Insurer Never Had Right to be Party in Repetitive Trauma Case

Friday, July 26, 2013 | 0

In QBE Insurance Co. v. The Illinois Workers' Compensation Commission, Ronald Voges, and G & S Foundry, (2013 IL App 5th 120336 WC, opinion filed July 12, 2013), QBE sought review of a Circuit Court order which confirmed a decision of the commission ordering the employer, G & S Foundry to pay Petitioner Ronald Voges benefits for repetitive trauma injuries he suffered to his hands, elbows and upper extremities.

Petitioner filed an Application for Adjustment of Claim, naming only the employer (G & S Foundry) as a respondent. The injury date was alleged to be May 12, 2009, but was later amended to be Oct. 14, 2010. It appears the amendment occurred at the time of the trial.

A 19(b) hearing was held and the arbitrator ordered the employer to compensate petitioner for medical expenses and treatment, including surgical intervention for severe bilateral carpal and cubital tunnel syndrome. The arbitration decision was filed on Feb. 11, 2011. On March 17, 2011, QBE Insurance retained new counsel and filed a petition for review of the arbitration decision. On March 23, 2011, counsel for the employer filed a petition for review as well.

In April 2011, QBE Insurance filed a motion with the Workers' Compensation Commission requesting it be added as a named party to the case. QBE Insurance stated in support of its motion when petitioner amended his application "at the time of trial," to allege an accident date of Oct. 14, 2010, "it brought the claim into the policy coverage dates of QBE." QBE Insurance asserted it did not receive notice of the claim "until after the 19(b) hearing took place and the proofs were closed." QBE Insurance sought to be added as a named party "to defend against the award made to [claimant]" and considered it "a conflict of interest to enter [its] appearance in conjunction with the [employer]." A commissioner granted QBE’s motion noting petitioner’s objection.

The Commission affirmed and adopted the arbitrator’s decision and QBE Insurance appealed to the Circuit Court of St. Clair County which confirmed the Commission decision. QBE appealed the Circuit Court’s decision on to the Appellate Court, but counsel for the employer did not.

The Appellate Court began its analysis by examining whether it had jurisdiction over the appeal even though the jurisdiction issue was not raised by the parties. The court noted it had an independent duty to vacate and expunge void orders of the Commission and may raise the issue sua sponte, or on its own will. The court indicated the purposes of the Illinois Workers’ Compensation Act do not concern themselves with an insurer’s interests in intervention as the purpose is to merely compensate claimants for income lost due to job-related injuries.

Section 4(g) of the act was examined by the Appellate Court and it noted the act does not mandate the insurance carrier be made a party to the proceedings, as the statute merely provides the insurance carrier "may be made a party to the proceedings" in the event the employer does not pay the award. It was noted the court found neither a provision in the act nor any Illinois case which provides for intervention following a Section 19(b) award by an insurer who was not a party to the proceedings where the petitioner chose to bring a claim against the employer alone. As such, the Commission’s order granting QBE’s motion to add QBE Insurance as a named party was vacated and QBE’s appeal was dismissed for lack of jurisdiction.

We want our readers to be aware of the possibility of a changed/amended alleged date of loss when battling in the repetitive trauma claim arena and the concerns this case brings to light with coverage issues. We feel arbitrators and attorneys who practice before the commission are generally flippant about the date or dates of loss in repetitive trauma and “repetitive working” claims. Some arbitrators will allow immediate changes to the date of claimed loss without any true notice to anyone. We feel this sets up the unhappy situation present here. Please note it may have been legal malpractice and/or an ethical conflict on the part of defense counsel and potentially the arbitrator to allow this matter to go ahead to hearing when it appears they clearly didn’t notify this new and unquestioned insurer for this employer.

Please also remember it might be possible for QBE Insurance to sue to block insurance coverage of this claim and leave the loss and risk to both the employer and its defense counsel. We don’t feel this confusion is good for anyone in the system. We also don’t like to see the insurer being blocked from defending itself and consider this unsavory situation a denial of their constitutional due process and equal protection rights. We consider it mildly unsettling to note our Appellate Court doesn’t appear to care in the slightest about this concern in writing their unanimous ruling.

In either event, QBE Insurance was barred from defending this case in any manner. It appears clear from the record, this carrier did not have notice of the claim until after the hearing. When dealing with repetitive trauma cases we suggest everyone currently in the case be made aware of insurance coverage dates. If the injury date is amended at the last minute, bringing the matter under separate coverage or a different insurer, such a change should provide grounds for a continuance to make sure all interests are properly considered and protected.

Matthew Ignoffo is an attorney for Keefe, Campbell, Biery & Associates, a Chicago law firm that represents employers. This column was reprinted with permission from the firm's client newsletter.