner thought they were paid. The court rejected this argument. The court held that the settlement contract terms didn't contain any fraudulent statements. The court noted that the settlement contract's terms specifically stated that petitioner was responsible for past and future medical bills.

Comment: This is an excellent decision from the appellate court. It is the fair and correct decision in this matter. Many claimants try to avoid the obligation to make sure their medical bills are paid prior to settlement. We try to make sure that it is the claimant's obligation to provide us with copies of any and all medical bills they wish considered at the time of settlement. The employer doesn't know where a claimant seeks medical treatment. Only the claimant knows what doctors and facilities he has visited. It is incumbent on the claimant to contact each medical provider to determine if there are outstanding bills. If a claimant wants a medical bill to be considered, it is the claimant's obligation to provide us with the bill prior to the settlement contract being approved. If a claimant discovers a medical bill isn't paid until after the settlement contract is approved and the settlement terms place that responsibility on petitioner, then it is petitioner's responsibility to satisfy the bill, not the employer's.

Commission Reinstates Workers' Compensation Claim -- Employer's Declaratory Judgment Action in Trial Court Seeking Injunction Is Rejected, Nestle USA v. Donald Dunlap and Industrial Commission et al., No. 4-05-0900, filed June 1, 2006 -- Fourth District.

Petitioner filed an application with the Commission alleging he sustained a heart attack on Sept. 4, 1999 while employed by Nestle. This application was filed on Jan. 13, 2000 by Attorney Fred Nessler. Petitioner changed attorneys. He terminated Nessler and hired Michael McDonald. A stipulation to substitute attorneys form was apparently completed but not filed with the Commission because Attorney Nessler continued to be shown as attorney of record on the Commission computer. On Oct. 16, 2003, the case was dismissed by Arbitrator White. A notice of case dismissal was issued Nov. 7, 2003 and sent to Attorney Nessler and respondent. Attorney McDonald filed a petition to reinstate on April 26, 2004. Attorney McDonald stated that he never got notice of the dismissal. A hearing was held on Sept. 8, 2004 and Arbitrator White granted the petition to reinstate.

The employer decided to take an unusual action. On Dec. 8, 2004, the employer filed a complaint in the circuit court for injunctive relief. The complaint sought a declaratory judgment barring the Commission from having any further hearings. The complaint alleged that the arbitrator and the Commission were refusing to follow Illinois law and were acting outside the powers granted to the Commission by the legislature. The Commission filed a motion to dismiss and the court granted the motion to dismiss. The court found that it didn't have any jurisdiction to hear the employer's complaint.

The employer appealed to the appellate court and the appellate court affirmed. The court cited two Supreme Court decisions which stated that the courts do not have any original jurisdiction in cases involving the determination of workers' compensation benefits. That jurisdiction is limited to the Commission. The court found that the complaint was improper and the court didn't have jurisdiction at this time. The court noted that there were certain circumstances where the court could have jurisdiction jointly with the Commission in a workers' compensation matter, but not in this circumstance. The court found that the employer failed to exhaust its administrative remedies and should not have filed a complaint in the circuit court.

Although the employer tried to characterize the matter as involving undisputed facts, the court noted that there were disputed facts as to whether or not petitioner's second lawyer had actually filed a substitution of attorneys which justified the late petition to reinstate. Since there were disputed factual issues, the factual disputes should have been heard by the Commission and not the court.

Comment: This is clearly a correct decision by the appellate court. The employer created needless litigation by attempting to circumvent the Commission simply because the employer didn't care for the arbitrator's initial ruling. The arbitrator reinstated this case because petitioner's second attorney claimed that he filed a substitution of attorneys form but the Commission didn't file the form and failed to send the notice of dismissal. Frankly, this is not uncommon. The Commission frequently fails to enter substitution of attorney forms into the Commission system. Moreover, the Commission's system of issuing notice of case dismissals is haphazard. They don't send out the notices certified. Therefore, an employer can never prove when an attorney received a notice of case dismissal.

It's likely that the arbitrator erred in granting the petition to reinstate here. However, the employer is forced to exhaust administrative remedies before attempting to get a circuit court decision barring the Commission from having any further hearings. The filing of the complaint was doomed to failure even before it began.

Employer's Failure to Pay Arbitration Award for Eleven Weeks Was Unreasonable -- Section 19(g) Attorney Fees Are Limited to a "Reasonable Amount"  No Automatic 20% Award, Father George Radosevich, Executor of Estate of Emma Hoemmen v. Industrial Commission and Roman Catholic Diocese of Springfield, Illinois, No. 4-05-0467, filed Sep. 19, 2006 -- Fourth District.

Petitioner claimed an injury of Aug. 31, 1999 when she slipped and fell and suffered a left shoulder fracture. She never returned to work. On September 17, 2002 an arbitrator awarded petitioner 37 weeks of TTD, 120 weeks of permanent total disability benefits, continuing PTD benefits, plus accrued maintenance benefits for $34,720.00, and $120.00 per week for maintenance thereafter. Neither party appealed and the decision became final. The employer received this decision Oct. 15, 2002. This means the decision became final on November 14, 2002.

On Dec. 13, 2002, petitioner's attorney filed a 19(g) action to enforce the award of the Commission. This is actually less than 30 days after the award became final. On Jan. 2, 2003, approximately seven weeks after the decision became final, a hearing was held in the circuit court. On Jan. 2 and 3, 2003, the employer issued payments for virtually the entire award, but they didn't pay interest.

The circuit judge found that the employer wrongfully refused to pay the award. He entered judgment for the entire award, plus he ordered $6,000.00 in attorney's fees and $847.20 in interest. There were a series of disputes with respect to entry of the order in the circuit court. A final order was eventually entered over two years later on May 5, 2005.

The employer appealed contending that it hadn't wrongfully refused to pay the award. The employer argued that it paid the decision fairly promptly after the decision became final. The appellate court disagreed. The appellate court noted that multiple payments were made to petitioner Jan. 2 and 3, 2003. However, some additional payments were made Jan. 10, 2003 and also May 28, 2003. The court found that the delay in payment was sufficient to justify a Section 19(g) award and an award of attorney's fees. Petitioner's attorney argued for 20% of the entire arbitration award as the attorney fee. The appellate court disagreed. The appellate court found that the award of $6,000 for an attorney fee was fair. The court found that there was no statutory mandate that a 20% award be entered. The court held that the 20% was merely the top limit of the potential attorney fee award that the circuit court could grant.

The appellate court also ruled that petitioner was entitled to interest on the arbitrator's award, not based on Section19(n) of the Workers' Compensation Act, but rather based on Section2- 1303 of the Code of Civil Procedure. The court rejected prior court precedents and ruled that once a Commission's decision is reduced to judgment, Section2-1303 interest applies. The court ruled, "Once a claimant implements section 19(g) [action] of the Act, a resulting order of the circuit court is an enforceable judgment and section 2-1303 interest is properly awarded from the date of the arbitrator's award through the date judgment was entered on that award. In addition, any prospective payments due pursuant to the section 19(g) judgment that are untimely shall also be subject to section 2-1303 interest."

Comment: The employer delayed making payments in this case, but the delay was not significantly long in my opinion. Although the arbitrator's award was entered Sept. 17, 2002, it wasn't received by the employer until Oct. 15, 2002. The decision became final on Nov. 14, 2002. In less than 30 days petitioner filed a Section19(g) action. Within three weeks thereafter, petitioner's attorney had the case set for a hearing in the circuit court.

The employer should have acted more promptly in making payment on the award, but they really weren't that late. This case shows that an employer should be especially prompt in issuing payments particularly once a Section19(g) action is filed. The employer's actions were likely delayed by the fact that the 19(g) action was filed right before the winter holiday season.

The court decision is a good one in that it limits Section19(g) attorney fees. Fees are only to be allowed at a reasonable level and not automatically at 20% of the award. However, $6,000 in fees is a lot where the delay in payment was only 11 weeks.

The award of interest is a change in the law. Code interest under Section2-1303 is set at 9%. Commission interest fluctuates. Employee groups demanded fluctuating interest rates back in 1989 when interest rates were very high. Since then interest rates have dropped and the interest rate associated with arbitration and Commission decisions under Section19(n) are low. The court in this case legislates a higher interest rate, even though the statute specifically states that the interest that should apply is Section19(n) interest and not Section2-1303 code interest. At least one justice dissented, finding that the majority's decision to legislate in the arena of interest was unwarranted.

Insurer Allowed to Set Off Workers' Compensation Benefits As Against Underinsured Policy Coverage,State Farm Mutual Automobile Insurance Co. v. Steven E. Coe, No. 1-05-1891, filed Sept. 5, 2006 -- First District.

Petitioner was employed as a police officer for the Village of Park Forest. On Nov. 20, 2001, he was working directing traffic when he was struck by a car driven by Nicole Moorehouse. Moorehouse had auto insurance with limits of $50,000. Petitioner filed a claim against Moorehouse's insurance company and they paid $50,000. Petitioner filed a workers' compensation claim and he received over $100,000 in workers' compensation benefits. Petitioner claimed that his total damages were $150,000. Petitioner had an auto liability policy with State Farm Insurance. That auto liability policy had an underinsured motorist provision with a limit of $100,000.

State Farm claimed that it didn't owe any payment to petitioner because it was entitled to offset the $100,000 workers' compensation benefits petitioner received. The workers' compensation carrier paid over $100,000 in benefits and waived its lien. The trial court ruled in State Farm's favor and found that State Farm was entitled to set off the workers' compensation benefits petitioner received. Petitioner appealed, claiming the ruling was contrary to the language of the policy and contrary to public policy. The appellate court affirmed the circuit court ruling. The appellate court found that neither the language of the policy nor the public policy of the state prohibited a carrier from offsetting workers' compensation benefits that petitioner received with respect to the underinsured motorist claim. The court primarily relied on the Supreme Court's ruling in the case of Sulser v. Country Mutual Insurance, 147 Ill.2d 548, 591 N.E.2d 427 (1992).

Comment: This is a good decision from the appellate court. The goal of uninsured and underinsured policies is to put a claimant in the best position they can be, assuming there was no third party coverage or inadequate coverage on the part of the tortfeasor. However, it's not a goal to provide a double recovery. Here petitioner received a civil settlement plus significant workers' compensation benefits. If petitioner hadn't received one or the other, the underinsured policy would have provided benefits, but that was not the case. Petitioner is not entitled to a double recovery.

Employer Did Not Waive or Forfeit Its Lien by Failing to Specifically Reserve It in Settlement Contract -- Fourth District Decision in Borrowman v. Prastein Rejected James Gallagher and Michelle Gallagher v. Jaroslaw Robert Lenart and Pacella Trucking Express (Rail Terminal Services, LLC, Intervenor), No. 1-06-0065, filed Aug. 30, 2006 -- First District.

Petitioner was employed as a truck driver for Rail Terminal. On April 10, 2001 he was involved in a motor vehicle accident when he was struck by a truck driven by Lenart, an employee of Pacella Trucking. The employer, Rail Terminal, paid workers' compensation benefits and paid a settlement to petitioner in July of 2003 for $150,000.00. The settlement contract did not specifically reserve the employer's right of subrogation with respect to the civil lawsuit.

On Nov. 21, 2001, petitioner filed a third party case against Lenart and Pacella. On Sep. 16, 2005, plaintiffs settled their case. The defendants agreed to pay $125,000 to petitioner for the personal injury claim and $225,000 to petitioner's wife for her loss of consortium claim. On Sept. 23, 2005, the employer filed a petition to intervene. They asserted a lien of $228,000 for TTD, medical, and permanent disability. The employer also objected to the breakdown of the settlement that gave almost two-thirds of the total settlement to the wife for loss of consortium and only one-third to the petitioner.

The defendants objected to any lien claim, citing the case of Borrowman v. Prastein, 356 Ill.App.3d 546, 826 N.E.2d 600 (2005). In Borrowman, the employer's lien claim had been denied because the employer did not specifically reserve its lien rights in a workers' compensation settlement contract even though the employer knew that petitioner had a civil suit seeking damages arising out of the work accident. The trial court granted the objection to the lien and denied.

The employer appealed and argued that the Borrowman case was wrongly decided and should be rejected. The appellate court agreed. The appellate court ruled that the Borrowman case was bad law. The appellate court from the 1st District specifically rejected the Fourth District court's reasoning in Borrowman, and claimed that the conclusion was flawed. The 1st District Appellate Court refused to apply Borrowman and specifically rejected it.

The court ruled that the employer was entitled to a lien claim based on public policy and Supreme Court case law. The court ruled that petitioner should not get a double recovery. The court ruled that an employer's lien should be protected. The court ruled that the employer had a lien in this case. The court remanded the case to the trial court with instructions to determine how much of the $350,000 settlement the employer could claim their lien against.

Comment: This is an excellent decision from the appellate court. The Borrowman case was a horrendous decision from the appellate court. It violated reason to hold that an employer waived its workers' compensation lien because it didn't specifically reserve the lien at the time of settlement of the workers' compensation claim. There was no case law nor any statutory basis for the appellate court's ruling in Borrowman. The case was an aberration and an abomination. This 1st District decision specifically rejects Borrowman and sets up a specific conflict in rulings between cases in the 1st District and cases in the 4th District. This decision is likely to be accepted on appeal by the Supreme Court to resolve the dispute between the districts. Employers are wise to specifically reserve their lien rights in any settlement contract. However, I think when this case eventually reaches the Supreme Court, the employer's right to its lien will again be held to be paramount. This decision should give employers greater confidence in asserting lien rights. This decision again supports the sanctity of the employer's workers' compensation lien.

Employer's Oral Promise to Skilled Nursing Facility for Worker's Treatment Can Be Enforced in Circuit Court -- Complaint Not Barred by Statute of Frauds, Rosewood Care Center Inc. v. Caterpillar Inc. and Betty Jo Cook, No. 3-05-0299, filed July 7, 2006 -- 3rd District.

Betty Jo Cook was employed by Caterpillar and suffered a work injury in October 2001. She required hospitalization and then nursing home care. Caterpillar tried to get her admitted to Rosewood Care Center on a fixed rate basis but Rosewood refused to allow that. Caterpillar's physician, Dr. Just, contacted Rosewood and asked them to admit petitioner. Allegedly, Dr. Just told Rosewood that Caterpillar would pay the full cost of Cook's care. Cook was admitted to the facility for approximately six months and Rosewood generated a bill of over $180,000. Caterpillar allegedly refused to pay the bill and Rosewood filed suit.

Caterpillar moved to dismiss the complaint on the basis that it was barred by the statute of frauds. The statute of frauds is an old statute which requires certain agreements to be in writing in order to be enforceable. One of the provisions states that an oral promise to pay for the debt of another is unenforceable unless in writing. Caterpillar argued that the statute of frauds applied because in essence Caterpillar allegedly made an oral promise to pay the debt of petitioner. In analyzing the case, the court reviewed prior Supreme Court cases from 1862 and 1878. The court held that the statute of frauds was not applicable here because the debt incurred by petitioner hadn't been incurred until after the agreement to pay. In this case the agreement to pay occurred before the debt had been incurred.

Comment: This is a dangerous case for employers. The legal liability here should be between the petitioner and the facility. The facility has a right of action against the petitioner for whom the medical treatment was rendered. The legal liability should not flow to the employer or carrier. Simply by agreeing to pay for treatment the employer should not be subject to a direct action. The claim should have been litigated before the Commission and a determination made as to the reasonableness and necessity of the charges. The line of responsibility becomes more indistinct where the claim is a catastrophic one and the employer can attempt to control its costs by negotiating directly with long term care providers. In this case, the employer created its own liability by negotiating directly with the provider and then allegedly refusing to follow through on its oral commitment.

Workers' Compensation Commission Decisions

TTD Awarded by Commission Even Though Claimant Justifiably Terminated for Cause, Louis Alicea v. Sysco Food Services, 03 WC 24689, 06IWCC596.

Petitioner suffered a work injury on April 9, 2003. Petitioner was employed as a forklift driver/warehouseman. Petitioner was operating a forklift truck and he fell from a lift cage. Petitioner's accident was caused by his willful failure to utilize fall protection when in an elevated level. As a result of the accident, petitioner was terminated from employment. Petitioner filed a grievance over the termination, but the grievance was denied and the termination was upheld.

Petitioner sought medical treatment and claimed entitlement to TTD. The employer claimed that it wasn't required to pay TTD because it would have offered petitioner light duty and brought him back to work if he hadn't been terminated for violating a safety rule. The arbitrator and Commission ruled against respondent. The Commission found that the violation of the safety rule did not bar petitioner from receiving workers' compensation benefits. Since the violation of the safety rule didn't bar the claim, the employer could not refuse to pay TTD based on the argument that it would have offered petitioner light duty but for the termination.

Comment: Unless the violation of the safety rule gives the employer a basis for not paying benefits at all, the employer won't be able to refuse TTD absent a full duty release. This puts employers in a difficult position. It is frustrating to employers to have to pay benefits to employees who are injured as a result of their own gross negligence. Moreover, benefits are extended because the employer can't bring the petitioner back to light duty as a result of the termination. Nevertheless, it is likely better to terminate the careless worker and avoid the potential future liability from a future safety violation.

Great Decisions Around the Office

Stuart Pellish obtained an excellent decision for the Illinois Public Risk Fund in the case of Natalie Popek v. City of Northlake, 06 WC 11496. Petitioner claimed an injury of Jan. 5, 2006. She filed a 19(b) petition seeking over 31 weeks of TTD, medical expenses of almost $8,000, and penalties and attorney's fees in excess of $12,000. Petitioner was employed as a clerk for the city. She did some typing and she also scanned water bills. Petitioner testified that she began having problems with her right hand and wrist Jan. 5, 2006. Petitioner sought medical treatment and claimed that it was the result of repetitive trauma. However, we presented several witnesses who testified that petitioner's job duties varied and no repetitive trauma existed. We proved that in Nov. 2005 petitioner started working for Kmart as a cashier. We proved that petitioner had complaints of right wrist problems and wore a brace even before the date of the alleged accident. The arbitrator rejected petitioner's testimony, finding it not to be credible. The arbitrator relied on the testimony of our witnesses and adopted the IME report of Dr. Michael Vender. The claim for compensation was denied in its entirety.

Joe Marciniak received an excellent decision from the Commission for State Farm Insurance. In the case of Czeslawa Augustyn v. Rich Harvest Farm, 99 WC 67179, 06IWCC0679, petitioner filed a claim for an accident of Jan. 6, 1999. The accident wasn't disputed. Petitioner was employed as a housekeeper and she sustained a rather minimal dog bite on her left upper arm. She initially treated at Dreyer Medical Clinic. Several months later she developed a generalized skin condition. She eventually obtained significant medical treatment and had a significant skin condition. We presented evidence that petitioner's condition was self-induced. The arbitrator ruled in our favor. The arbitrator denied approximately $17,000 in medical bills and awarded only 10 weeks of disfigurement. Petitioner appealed but the Commission in a 2-1 decision affirmed the decision of the arbitrator. The dissenting commissioner wanted to award over $15,000 in medical bills and 75 weeks in compensation.

Mark Cosimini won a case outright for Wal-Mart. In the case of Roy Purkes v. Wal-Mart, 03 WC 45054, petitioner claimed an accident occurred at work July 28, 2003. Petitioner claimed that he hurt his back placing a tire in a van. However, we presented evidence from co-workers. They testified that petitioner reported he had been injured while on vacation. The alleged accident occurred shortly after petitioner returned from vacation. Arbitrator White found the witnesses to be credible and denied compensation in its entirety.

Joe Basile received a very good decision from Arbitrator Williams on behalf of NHRMA Mutual. In the case of Ron Burge v. Village of Dolton, 05 WC 49726, petitioner filed a claim for an alleged accident of July 4, 2005. Petitioner was employed as the chief of police for the Village of Dolton. He was involved in a motor vehicle accident with a drunk driver on July 4, 2005. He claimed his motor vehicle accident was work-related because he was driving home to obtain a black police jacket so he would be less of a target at night instead of wearing only a white shirt. We contended that the accident wasn't compensable. We presented a witness to show that petitioner wasn't engaged in a business trip at the time of the accident. Instead, petitioner was visiting his mother. The case was a significant one. Petitioner was off work for over 45 weeks. The claim for compensation was denied.

Ken Marshall obtained an excellent decision from the Commission on behalf of EMC Insurance. In the case of Jose Huerta v. Village Pontiac, 02 WC 9523, 06IWWC0557, petitioner claimed an injury of March 3, 2001. Petitioner slipped and fell while emptying a barrel of oil. Petitioner claimed that he injured his knee and shoulder. We disputed the knee claim. The arbitrator found that only petitioner's shoulder injury was causally related. We argued that petitioner was not disabled as a result of his shoulder. The arbitrator denied TTD and awarded 2.5% loss of use of the left arm. After taking credit for TTD overpaid, the net decision requires petitioner to pay respondent $395.33.

Joe Marciniak also obtained a very good result for AIG Insurance with respect to a complicated case wherein petitioner was claiming multiple accident dates and an aggravation of a pre-existing condition of multiple sclerosis. In the case of Kathleen Smith v. St. Vincent DePaul Society, 01 WC 28359 and 57178 and 02 WC 38151 and 38152, petitioner claimed accident dates of April 1, 2000, Oct. 30, 2000, Jan. 24, 2001, and Sept. 19, 2001. The claims were all disputed except for the accident of Jan. 24, 2001. With respect to that accident, petitioner tripped over a pallet and sustained a non-displaced fracture of the fifth metatarsal. Later X-rays actually showed fractures of the third, fourth and fifth metatarsals. Medical records showed that the fractures healed. Petitioner claimed that this incident and a subsequent accident also aggravated her preexisting condition of MS. She submitted over $25,000 in medical bills. The arbitrator denied the medical bills. The arbitrator denied the alleged causal connection between the MS and the accidents. The arbitrator awarded 20% loss of use of the foot. The total award was approximately $5,000 less than our pretrial offer.

Mark Cosimini obtained a good decision on behalf of EMC Insurance. In the case of Kimberly Smith v. Green Oil Co., 04 WC 24958, petitioner claimed an accident Aug. 9, 2001. The accident was not disputed. Petitioner jammed her right shoulder while running a sweeper. She had surgery on the shoulder which included an arthroscopy and a rotator cuff debridement. Medical records showed petitioner was discharged from care May 15, 2002 without any significant problems. Petitioner changed jobs and worked for a different employer. In July 2004 she sought additional medical treatment. She had a second surgery on her right shoulder. We disputed causal relationship. Dr. James Kohlmann testified on our behalf that there was no causal relationship between the original accident and the subsequent surgery. The arbitrator ruled in our favor and denied the second surgery, including $20,000 in medical bills. The arbitrator awarded permanent disability only for the first injury. The arbitrator awarded 20% loss of use of the arm.

Ken Marshall received a zero award on behalf of State Farm Insurance. In the case of Delores Martinez v. Universal Laminating, 00 WC 53427, petitioner claimed that she suffered an accident April 6, 2000. It was admitted that petitioner fell on that date, but it was disputed why petitioner fell and whether petitioner suffered any injury. Petitioner claimed that she slipped and fell on scrap material. However, the employer's facility is set up to catch all scrap material into a bin. Witnesses denied having any scrap material on the floor. The arbitrator chose to believe the witnesses rather than petitioner whose testimony was inconsistent and not credible. The arbitrator concluded that petitioner tripped over her own feet. Compensation was denied.

Dan Arkin obtained a good decision from the Commission affirming an arbitrator's denial on a petition to reinstate. In the case of Michael Knight v. Village of Bartlett, 00 WC 4979, 06IWCC0787, petitioner had a claim on file for an accident date of June 6, 1999. The case was filed with the Commission Jan. 28, 2000. It was continued from time to time for over three years. The case appeared on the status call Oct. 27, 2003 and was set for trial Nov. 6, 2003. Petitioner failed to appear for trial and the case was dismissed on that date. A notice of dismissal was issued Nov. 23, 2003. Petitioner didn't file a motion to reinstate until March 25, 2004, almost four months after the dismissal order had been issued. Petitioner noticed up his motion for hearing April 1, 2004 but then didn't present the motion. A second motion to reinstate was filed on June 2, 2004. It was set for argument on July 8, 2004. Petitioner appeared at that time and argued that the notice of case dismissal was never received. Petitioner's attorney submitted affidavits claiming that the notice of dismissal had never been received. The arbitrator found that petitioner hadn't been diligent in pursuing the case and denied the petition to reinstate. Petitioner filed an appeal to the Commission and the Commission affirmed the decision of the arbitrator. The decision is a good one for employers. It certainly puts more teeth into dismissal orders. Dismissals become meaningless if arbitrators don't enforce them. More arbitrators have to be more vigilant in denying petitions to reinstate.

Joe Marciniak obtained a favorable decision on behalf of West Bend Mutual Insurance. In the case of Alfonso Gutierrez v. McGrath Nissan, 06 WC 23331, petitioner claimed an accident of March 4, 2006. The accident wasn't disputed. Petitioner slipped and fell while washing cars. Petitioner complained of knee pain but didn't lose any time from work. He didn't seek any medical treatment. Petitioner claimed a new injury March 6, 2006 while cleaning show from cars. However, he didn't file an application for a second claim. We disputed whether petitioner needed surgery. The arbitrator ruled in our favor. The arbitrator adopted the conclusion of our IME report authored by Dr. Jay Levin. The claim for surgery was denied. The arbitrator refused to find causal connection.

Michael E. Rusin is a senior partner of the Chicago firm Rusin, Maciorowski, Friedman. He can be reached at merusin@rusinlaw.com or by phone at (312)454-5119.

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