advanced workers` compensation recent case law update

Transcription

ADVANCED WORKERS' COMPENSATION
RECENT CASE LAW UPDATE
Cameron B. Clark
The Law Offices of Arnold G. Rubin
100 W. Momoe, Ste. 1100
Chicago, IL 60603
(312) 899-8333
(312) 899-8141
[email protected]
Pipe-fitter Fits the Role of a Traveling Employee
Cameron B. Clark & Catherine Krenz Doan/ Arnold G. Rubin, Ltd.
In Venture-Newberg Perini Stone and Webster v. Rlinois Workers' Compensation Commission, 2012
IL App (4th) 110847WC, 2012 WL 6057923 (lll.App. 4 Dist.), the claimant appealed the decision of the
Circuit Court of Sangamon County fmding that he was not entitled to benefits under the Act for injuries
he sustained while employed by Venture-Newberg Perini Stone and Webster. On appeal, the claimant
argued that the circuit court erred in setting aside the Commission's decision that his accident, which
occurred while he was traveling from his motel to a jobsite, arose out of and in the course of his
employment. The appellate court agreed, reversed the judgment of the circuit court and reinstated the
Commission's decision.
At the time of the accident, the claimant was a 50-year-old pipefitter who resided in Springfield, Illinois.
He was a member of the Plumbers & Pipefitters Union Local 137 based in Springfield. At the hearing,
evidence was introduced that established that union members were permitted to take jobs outside of Local
137's home territory provided no work was available locally. The employer was a contractor that was
hired to perform maintenance and repair work at a nuclear plant in Cordova, Illinois. Cordova is located
approximately 200 to 250 miles from Springfield. The position in Cordova were temporary. The
tradesmen that werehired for the Cordova job were expected to work six ( 6) to s.even (7) days a week, ten
(10) to twelve (12) hours per day. Also, the employees could be called into work on in emergency
circumstances.
Due to insufficient manpower within its home territory, Local 25 sought members from other locals,
including Local137, to work at the Cordova plan. The claimant bid on the Cordova job since at the time
of the posting he was unemployed and there was no work available for him locally. The claimant and
Todd McGill, another member ofLocal137, accepted positions at the Cordova plant. The claimant and
McGill first reported to work at the Cordova plant on March 23, 2006. After completing their shifts that
day, they spent the night at the Lynwood Lodge, located 30 miles from the jobsite. The men were
scheduled to start work the following day at 7:00a.m. On the morning of March 24, 2006, the men left
the motel for the Cordova plant in McGill's pickup truck. Shortly after 6:00a.m. the vehicle, which was
driven by McGill, skidded on a patch of ice while traveling on an overpass. The claimant sustained
serious injuries as a result of the motor-vehicle accident.
At the arbitration hearing, the claimant testified that it was his "understanding" that in "most cases," the
employer requested workers to be within an hour of the jobsite so that they are alert and ready for work.
He further explained that workers "had to be available just at a phone call, and they would call you and
maybe you would come in early or you would stay late, so you had to stay within a certain parameter of
the plant." The claimant testified that he did not want to have to work 12-hour shifts and then drive
home. Further, the claimant testified that he planned on staying at the Lynwood Lodge because the
jobsite was approximately 200 miles from his residence. The claimant acknowledged that the employer
did not instruct him to stay at the Lynwood Lodge and that the employer did not direct him on the route to
take from the motel to the jobsite.
McGill also testified at the hearing. He did acknowledge that the employer never expressly requested
employees to reside near the jobsite. However, he opined that driving a distance of more than 200 miles
to the jobsite would make it difficult to work a 12-hour shift and for employees to be available to the
employer in the event of an emergency.
The safety supervisor, Mr. Cahill, testified on behalf of the employer. Cahill acknowledged that by
staying in a motel, the claimant benefited the employer and helped it perform the job at the Cordova
nuclear power plant. He noted that the claimant might not be able to assist in the case of an emergency if
he had to travel200 miles to reach the jobsite.
Based on the foregoing evidence, the Arbitrator concluded that the claimant failed to sustain his burden of
establishing that the motor vehicle accident arose out of and in the course of his employment. In a
divided decision, the Commission reversed the decision of the Arbitrator and concluded that the claimant
sustained an accident arising out of and in the course of his employment. The Commission acknowledged
that, ordinarily, an accident that occurs while an employee is traveling to or from work is not considered
one that arises out of and in the course of employment. However, the Commission found that two (2)
exceptions applied to the general rule. First, the Commission concluded that the claimant was in the
course of his employment while driving to work because of the method of travel was determined by the
demands of the job rather than by the claimant's personal preference as to where he chose to live.
Second, the Commission found that the claimant was a "traveling employee" at the time of the accident.
On review, the Circuit Court of Sangamon County reversed the decision of the Commission.
The claimant argued on appeal that the circuit court erred in reversing the Commission's decision. The
appellate court noted that an employee's injury is compensable under the Act only if the accident arises
out of and in the course of the employment. Both elements must be present at the time of the claimant's
injury in order to justify compensation. The determination of whether an injury to a traveling employee
arose out of and in the course of employment is governed by different rules than are applicable to other
employees. The court frrst addressed the issue of whether the claimant qualified as a traveling employee.
The court defmed a "traveling employee" as "one who is required to travel away from his employer's
premises in order to perform his job." The court noted that it was undisputed that (1) the claimant in this
case was employed by the employer; (2) he was assigned to work at a nuclear power plant in Cordova,
lllinois, operated by Exelon in excess of 200 miles from his home; and (3) the premises at which the
claimant was assigned to work were not the premises of his employer. These facts establish the
claimant's status as a traveling employee.
The court went on to note that a claimant's status as a traveling employee does not necessarily satisfy his
or her burden of establishing that the injury arose out of and in the course of his employment. A finding
that a claimant is a traveling employee does not relieve him from the burden of establishing that the
accident arose out of and in the course of employment. The test of whether a traveling employee's injury
arose out of and in the course of his employment is the reasonableness of the conduct in which he was
engaged at the time of his injury and whether that conduct might have been anticipated or foreseen by the
employer. The court noted that in this case the Commission found that the employer must have
anticipated that the claimant, recruited to work at Exelon's facility over 200 miles from the claimant's
home, would be required to travel and arrange for convenient iodging in order to perform the duties of his
job, and that it was reasonable and foreseeable that the claimant would travel a direct route from the ledge
at which he was staying to Exelon's facility. Therefore, the Commission properly concluded that the
claimant's injury, sustained when the vehicle in which he was riding to work form the lodge at which he
was staying skidded on a public highway, arose out of and in the coU:rse of his employment. This
determination was.clearly not against the manifest weight of the evidence.
Prior Stipulation by Employer Dooms Its Jurisdictional Argument
Cameron B. Clark I Arnold G. Rubin, Ltd.
In Ingrassia Interior Elements v. Rlinois Workers' Compensation Commission, 2012 WL 6100019
(lll.App. 2 Dist.), the claimant filed a Petition for Review of the Arbitrator's decision denying his claim
pursuant to the Act. Thereafter, the Commission denied a motion by the employer, Ingrassia Interior
Elements to strike the petition for lack of subject matter jurisdiction due to the claimant's failure to timely
file a transcript of the proceedings before the Arbitrator. The employer sought review of the
Commission's denial in the Circuit Court of Winnebago County. The trial court concluded that the
Commission lacked subject matter jurisdiction and held that the decision of the Arbitrator was fmal. The
claimant sought appeal to the appellate court. The court reversed the trial court and reinstated the
Commission's decision, and issued a remand.
During a hearing before the Arbitrator on April 11, 2008, the claimant and Respondent both signed a
"request for hearing" form. The court noted that the form contained the following stipulation:
"Both parties agree that if either party files a Petition for Review ofArbitration Decision
and orders a transcript of the hearings, and if the Commission's court reporter does not
furnish the transcript within the time limit set by law, the other party will not claim the
Commission lacks jurisdiction to review the arbitration decision because the transcript
was not filed timely."
An evidentiary hearing commenced on June 13, 2008. At the beginning of this hearing, the employer
informed the Arbitrator that it "would like to put a line through [the standard stenographic stipulation] and
***asked that the Commission follow the mandates under Section 19(b) of the Act." The form was filed
with the Arbitrator only thereafter.
The Arbitrator's decision was adverse to the claimant, so on July 25, 2008, he filed a timely petition to
review the decision. Claimant promptly ordered a transcript of the proceeding and made telephone calls
to the Commission's court reporter in an effort to file the transcript in a timely manner (claimant moved
for and received an extension of time to file the transcript). The court reporter did not provide claimant
with a transcript within the applicable time limit; therefore, a transcript was not filed with the
Commission with the time set in Section 19(b).
The employer then moved to strike claimant's petition for review, arguing the fact that a transcript was
not timely filed left the Commission without subject matter jurisdiction. The Commission disagreed with
the employer. It found that the employer was bound by the stenographic stipulation to which it agreed on
April 11, 2008, notwithstanding its attempted repudiation of the stipulation on the date the evidentiary
hearing began. The Commission also noted that the claimant had been diligent in attempting to file the
transcript.
The employer sought judicial review and the trial court reversed. It disagreed with the Commission's
interpretation of Section 7030.40 and instead held that this section requires that a "request for hearing" be
filed with the Arbitrator before it is binding on the parties. Thus, the trial court reasoned that the earlier
stenographic stipulation was a nullity because it was not filed with the Arbitrator. It also rejected the
Commission's reliance on claimant's due diligence, noting that the Act provides for another remedyspecifically trial de novo before the Commission-when a transcript is not timely filed due to the fault of
someone other than the party seeking review. Therefore, the trial court held that the decision of the
Arbitrator was fmal.
On appeal, the appellate court determined that the sole issue is whether the fact that a transcript was not
filed within the time period specified in Section 19(b) of the Act deprives the Commission of jurisdiction
to review the decision of the Arbitrator. Under the circumstances of this case, the court concluded that it
does not. The court noted that the meaning of an administrative regulation is also at issue. Therefore, the
court owes substantial deference to an agency's construction of its own regulations. This is true regarding
even questions of jurisdiction. Thus, where reasonable minds could disagree as to the extent of an
agency's jurisdiction, "we defer to the agency's interpretation if the interpretation is defensible."
The court noted that the lllinois Supreme Court had previously rendered a decision relative to this issue in
Pocahontas Mining Co. v. Industrial Comm'n, 301 Ill. 462 470-78 (1922). Subject matter jurisdiction is,
of course, "the power of a court to hear and determine cases of the general class to which the proceeding
in question belongs." In Pocahontas, like in the instant matter, at issue was whether the failure to timely
file with the Commission a transcript of proceedings before the Arbitrator deprived the Commission of
jurisdiction to review the Arbitrator's decision. The Supreme Court observed, "the Commission has
jurisdiction or the statutory right and power conferred upon it to hear and determine the class of case to
which this case belongs," that is, the class of case involving review of the decision of an Arbitrator. Thus,
the question before the appellate court is whether or not the employer waived its ability to object to the
fact that neither a transcript nor an agreed statement of facts was filed within the statutory time period.
To answer this question, the court considered whether the stenographic stipulation into which the
employer and claimant entered on April 11, 2008 remains in effect. This turns on whether the stipulation
became binding at the time the parties, by signing the "request for hearing" form, exchanged their
promises not to object to jurisdiction in the event the transcript was not timely filed or whether it was
ineffective until the "request for hearing" form was filed with the Arbitrator, which was after
Respondent's purported repudiation of the agreement.
The court reviewed Section 7030.40 and found nothing in this provision that speaks to when a "request
for hearing" form-and stenographic stipulation contained therein-becomes binding. Moreover, we
note that much of a "request for hearing" form consists of what are essentially requests for evidentiary
admissions intended to limit the issues that are in dispute. It would be an odd rule indeed that would
allow a party to recant such an admission on the eve of a hearing, thereby depriving an opponent the
opportunity to conduct discovery on an issue. The court noted that the Commission citing Walker v.
Industrial Comm'n, 345 Ill.App.3d 1084, 1088 (2004), found that where the parties have signed the
stenographic stipulation "the language of Section 7030.40 indicates that the request for hearing is
binding." It also stated that the employer "mistakenly believes that it can deny the applicability of the
Stenographic Stipulation after agreeing to be bound to it." The court noted that the Commission's
position is also entirely consistent with the ordinary principles of contract law. The stipulation clearly
stated that the parties were coming to an agreement; hence, the parties manifested mutual assent to the
terms contained in the stipulation; Moreover, the parties' signatures manifested their acceptance of the
contract. Finally, the court noted that there is no condition precedent to the stipulation becoming binding.
In light of the foregoing, the order of the Circuit Court of Winnebago County was reversed and the
decision of the Commission was reinstated. The cause was remanded to the Commission for further
proceedings.
Truck Driver Hauls in the Necessary Evidence to Establish an Employer-Employee Relationship
and Employer Loses Jurisdictional Argument Due to Service on the Commission
In Lahuz v. Illinois Workers' Compensation Commission, 2012 WL 5395260 (lll.App. 1 Dist.), both the
claimant, a truck driver, and his purported employer sought review of the decision of the Commission
awarding claimant certain benefits for neck, back and left shoulder injuries. The Circuit Court of Cook
County upheld the Commission decision. Both the claimant and the purported employer appealed. The
appellate court held that: (1) service on the Commission as an entity was not insufficient to trigger circuit
court jurisdiction; (2) evidence was sufficient to support the Commission's fmding that the claimant was
an "employee" rather than an independent contract; (3) employer's refusal to pay benefits was not
unreasonable, so that claimant was not entitled to penalties and fees; and (4) the Commission should have
calculated claimant's average weekly wage by using the number of weeks actually worked in the year
preceding the accident. The cause was affirmed in part, reversed in part, and remanded with directions.
The second cause was affirmed.
In Labuz, the claimant testified through a Polish interpreter. The claimant testified that he began working
for JKC as a truck driver in May 2007. He said that JKC required him to submit documentation and to
watch a training video before starting work. He was also required to take and pass a drug test, submit
written invoices for his trips in order to receive payment for his work. In addition, the claimant testified
that JKC did not offer him any benefits and in fact told. him that he would not receive health insurance
from the company. The arbitration record also contained a "Master Independent Contractor's
Agreement" signed by the claimant in June 2007. That document indicated that the claimant was retained
as an independent contractor for JKC. The claimant testified that he did not understand the document,
which was written in English, but signed anyway because he understood that his doing so was a condition
of his continued employment with JKC. Further testimony from claimant set forth that he did not own his
own truck when he worked for JKC. Instead, he drove JKC trucks bearing JKC logos, but he noted that
he did not always drive the same JKC truck. JKC paid for his tolls and fuel, and it provided him with log
books he was to complete to record his movements. The claimant also testified that JKC told him what
gas stations he could use during his trips, and that the JKC dispatchers chose his routes for him. In
addition, accord to the claimant, he was required to report his movements to JKC every morning by 11:00
a.m., or face a $100.00 fme. Other facts were elicited regarding the degree of control excised by JKC
over claimant.
On March 28, 2009, the claimant slipped and fell while he was checking a load on his trailer for JKC.
The fall caused him to lose consciousness and led to his multiple injuries. At the arbitration hearing, a
second witness, lreneusz Panek, testified that he was an employee of ADP Total Source, a company that
leased workers to JKC. Panek stated that ADP leased a total of 240 employees to JKC and that JKC paid
the premiums on their workers' compensation insurance. He further testified that JKC or ADP caused
taxes to be deducted from the paychecks of the 240 leased employees. According to Panek, at his initial
meeting with the claimant, he offered the claimant two options: full employment with benefits, or an
independent contractor relationship. Panek said that the claimant preferred to become an independent
contractor so that he could avoid immediate tax deductions. In his testimony, Panek described several
differences between employees and contract drivers for JKC. After reviewing JKC records, Panek said
that, in the 52-weeks preceding the claimant's accident, JKC had paid the claimant $28,654.00. Panek
asserted that the claimant's average weekly wage, therefore, was that figure divided by 52, or $551.04.
The claimant objected to that calculation and he asserted that his average weekly wage was $1,404.30.
The claimant's figure represents $28,086.00 (the claimant's tabulation of his past-year's wages), divided
by 20, the number of trips he took for JKC.
Following the arbitration hearing, the Arbitrator found that the claimant's injury arose out of and in the
course of his employment with JKC. In finding that the claimant was an employee of JKC and not an
independent contractor, the Arbitrator relied on JKC's level of control over the claimant's work, the fact
that the claimant's type of work matched the type of work JKC itself did, that JKC controlled the
claimant's pay, and that the claimant used JKC's equipment. The Arbitrator further noted that the
independent contractor agreement that the claimant had signed but he found the signature to be invalid
because the claimant did not understand English and signed the form only so that he would "not be fired."
The Arbitrator calculated the claimant's average weekly wage at $551.04. The Arbitrator denied the
claimant's claim for penalties and fees. Finding that JKC "placed a reasonable reliance on the disputed
issue of the employee-employer relationship." JKC and the claimant both sought review of the
Arbitrator's decision before the Commission. JKC challenged the Arbitrator's finding that the claimant
was an employee and not an independent contractor. The claimant challenged the Arbitrator's
determination of his average weekly wage and the denial of penalties and fees. In a unanimous decision,
the Commission affirmed and adopted the Arbitrator's decision. JKC and the claimant both sought
review of the Commission's decision to the circuit court of Cook County. On appeal before the circuit
court, the parties renewed their arguments. In addition, JKC also asserted that the claimant's petition for
review should be dismissed for lack of jurisdiction because he had caused a. summons to be mailed to the
Commission but did not have a summons served personally on a particular Commission member, or the
Secretary or Assistant Secretary thereof. The circuit court denied the motion to dismiss and conf:ulned
the Commission's decision.
On appeal before the appellate court, JKC's first argument centered on its position that the circuit court
should have dismissed the claimant's petition for review for lack of subject matter jurisdiction. JKC
directed the court to section 19(:t) of the Act. JKC asserted that the language of Section 19(:t) mandated
that service on the Commission may be accomplished only by serving a particular Commission member
or the Secretary or Assistant Secretary thereof. The appellate court did not agree. The court reviewed
Section 19(:t) of the Act and found that the plain legislative purpose underlying the requirement that
service be tendered to the Commission is that the Commission be adequately and timely notified of the
challenge to its decision. This purpose is no less accomplished if the Commission receives notice as an
entity rather than via an individual member. For these reasons, the court rejected JKC's argument.
The court next turned its attention to the second argument on appeal relative to the employee-employer
relationship. The coUrt noted that no rigid rule exists regarding whether a worker is an employee or an
independent contract. Rather, courts have articulated a number of factors to consider in making this
determination. The single most important factor is whether the purported employer has a right to control
the actions of the employee. Also of great significance is the nature of the work performed by the alleged
employee in relation to the general business of the employer. Additional facts to consider are the method
of payment, the right to discharge, the skill the work requires, which party provides the needed
instrumentalities, and whether income tax has been withheld. Finally, a factor oflesser weight is the label
the parties place upon their relationship.
The court noted that on the first, most important factor, JKC cites what it views as "compelling evidence"
that the Commission was mistaken in its conclusion that JKC controlled the claimant's work. JKC asserts
that the claimant "came to work whenever he pleased, and took off whenever he wanted to." It also
discounted several of the modes of JKC's control over the claimant's work, because, it notes, many of
those requirements were conceived not by JKC but by federal regulation. In deciding this issue, the court
found that the Commission properly noted that JKC provided the claimant with the truck he was to drive,
and the claimant's work was the precis{) type of work JKC was in the business to provide. Also, based on
the totality of the circumstances, it concluded that there was sufficient evidence to allow a rational trier
fact to conclude that the claimant was an employee. For that reason, the court rejected JKC's argument
that the Commission's fmding, that the claimant was a JKC employee at the time of his injury, was
against the manifest weight of the evidence.
Next, the court turned its attention to the claimant's contentions on appeal. The first issue was the
Commission's denial of penalties and fees. The court noted that "lllinois courts had refused to assess
penalties under these sections where the evidence indicates that the employer reasonably could have
believed that the employee was not entitled to the withheld compensation." The question of whether an
employer's refusal to pay was reasonable is a factual question for the Commission and the Commission's
determination will not be disturbed on appeal unless it is against the manifest weight of the evidence.
Here, the claimant argues that JKC's basis for withhold his payments and its argument that he was an
independent contractor and not an employee was unreasonable and vexatious. The court noted that while
it was true that the claimant had prevailed on the issue of employment status at every stage of this action,
there are reasonable arguments for JKC's position that he was an independent contractor. Accordingly,
the court agreed with the Commission's determination that JKC's refusal to pay, based on its assertion
that the claimant was a contractor, was not unreasonable.
The court next turned its attention to the issue regarding the calculation of the average weekly wage. The
claimant argued that the Commission should have divided his wage by 31, the number of weeks he
actually worked in the year preceding his accident. The court noted, where the issue is whether the
Commission has complied with the Act's requirements for setting compensation, their review is de novo.
The claimant cited case law for the proposition that the Commission should take lost time into account
when determining his average weekly wage. The court noted that its previous decision in McCartney, is
instructive. fu McCartney, the Commission set the claimant's average weekly wage by dividing his
yearly income by 52. The court noted that, pursuant to section 10 of the Act, "an employee's average
weekly wage is determined on the basis of the employee's actual regular earnings divided by the number
of weeks actually worked if the employee lost five or more calendar days of employment" during year
preceding his injury. Even without evidence of the precise amount of the claimant's total lost time, the
court concluded that it was clearly establish that the claimant had not worked a full 52 weeks in the year
preceding his injury. On that basis, the court set aside the Commission's determination of the claimant's
average weekly wage and remanded to the Commission for recalculation of the claimant's average
weekly wage. fu a consolidated case, the court reversed that portion of the circuit court's judgment
confirming the Commission's calculation of the claimant's average weekly wage, vacated the
Commission's calculation of the claimant's average weekly wage and remanded the cause of the
Commission for determination of his average weekly wage and the weekly benefits to which he is
entitled.
Bank Teller's Alleged Intentional-Tort Claim is ''Held Up" by Exclusivity Provision ofthe Act
In Glasgow v. Associated Bane-Corp., (2012 WL 5935557 (Ill.App. 2 Dist.), a bank teller who was
allegedly injured during a bank robbery brought an intentional tort action against the bank and branch
where she worked. The Circuit Court of Lake County dismissed the complaint. The bank teller appealed.
The appellate court held that the teller's workers' compensation claim was her sole remedy, and that the
teller's failure to plead a specific intent to harm warranted dismissal.
In Glasgow, the plaintiff/bank teller filed a two-count complaint alleging injuries that arose during a bank
robbery. On February 17, 2011, the plaintiff filed an amended complaint additionally alleging that the
defendant's conduct was outrageous. Specifically, Count I of the amended complaint alleged that, on
December 2, 2009, plaintiff was working as a bank teller at the Lindenhurst branch of Associated BaneCorp with a female coworker. Around 3:00p.m. a cash truck delivered fresh currency to the Branch.
Five minutes before the bank was scheduled to close for the evening, three or four masked robbers took
over the bank. One robber struck the teller on the head, neck, and right shoulder. The teller and her
coworker were ordered to give the robbers money from the cash drawers and the vault. Before leaving,
the robbers ordered the plaintiff to lie face down on the floor. She was also ordered not to move and not
to call police, under threat of additional harm. Plaintiff alleged that she sustained "serious and permanent
injuries of orthopedic, neurological, and psychiatric conditions of ill-being, and remains under treatment."
According to the amended complaint, the Branch was robbed twice previously, once in 2006 and again in
2008. Plaintiff had not been aware ofthe previous robberies and alleged that she would not have taken
the teller position if she had been aware of the robberies. Her Complaint also alleged that she and a
coworker advised their supervisor that the Branch lacked a security guard, lacked bulletproof glass and
preventive windows, and should not have open cash drawers at teller stations. According to her amended
·complaint, the defendant's "knowing, willfully, and purposely failed, with obvious intent and outrageous
conduct to provide adequate bank security to deter and/or prevent the December 2, 2009 bank robbery."
The amended complaint also maintained that the defendants knew or should have known prior to
December 2, 2009, that the Branch could reasonably be expected to be robbed. The plaintiff sought
punitive damages against the defendants for their "outrageous conduct" and to encourage defendants and
other banks to implement proper minimum security measures to prevent robberies.
On December 10,2009, plaintiff filed a workers' compensation case which, as of the date this appeal was
filed, was still pending with the lllinois Workers' Compensation Commission. The defendant's workers'
compensation insurance carrier was currently providing workers' compensation benefits to the plaintiff.
On April28, 2011, the defendants filed a Section 2-619.1 motion to dismiss. On August 9, 2011, the trial
court granted the defendant's motion on Section 2-619 grounds. Thereafter, the plaintiff filed a motion to
vacate and for leave to file a second amended complaint. On November 15, 2011, the trial court denied
the motion. The plaintiff timely appealed the instant matter. On appeal, the plaintiff contended that the
trial court erred when they granted the defendant's motion to dismiss. Specifically, plaintiff argued that
(1) the Act did not constitute the exclusive remedy under the present circumstances; (2) the pleaded facts
established a cause of action against defendants; and (3) the legislature did not intend to give immunity
from suit for intentional inactions under the Act. The defendant responded that, pursuant to the Act,
plaintiff's sole remedy is her pending workers' compensation claim. The court agreed with the
defendants.
The court noted that once an employee has collected compensation on the basis that his or her injuries
were compensable under the Act, the employee cannot then allege that those injuries fall outside the Act's
provisions. Therefore, the court concluded that, once plaintiff applied for and accepts workers'
compensation benefits, she was barred from pursuing an intentional-tort action against defendants. The
court had rejected the plaintiff's argument that they exclusivity provisions of the Act do not bar commonlaw causes of action against an employer for injuries that the employer or its alter ego intentionally
inflicts upon an employee or that were commanded or expressly authorized, by the employer. The
plaintiff had asserted that the defendant's refusal to increase security measures after her request and two
prior robberies constituted the intentional act of "inviting" another robber. The court pointed out that the
Illinois Supreme Court had previously determined that an injured employee is not permitted to seek
workers' compensation benefits, claiming that the injuries are compensable under the Act while
additionally pursuing a common-law action for an intentional tort. Collier B. Wagner Castings Company,
81 Il1.2d (1980).
In conclusion, the court found that because plaintiff in the present matter was currently receiving workers'
compensation payments pursuant to the Act, she is no longer at liberty to pursue a common-law action.
Accordingly, the trial court's ruling was affirmed. Moreover, the court determined that, even if Collier
did not apply, the trial court was still correct in dismissing the plaintiff's amended complaint because
plaintiff's complaint failed to plead a specific intent to harm.
Employer/Respondent is not Entitled to a FCE as part of a Section 12 Examination
In W.B. Olson v. Illinois Workers' Compensation Commission, 2012 IL App (1st) 113129WC No. l-113129WC, the appellate court held that a respondent is not entitled to a functional capacity evaluation as
part of an independent medical examination. In reaching its decision, the court focused its attention on the
defmition of a medical "practitioner." Rather than settling the law on a confusing issue, this case is likely
to cause further confusion and litigation regarding a petitioner's ability to return to work.
The claimant in WB. Olson case sustained an injury to his right knee on February 1, 2006, while
attempting to push a wheelbarrow down a plank at a construction site. He later underwent two
arthroscopic procedures. Ultimately, he attended a Section 12 examination with Dr. Mark Levin, who
suggested a functional capacity evaluation and possible work hardening.
The claimant attempted to return to work in a light duty position, but was unable to complete the drive
into the office due to his knee pain. Thereafter, he participated in a course of work hardening. Upon
completion of the work hardening program, the claimant again attempted the drive into work for a light
duty position. Claimant was unable to complete the drive, and his treating physician provided him with a
note that advised him to avoid prolonged driving. Thereafter, claimant began a job search. The claimant
sought modified employment for over a year and a half.
The employer obtained an updated Section 12 examination with Dr. Tonino. Dr. Tonino concluded the
petitioner had no limitations on his ability to drive, and opined that the petitioner could return to work as
a truck driver and recommended a functional capacity evaluation. The appellate court's decision notes
that Dr. Tonino believed the FCE would be "a more reliable objective indication" of the petitioner's
abilities.
Based on Dr. Tonino's opinion, the employer suspended benefits, and the matter proceeded to a 19(b)
hearing. The arbitrator found that the petitioner had made a good faith effort to fmd employment, and was
participating in an appropriate vocational rehabilitation program. Further, the arbitrator allowed the
petitioner to continue with his vocational rehabilitation program, without taking the additional steps
recommended by the employer's witnesses, including the recommended functional capacity evaluation.
The employer sought review of the arbitration decision. The Commission upheld the arbitrator's decision
with only minor corrections. The Commission further concluded that it was "unnecessary and
inappropriate to order either a repeat FCE or formal vocational rehabilitation" because the program being
utilized by the petitioner was sufficient. The circuit court confirmed the Commission's decision, and the
employer appealed to the appellate court.
The employer raised three primary issues before the appellate court. First, it argued that claimant should
not be entitled to an award of further "vocational-rehabilitation benefits." Second, the employer argued
that the Commission erred in awarding maintenance benefits. Both of these arguments were dismissed by
the appellate court, citing the "manifest weight of the evidence" standard. In both instances, the court
explained that the Commission's decisions were supported by competent evidence. The employer's fmal
argument concerned the Commission's refusal to order the claimant to participate in an updated FCE.
The appellate court noted this was a question of statutory construction, allowing de novo review.
The employer argued that a FCE should be allowed pursuant to Section 12 of the Act. In rejecting this
argument, the appellate court noted that the relevant portions of the Act stated that, "[a]n employee shall
be required, if requested by the employer, to submit himself for examination to a duly qualified medical
practitioner or surgeon selected by the employer." 820 ll,CS 305/12. The court focused on the limitation
of an examination by a "medical practitioner or surgeon." Ultimately, the court looked to Dorland's
illustrated medical dictionary, which defmed a medical "practitioner" as "one who has complied with the
requirements and who is engaged in the practice of medicine." The court contrasted that definition with
the entry for "physical therapist," which was defmed as a "person skilled in the techniques of physical
therapy and qualified to administer treatment prescribed by a physician and under his supervision." The
court concluded that, "Clearly, a physical therapist does not fall within the meaning of a 'medical
practitioner' as specified in Section 12."
The employer then attempted to argue that its constitutional right to due process was violated.
Specifically, the employer argued that its due process rights were violated because the inability to obtain
an FCE denied it of "a meaningful hearing and a 'level playing field' on which to defend claims." The
appellate court observed that the "fundamental purpose of the Act is to afford protection to the employees
by providing them with prompt and equitable compensation for their injuries." Further, the court found
that the portions requiring a petitioner to "submit to an examination by a doctor chosen by his or her
employer, under Section 12 of the Act, clearly is designed to provide the employer with a meaningful
hearing and a 'level playing field.'." According to the appellate court, the employer's due process rights
were not violated "merely because a Section 12 examiner lacks authority to require additional FCE
testing."
WORKERS' COMPENSATION
.
Kenneth F. Werts, Craig & Craig, Mt. Verlwn
Friedman, Ltd., Champaign
_R. Ma.rk Cosimini, Rusin Maciorowsld &
Reprinted from Illinois w·orkers' Compensation Gzddebook, 2012 Edition with permission. ©
2012 Matthew Bender & Company, Inc.,a member of the LexusNexis® Group. All rights
reserved.
Arising Out of and in the Course of Employment
Claimant denied benefits when accident occun;ed while on a personal errand,
By: Kenneth F. Werts
A widow appealed a judgment of the circuit comi that affirmed a decision of the Workers'
Compensa~ion Commission which denied her benefits under the Workers' Compensation Act
and finding that the death of her husband, the employee, did not arise out of and in the course of
the employment. The employee was a design engineer who often·woke up eal'ly and traveled to
the employer's local headquarters. He often took work home at night, working on a laptop
computer. He can~ied a cell phone that he used almost exclusively for business pmposes. On the
evening of his death? the employee worked a few homs at honie and took several businessrelated telephone calls. He decided that he needed a break and his children wanted a snack.
According to claimant, the decedent left to go to a nearby store for snacks, including a.
cappuccino. He drove his personal motorcycle instead of the family van so that he could "wake
up." He had his pager and cell phone with him. As he was returning home, a car pulled out in
front of him. The employee was killed.
The arbitrator fom1d that the claimant had failed to prove that the decedent's death arose out of
and in the cotu·se of his emplo,Yment. In pruiictllar, the arbitrator found that the circumstances of
the accident did not suggest that it was related to the decedent's employment in any way. The
Commission affirmed and adopted the arbitrator's decision. The circuit court confumed the
Commission's finding and the claimant appealed. The appellate couti indicated that it was clear
that, in going out on his motorcycle at 9:15 p.m. to buy snack ingredients and a cappuccino, the
decedent was not acting under express instructions fi·om his employer or a statutory or commonlaw duty. In addition, the decedent's shopping excursion was not an activity that he reasonably
could be expected to perform incident .to his assigned duties. The court said that the record also
indicated that the decedent's decision to work at home in the evening was his personal choice.
Though the plaimant testified that the decedent wanted to get the cappuccino so he could "wake
up" and that he intended to continue working upon his return, there was no evidence that the
decedent's employer had directed him to work on his computer while at home or had designated
his home as an alternative work site. In addition, the decedent's remark that he needed to retum
hbme after purchasing the groceries was insuffiCient to establish that he had been instructed to
perfo11n a patticulat' work assigmnent during the cell phone call that took place while he was in
the store. Therefore, it could not be said that the accident occurred while the decedent was
attending to his employer's business or while he was retmning to his assigned tasks. Rather, the
record demonstrated that the decedent had embarked on a family errand to purchase groceries for
his children and a cappuccino for himself. The decedent's shopping tdp was a purely private
excursion that was not required by or incidental to his employment, nor was it something that
was foreseeable by or beneficial to his employer in any way.
Based on the record presented, the Commission's decision that the accident resulting in the
decedent's death did not arise out of and in the col.wse of his employment was not against the
manifest weight of the evidence. Ross v. Illinois Workers' Comp. Comm 'n, 2012 Ill. App:
Unpub. LEXIS 1491 (June 25, 2012).
Insect bite determined to arise out of employment.
The employer appealed from an order of a circuit court that confirmed a decision ofthe Illinois
Workers' Compensation Commission (Commission) awarding the claimant benefits pursuant to
the Workers Compensation Act (Act) (820 ILCS 305/1 et seq. (2006)), for il\iuries sustained
when he was stung by an insect while working as a janitor. The claimant testified that before his
injury he had seen insects stmounding the dumpster in the rear of the theater. There was no
evidence introduced at the hearing which contradicted the claimant's version of events. The
court observed that there isno disputing the fact that, at the time of his injury, the claimant was
performing acts he was instructed to perform by his supervisor. Additionally, the Commission
adopted the arbitrator's findings that the claimant was exposed to a greater risk than the genel'al
public in that he would be exposed to a greater risk of insects and unsanitary conditions that a
normal everyday visitor to the employer's college campus and that the area where the claimant
was injured was not an area where the general public was allowed to, or would nommlly, go.
These conclusions were factual in nature, indicated the court. The comt indicated that the
Commission could reasonably conclude that requiring the claimant to deposit trash in a dumpster
which insects had been known to smmund exposed him to the risk of a bug bite beyond that to
which the general public was exposed. Parkland College v. Illinois Workers' Comp. Comm 'n
(Like), 2012 Ill. App. Unpub. LEXIS 877 (Apr. 17, 2012).
Causal Connection
Intoxication defense failed based upon evidence of claimant's behavior prior to accident.
By: KennethF. Werts
The appellate coutt held that the Commission's determination that the claimant sustained injuries
that arose out of and in the course of his employment was not against the manifest weight of the
evidence because the evidence did not show that the injury arose out of intoxication rather than
employment or that the claimant was intoxicated to a degree that could be viewed as an
abandonment or departm·e :fi.·om employment. A drug screen performed after the accident at one
hospital showed that the claimant tested positive for cocaine and cannabinoids and negative for
opiates. A second drug screen performed at another hospital showed that the claimant tested
positive for cocaine and opiates but tested negative for cannabinoids. The claimant admitted to
drinking a co1.1ple of beers and ingesti11g cocaine the day before the accident, but denied using
cocaine on the day of the accident. A co-worker testified that he had worked with the claimant all
morning prior to the fall and had no reason to believe that he was intoxicated. The court noted
that the claimant had worked for more than two hours before his accident. There was no
evidence presented that he was unable to pay attention at a safety meeting, that he was unable to
communicate with a crane operator, or that he was 'llllable to unfasten irm~ that had been installed
inconectly on a previous day. The appellate court indicated that the Co.mmissionchose to
believe the witnesses who testified that there was no evidence that the claimant was intoxicated
while petforming his job duties. Under the instant circumstances, the court found that the.
Commission could reasonably c01l.clude that the claimant was able to perform his work properly
and was ca11'ying out his employment responsibilities when he fell. Although there was evidence
that the claimant tested positive for cocaine, ~he comt could not say, as a matter oflaw, that the
Commission etTed in determining that the claimant's injuries arose out of his employment, or that
its detetmination in this regard was against the manifest weight of the evidence. A-lert Constr.
Servs v. Illinois Workers' Comp. Comm 'n (Dilley), 2012 Ill. App. Unpub. LEXIS 905 (Apr. 19,
2012).
Repetitive Trauma
Initial diagnosis date and first date ofpresc1·ibed treatment held to be appropdate
manifestation date.
The appellate comt held that the Commission could reasonably infer that the "manifestation
date" of claimant's repetitive-trauma condition was March 17, 2009; even though evidence
suggested that claimant was aware of the nature of her injury and its relationship to her
employment well before then, that was the date she first sought medical attention for her bilateral
wrist symptoms, it was the first date a diagnosis was made, and it was the first date treatment
was prescribed. The ccnut also held that the Commission's finding that claimant provided timely
notice of accident to employer was not against the manifest weight of the evidence where
claimant testified that she infonued the employer that she sought medical care for her condition
and had previously inquired about filing a workers' compensation claim and where the employer
was aware that claimant was experiencing problems with her wrist and acknowledged that
claimant's position involved repetitive activities. Harmony's Corner v. Illinois Workers' Camp.
Comm'n (Crumpton), 2012 Ill. App. Unpub. LEXIS 1417 (June 18, 2012).
Workers' Compensation Fraud
Fraud conviction upheld where defendant misrepresented pain levels and worked despite
claims of being unable to do so.
Byi Kenneth F. Werts
Defendant appealed a judgment ofthe Circuit Court ofKane County convicting him oftwo
counts of workers' compensation fraud under 820 ILCS 305/25.5(a) (2006), sentencing him to 24
months' probation, and ordering him to pay $22,594 in restitution to the administrator of workers'
compensation benefits for defendant's employer to reimburse it for the costs of investigating
defendant's woikers' compensation claim and its attorney fees. The appellate court held that the
evidence was inSl.lfficient to support defendant's conviction under cotmt I because nothing in his
initial application for workers' compensation benefits or the 820 ILCS 305/19(b) (2006) petition
required him to state whether he was totally disabled from wotking,, and therefore his failure to
disclose his temporary light-duty work did not render his workers' compensation claim false or
fi:audulent. However, the evidence was sufficient to support defendant's conviction under count
II because the evidence showed that defendant consistently represented to his treating physician
thathis level of pain was a "nine or ten," leading the physician to conclude that defendant was 8~
percent or more disabled. Contrary to those representations, defendant had been working light
duty at two construction sites for 27 days. The court also held that 820 ILCS 305/25.5 was not
unconstitutionally vague because the terms ''false or :fraudulent" and "material representation"
were within the daily vocabulary of ordinary people and therefore did not have to be defined in
the statute. Defendant's conviction
on count I was
, on count II was affirmed, but his conviction
.
- reversed. The order of restitution was reduced to $12,923. The judgment was otherwise affirmed.
State v. Oshana, 2012 Ill.App.2d 101144, 965 N.E.2d 1174 (2na Dist. 2012).
·
Permanent Total Disability
Claimant's ability to perfonn meaningful work blocl{ed bis claim fm' permanent total
disability benefits.
The employer appealed a circuit court order that confirmed a decision of the Workers'
Commission that awarded claimant benefits under the Workers' Compensation Act, 820 ILCS
301/1 et seq. (2002), includingpennanent total disability benefits (PTD) and a recovery for
medical expenses in the sum of $131,626. The employer argued, inter alia, that the circuit cou1t
erred in confirming the Commission 1s award ofPTD benefits on an "odd~lot" basis under 820
ILCS 301/8. The court of appeals agreed. There was no medical evidence that could support a
claim of total disability. To the contrary, doctors each voiced opinions thatthe claimant could
work, albeit with varying restrictions. As for evidence that the claimant engaged in a diligent but
unsuccessful job search, the arbitrator concluded that the claimant failed to demonstrate that he
made diligent but unsuccessful attempts to find work. Fmther, the claimant made no argument
that applying for cashier positions at nine auto dealerships and looking in the Sunday newspaper
constituted a diligent job search. The evidence failed to support a finding that the claimant 1s
meager eff01ts to find work constituted a diligent but unsuccessful job search. In the absence of
medical evidence to supp01t a claim of total disability or his having conducted a diligent but
unsuccessful job search, the claimant had the burden of proving he was so handicapped he would
·
not be employed regularly in any well-known branch of the labor market.
Professional Transp., Inc. v. Illinois Workers' Camp. Comm 'n (Clarke), 2012 Il.App.3d
100783WC, 966 N.E.2d 40 (3rd Dist. 2012).
·
Permanent Partial Disability Benefits
Injury to shoulder not classified as a loss of the arm.
The claimant suffered an injui:y to his right shoulder that arose out of and in the cm.ll'se of his
employment. The Commission affirmed an arbitrator's decision to awru.·d benefits under 820
ILCS 305/8(d)2 (2008). The trial court confirmed that decision; and this appeal followed ..
According to the employer, the record established that claimant had returned to work at full duty
resuming allprior job activities, that claimant was under no medical restrictions, and that
. claimant' had not sought any additional treatment for his right shoulder. For those reasons, argued
the employer, it was improper to award claimant benefits under sedion 8(d)2 on the basis that
claimant proved a partial incapacity which prevents him fi·om "pursuing the duties of his usual
and customary line of employment." Instead, the employer maintained that the Commission
should have. awarded claimant benefits, if at all, for a scheduled loss to the right arm as set forth
in section 8(e)(10) of the Act (820 ILCS 305/8(e)(l0) (2008)).
The appellate court observed that§ 8(d)2 provided for benefits in any of the following three
situations: (1) Where a claimant sustains serious and permanent injuries not covered by section
8(c) (820 ILCS 305/8(c) (2008) (relating to injuries resulting in disfigurement)) or section &(e) of
the Act; (2) where a claimant covered by§ 8(c) or 8(e) of the Act also sustains other injuries
which are not covered by those two sections and such injul'ies do not incapacitate him from
pmsuing his employment but would disable him fi·om pursuing other suitable occupations, or
which have otherwise resulted in physical impairment; or (3) where a claimant suffers injuries
which patiially incapacitate him fi·om pursuing the duties of his usual and customary line of
employment but do not result in an impairment of earning capacity. 820 ILCS 305/8(d)2 (2008).
Here, the Commission determined that a person-as-a-whole award was appropriate under the
third subpart of section 8(d)2. The court indicated that although it was ordinarily reluctant to set
aside the Commission1s decision on a factual question, it would not hesitate to do so when the
cleru.·ly evident, plain, and indisputable weight of the evidence compelled an opposite conclusion.
The court added that this was such a case. There was no indication that the claimant's physicians
limited claimanfs ability to engage in the d·uties of his usual and customary line of employment.
There was no evidence that claimant's duties required any modification or that clain1ant was less
productive. Based on the evidence, the court found that the Commission1s award of benefits for
the loss of a person as a whole under § 8(d)2 on the basis that the injury to claimant's right
shoulder pmiially incapacitated him from pursuing the duties of his usual and customary line of
employment was against the manifest weight of the evidence.
The comi went on to indicate, however, that this did not mean that compensation should be
awarded on the basis of a scheduled loss to the right arm under § 8(e)(10) of the Act. The couti
noted that the employer's argument assumed that an inj"I.U'Y to the shoulder was an injury to the
arm. This cout't had riot had occasion to consider the classification of suqh a shoulder injury. The
court said that here the evidence clearly established that the injury was to the shoulder, not to the
arm. Since claimant's shoulder injury did not qualify as a scheduled loss to the arm, the comi
t1.m1ed to other provisions of the Act for guidance, finding applicable the first subpart of § 8(d)2.
That provision provided for a person~as~a-whole award where .the claimant sustained serious and
permanent injuries not covered by section 8(c) or 8(e) of the Act. In this case, there was no
evidence that claimant suffered disfigurement as tequired for an award under section 8(c) of the
Act (820 ILCS 305/S(c) (2008)). In addition, as set forth above, the injury to claimant's right
shoulder did not qualify as a scheduled loss to the ru.m under section 8(e)(l 0). As such, the court
held that benefits were proper under the first subpati of section 8(d)2, and not, as the
Commission concluded, under the third subpartof section 8(d)2. While the Cotmnission's
rationale was incorrect, its decision awarding benefits under section 8(d)2 of the Act.
·wm County Forest Preserve Dist. v. Illinois Workers' Camp. Comm 'n (Smothers),
2012 Ill.App.3d 110077WC, 970N.E.2d 16 (3rdDist. 2012)
Claimant's bonus properly excluded from wage differential calculations.
The appellate court held that the Commission had not erred in either awarding claimant wagedifferential benefits under the Act or in computing that award by finding certain monthly
compensation claimant received constituted a "bonus" and excluding those amounts from its
wage-differential calculations.
Zimmerman Ford v. Illinois Workers' Camp. Comm 'n (D'ono.fi'io), 2012 Ill. App. Unpub. LEXIS
1481 (June 25, 2012).
Jurisdiction
Department of Labor decision did not estop claimant from pursing Workers'
ComJlensation benefits.
Claimant, a coal miner :fi·om 1969 to 1999, challenged a trial comt's decision that set aside a
decision from the Illinois Workers' Compensation Commission in a workers' compensation case.
The claimant alleged that as a result of inhaling coal mine dust, he experiences sh01tness of
breath and exercise intolerance. Following a hearing, the arbitrator concluded that claimant
suffered from coal workers' pneumoconiosis (CWP), that he established his disablement within
two years after the date of last exposure to the hazards of the disease (see 820 ILCS 31 0/1 (f)
(2002)), and that respondent failed to demonstrate that the timing of the notice of the claim
caused undue prejudice (see 820 ILCS 31 0/6(c) (2002)). The arbitrator awarded claimant
permanent pmtial disability (PPD) benefits and the Commission affirmed that decision. The trial
court found that the doctrine of collateral estoppel precluded any finding that claimant had CWP
within two years after his last date of exposure because the United States Department of Labor
had found to the contrary in a proceeding for benefits m1der the Black Lung Benefits Act (30
U.S. C. § 901 et seq. (2000)). In reversing the trial court, the appellate comt held that a decision
denying the claimant benefits under the Black Lung Benefits Act did not preclude him from
establishing timely disablement under 820 ILCS 310/1 (f) (2002). CoHateral estoppel did not
preclude the claim, although there was an identity of issues and a final decision by the district
director, because the district director's role was. investigative or administrative in nature, rather
than adjudicatory. The informational nature at the initial stage of a federal proceeding, coupled
with constraints on the nature of the evidence fm submission, led to the conclusion that the
proceedings on the request for benefits undel' the Act did not constitute an adjudication for
purposes of collateral estoppel.
Edmonds v. Illinois Workers' C01np. Comm 'n, 2012 Ill.App (5t11 ) 110118WC, 968 N.E.2d 775
(5 111 Dist. 2012).
Mailbox Rule does not apply to appeal from the Commission to the Circuit Court.
Claimant challenged an trial court's order that affirmed a decision ofthe Illinois Workers1
Compensation Commission denying him benefits pursuant to the Workers' Compensation Act,
820 ILCS 305/1 et seq. (2002), for injul'ies he allegedly sustained on July 21,2004, while
working for the employer. The employer filed a cross-appeal fi·om the denial of its motion to
dismiss. The employer argued that the requisite subject-matter jurisdiction to ente1iain the
claimant1s action for judicial review was lacking because the action was not filed with the clerk
of the circuit court within 20 days of receipt of the Comrnission1s decision by the claimanfs
attorney. The claimant asserted that proof of the mailing of all of the necessary documents to the
clerk of the court within the 20-day period was sufficient to vest the circuit coUlt "\'\rith subjectmatter jurisdiction. The appeals court found that the claimant failed to commence his action for
judicial review within the 20-day period mandated in§ 19(±)(1) (820 ILCS 305/19(±)(1) (2008))
of the Act. This statute had always been interpreted to mean that the commencement date was
the date upon which the comphi.int was received by the clerk of the comi, not the date that the
document was mailed to the clerk. Section 19(±)(1) did not contain a "mailbox rule." The
judgment of the circuit comt was entered in the absence of subject-matter jm·isdiction. It was
accordingly vacated and the claimant's appeal was dismissed.
Gruszeczka v. Illinois Workers' Comp. Comm 'n, 2012 Ill.App.2d 101 049WC, 966 N.E.2d 356
(211d Dist. 2012).
·
·
Insurance coverage issue should. be decided by Circuit Court and not by Commission.
The employee sustained a kne~ injury during the course of his employment mth the employer.
He then filed a claim with the Commission that named the employer and the insurer as
respondents. Tlie employer tendered its defense atid indemnity to its insmer. The insurer filed a
declaratory judgment action asserting that it did not owe coverage to the employer because the
relevant workers' compensation insurance policy had been canceled. An arbitration proceeded
with the employee, but without the employer ot insurer present. In the declarat01y case, the
insurer filed a motion to stay the workers' compensation proceedings, and the employer and
employee filed a motion to dismiss. The trial court denied the motion to stay as moot since the
arbitrator had already issued a decision, and granted the motion to dismiss upon finding that the
Commission could decide the coverage issue. The appellate court found that the trial court etTed
in granting the motion to dismiss because it, being a comt of original jmisdiction tmder Ill.
·
Canst. rut. VI, § 9, should have decided the coverage issue. It also found that resolving the
coverage issue did not require any ofthe Commission1s special expertise.·The appellate court
reversed the trial court's judgment and remanded the case to the trial court with directions for it
to stay the underlying workers1 compensation claim until a decision was made by the trial court
·
regarding the issue of insurance coverage.
HastingsMut. Ins. Co. v. Ultimate Backyard, LLC, 2012 Ill.App.ld 101751, 965 N.E.2d 656 (1st
Dist. 2012).
Circuit Court lacked jurisdiction over insurance carder when carrier was not named as a
.party in the underlying action.
By: Ke:lmeth F. Werts
The appellate court held that the circuit court lacked subject~matter jurisdiction over plaintiff's
workers' compensation claims against her employer's insurer since the insurer was not named as
a defendant in the underlying action before the Illinois Industrial Commission and could not be
added in the same action after the employer's liability was determined ex parte. Plaintiff provided
. no authority allowing the circuit court to order the insurer to pay the Commission's award that
was secured against only the employer.
Aber v. American Home Assurance, 2011 Ill. App. Unpub. LEXIS 2717 (Nov. 7, 2012).
Sanctions
Commission lacl<S authority to award penalties based upon a delay in authorizing medical
~
treatment.
By: Kenn~th F. We1·ts
Claimant was employed as a cocktail waitress. She suffered a crushing injmy to her rightfoot
while working. During the course of treatment, a surgeon implanted a spinal cordstimulator in
the claimant. Following an initial award ofbenefits, the claimant continued under the care of her
physician. Two years passed and her physician sent a letter to the claims adjuster indicating that
there were signs indicating that the stimulator's battery was nearing the end of its life and would
likely need replacement within the first quarter of2007. In May, 2007, the battery in the spinal
cord stimulator ceased to function and the claimant's physician scheduled the necessary surgery
to replace it.. In August, 2007, some two weeks aftet· the claimant filed a petition requesting that
. penalties and attomey fees for delay be assessed, the carrier authorized the surgery. At trial, the
adjuster admitted that she was in possession of everything that she needed to authorize the
battery replacement on June 18, 2007; the surgery took place August 27,2007. The Workers'
Compensation Commission awarded the employee $40,750 in penalties against the employer
p1.usuant to section 19(k) of the Workers' Compensation Act {Act), 820 ILCS 305/19(k) (2006).
The trial comt reversed and the employee appealed. The appellate court affirmed, noting in·
relevant part that the statute addressed ~'delay in paymentH and "underpayment" of
compensation; it said nothing about any award ofadditional compensation (penalties) for an
employer's delay in authorizing medical treatment, even assuming arguendo that an employer
. had an obligation to give authorization in advance of medical treatment for an injured employee.
Here, the Commission had not awarded section 19(k) penalties for any delay on the part of the
employer or carrier in paying the claimant's medical bi11s or for any underpayment of those bills.
As a fachlal matter, claimant's attomey readily admitted that those bills were actually paid in a
timely fashion. Rather, the Commission awarded section 19(k) penalties by reason of the
employer/can·ier's unreasonable delay in authorizing the claimant's battery replacement surgery.
It had no stah1tory authority to do. Justice Stewart, joined by Justice Holdridge, dissented,
· indicating that§ 19(k) must be read together with section 8(a) of the Act, which provides that the
employer shall provide and pay for all the necessary first aid, medical and surgical services, and
all necessary medical, sm·gical and hospital services thereafter incm:red, limited, however, to that
which is reasonably required to cure or relieve from the effects of the accidetital injury. 820
ILCS 305/8(a) (West 2006). The justice argued that it was clear l.mder § 8(a) that an employer
was obligated to «provide" medical services for an i~ured worker, as well as "pay" for those
·
services when rendered.
Hollywood Casino-Aurora, Inc. v. Illinois Workers' Camp. Comm 'n (Viericki-Iverson), 2012
IILApp.2d 110426WC, 967 N.E.2d 848 (211d Dist. 2012).
,
Entitlement to a credit for overpayment of benefits does not prevent a 19(g) request for
penalties.
The employee filed a petition for judgment on a workers1 compensation award when the
employer failed to pay the award, and the employee also requested penalties under 820 ILCS ·
305/i9(g) (2008). The circuit corut entered judgment against the employer for the amount of the
benefits award, and later awarded the employee attorney fees, costs, and interest. The employer
sought review. In the underlying workers1 compensation case, :the employer had been granted a
credit in excess ofthe amount of the benefits award, and it argued that the circuit court erred in
denying its motion to dismiss and in enterfng judgment in favor of the employee because it had
already paid more than it was obligated to pay. The appellate court observed that the allowance
of a credit within a decision or award merely served to reduce the total payment of compensation
benefits. Under § 19(g), a "credit" did not equal "compensation.'' The fact that the employer
inadve11ently overpaid on the benefits for a certain time period was not something for which §
19(g) pl'Ovided a remedy. The employee had not received an award for future payments, merely
an award for payments to which he was previously entitled. Just as the employer could not seek
to recover the amount of the overpayment by filing a claim tmder § 19(g), it could not apply its
credit for the overpayment to avoid an entry of judgment pursuant to § 19(g). Thus, the employer
was not entitled to use the credit as an offset against the benefits awarded to the employee under
§ 19(g).
Patel v. Home Depot USA, Inc., 2012 Ill.App.ld 103217, 964 N.E.2d 1288 (1st Dist. 2012).
Contribution
Exclusive Remedy
Safety inspectors held to be immune from tort liability because they are "service
organizations~' retained by employer.
The trial co1.ut grante4 summary judgment for defendant safety inspectors in a personal injury
action arising fi·om plaintiff employee's fall into a floor opening that was part of a manlift (a
vertical conveyor belt system used to move personnel fi:om floor to floor). Plaintiffs appealed. It
was undisputed that the safety inspectors provided safety service, advice, and recommendations
to the employer. The reviewing court held that they were immune fi·omliability under the
Workers' Compensation Act because they were service organizations retained by the employer
within the meaning of820 ILCS 305/5(a). The Illinois legislature clearly intended to extend the
.immunity grante~ to an employer under the Workers' Compensation Act beyond the insurer of
the employer for a common law action for the negligent performance of gratuitous safety
inspections and safety engineering service. The court was not persuaded by the argument that an
inspector should be not covered by§ 5(a) because it did not contribute to the workers'
compensation coverage for the employee, was not sufficiently tied to the employer-employee
relationship, performed maintenance and repair, or was compensated for the services it provided.
Ifthe legislature had meant to restrict the application of"service organization," it could have
expressly imposed those restrictions, as other states had done .
.A1ockbee v. Humphrey Manlift Co., Inc., 2012 IL. App. (1st) 093189, 973 N.E.2d 37 (1 51 Dist.
2012)
Negligent Supervision, Hiring, and Retention
Workers' Compensation Act preempts claim for negligent infliction of emotional distress
and negligent supervision and training.
A fanner employee sued defendant former employer alleging (1) retaliatory discharge; (2)
violation of the Whistleblower Act, 740 ILCS 17411 through- 35 (2006); (3) intentional infliction
of emotional distress (liED); (4) negligent infliction of emotional distress (NIED): and (5)
. negligent supervision and training. The circuit court granted the employer's motion for summary
judgment. The employee appealed. In response to the e!flployee's various assigmnents of en·or,
the appellate court concluded, inter alia, that: (1) the employee's discharge, even if motivated by
actions the employee took, could not have violated a clearly mandated public policy because the
employee, as operations manager of the health information depru1ment and its representative
with respect to the hospital's accreditation, was herselfresponsible for bringing the employer into
compliance with the regulations she complained defendant violated; (2) the employee 1s refusal to
sign hospital record certifications was not a protected activity supporting a claim under the
Whistleblower Act; (3) the prolonged and unexpected deterioration of the parties' relationship,
including a s·upervisor1s comments to other employees about the employees perfonnance, while
stressful and unpleasant to the employee, did not meet the standard of "extreme and outrageous'.'
conduct required for a claim of liED; and (4) the employee's claims for NIED·and negligent
supervision and training were preempted by the Illinois Workers' Compensation Act.
Ulm v. Memorial Med.. Ctr., 2012 Ill.App.4d 110421, 964 N.E.2d 632 (4th Dist. 2012).
Settlement and Waiver
Pursuant to divorce settlement agreement, ex-wife of claimant entitled to percentage of
MSA.
The wife's former husband challenged a judgment from the trial court that awarded the wife a
percentage of funds from the husband's workers' compensation settlement that had been placed
in a Medicare set-aside account (MSA). During the maniage, the husband sustained a workrelated injury and filed a claim for workers' compensation. The claim had not yet been resolved
when the husband filed a petition for dissolution ofmalTiage. The parties entered into a
settlement agreement, incorporated into the judgment of dissolution of marriage, which provided
that the wife wotdd receive a specified percentage of the net proceeds from the husband's
workers' compensation settlement. Net proceeds were defined to include reimbursement for
medical payments. The trial court interpreted the parties' agreement to include the funds placed ·
in the MSA as net proceeds. The appellate comi, in affirming, concluded that the funds in the
MSA fell squarely under the definition of net proceeds in the dissolution agreement because
these funds reimbursed the husband for his futttre medical costs. Under the Medicare as
Secondary Payer statute, 42 U.S.C. § 1395y, and its regulations, in particular 42 C.P.R. §§
411.20(a)(2)(2012), 411.46 (2012), Medicare would pay for covered tnedical services only after
the exhaustion of the funds in the MSA. Those fllllds were for the sole pmpose of paying the
husband's medical bills.
In reMarriage ofWashkmviak, 2012 Ill.App;3d 110174, 966 N.E.2d 1060 (3rd Dist. 2012).
0
'
Methods of Insurance
Failure oflending employer to obtain endorsement adding borrowing employer to
insurance policy did not operate to remove borrowing employer's wm·kers from coverage.
A borrowing employer challenged the trial court's judgment reversing the decision of the Illinois
Workers' Compensation Commission concerning workers' compensation coverage, in the action
with a workers' compensation claimant and a lending employer's insurer. The claimant had filed
an application for adjustment of claim pmsuant to the Workers' Compensation Act (Act), 820
ILCS 305/1 through 30 (2002)) seeking benefits from the borrowing employer for injmies the
claimant
suffered on January 10, 2003. The Commission found that the claimant
proved he
.
.
sustained injuries arising out of and in the course of his employment with the borrowing
employer. The borrowing employer had contracted with the lending employer for outsourced
employee-related services, including workers' compensation coverage. The Commission found
the borrowing employer and lending employer jointly and severally liable for the claimant's work
related inJuries. The circuit comt reversed that portion of the Commission's decision conceming
workers' compensation coverage, finding that the bon·owing employer was not endorsed as an
insured on the Tmvelers policy u11til August 29,2003, and therefore Travelers owed no
coverage. The appellate court disagreed and reversed. It indicated that by choos1ng to purchase
workers' compensation coverage the lending employer was deemed to have pmchased it for all of
its employees, including the claimant; The lending employer's failure to sec1.Jre an endorsement
adding the borrowing employer to the insurer's policy until August 29, 2003, was ineffective to
withdraw the claimant from the operation ofthe Act. The claimant was still under the protection
ofthe Act atthetime ofhis injury.
Travelers Ins. v. Precision Cabinets, 2012 Ill.App.2d 11 0258WC, 967 N.E.2d 856 (IlL Ct. App.
W12~
.
Injured employees' UIM coverage not triggered where other drivers' UIM coverage.
exceeds limit of employer~s coverage.
Katz was involved in an automobile accident while driving a vehicle that was owned by his
per
person.
and insured
.employer
.
.
. through Sentry. The Sentry policy had UIM limits of$50,000
.
.
\.
The driver of the other vehicle was insured by State Farm under the terms of a policy that had a
-
liability limit of$100,000. The other driver's carrier (State Farm) paid the $100,000 limit to
Katz, allocated $60,000 to Katz himself and the remaining $40,000 to his spouse for loss of
consortium. Katz also received workers' compensation betiefits of such $47,654.08. Sentry, the
employer's auto insurer, paid Katz $2,545.92, the difference between the workers' compensation
benefits and the $50,000 UIM limit. Katz then sought UIM benefits under three personal
automobile policies issued to him by State Farm. State Farm paid $161,876 in UIM benefits and
Katz filed suit for what he claimed were additional UIM benefits owed to him. A provision in
the State Farm policies provided that the UIM benefit would be paid "on a primary basis 11 if the
insured was occupying his own car at the time of the accident, but 11 on an excess basis" if the
insured was occupying another car. Since he occupied his employer's car at the time of the
accident, Katz contended that the State Farm $250,000 limit should be "stacked" on top of the
Sentry limit already paid. State Farm f11ed a motion for summary judgment, which the circuit
court granted. Katz appealed. The appellate court affirmed. Under 215 ILCS 5/143a-2(4)
(2008), the driver of the other vehicle was not an underinsured motorist because the $100,000
liability limit for his vehicle was greater than the $50,000 underinsured motorist benefit limit
contained in the employer's policy. Because the employer's policy did not provide any coverage,
State Farm, as Katz' UIM insurer, was not an excess insure1~ but the only underinsurer. The
appellate court held that State Farm was entitled to setoffs for the $100,000 settlement plaintiff
. received in the underlying action and $47,654.08 he received in workers' compensation benefits.
The loss of consot1ium claim derived from plaintiffs bodily injury was also subject to the perperson limitations of defendant's policy. Because State Farm did not owe any additional benefits,
Katz was not entitled to damages under 215 ILCS 5/155 (2008); there was no merit to his claim
that defendant's conduct was unreasonable and vexatious.
Katz v. State Farm Mut. Automobile Ins. Co., 2012 Ill.App.ld 110931, 965 N.E.2d 636 (1st Dist.
2012).
State guarrantee fund available to self-insured employer when excess insurer became
insolvent.
The circuit comt gtanted summary judgment to plaintiff company after it filed a declaratory
judgment action seeking a declaration that it was entitled to payment from defendant state
insurance guaranty fund based on excess workers' compensation policies purchased from an
insurer before the insurer became insolvent. The fund appealed. The company's predecessor-ininterest had an employee injured in the scope and course of her employment when she sustained
a bulletwound to the head. Eventually, the predecessor-in-interest was ordered to pay the
employee workers' compensation benefits for life. At the time of the injury, the predecessor-ininterest was a qualified self-insurer with respect to workers' compensation insurance. However, it
had excess workers' compensation policies it had purchased from the insurer. The predecessorin-interest paid up to its policy amounts. The insurer then paid until it went into receivership. The
defendant state insurance guaranty fund then paid benefits until it reached a statutmy cap. The
company, as a successor-in-interest, sought a declaration that the fund should not have ceased
paying. The trial court granted summary judgment in favor of the company. The defendant fund
argued that the company's claim against an excess insurer was not a workers' compensation
claim under section 537.2 of the Code. According to the defendant fund, where an employer
elected to self-insure under the Workers' Compensation Act and its excess insurer became
insolvent, the employer remained liable for payment of all obligations until it became insolvent,
at which point the obligation passed to the Self-Insurers Advisory Board. The appellate court
observed that the majority ofJmisdictions to consider the issue had ruled that a self-insured
employer under their state's w:orkers' compensation laws was not an ''insurer11 for purposes of
their state's guaranty laws, ai1d thus, self-insured employers could recover from their state's
guaranty funds after their excess insurers became insolvent The appellate court found that the
company, a self-insuring employer, was entitled to be reimbursed by the fund based on excess
workers' compensation policies purchased fi:om insurer before its insolvency, as the required -215
ILCS 5/537.2 (2004) workers' compensation claims were not limited to employee claims, but
could include policyholdet claims.
Skokie CastingS, Inc. v. Illinois Ins. Guaranty Fund, 2012 Ill.App.ld 111533, 964 N.E.2d 1225
(1st Dist. 2012).
W:\Ustirs\125\0l309762.DOC

advanced workers` compensation recent case law update

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