Brady, Connolly & Masuda, P.C. Sixth Annual Spring Seminar
Thursday, May 3, 2007, 1:00 p.m. - 4:30 p.m. 4:30 p.m. - 7:30 p.m. - Reception (Cocktails and Hors d’oeuvres)
DoubleTree Guest Suites 2111 Butterfield Road, Downers Grove, Illinois 60515
REDUCING YOUR WAGE DIFFERENTIAL AND PENALTIES EXPOSURE BEFORE THE ILLINOIS WORKERS’ COMPENSATION COMMISSION
1:00 p.m. - 1:30 p.m. Registration 1:30 p.m. - 1:35 p.m. Opening Remarks Francis M. Brady, Esq. 1:35 p.m. - 1:55 p.m. Calculating and Assessing Your Wage Differential Exposure: The New §8(d)1 Maximum Rates Peter J. Stavropoulos, Esq., Valerie J. Peiler, Esq. 1:55 p.m. - 2:20 p.m. Utilization of Vocational Rehabilitation to Reduce Wage Differential Exposure Susan Rosenberg, MS, CRC, LCPC, Susan Rosenberg & Associates, Inc. 2:20 p.m. - 2:45 p.m. Wage Differential Claims and Vocational Rehabilitation: An Arbitrator’s Perspective Arbitrator Kurt Carlson, Illinois Workers’ Compensation Commission 2:45 p.m. - 3:00 p.m. Effective Use of Vocational Rehabilitation Before the Illinois Workers’ Compensation Commission John P. Connolly, Esq. 3:00 p.m. - 3:15 p.m. Break 3:15 p.m. - 3:30 p.m. Managing Concurrent Exposures: Workers’ Compensation and Civil Andrew R. Makauskas, Esq. 3:30 p.m. - 3:45 p.m. Avoiding Awards of Penalties and Attorney’s Fees: A Defense Perspective Julia B. McCarthy, Esq. 3:45 p.m. - 4:25 p.m. Panel Discussion/Questions Arbitrator Kurt Carlson, Susan Rosenberg, MS, CRC, LCPC, John P. Connolly, Esq., Valerie J. Peiler, Esq. 4:25 p.m. - 4:30 p.m. Closing Remarks Beverly N. Masuda, Esq. 4:30 p.m. - 7:30 p.m. Reception
RSVP on or before April 27, 2007, to: Ms. Linda M. Barker / [email protected] (312) 425-3131 / (312) 425-0110 (FAX)
** If you are unable to attend the Seminar, please feel free to join us at the Reception. *** If you are unable to attend the Seminar and would like to receive the seminar materials, please e-mail our office at [email protected].
CALCULATING AND ASSESSING YOUR WAGE DIFFERENTIAL EXPOSURE: THE NEW §8(d)1 MAXIMUM RATES
Peter J. Stavropoulos, Esq., Valerie J. Peiler, Esq. BRADY, CONNOLLY & MASUDA, P.C. One North LaSalle Street Suite 1000 Chicago, Illinois 60602 (312) 425-3131 (312) 425-0110 - FAX www.bcm-law.com
May 3, 2007 6th Annual Spring Seminar CALCULATING AND ASSESSING YOUR WAGE DIFFERENTIAL EXPOSURE: THE NEW §8(d)1 MAXIMUM RATES
Introduction
The 2005 Amendments to the Illinois Worker’s Compensation Act altered the law governing both vocational rehabilitation and the value of a wage differential award under Section 8(d)1 of the Workers’ Compensation Act. The changes to the maximum possible wage differential award have the potential to significantly increase the cost of such claims for high wage individuals, such as skilled construction workers; supervisory personnel in construction and other manual labor positions; and skilled individuals whose jobs entail some physical demands. The purpose of this presentation is to demonstrate the differing values associated with permanent partial disability that result from changes to one sole factor: the type of employment to which the injured worker can return. The value of the permanent disability associated with a restricted return to work varies dramatically depending upon the type of work to which the injured employee can return. Obviously, a critical factor in returning the employee to the best possible employment within work restrictions is the quality of the vocational rehabilitation program. However, the vocational rehabilitation process has costs to both the employer and employee, including the simple passage of time with no resolution of the workers’ compensation claim. In order to determine whether a vocational rehabilitation plan is cost effective, it is necessary to value the permanency liability under the various statutory schemes. We will explore the value of permanent disability associated with a debilitating injury under Section 8(e), governing specific losses; Section 8(d)2, governing man as a whole; and Section 8(d)1, providing for wage differential awards, under both the OLD and NEW systems. By assessing the value of the permanent disability of a claim under each statutory scenario, and weighing that value against the cost of the vocational rehabilitation program proposed, the parties can determine the best possible outcome, from each party’s perspective, for conclusion of the claim.
The Law Governing Wage Differentials Notably, the change to the wage differential maximum liability is not found in Section 8(d)1 of the Act. Instead, the new maximum is set out in Section 8(b)2 of the Act. A copy of the language of both Sections of the Act is provided in these materials. Another critical point to note in assessing the value of a wage differential is that the differential is NOT based on the average weekly. Instead, a wage differential is measured as the difference between what the employee COULD be earning in his prior occupation and what he is CAPABLE of earning in his post-accident condition. Under this language, the wage a union employee could be earning is measured by the hourly wage set out in the contract on the date of trial before an Arbitrator of the Commission. If an employee was earning $31.50 per hour under his union contract when he was injured on May 3, 2001, and he would now be earning $35.65 per hour under that union contract, his wage differential will be measured using the $35.65 per hour wage. The last significant legal principle raised in this discussion is that the law basically awards this permanency benefit for the natural life of the employee. The only basis on which to terminate payment of the wage differential benefit is if the employee’s PHYSICAL condition changes so as to allow him to pursue a higher paying occupation. The fact the employee is earning as much money as he did at the time of the accident is not a sufficient legal basis for terminating wage differential benefits.
Hypothetical Example
For purposes of illustrating the impact of the ability to return to work, let’s assume a construction worker belonging to the ironworker’s union sustains a tri-malleolar fracture to the right foot on May 3, 2005. As his accident date is before February 1, 2006, the prior law applies. His union contract reflects that he currently would be able to earn $38.25 per hour, or $1,530.00 per week. He is released to work with restrictions, primarily no walking on uneven ground. Because of this specific restriction, he is unable to return to his prior occupation of ironworking. If his employer takes him back to work and makes him a supervisor with no construction responsibilities working under the union contract, the value of his permanent disability could be measured as a percentage loss of use of the foot. With a May 3, 2005, accident date the maximum permanent partial disability rate was $567.87 and a foot was worth 155 weeks. Therefore, a permanency award of 45 percent loss of use of the right foot would be valued at
$39,608.93. If the employer chose to provide the employee with a position as an inside estimator, earning the same wage as he would have earned as a union worker, the permanent partial disability value could be measured as a percentage loss of use of the man as a whole, because the employee is partially incapacitated from his prior employment. If such a loss were valued at 30 percent loss of use of the man as a whole, the value of the permanent partial disability, again utilizing the maximum permanent partial disability value of $567.87, would be $85,180.50. If the employer would or could not accommodate the employee’s restrictions, and the employee was only able to locate work as a security guard earning $8.50 per hour, the value of the permanency would be measured under Section 8(d)1 of the Act, because the employee has clearly suffered a loss of earning capacity. For the May 3, 2005, accident date, the employee’s weekly wage differential benefit is capped at $567.87 per week, the maximum permanent partial disability rate for that date of accident. This weekly benefit yields a yearly cost of $29,529.24. Given the employee’s life expectancy of 40 years, and utilizing a present cash value discount of 6 percent, the present cash value of this wage differential would be $444,305.80.
New Law This hypothetical example utilized a May 3, 2005, date of accident. However, for all accidents occurring on or after February 1, 2006, the computation of the wage differential has changed significantly for high wage earners. In the example above, the wage differential was capped at the maximum permanent partial disability rate of $567.87 per week. Under the new law, the wage differential is capped at the State of Illinois’ average weekly wage. Therefore, for an accident occurring on May 3, 2007, instead of 8(d)1 claims being capped at the maximum permanent partial disability rate of $619.99 per week, they are now capped by the State’s average weekly wage of $861.38. As of May 3, 2007, the maximum wage differential under Section 8(d)1 has increased by almost $250.00 per week. The maximum present cash value under the “old” law and the “new” law is quite significant, with an increase of $229,644.45 for the identical scenario occurring two years apart, as illustrated below.
Maximum exposure under Present cash value of Section 8(d)1 prior to maximum rate wage $444,305.80 February 1, 2006 (capped at differential for May 3, 2005, maximum PPD rate on date of date of accident assuming a 40 accident, $567.87) year life expectancy and a 6% rate of return Maximum exposure under Present cash value of Section 8(d)1 after February 1, maximum rate wage 2006 (State AWW on date of differential for May 3, 2007, $673,950.25 accident) date of accident assuming a 40 year life expectancy and a 6% rate of return
Using our prior example of the iron worker who does not return to his prior employer, but instead finds a job as a security guard, the wage differential is again measured at two-thirds of the differential between $1,530.00 per week at his ironworking job and the $340.00 per week wage of his job as a security guard. However, if this same ironworker is injured on May 3, 2007, the cap is now $861.38 per week. So the employee is now entitled to receive $793.33 per week for as long as his disability shall last, or $41,253.16 per year, as a differential benefit. Given his life expectancy of 40 years, and utilizing a 6 percent present cash value discount, the value of the wage differential award is $620,707.42. As you can see, the value of this wage differential scenario is valued $176,401.62 higher than it would have been had the legislature not changed the 8(d)1 cap from the maximum permanent partial disability rate to the State average weekly wage. The chart below illustrates the various return to work scenarios laid out above for the hypothetical 36 year old ironworker and demonstrates the gains that can be achieved through effective vocational rehabilitation.
Exposure under Section 8(e) 45% loss of use of the foot $46,575.72 after February 1, 2006 Exposure under Section 8(d)2 30% loss of use of a person as $92,965.50 for partial loss of occupation a whole Exposure under Section 8(d)1 Present cash value of wage assuming petitioner undergoes differential for May 3, 2007, vocational rehabilitation date of accident assuming $673,950.25 petitioner returns to work earning $8.50 per hour, has a 40 year life expectancy and using a 6% rate of return
Conclusion Until the passage of the 2005 Amendments, it was relatively simple to assess whether a maximum wage differential would result irrespective of the vocational rehabilitation plan developed for the injured employee. With the increased maximum wage differential benefit now tied to the State’s average weekly wage, wage differential claims by high end wage earners require greater scrutiny to assess the costs and benefits of vocational rehabilitation efforts and the impact of those efforts on the ultimate value of the permanent disability in the case. By utilizing the analysis laid out above, the various factors associated with vocational rehabilitation and wage differentials, such as maintenance benefits and education costs, can be weighed against any resulting potential diminution in liability for permanent disability. When a highly paid employee is injured, this analysis will assist in determining the most effective management plan to enhance the outcome of the claim.
As illustrated by the scenarios for the hypothetical ironworker, effective vocational rehabilitation can result in substantial savings on the permanent partial disability value of 8(d)1 cases. SUSAN ROSENBERG & ASSOCIATES, INC. P.O. BOX 126 DEERFIELD, ILLINOIS 60015 847-940-8152 FAX 847-940-7483 EMAIL [email protected]
Susan Rosenberg has been a vocational rehabilitation counselor for 13 years and has worked in the vocational rehabilitation field over twenty years in both the public and private sectors. Her work includes workers’ compensation, long term disability, US Department of Labor workers’ compensation, FELA, and civil litigation. Ms. Rosenberg is a certified rehabilitation counselor and is an expert in job analysis, vocational assessments, job seeking skills training, and labor market surveys. She has a Masters in Rehabilitation Counseling from the University of Illinois, Champaign/Urbana, and is a Licensed Clinical Professional Counselor. She is a member of the National Rehabilitation Association and the Illinois Association of Rehabilitation Professionals.
SUSAN ROSENBERG & ASSOCIATES, INC. P.O BOX 126 DEERFIELD, ILLINOIS 60015 847-940-8152 FAX 847-940-7483 SUSAN J. ROSENBERG, MS, CRC, LCPC Professional Experience
Rehabilitation Consultant May 1996 - Present Susan Rosenberg & Associates, Inc. (formerly Rehabilitation Works, Inc.) Deerfield, Illinois Founder and president of private vocational rehabilitation company. Assess vocational potential of individuals. Interview and evaluate individuals to determine feasibility of vocational rehabilitation. Identify alternative occupations consistent with interests, aptitudes, and physical capabilities. Administer and interpret vocational tests, provide job-seeking skills instruction, and develop job leads. Conduct labor market surveys to determine availability and wages of occupations and on-site job analyses, recommending modifications and accommodations to employers. Provide expert testimony.
Rehabilitation Consultant November 1995 - May 1996 Ellis and Associates Chicago, Illinois Assessed vocational potential of occupationally injured employees. Interviewed and evaluated individuals to determine feasibility of vocational rehabilitation. Identified occupations consistent with interests, aptitudes, and physical capabilities. Researched and arranged training for entry into alternate employment. Developed job leads and assisted in placement. Conducted on-site job analyses, recommending modifications and accommodations to employers. Promoted prospective employer participation in external placement program for a national corporation.
Vocational Rehabilitation Consultant 1993 - November 1995 Rehabilitation Management, Inc. Chicago, Illinois Assessed vocational potential of occupationally injured individuals, provided vocational counseling, administered and interpreted vocational tests, conducted specialized job placement and labor market analyses, modified job requirements to accommodate limitations, and provided medical management.
Senior Placement Specialist 1989 - 1993 Rehabilitation Management, Inc. Chicago, Illinois Developed leads with prospective employers to place industrially injured clients. Assessed skills, identified vocational goals and designed resumés. Provided job-seeking skills training for clients. Researched and wrote labor market surveys to determine availability of occupations.
Placement Consultant 1988 - 1989 Rehabilitation Consultants for Industry Oak Brook, Illinois Provided placement assistance for industrially injured persons. Assessed skills and identified vocational goals. Developed and implemented weekly program to instruct candidates in job seeking skills. Designed training manual. Wrote resumés, cover letters and evaluation reports. Conducted telephone and on-site labor market surveys to determine availability of occupations. Initiated and maintained relationships with employers, arranged interviews, and coordinated Job Fairs.
Rehabilitation Counselor/Employment Specialist 1986 - 1988 Jewish Vocational Service Chicago, Illinois Liaison between people with disabilities and private industry. Counseled clients, assessed skills, edited resumés for appropriate job placement. Facilitated contacts with private sector. Explained and coordinated financial and tax incentives and assisted in job site modifications and accommodations. Wrote monthly newsletter distributed to participating employers and the State of Illinois Department of Rehabilitation Services.
Certification and Licensure
Certified Rehabilitation Counselor, April 1994. Licensed Clinical Professional Counselor, March 1996.
Professional Affiliations
Board of Directors, Illinois Rehabilitation Association, Northeast Chapter Member, National Rehabilitation Association Member, Illinois Association of Rehabilitation Professionals
Education
University of Illinois Urbana/Champaign, Illinois Masters in Rehabilitation Counseling, awarded May 1994. Member: Phi Kappa Phi; Chi Sigma Iota.
Macalester College St. Paul, Minnesota Bachelor of Arts, Magna Cum Laude, awarded 1978, English. Foreign Study: London and Florence, 1976-1977; Japan 1984.
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Your Role As Participant in the Job Search and Placement Process
Carry out the instructions and assignments of Susan Rosenberg and Associates, Inc. as well as job seeking skills training recommendations. This may include but not be limited to the following:
1) Be available at all times for interviews; 2) When notified, be responsible to go to employers to complete applications; 3) If you will be out-of-town, inform Susan Rosenberg immediately of your absence; 4) Keep in mind good images and attitudes are key aspects. Dress appropriately for interview (no T-shirts, jeans, or gym shoes); 5) You are requested to provide feedback to Susan Rosenberg immediately following interviews and job offers.
Consider the job search as a full-time task. Make it a diligent and positive one emphasizing your capabilities, work experiences, and employment potential which will increase possibilities of obtaining employment.
Take responsibility to perform job search activities independently. You are required to contact and apply on your own three to eight employers weekly. If unable to meet this goal, contact Susan Rosenberg for assistance.
Record all employer contacts on the EMPLOYER CONTACT SHEET. Turn in or mail this form to Susan Rosenberg on a weekly basis.
Keep prearranged interviews as well as appointments with Susan Rosenberg & Associates, Inc. Punctuality and dependability are important aspects of the process. If unable to keep an appointment, cancel prior to the arranged time and reschedule for a later date. When necessary, Susan Rosenberg may accompany you to interviews.
Maintain contact with Susan Rosenberg & Associates, Inc. weekly to discuss job search activities.
The more active you are in the job search, the greater are the chances for employment. It may be necessary to rearrange your home schedule to devote most of the week to the job search activities.
C:\Documents and Settings\CopyMax_DTP\Desktop\BC&M 4-26-07\JSST.doc rev. 4/26/07 ILLINOIS WORKERS' COMPENSATION COMMISSION REHABILITATION PLAN
ATTENTION. The employer, in consultation with the injured worker, shall prepare a rehabilitation plan when the employee has been unable to work for more than 120 continuous days or when it can be reasonably determined that the injured worker will be unable to resume his or her regular, pre-injury duties. The plan shall be updated at least every four months while the employee remains incapacitated or until the case is closed by the Commission. A copy of each document shall be given to the injured worker. See Section 7110.10 of the Commission Rules.
______Case # ______WC ______Employee/Petitioner v.
______Employer/Respondent
Attach the most recent medical report and provide an assessment of the medical care necessary for the petitioner to return to work.
______
______
Is rehabilitation necessary for the employee to return to work? Yes ____ No ____ Explain below.
______
______
If rehabilitation is necessary, address the need for each of the following:
Medical evaluation ______
______
Vocational evaluation ______
______
Modified or limited duty ______
______
Retraining ______
______
Other ______
______
______Signature of petitioner Date Signature of person completing this form Date
______Name of petitioner (please print) Name of person completing this form (please print)
IC31 12/04 100 W. Randolph St. #8-200 Chicago, IL 60601 312/814-611 Toll-free 866/352-3033 Web site: www.iwcc.il.gov Downstate offices: Collinsville 618/346-3450 Peoria 309/671-3019 Rockford 815/987-7292 Springfield 217/785-7084
VOCATIONAL REHABILITATION LITIGATION CONSIDERATIONS
John P. Connolly, Esq. BRADY, CONNOLLY & MASUDA, P.C. One North LaSalle Street Suite 1000 Chicago, Illinois 60602 (312) 425-3132 (312) 425-0110 - FAX [email protected]
May 3, 2007 6th Annual Spring Seminar VOCATIONAL REHABILITATION LITIGATION CONSIDERATIONS
I. Introduction
The economic impact of Section 8(d)1 awards and the lack of credit from prior “man as a whole/Section 8(d)2” awards and prior “Section 8(d)1" awards require Illinois employers to insure that all petitioners who qualify for vocational rehabilitation fully and “reasonably” cooperate with the vocational rehabilitation process.
There are a number of litigation considerations which will impact the direction of each Vocational Rehabilitation Plan. Creating a strong Vocational Rehabilitation Plan and requiring all parties to adhere to the Plan will facilitate a successful result.
There exists a significant financial incentive to insure that the petitioner makes a “good faith” attempt at trying to return to the work force. The respondent must work with the vocational counselor to insure that the petitioner is motivated to return to the highest paying position.
The respondent must embrace the challenge and take all reasonable steps to insure that all parties meet their obligations.
II. Early Identification of Vocational Rehabilitation Exposure
Prior to retaining a vocational rehabilitation expert, even before the petitioner reaches maximum medical improvement, we must evaluate the likelihood of the petitioner being able to return to his former employment responsibilities. In the event we know that there exists a significant likelihood that the petitioner will have permanent restrictions, we must consider the following:
• Anticipated permanent restrictions;
• Whether employer/insured will be able to accommodate permanent restrictions;
• Petitioner’s existing and transferable skills in the event that the employer/insured will be unable to accommodate the permanent restrictions;
• When petitioner will reach maximum medical improvement; and
• When should we hire our vocational rehabilitation counselor?
In assessing whether the petitioner will ever return to his former employment responsibilities or a comparably paying wage, we must consider the following:
• Treating physicians:
o Are they willing to allow the petitioner to attempt to return to work:
o Are they overprotective of the petitioner?
o Do they continue to order physical therapy?
o Do they continue to order pain programs?
• The benefit of securing independent medical evaluations.
• Activity level:
o Investigation; and
o Surveillance.
• Are there systemic medical problems which may complicate or impede the petitioner’s return to work?
• Age consideration.
o A mature petitioner may contemplate retirement and look to retire early; and
o A younger petitioner may benefit from re-training and/or additional formal education.
• Education consideration.
• Retirement consideration.
• Union involvement:
o Collateral benefits;
o Union pension; and
o Union disability.
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• “Want to” factor.
• “Need to” factor.
Prior to retaining a vocational rehabilitation counselor, consider the following associated costs:
• Vocational Rehabilitation Counselor $ 7,500.00
• Defense Attorney $ 7,500.00
• Maintenance Benefits (Six (6) Months) $ 25,000.00
• Vocational Training $ 3,000.00
• Travel Expense/Mileage $ 1,000.00
• Ongoing Medical Care and Treatment $ 6,000.00 $ 50,000.00
The costs associated with the work-up and vocational rehabilitation may warrant consideration of a global resolution on a discounted basis.
III. Taking the National Tea Plunge
In National Tea Company v. Industrial Commission, 97 Ill.2d 424, 454 N.E.2d 672 (1983), the Illinois Supreme Court identified the following factors which favored vocational rehabilitation:
• An injured worker sustained a permanent injury which caused a reduction in earning power;
• There exists reasonable evidence that vocational rehabilitation will increase the injured worker’s earning capacity;
• The injured worker has a potential loss of job security due to the compensable injury; and
• There exists an increased likelihood that the injured worker will be able to obtain employment upon completion of the vocational training program.
3 Illinois Supreme Court factors which mitigate against vocational rehabilitation:
• Whether the injured worker has previously undergone similar vocational programs without success;
• Whether the injured worker is a viable vocational candidate and trainable based upon the following considerations:
o Age;
o Education;
o Training; and
o Occupation.
• The petitioner has sufficient skills to obtain employment without further training.
The Illinois Supreme Court in the National Tea Company Decision also identified additional factors which may be considered prior to authorizing a vocational program:
• The relative costs and benefits to be derived from the program;
• Petitioner’s work life expectancy;
• Petitioner’s ability;
• Petitioner’s motivation to undertake the program; and
• Petitioner’s prospect for recovering work capacity through medical rehabilitation or other means.
The Illinois Supreme Court noted that the issue of whether rehabilitation programs should be designed to restore a claimant to his pre-injury earning capacity depends upon the particular circumstances. However, in citing Hunter, the Illinois Supreme Court held that the standard should not be “inflexibly applied” and concluded:
• The Illinois Workers’ Compensation Commission must consider both the Petitioner and Respondent in determining the appropriate rehabilitation program.
• Since employers are required to underwrite the expenses associated with vocational rehabilitation, it is essential that any program selected be reasonable and realistic.
4 • That where rehabilitation is ordered, the Illinois Workers’ Compensation Commission should establish boundaries which reasonably confine the employer’s responsibility. National Tea Company v. Industrial Commission, et al., 97 Ill.2d 424, 454 N.E.2d 672 (1983).
IV. Assessing an Employee’s Right to Vocational Rehabilitation Benefits
In determining whether an injured employee is entitled to rehabilitation, the Illinois Workers’ Compensation Commission and courts will weigh several variables in seeking to determine whether vocational rehabilitation is a reasonable alternative. In Connell v. Industrial Commission, et al., 170 Ill.App.3d 49, 523 N.E.2d 1265 (1st Dist., 1988), the Arbitrator and the Illinois Workers’ Compensation Commission found that the petitioner was temporarily totally disabled, however, denied petitioner’s request for rehabilitation and penalties. The Circuit Court held that the Commission’s Decision regarding temporary total disability benefits, rehabilitation and penalties were against the manifest weight of the evidence. The Circuit Court awarded petitioner additional temporary total disability benefits, remanded the cause for calculation of attorney’s fees and penalties as well as for the development of a rehabilitation program. The Illinois Appellate Court addressed whether the Circuit Court erred in holding that the Commission’s denial of rehabilitation was against the manifest weight of the evidence.
The Illinois Appellate Court in Connell again identified the factors favoring rehabilitation:
• Employee sustained an injury which caused a reduction in earning power and there is evidence that rehabilitation will increase his earning capacity;
• Employee is likely to lose job security due to the injury; and
• Employee is likely to obtain employment upon completion of rehabilitation training.
The Illinois Appellate Court in Connell also noted the factors mitigating against rehabilitation:
• Employee has unsuccessfully undergone similar treatment in the past;
• Employee has received training under a prior rehabilitation program which would enable him to resume employment;
• Employee is not trainable due to age, education, training and occupation; and
• Employee has sufficient skills to obtain employment without further training or education.
5 In Connell v. Industrial Commission, 97 Ill.2d 424, 523 N.E.2d 1265 (1st Dist., 1988), the Appellate Court concluded that the only evidence concerning petitioner’s need for rehabilitation came from the petitioner and the vocational counselor. Petitioner admitted that he had not made any vocational goal decisions, however, did express an interest in working with a rehabilitation counselor. The petitioner retained a vocational counselor, Susan Entenberg, who testified that while the petitioner would never return to his prior occupation, he was capable of performing other competitive employment and was a candidate for vocational rehabilitation. It is significant to note that the vocational counselor testified that the petitioner did not have all of the skills needed to start a new job, however, she planned to help him identify specific types of job prospects that would be helpful if petitioner conducted his own job search.
The Connell court rejected the Commission’s findings and determined that the vocational rehabilitation counselor’s testimony supported petitioner’s need for rehabilitation. The Appellate Court determined that Section 8(a) of the Act “does not limit rehabilitation to formal training and is flexible enough to include career guidance of the type the vocational counselor proposed.” The Appellate Court ordered the cause remanded for determination of a Vocational Rehabilitation Plan.
In Connell, the Illinois Appellate Court also addressed the issue of temporary total disability benefits versus maintenance benefits. The court held that temporary total disability benefits are only available until an injured employee has recovered as fully as the nature of his injury permits, however, concluded that where an employee’s physical condition is stabilized, he may still be entitled to “maintenance” under Section 8(a) of the Act while he is in a prescribed rehabilitation program. The court noted that the payment of “maintenance” is often a continuation of temporary total disability benefits. Revere Copper & Brass, Inc. v. Industrial Commission, 97 Ill.2d 388, 454 N.E.2d 657 (1983).
The Connell court held that if the petitioner is entitled to rehabilitation, that he would be entitled to the ongoing payment of temporary total disability benefits until the start of the rehabilitation program and once the rehabilitation program began , the petitioner would be eligible for maintenance benefits. The matter was remanded to the Illinois Workers’ Compensation Commission for a determination of the proper amounts of temporary total disability and maintenance benefits in conjunction with the formulation of a Vocational Rehabilitation Plan.
V. Choosing a Vocational Rehabilitation Counselor
The new Illinois Workers’ Compensation Act requires vocational rehabilitation counselors that provide services under the Illinois Workers’ Compensation Act to have appropriate certification evidencing that he/she is qualified to render opinions relating to vocational rehabilitation. Vocational rehabilitation may include, but is not limited to, counseling for job searches, supervising a job search program, and vocational rehabilitation re-training, including education in an accredited learning constitution. 820 ILCS 305/8(a).
6 The Commission on Rehabilitation Counselor’s Certification (CRCC) is a certifying body in a private sector providing certification for certified rehabilitation counselors. Certification requires a Master’s degree and testing through the CRCC. The Illinois Department of Human Services, Division of Rehabilitation Services requires that a rehabilitation counselor possess a Master’s degree in vocational rehabilitation and a certified rehabilitation counselor’s certificate, however, the amendment to Section 8(a) did not specifically address where one must obtain this certification. The question becomes what is appropriate certification and who or what defines if someone to qualified to render opinions relating to vocational rehabilitation.
In assessing the credibility of a vocational rehabilitation counselor as a witness, the Arbitrator and Illinois Workers’ Compensation Commission will consider the following factors;
• Educational background;
• Practical training;
• Length of time providing vocational counseling;
• Illinois Workers’ Compensation Commission reputation;
• Depth and scope of the initial Vocational Rehabilitation Plan;
• Execution and follow through of the initial Vocational Rehabilitation Plan;
• Timeliness of reporting; and
• Reasonableness of the Vocational Rehabilitation Plan recommendations relative to the petitioner’s alleged condition of ill-being.
Your choice of a vocational rehabilitation counselor is one of the most important decisions that will impact the outcome of all Section 8(d) wage differential claims.
A thorough and well-reasoned Vocational Rehabilitation Plan that is administered and monitored by an experienced vocational rehabilitation counselor will insure a successful result. As we all know, a successful result may occur in a number of different forms including, but not limited to, finding a comparable paying position, return to work with a minimal wage differential, and/or a global resolution.
VI. Plan Your Work and Work Your Plan
• Consider what factors may impact your Vocational Rehabilitation Plan:
o Petitioner;
o Petitioner’s attorney;
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o Vocational rehabilitation counselor;
o Treating physician;
o Independent medical evaluator;
o Investigator of the petitioner’s activities of daily living;
o Spouse/family members; and
o Arbitrator/Illinois Workers’ Compensation Commission.
• How to work your Vocational Rehabilitation Plan:
o Make sure that the Vocational Rehabilitation Plan is a thorough and detailed recitation of what all parties (the petitioner, his/her attorney, the respondent, the respondent’s attorney and/or the claim representative) agreed upon;
o Insure that the vocational rehabilitation counselor is going to meet with the petitioner at least two times per month;
o Confirm that the vocational rehabilitation counselor is going to attend interviews, when necessary, if there exists an issue regarding the petitioner’s cooperation level;
o Diary the case for conferences with the vocational rehabilitation counselor every two weeks;
o Request e-mail updates from vocational rehabilitation counselor;
o Follow-up with vocational rehabilitation counselor regarding the petitioner’s cooperation level;
o At the first sign of red flags or problems, contact the vocational rehabilitation counselor and request that a written report be directed your attention as well as to the petitioner’s attorney;
o Do not wait for repeated miscues before taking affirmative steps to resolve the issues, however, be careful not to immediately suspend benefits;
o Keep the “reasonableness standard” in mind throughout the vocational rehabilitation progress.
8 VII. Reasonableness of Vocational Rehabilitation Program
In Howlett Tree Service v. Industrial Commission, 160 Ill.App.3d 190, 513 N.E.2d 82 (1987), the petitioner was employed as a tree trimmer and sustained an injury to his left leg. The petitioner was unable to continue working for the respondent and was restricted to sedentary work. Respondent sent the claimant to a vocational consultant who suggested that if the petitioner wanted to take courses in a vocational program, he needed to complete his GED. Petitioner enrolled in a GED class, which respondent paid for, and received his GED. Respondent’s vocational rehabilitation counselor recommended a one-year training program at a local junior college as the most appropriate vocational program for the claimant. Respondent refused to pay for any junior college courses after it paid for the orientation program.
Respondent subsequently secured the services of a vocational rehabilitation service which began to provide petitioner with job leads. Petitioner did not have any success in securing employment from the leads. Petitioner expressed an interest in attending an underwater welder and construction worker school in Texas.
The Arbitrator awarded the claimant temporary total disability benefits and vocational rehabilitation expenses for a one-year course at a local junior college for a position in co-op management, seed fertilizer sales or as an elevator operator. The Illinois Workers’ Compensation Commission affirmed the Arbitrator’s award, added additional temporary total disability benefits and awarded interest, penalties and attorney’s fees. The Circuit Court set aside the award of the penalties and attorney’s fees, but confirmed the Commission’s Decision in all other respects.
On appeal, the respondent contended that the award of temporary total disability benefits and vocational rehabilitation expenses were an abuse of discretion based on the following:
• Claimant’s failure to find suitable employment was a result of general economic conditions;
• Claimant’s failure to make a good faith effort to find a job;
• Claimant’s failure to show that a position would be available for him if he completed the training program ordered by the Arbitrator; and
• Insufficient evidence to support the type of vocational rehabilitation ordered by the Arbitrator.
In Howlett court noted that “it is the Commission’s providence to weigh all factors regarding a rehabilitation program.” The Appellate Court noted that the petitioner did not present substantial evidence regarding his ability to find work after he completed the class, however, found it significant that the petitioner clearly proved that he sustained an injury which reduced his earning power, that the proposed rehabilitation program would increase his earning capacity, that the petitioner had not unsuccessfully undergone a prior vocational training program, nor had he completed a prior rehabilitation program which would enable him to resume
9 employment. The Howlett court further noted that the injured employee provided sufficient evidence to demonstrate his positive capacity to be trained relative to his age, education, training and occupation.
The respondent sought to rely on the Hunter Decision whereby the claimant created his own rehabilitation program without the assistance of a public or private agency and the court indicated its disapproval of claimant-created rehabilitation programs.
The Howlett court noted that petitioner had produced substantial evidence that he did not have sufficient skills to obtain employment without further training or education and there was no dispute that the petitioner who had been employed at several unskilled manual labor jobs could no longer perform such tasks. Both parties agreed that petitioner would be employed in a sedentary position and one of respondent’s rehabilitation counselors suggested that petitioner would benefit from a GED program and subsequent training. The Howlett court considered the relative costs and benefits to be derived from the vocational program and noted that there existed little question in light of the petitioner’s work life expectancy, the benefits far outweighed the costs. The petitioner was in his early 30's and had a life expectancy of approximately three decades which would likely be enhanced by his completion of the proposed program. The court noted the factual differences in Hunter in that the claimant was 58 years of age, 25 years older.
The Howlett court concluded that the respondent presented scant evidence to support the defense that the claimant failed to make a good faith effort to find work and that he possessed sufficient skills to find work without further training.
The Appellate Court concluded that the Circuit Court erred by setting aside the award of penalties and attorney’s fees and concluded that the Commission’s award of vocational rehabilitation expenses to the claimant for a one year course in co-op management, seed fertilizer sales or elevator operator at Blackhawk College was reasonable and that the Commission’s award of penalties and attorney’s fees to the claimant was proper.
VIII. Suspension/Termination of Maintenance Benefits and/or Vocational Rehabilitation Benefits
• Has the Petitioner Cooperated and Made a Good Faith Effort?
If an employer agrees to provide a petitioner with vocational rehabilitation, the Illinois Workers’ Compensation Commission may establish boundaries which reasonably confine an employer’s responsibilities including the requirement that a petitioner make a good effort to cooperate.
In Archer Daniels Midland Company v. Industrial Commission, et al., 174 Ill.App.3d 918, 529 N.E.2d 237 (3rd Dist., 1988), the Illinois Supreme Court sought to determine whether the respondent properly suspended workers’ compensation benefits after the petitioner completed an advanced locksmith course. Petitioner filed a Section 19(b-1) Petition. There exists no dispute that following a work-related incident, petitioner sustained an injury to his low back
10 requiring a spinal fusion, resulting permanent lifting restrictions and an inability to sit for any extended period of time. Petitioner had an eighth grade education and few transferable job skills. Respondent arranged for a rehabilitation counselor to work with the petitioner. At petitioner’s request, and with the counselor’s agreement, respondent paid for a Belsaw Institute locksmith correspondence course for the petitioner. There was an issue in dispute regarding the length of time it should take petitioner to complete the course. Respondent notified petitioner’s attorney that petitioner was expected to complete the locksmith training by October 31, 1985 and, thereafter, would terminate weekly rehabilitation payments.
On November 14, 1985, the respondent terminated temporary total disability benefits. The employer maintained that it was justified in terminating benefits that it was paying to the petitioner because of his “lackadaisical progress in completing the locksmithing course.” The employer argued that the petitioner failed to cooperate in his rehabilitation because he did not make a “reasonable attempt to complete the program in a timely manner.”
The Illinois Supreme Court acknowledged that in attempting rehabilitation of the injured employer, there are “boundaries which reasonably confine the employer’s responsibility” including a requirement that the claimant make good faith efforts to cooperate in the rehabilitation effort. However, the Illinois Supreme Court held that the employer was not justified in terminating the employee’s benefits based on the claimant’s failure to cooperate.
The Illinois Supreme Court noted that there was sufficient evidence to support a good faith effort by the employee including considerations for petitioner’s medical condition, the Belsaw Institute representative’s testimony that petitioner’s progress was satisfactory, and the vocational rehabilitation representative’s testimony that the employee had cooperated in the rehabilitation program.
The Illinois Supreme Court concluded that “an employer cannot meet its rehabilitation obligations simply by providing a correspondence course in an industry of questionable opportunity, and a vocational rehabilitation course can hardly be appropriate where there is no likelihood of employment in the industry upon completion of the course.”
In Archer Daniels Midland Company, the Illinois Supreme Court also addressed the employer’s contention that upon completion of the locksmithing course, that the petitioner was no longer temporarily and totally incapacitated. The employer argued that the employee’s condition had stabilized, that he had been rehabilitated, and that he was qualified for and capable of obtaining employment as a locksmith. The Illinois Supreme Court noted that once an injured employee’s physical condition stabilizes, he is no longer eligible for temporary total disability benefits although he may be entitled to permanent partial total disability compensation under Section 8(d) or permanent total disability compensation under Section 8(f).
In addition, if the claimant’s disability is limited in nature so that he is not obviously unemployable, or if there is no medical evidence to support a claim of total disability, the burden is upon the claimant to establish the unavailability of employment to a person in his circumstances. If an employee shows that he is unable to perform and obtain regular
11 employment for which he is qualified, the burden shifts to the employer who must come forward with evidence to establish “that the employee is capable of engaging in some type of regular and continuous employment” and that “such employment is reasonably available.” E.R. Moore Company v. Industrial Commission, 71 Ill.2d 353, 376 N.E.2d 206 (1978).
The Illinois Supreme Court noted that after the locksmith course, the employee was arguably able and qualified to be a locksmith and that all of the physicians agreed that locksmithing is a suitable activity for the petitioner, however, the court noted that the mere fact that one may be able to generate some income through an activity does not, in and of itself, permit a conclusion that one is employable and can support one’s self by that activity. The Supreme Court observed that the injured employee was unable to return to his former occupation, however, his doctors indicated that he was capable of gainful “light duty” employment, including locksmithing. The petitioner’s condition was not so limited in nature that he was obviously unemployable and petitioner has the burden of establishing the unavailability of employment to a person in his circumstances.
The Illinois Supreme Court held that diligent but unsuccessful attempts to find employment will satisfy this burden. Interlake, Inc. v. Industrial Commission, 86 Ill.2d 168, 427 N.E.2d 103 (1981). Although the petitioner did not attempt to secure employment after he completed the correspondence course, nonetheless, he contacted several possible employers immediately prior to the completion of the course and was advised that no locksmithing jobs were available. The rehabilitation counselor also testified that based upon Labor Market Surveys and personal knowledge of the labor market that no jobs were available in the petitioner’s area. The Illinois Supreme Court felt that the petitioner’s activities, Labor Market Survey and the rehabilitation counselor’s testimony satisfied the employee’s burden. The Illinois Supreme Court held that the burden thus shifted to the employer to prove that the employee was capable of engaging in some type of regular and continuous employment and that such employment was reasonably available.
The Illinois Supreme Court held that the employer proved nothing more than it had provided the petitioner with a locksmithing correspondence course and as the Arbitrator had suggested, the employer did not offer any appropriate light work and made no showing of other light work including locksmithing was available for him. The Illinois Supreme Court concluded that the records support the Illinois Workers’ Compensation Commission’s finding that the injured worker’s condition had not stabilized, that he was still not totally disabled and the Appellate Court erred in holding that the Illinois Workers’ Compensation Commission’s Decision awarding temporary total disability benefits was against the manifest weight of the evidence.
In Hayden v. Industrial Commission, et al., 214 Ill.App.3d 749, 574 N.E.2d 99 (1991),1 the petitioner, a 41 year old structural iron worker sustained an injury to his low back and left arm. Petitioner participated in a work hardening program and was released to return to work,
1 Hayden v. Industrial Commission proceeded to trial before the Illinois Workers’ Compensation Commission and was successfully defended before the Illinois Appellate Court by the author. The Hayden Decision remains the seminal Decision on the petitioner’s responsibility to act in good faith during the vocational rehabilitation process
12 however, was unable to work at unprotected heights. Petitioner’s examining physician maintained that petitioner should not engage in repetitive bending, weight lifting or prolonged walking, standing, sitting or standing.
Petitioner was referred to a vocational rehabilitation counselor for job development and placement services. Interviews were scheduled by the vocational counselor, however, petitioner admitted that he was not interested in a clerical position or working indoors. Petitioner testified that he was considering returning to school on a full time basis in order to obtain his degree. The vocational counselor recommended that further rehabilitation efforts be withheld until petitioner made a commitment to pursue employment for which he was qualified.
Respondent terminated petitioner’s temporary total disability benefits as a result of the employee’s failure to cooperate with placement efforts. At trial, the Arbitrator determined that petitioner had unreasonably substituted his judgment for that of the physician in advising the union personnel that he would be returning to structural iron work within 3 - 6 months.
On appeal, the Appellate Court addressed whether the Arbitrator and Illinois Workers’ Compensation Commission’s Decisions terminating temporary total disability and medical benefits due to petitioner’s unwillingness to cooperate with vocational placement was against the manifest weight of the evidence. In Hayden, the Appellate Court found that the Commission’s conclusion that petitioner was no longer entitled to temporary total disability and medical benefits. The Appellate Court identified sufficient evidence in the record to support the Commission’s finding that petitioner’s condition had reached a state of permanency by the time he was released to return to work.
The Appellate Court in Hayden agreed with the Commission’s determination that the petitioner’s absence of good faith in cooperating with the vocational rehabilitation efforts justified respondent’s termination of his temporary total disability benefits.
The Hayden court specifically determined that “in attempting rehabilitation of the injured employee, the Commission should establish boundaries which reasonably confine the employer’s responsibility including a requirement that the claimant make good faith efforts to cooperate in the rehabilitation effort.” Archer Daniels Midland Company v. Industrial Commission, et al., 174 Ill.App.3d 918, 124 Ill.Dec 417, (1988). National Tea Company v. Industrial Commission, et al., 97 Ill.2d 424, 454 N.E.2d 672 (1983).
In Stone v. Industrial Commission, 286 Ill.App.3d 174, 675 N.E.2d 280 (2nd. Dist., 1997), the Illinois Workers’ Compensation Commission terminated the claimant’s temporary total disability benefits finding that the claimant had failed to reasonably cooperate with vocational rehabilitation. The Circuit Court confirmed the Decision and the Appellate Court examined whether the lower court’s determination that the claimant had failed to reasonably cooperate with vocational rehabilitation was against the manifest weight of the evidence. The Appellate Court in Stone acknowledged that the law on “reasonable cooperation” is scant, however, cites references to Archer Daniels Midland, Jewel Foods v. Industrial Commission and Hayden v. Industrial Commission.
13 In Stone, the petitioner’s benefits were terminated based upon the following:
• Over a three month period, the claimant received rehabilitation counseling;
• Failed to take any steps to obtain his GED;
• Failed to visit the library to research the case;
• Failed to give any indication whatsoever that he was interested in vocational rehabilitation services;
• Forced an interview to be rescheduled because he was not given 48 hours notice; and
• Appeared for an interview unshaven and dirty and failed to dress properly despite being specifically told by the vocational rehabilitation counselor how to dress and appear.
The Appellate Court concluded that the Commission could reasonably infer that the employee was malingering and was not sincere in his efforts at rehabilitation.
IX. Working the “Plan” and Successfully Closing the Claim
• Purpose of closely supervising/monitoring the Vocational Rehabilitation Plan:
o Increases the likelihood of a successful return to work;
o Insures the cooperation of the petitioner;
o Insures that the petitioner is accessing the highest paying employment opportunities; and
o Able to determine and assess the petitioner’s interest in returning to work.
• Avoid Unnecessary Litigation:
o Prior to terminating maintenance benefits, consult with the vocational rehabilitation counselor and defense counsel regarding the petitioner’s cooperation level;
o Make a reasonableness analysis, which is the standard that will be applied by the Illinois Workers’ Compensation Commission;
o Has the petitioner demonstrated a genuine interest in returning to work and complied with the vocational rehabilitation counselor’s
14 recommendation or, in the alternative, has there been a number of red flags identified by the vocational rehabilitation counselor?
o Determine the petitioner’s effort level and whether he has demonstrated a good faith approach to the vocational rehabilitation counselor’s recommendations;
o Confirm that the petitioner’s attorney agrees with the Vocational Rehabilitation Plan;
o Ascertain written notice from the vocational rehabilitation counselor as soon as the petitioner fails to cooperate or demonstrates a lack of “good faith” effort;
o Determine whether medication, medical care and treatment, and/or permanent restrictions are impacting the petitioner’s ability to cooperate with the recommendations of the vocational rehabilitation counselor; and
o Seek to assess whether the petitioner has an agenda and if that involves sabotaging his own return to work in order to continue to receive weekly benefits or continue to receive benefits from a collateral source including Social Security disability benefits, union pension, and union disability benefits.
X. Amendment to Illinois Workers’ Compensation Act Impacting Vocational Rehabilitation
• Accidental injuries or diseases that occur on or after February 1, 2006, allow both the employer and employee to petition the Illinois Workers’ Compensation Commission to decide disputes relating to vocational rehabilitation, including payment for the vocational rehabilitation program by the employer. 820 ILCS 305/8(a).
• Section 19(b) of the Illinois Workers’ Compensation Act was amended and now provides for an expedited hearing at the request of an employee who is not receiving, or has not received, temporary total disability benefits, temporary partial disability benefits, medical benefits, vocational rehabilitation benefits, or other benefits regardless of whether the employee is working.
• It is significant to note that an employer may also request an expedited hearing on the issue of whether an employee is entitled to these benefits as long as the employer continues to pay compensation to the employee until a Decision is rendered that the employee is not entitled to benefits, until the employee has been released to return to work by the treating physician, or until the employee has returned to work.
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• Although the Illinois Courts have expressed their disfavor with informal claimant-directed vocational rehabilitation, there exists no doubt that a claimant is not required to tender a formal request for vocational rehabilitation before being entitled to an award of maintenance benefits. In addition, there is no express rule prohibiting claimant-created and claimant-directed vocational rehabilitation programs. Roper Contracting v. Industrial Commission, 349 Ill.App.3d 500, 812 N.E.2d 65 (5th Dist., 2004).
XI. Opportunity to Successfully Resolve the Claim
• Recognize your opportunities;
• Create your opportunities;
• Leverage your opportunities;
• Assess whether the petitioner is motivated to resolve the claim;
• Assess whether the petitioner’s attorney is motivated to resolve the claim;
• Determine the cost of adverse wage differential award;
• Secure the cost of purchasing an annuity;
• Secure the cost of securing a structured settlement proposal;
• Secure a Rated Age contemporaneous with the initiation of vocational rehabilitation:
o The life expectancy of an injured worker may be an important cost factor in determining whether to pay the petitioner weekly wage differential benefits or resolve the claim on a lump sum basis. The annuity cost for periodic payments will be affected by age, gender, and nature of injuries. In addition, non-work related injury conditions will also impact the rated age including, but not limited to, family health history, cancer, coronary artery disease, high blood pressure, diabetes, and other systemic injuries that affect activities of daily living;
o Require the petitioner’s attorney to accept the petitioner’s overall medical condition and his actual life expectancy as opposed to life expectancy tables which assume that the petitioner has a normal life expectancy.
• Assess the petitioner’s activity level;
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• Secure the petitioner’s Income Tax Returns from the date of accident through the present to insure that the petitioner has not sought or secured employment or has a stream of income;
• Future medical considerations;
• CMS/MSA considerations.
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MANAGING CONCURRENT EXPOSURES: WORKERS’ COMPENSATION AND CIVIL
Andrew R. Makauskas BRADY, CONNOLLY & MASUDA, P.C. One North LaSalle Street Suite 1000 Chicago, Illinois 60602 (312) 425-3131 (312) 425-0100 - FAX
May 3, 2007 6th Annual Spring Seminar
MANAGING CONCURRENT EXPOSURES: WORKERS’ COMPENSATION AND CIVIL
I. Using The Circuit Court To Obtain The Best Possible Result In Your Workers’ Compensation Case
In light of recent legislative changes and the current climate at the Illinois Workers’ Compensation Commission, Respondents do not have a lot of tools available to assist in getting successful workers’ compensation results. The Circuit Court is a resource which can be helpful in achieving a favorable result in your workers’ compensation case. Look to the Circuit Court as an aid to investigation, a source of subrogation recovery and an area to obtain insurance coverage rulings.
A. INVESTIGATION
1. Prior lawsuits 2. Corresponding civil lawsuit
(a) Source of medical providers
(b) Additional information available through discovery responses and deposition testimony
B. CLAIMS FROM WHICH A WORKERS’ COMPENSATION AND CIVIL LITIGATION LAWSUIT CAN ARISE
Many incidents can lead to a workers’ compensation and corresponding civil litigation claim. The workers’ compensation claim is filed against the employer. The civil litigation claim is filed against a third-party who allegedly is at fault for the injured worker’s injuries. The defendant in the third-party case may then file a third-party complaint against the employer, seeking contribution. Early identification of claims which involve both workers’ compensation and civil litigation causes of action can lead to successful results in both claims, possible subrogation recovery and savings in litigation expenses. Incidents from which a workers’ compensation and civil litigation lawsuit can arise include the following:
- Automobile/Transportation Cases
- Construction Cases
- Product Liability Cases
- Premises Liability Cases
- Medical Malpractice Cases
The following will discuss situations involving workers’ compensation and civil litigation actions as well as issues that pertain to both types of cases.
1. Civil Lawsuit Where The Employer Has Not Been Sued
(a) Is civil lawsuit already settled?
1. Assert lien rights
2. Potentially close workers’ compensation case
(b) Civil lawsuit is still pending
1. Intervene into civil lawsuit
(a) Parties know they have to negotiate with lienholder before settling case
(b) You will have notice of pre-trial conferences, proposed settlements and protection of lien by court.
2. Employer Has Open Workers’ Compensation And Civil Litigation Cases
(a) Assess the exposure of open workers’ compensation case
(b) Calculate current and anticipated future amount of subrogation lien
(c) Assess Plaintiff’s chances of recovery against third-party in civil case
(d) Assess percentage of liability that will be attributable to employer in civil case
2 (e) Assess verdict potential for Plaintiff in civil case
(f) Determine strategy
1. Achieve cost savings in workers’ compensation case and potentially recover from the civil case some of what has been paid in the workers’ compensation case
2. Ability to save attorneys’ fees and litigation expenses in both the workers’ compensation and civil litigation matters
C. OBTAIN FAVORABLE INSURANCE COVERAGE RULINGS IN CIRCUIT COURT
1. Sole proprietor/small company cases – Officers opting out of coverage and then filing claims
2. Other insurance coverage issues
D. ADDITIONAL SITUATIONS INVOLVING BOTH CIVIL AND WORKERS’ COMPENSATION CASES
1. Responding to subpoenas
(a) Withhold privileged information
(b) Surveillance reports/videotape
1. Delay/prevent disclosure of surveillance tape
2. Maker of surveillance videotape qualifies as a consultant under Illinois Supreme Court Rule 201(b)(3)
2. Respondent in discovery
Illinois Supreme Court Rule 224 allows a Plaintiff to engage in discovery for the sole purpose of learning the identity of one who may be responsible for damages by filing suit for the purposes of discovery
3 (a) Prevent disclosure of privileged documents or information harmful to the employer in future litigation
(b) Prevent spoliation of evidence
II. Related Caselaw
A. PRO RATA SHARE OF EXPENSES CALCULATED BY SECOND DISTRICT
Overlin v. Windmere Cove Partners, Inc., 325 Ill.App.3d 75, 756 N.E.2d 926 (2nd Dist., 2001).
Thomas Overlin filed a workers’ compensation action against his employer. The employer paid Mr. Overlin $121,592.92 in workers’ compensation benefits.
Mr. Overlin also filed a third-party action against Windmere Cove Partners, Inc. (Windmere). The employer assigned its $121,592.92 workers’ compensation lien to Windmere. In the civil trial, the jury found Windmere liable to the Plaintiff for $250,114.96.
Windmere issued a settlement check to the Plaintiff, but subtracted the recoverable workers’ compensation lien amount from the Plaintiff’s total award of $250,114.96. The Plaintiff objected to Windmere’s calculation of the recoverable workers’ compensation lien and appealed.
To determine the computation for the recoverable workers’ compensation lien, the Appellate court analyzed the subrogation provisions of the Workers’ Compensation Act, Section 5(b), in conjunction with the Illinois Supreme Court case of Zuber v. Illinois Power Co., 135 Ill.2d 407, 142 Ill. Dec. 871, 553 N.E.2d 385 (1990). The appellate court held the legislative history of the Workers’ Compensation Act intended that 25% of the employer’s total reimbursement for its workers’ compensation lien be taken off as plaintiff’s attorneys fees. The remaining amount is compared to the total recovery from the third-party to determine the employer’s pro rata share of costs and necessary litigation expenses.
Therefore in Overlin the computation of the recoverable workers’ compensation lien was as follows:
Third-party settlement gross recovery: $250,114.96 Workers’ compensation lien: $121,592.92 Statutory attorney fees in civil case: $121,592.92 x 25% = $30,398.23
Actual reimbursement by employer: $121,592.92 – $30,398.23 = 91,194.69 Employer’s pro rata share of costs: $91,194.69/250,114.96 = 34.6%
4 B. NURSE CASE MANAGEMENT COSTS ARE NOT PART OF SUBROGATION LIEN
Cole v. Byrd, 167 Ill.2d 128, 656 N.E.2d 1068 (1995).
David Cole filed both a workers’ compensation case and a third-party suit for his injuries from an automobile accident. The workers’ compensation case settled and the third-party case went to trial. Following a jury verdict in the Plaintiff’s favor, the employer sought reimbursement of its workers’ compensation lien from the trial award. Specifically, the employer sought reimbursement of money it paid to a nurse case manager hired to monitor Mr. Cole’s medical treatment.
Section 8(a) of the Workers’ Compensation Act requires an employer to pay for all necessary medical and rehabilitative services. However, the Illinois Supreme Court held that the employer was not entitled to recover money paid for nurse case management because her services were not medical treatment.
C. PLAINTIFF’S ATTORNEY GETS 25% FEE FOR EMPLOYER’S FUTURE WORKERS’ COMPENSATION SAVINGS
Zuber vs. Illinois Power Company, 135 Ill.2d 407, 553 N.E.2d 385 (Ill. 1990).
In Zuber vs. Illinois Power Company, 135 Ill.2d 407, 553 N.E.2d 385 (Ill. 1990), the parties could not agree upon the proper allocation of fees and costs. The Plaintiff’s decedent, Ralph Zuber, was an employee of R. Dron Electrical Company, Inc., at the time of his accident. He was working at an Illinois Power Company substation when he was injured. Mr. Zuber died the following day. The surviving spouse filed a workers’ compensation claim against the employer. A civil lawsuit was filed against Illinois Power Company.
Section 5(b) of the Illinois Workers’ Compensation Act permits an employee or its representative to bring a separate action for damages against third-parties; against any sum obtained as a consequence of the action, the employer may be reimbursed for the amount of workers’ compensation benefits paid or to be paid by it. Such reimbursement may take the form of a lien, on past payments of compensation, or a credit, on future payments. From the “reimbursement received by the employer pursuant to” the statute, the employer must pay its proportionate share of the costs and expenses of the third-party action. In addition, the employer must pay an attorney of 25% of the gross amount of such reimbursement”. Zuber vs. Illinois Power Company, 135 Ill.2d at 411, 553 N.E.2d at 386.
The Supreme Court found that the 25% attorney fee applied to savings that the employer would receive on future workers’ compensation payments. The duration during which the employer was to pay the 25% attorney fee would correspond to the period during which the employer
5 would have otherwise have had to pay workers’ compensation benefits but for the recovery from the third-party in the civil litigation case.
D. FOURTH DISTRICT HOLDS 5(b) RIGHTS MUST BE LISTED IN WC CONTRACT
Borrowman v. Prastein, 356 Ill.App.3d 546, 826 N.E.2d 600 (4th Dist., 2005).
The Plaintiff injured his foot at work and filed a workers’ compensation case against his employer. While the workers’ compensation case was pending, Mr. Borrowman filed a medical malpractice suit against Dr. Prastein alleging her treatment worsened the condition, requiring additional surgery and treatment.
The Plaintiff and the employer settled the workers’ compensation case for $230,000. However, the settlement contract did not contain any reservation of rights (or waiver) language regarding Borrowman’s pending medical malpractice suit.
The Fourth District Appellate Court held that the employer waived reimbursement of its workers’ compensation lien in the petitioner’s pending medical malpractice suit by not including specific Section 5(b) language in the settlement contract for the workers’ compensation case.
E. FIRST DISCTRICT HOLDS 5(b) RIGHTS NEED NOT BE LISTED IN WORKERS’ COMPENSATION CONTRACT
Gallagher v. Lenart, 367 Ill.App.3d 293, 854 N.E.2d 800 (1st Dist., 2006).
A truck driver involved in an automobile accident with Lenart filed a workers’ compensation claim against his employer and a third-party claim against Lenart. After the workers’ compensation case settled, the employer intervened in the third-party case seeking reimbursement of its workers’ compensation lien.
Relying on the Fourth District Appellate Court case of Borrowman v. Prastein, 356 Ill.App.3d 546, 292 Ill.Dec. 459, 826 N.E.2d 600 (2005), the trial court held the employer waived its workers’ compensation lien because the settlement contract in the workers’ compensation case did not include Section 5(b) language specifically reserving its right to assert its workers’ compensation lien in the third-party case. The employer appealed.
The First District Appellate Court refused to rely on Borrowman, finding the decision unsupported by caselaw. Instead, the First District held that an employer did not waive its workers’ compensation lien when it did not include language reserving its right to assert its workers’ compensation lien in the workers’ compensation settlement contract.
6 On November 29, 2006, the Illinois Supreme Court granted the employee’s petition for leave to appeal, and will hopefully resolve the discrepancy between the First District and Fourth District Appellate Court holdings.
F. FIRST DISTRICT HOLDS THAT OFFICER WHO OPTS OUT OF INSURANCE COVERAGE OPTS OUT OF PROTECTIONS OF WORKERS’ COMPENSATION ACT
D. Mayer Landscaping vs. Industrial Commission of Illinois, 328 Ill.App.3d 853, 767 N.E.2d 821 (Ill.App 1 Dist. 2002).
In this case Donald Mayer, the president of a small, personally-held landscaping company, obtained workers compensation insurance for his company. On the application for workers’ compensation insurance and in the policy, Donald Mayer was specifically excluded from coverage, as president of D. Mayer Landscaping, in order to pay a lower insurance premium. Mr. Mayer was killed when the lawnmower he was operating, as an employee of D. Mayer Landscaping, tipped over on him.
On Section 3(17)(b) of the Act provides in relevant part:
“the corporate officers of any domestic or foreign corporation employed by the corporation may elect to withdraw themselves as individuals from the operation of this Act. Upon an election by the corporate officers to withdraw, written notice must be provided to the insurance carrier of such election to withdraw, which election shall be effective upon receipt by the insurance carrier of such written notice…For purposes of this paragraph, a “corporate officer” is defined as a bona fide President, Vice President, Secretary or Treasurer of a corporation who voluntarily elects to withdraw.” 820 ILCS 305/3(17)(b) West, 2004.
Donald Mayer’s wife filed an Application for Adjustment of Claim with the Illinois Industrial Commission seeking to recover benefits relating to Donald Mayer’s death. In reversing the award of benefits to Donald Mayer’s wife, the court held that Donald Mayer, pursuant to Section 3(17)(b) of the Act, had effectively removed himself from coverage under the Act and thus there was no statutory basis for recovery. The court held “we determine pursuant to the language contained in Section 3(17)(b) of the Act, when an officer elects not to be covered by a workers’ compensation policy, the Act does not apply at all. D. Mayer Landscaping vs. Industrial Commission of Illinois, 328 Ill.App.3d at 860.”
7 G. SECOND DISTRICT HOLDS EXCLUSION MUST STATE OFFICER IS OPTING OUT OF ACT
General Casualty Company of Illinois vs. Carroll Tiling Service, 342 Ill.App.3d 83, 796 N.E.2d 702 (Ill.App 2 Dist. 2003).
In General Casualty, the Second District Appellate Court held that the employer owed an officer workers’ compensation benefits despite the fact that the officer had opted out of benefits under the policy. Todd Carroll, the vice president of Carroll Tiling, filed an Illinois Workers’ Compensation claim subsequent to an on-the-job injury. Todd Carroll had signed a form provided by the workers’ compensation carrier, General Casualty, which stated that he did not want to be covered under the policy.
In reversing summary judgment in favor of General Casualty, the Second District Appellate Court looked at the exclusionary language provided by the workers’ compensation carrier, General Casualty. The court noted that the language did not specifically state that opting out of the insurance policy also meant opting out of the protections of the Illinois Workers’ Compensation Act. As the exclusion did not specifically state that Mr. Carroll was opting out of the protections of the Illinois Workers’ Compensation Act, the exclusion was considered void. Thus, General Casualty, the workers’ compensation carrier, was required to provide workers’ compensation benefits to Mr. Carroll.
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CASE LAW UPDATE
Paul W. Pasche BRADY, CONNOLLY & MASUDA, P.C. One North LaSalle Street Suite 1000 Chicago, Illinois 60602 (312) 425-3131 (312) 425-0110 – FAX
May 3, 2007 6th Annual Spring Seminar
2006-2007 ILLINOIS CASE LAW UPDATE
Please note: This summary includes some pertinent and significant decisions issued by the Workers’ Compensation Commission, the Illinois Appellate Courts and the Illinois Supreme Court. However, the decisions of the Commission and appellate courts are potentially subject to continued appeal and may not represent the final adjudication of the issues presented. For further information on a particular case or subject, please call any of the attorneys at Brady, Connolly & Masuda, P.C.
TABLE OF CASES REVIEWED
Accident: Arising out of Back vs. Sandoval High School, 02 WC 37350, 2006 IWCC 322 (April 20, 2006). First Cash v. Industrial Comm’n, 367 Ill.App.3d 102, 853 N.E.2d 799 (2006)
Accident: Safety Rule Violation Coronado v. MVP Temp Agency, 03 WC 39495, 2005 IWCC 789 (October 12, 2006) J.S. Masonry, Inc. v. Industrial Comm’n, 369 Ill.App.3d 591, 861 N.E.2d 202 (2006)
Accident defense: Recreational activity Gooden v. Industrial Comm’n, 366 Ill.App.3d 1064, 853 N.E.2d 37 (2006)
Average Weekly Wage: Overtime Airborne Express, Inc. v. Workers’ Comp. Comm’n, No. 1-06-1960WC (Ill.App. 2007) Baker v. Silver Cross Hospital, 03 WC 6069, 2006 IWCC 311 (April 18, 2006).
Benefits Rates: Modification after final award Gurnitz v. Lasits-Rohline Service, Inc., 368 Ill.App.3d 1129, 859 N.E.2d 1156 (2006)
Causation: Pre-existing condition Certified Testing v. Industrial Comm’n, 367 Ill.App.3d 938, 856 N.E.2d 602 (2006) St. Elizabeth's Hospital v. Workers’ Comp. Comm’n, No. 5-06-0081WC (Ill.App. 2007)
Causation: Repetitive trauma Durand v. Industrial Comm’n, 224 Ill.2d 53, 862 N.E.2d 918 (2006) Hayes v. University of Illinois, 98 WC 35041, 2006 IWCC 651 (August 3, 2006) Montgomery v. Genuine Parts Co., 01 WC 47877, 2006 IWCC 493 (June 6, 2006)
Employer-Employee Relationship: Independent Contractor Roberson v. Industrial Comm’n, No. 102723, (Ill. 2007)
Exclusive Remedy: Direct liability exception Forsythe v. Clark USA, Inc., No. 101570 (Ill. 2007)
Interest on awards Radosevich v. Industrial Comm’n, 367 Ill.App.3d 769, 856 N.E.2d 1 (2006), appeal denied, 222 Ill.2d 623, 862 N.E.2d 238 (Table)(2007)
Jurisdiction/attempted waiver P.I. & I. Motor Express, Inc. v. Industrial Comm’n, 368 Ill.App.3d 230, 857 N.E.2d 784 (2006)
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Maintenance Adams v. Murray Development Center, 01 WC 24768, 2006 IWCC 384 (May 8, 2006) Holofchak v. Morton Buildings, 01 WC 04216, 2006 IWCC 741 (January 17, 2007) Hansbraugh v. NACCO, 98 WC 64930, 2006 IWCC 32 (March 13, 2006) Morgan v. Continental Airlines, 97 WC 09766, 2006 IWCC 65 (January 25, 2006) Vresh v. Judge & Dolph, Ltd., 97 WC 32745, 2005 IWCC 785 (October 7, 2005)
Manifest Weight First Cash v. Industrial Comm’n, 367 Ill.App.3d 102, 853 N.E.2d 799 (2006) Pinckneyville Community Hospital v. Industrial Comm'n, 365 Ill.App.3d 1062, 851 N.E.2d 595 (2006) Morton's of Chicago v. Industrial Comm’n, 366 Ill.App.3d 1056, 853 N.E.2d 40 (2006) University of Illinois v. Industrial Comm’n, 365 Ill.App.3d 906, 851 N.E.2d 72 (2006)
Penalties: Reasonableness of reliance on defense evidence Gray v. Yellow Freight Systems, 04 WC 7249, 2006 IWCC 157 (March 13, 2006)
Medical Benefits: Refusal of surgery Jones v. Sun Chemical, 01 WC 16726, 2006 IWCC 730 (August 30, 2006)
Permanent Partial Disability Blackwell-Harvey v. Dept. of Corrections, 01 WC 17842, 2006 IWCC 528 (June 27, 2006) First Assist, Inc. v. Industrial Comm'n, No. 4-06-0206WC (Ill.App. 2007)
Procedure Nestle USA v. Dunlap, 365 Ill.App.3d 727, 852 N.E.2d 282 (2006) Piasa Motor Fuels v. Industrial Comm’n, 368 Ill.App.3d 1197, 858 N.E.2d 946 (2006)
Procedure—Section 5(b) Crispell v. Industrial Comm’n, 369 Ill.App.3d, 861 N.E.2d 1026 (2006) Gallagher v. Lenart, 367 Ill.App.3d 293, 854 N.E.2d 800 (1st. Dist. 2006), leave to appeal granted, 222 Ill.2d 570, 861 N.E.2d 654 (Table)(2006) Harder v. Kelly, 369 Ill.App.3d 937, 861 N.E.2d 673 (2nd Dist. 2006)
Procedure: Section 19(h) Behe v. Industrial Comm’n, 365 Ill.App.3d 463, 848 N. E. 2d 611 (2006)
Settlement contracts: resolution of medical bills Kinn v. Prairie Farms/Muller Pinehurst, 368 Ill.App3d 728, 859 N.E.2d 99 (2006)
Temporary Total Disability Glenn v. Bailey d/b/a DC Construction, 99 WC 66746, 2006 IWCC 448 (May 26, 2006). Jackson v. Airborne Express, 04 WC 33444, 2006 IWCC 433 (May 22, 2006) Repa v. Roadway Express, Inc., No. 06-2360 (7th Cir. 2007)
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CASE SUMMARIES
Accident: Arising out of Back vs. Sandoval High School, 02 WC 37350, 2006 IWCC 322 (April 20, 2006)
A custodian slipped and fell while descending a flight of exterior stairs. The Commission reversed the arbitrator's award of compensation & found that the claimant was exposed to a risk that was common to the general public since there was no evidence that the claimant was carrying anything, that he was hurrying, or that the stairs were defective.
Accident: Arising Out Of—Increased Risk of Injury Manifest Weight: Unreasonable inferences First Cash v. Industrial Comm’n, 367 Ill.App.3d 102, 853 N.E.2d 799 (2006)
A loan teller slipped and fell, dislocating her elbow, while entering the bathroom at the end of her shift to retrieve a personal item (a lunch container.) She did not notice any defect or debris on the floor. There were no witnesses to the fall. Three co-workers testified that they did not notice any debris on the floor, although they could not recall the last time the bathroom had been cleaned prior to the accident. The case was found by the arbitrator to be compensable, and the Commission and circuit court affirmed without comment.
The appellate majority reversed, analyzing the three types of risks that occur in the workplace: employment-related risks (such as defective or debris-laden surfaces; or duties that increase the risk of injury), employee-related risks (such as idiopathic physical conditions in an employee that could cause one to fall), and neutral risks (not increased by any employment-related factors). The latter two are not generally compensable. The court held that the arbitrator improperly speculated that it was "possible" that the floor was dirty, and required the employer to prove that it was not:
"In his findings, the arbitrator noted that no evidence was presented "that the bathroom tiles were dry or free of hair, dust, debris, make-up, tissue, oil, water droplets or of the many other possible substances." The arbitrator appears to have improperly shifted the burden of proof to First Cash to disprove the existence of a defect in the bathroom floor. The claimant, and not First Cash, had the burden of proving that her injury arose out of her employment. In her brief before this court, the claimant argues that the record contains sufficient circumstantial evidence from which it can be inferred that the bathroom floor was dirty on August 8, 2003, and that this was the cause of her fall. However, circumstantial evidence can only support an inference which is reasonable and probable, not merely possible. Where the evidence allows for the inference of the nonexistence of a fact to be just as probable as its existence, the conclusion that the fact exists is a matter of speculation, surmise, and conjecture, and the inference cannot reasonably be drawn." (Citations omitted.)
Therefore, the claimant’s fall was neutral, and she failed to prove her accident arose out her employment. Assuming this survives an anticipated supreme court appeal, this will be some rare good case law for employers!
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Accident: Safety Rule Violation Coronado v. MVP Temp Agency, 03 WC 39495, 2005 IWCC 789 (October 12, 2006)
Claimant, a shipping and receiving clerk, drove a forklift off the employer’s parking lot onto soft grass. The forklift tipped over on top of the claimant, injuring him. There was a company rule prohibiting unsupervised use of the forklift. The arbitrator noted that as long as the employee is in the course of his employment, even if in violation of a safety rule, the injury is compensable. According to the arbitrator, a safety rule violation precludes benefits only if the claimant’s violation of the safety rule is purely for personal reasons that do not benefit the employer. The Commission affirmed.
J.S. Masonry, Inc. v. Industrial Comm’n, 369 Ill.App.3d 591, 861 N.E.2d 202 (2006)
The claimant, a mason, admittedly violated a safety rule in failing to close a railing on a scaffold. Later, when he lost his balance and fell against the railing, it opened, and the petitioner fell four meters, injuring himself. Relying on Saunders v. Industrial Comm'n, 189 Ill. 2d 623, 727 N.E.2d 247 (2000), the employer argued that the injury did not arise out of his employment due to the safety rule violation. The court, affirming the award of benefits from all lower levels, distinguished Saunders, which involved a worker who rode on forklift forks for purely personal convenience and not in furtherance of any work duties. Here, there was no dispute that the petitioner was engaged in activities for the benefit of the employer (i.e., erecting a wall) when he lost his balance. Comparing the present case with Chadwick v. Industrial Comm'n, 179 Ill. App. 3d 715, 534 N.E.2d 1000 (1989), the court found no conflict in the law. Summarizing, the court stated that any injury that occurs while an employee is performing duties for which he was hired arises out of the employment, without regard to the fact that the employee knowingly violated a safety rule. In Saunders, the employee was not engaged in any authorized work activity when the safety rule violation occurred. Perhaps the following language from the opinion says it the best:
In Republic Iron & Steel Co. v. Industrial Comm’n, 302 Ill. 401, 134 N.E. 754 (1922), the supreme court set forth the proposition which governs cases in which an employee violates a rule and is injured. "The rule is, that where the violation of a rule or order of the employer takes the employee entirely out of the sphere of his employment and he is injured while violating such rule or order it cannot be then said that the accident arose out of the employment, and in such a case no compensation can be recovered. If, however, in violating such a rule or order the employee does not put himself out of the sphere of his employment, so that it may be said he is not acting in the course of it, he is only guilty of negligence in violating such rule or order and recovery is not thereby barred. *** [I]t does not matter in the slightest degree how many orders the employee disobeys or how bad his conduct may have been; if he was still acting in the sphere of his employment and in the course of it the accident arose out of it." Republic, 302 Ill. 2d at 406.
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Accident defense: Recreational activity Gooden v. Industrial Comm’n, 366 Ill.App.3d 1064, 853 N.E.2d 37 (2006)
The employer held a company picnic and employees were given the option of attending the picnic or working their regular jobs that day. Either way, they were paid full wages for the day. There was no evidence of any negative consequences for choosing not to attend the picnic. The injury allegedly occurred while the petitioner was playing sports at the picnic. The court held that this situation was exactly that envisioned by Section 11's exception to coverage for recreational activities. Therefore, the claim was dismissed. This is a good example of effective risk prevention planning (as far as the company picnic policy) and also was well handled as far as producing sufficient evidence at trial to establish the defense.
Average Weekly Wage: Overtime Airborne Express, Inc. v. Workers’ Comp. Comm’n, No. 1-06-1960WC (Ill.App. 2007)
The claimant here worked a standard eight-hour shift each day as a delivery driver, but was required to finish all his deliveries before his shift could be ended. In addition, he could request voluntary overtime based on his seniority. Neither the claimant nor the regional manager for the employer could recall any time during the relevant year prior to the work injury when the claimant worked overtime other than voluntary. He earned $28,845.09 in regular wages during 32 weeks. He also worked 538.7 hours of overtime, including some hours in 31 of the 32 weeks. Two union representatives also testified regarding the overtime scheme, but apparently had no knowledge whether the petitioner worked any type of overtime other than voluntary. The arbitrator excluded the overtime, but the Commission included the hours at the straight-time rate for total earnings of $40,475.62. The circuit court confirmed the Commission.
On appeal, the appellate court referenced the exclusion of overtime in Section 10 of the WCA. The court noted the ordinary meaning of "overtime" is "working time in excess of a minimum total set for a given period." The court then analyzed the following cases: Edward Hines and Ogle (finding that mandatory overtime should be included as part of the regular working hours of 67 and 48 per week, respectively); Edward Don Co. (holding that mere fact of overtime in 15 of 16 pay periods, without evidence overtime was mandatory, was insufficient to prevent exclusion under Section 10); and Freesen (overtime excluded where there was no evidence it was mandatory or a set part of regular hours worked each week). In this case, the court noted that the claimant's regular hours were eight per day, and his overtime per week varied from .8 to 28.43 hours per week. Although the employer could require overtime, there was no evidence that the claimant actually was ever required to. The court stated that unless overtime is mandatory or a part of a fixed, consistent work week (in effect, becoming mandatory), then it must be excluded. To hold otherwise, stated the court, would render Section 10 meaningless. Therefore, the arbitrator's calculation of wages and benefits was reinstated. This decision confirms our practice of excluding all voluntary overtime.
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Baker v. Silver Cross Hospital, 03 WC 6069, 2006 IWCC 311 (April 18, 2006)
Certified nursing assistant could not leave at end of shift if she was in the middle of a job, or if the next shift employee did not appear. The employer produced no evidence that the work was voluntary. The arbitrator and Commission applied the rule that mandatory overtime is included in the calculation of the average weekly wage.
Benefits Rates: Modification after final award Gurnitz v. Lasits-Rohline Service, Inc., 368 Ill.App.3d 1129, 859 N.E.2d 1156 (2006)
The arbitrator awarded permanent partial disability (PPD). On the claimant's review, the Commission awarded permanent total disability (PTD), but at the PPD weekly benefit rate. The employer appealed to circuit court, but claimant did not appeal. The court reinstated arbitrator's award. The claimant then appealed to the appellate court on the issue of whether the disability was partial or permanent, but did not mention benefits rates. The appellate court reversed circuit court and reinstated Commission decision. A year later, after the employer had complied with payments as stated in the award, the claimant filed a complaint under Supreme Court Rule 369, requesting modification of the rate. The employer moved to dismiss due to lack of subject- matter jurisdiction. Before the court ruled on this motion, the claimant filed a motion to amend the complaint to cite Section 19(g) of the Act, but otherwise the complaint was the same. The circuit court granted employer's motion and dismissed the case.
On appeal, the question was whether a 19(g) proceeding empowered the court to change the original award. [For those who are wondering, 19(g) is the provision for judicial enforcement of Commission awards, whereas 19(f) is the provision for appealing Commission awards.] The appellate court cited earlier case law that supported modification of the award where there were "irreconcilable inconsistencies" within the four corners of the Commission award. The theory is that in order for court to enforce the award, the court must be able to make sense of it. Here, because the Commission clearly awarded PTD, and there was no dispute what the weekly benefit was supposed to be, the court was allowed to modify the award so that it would make sense.
Causation: Pre-existing condition Certified Testing v. Industrial Comm’n, 367 Ill.App.3d 938, 856 N.E.2d 602 (2006)
This is a pretty basic manifest weight case. The employer did a good job of investigating the alleged injury, cross-examining the treating surgeon, and retaining a credible examining doctor. However, there was still enough evidence in the record to support the arbitrator's decision that a compensable injury occurred when a 380-pound man extended his leg to climb down a ladder while carrying a load of tools. This was affirmed by the Commission and the courts, notwithstanding that the claimant had been complaining about and receiving treatment to his right knee as recently as nine months earlier, that his supervisor had observed him limping constantly on a prior job and on this job prior to the alleged injury and denied receiving any report of accident on or about the date of alleged injury, and that his primary care physician of 10 to 12 years wrote this initial history after the alleged accident: "[Claimant] presents today with
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complaints of right knee pain which has been a chronic problem for 3 years. [Claimant] states he injured it 3 years ago, and since that time has had occasional flare ups of his knee pain. He states that over the past week he has been doing a lot of ladder climbing and over this week he has noticed increased swelling and pain to his right knee. He denies any specific new injury to the knee." At trial, the claimant neatly explained everything away during his testimony and his surgeon gave the requisite minimum causal connection opinion. That was enough manifest weight to carry the day in this unfortunate result.
St. Elizabeth's Hospital v. Workers’ Comp. Comm’n, No. 5-06-0081WC (Ill.App. 2007)
At face value, this case is a manifest weight decision that rehashes the case law regarding causal connection and pre-existing conditions. However, on further inspection the Court included a strong reminder to attorneys regarding an apparent revision to Supreme Court Rule 341 (requiring certain citations in appellate briefs). On another side note, the court initially dealt with a jurisdictional argument based on the Arbitrator's/Commission's failure to specify the TTD rate in the arbitration award that was summarily affirmed by the Commission. Citing well-aged precedent, the court stated that if the decision contains sufficient information that only a mere mathematical calculation is needed to ascertain the award, then the decision is considered "final" and subject to appeal. Here, the parties had stipulated to the average weekly wage, the petitioner's marital status and the number of children. Therefore, the calculation of the TTD rate was only a mere mathematical calculation.
On the causation issue, the court reviewed the concepts of increased risk, causative factor standard (not necessarily sole or principle causative factor, as long as it was a causative factor), pre-existing conditions (burden on claimant to prove injury was aggravating factor, not just part of normal degenerative process of pre-existing condition), and “egg-shell skull theory” that employers must take employees as they find them. The court noted that the arbitrator and Commission relied heavily on the testimony of the claimant’s treating physician that the claimant’s back condition was related to moving patients, whereas the employer’s two experts disagreed. The court stated that there was conflicting evidence to support both positions, and it could not therefore say that the Commission’s resolution in favor of the claimant was not against the manifest weight of the evidence. The award was affirmed.
Causation: Repetitive trauma Durand v. Industrial Comm’n, 224 Ill.2d 53, 862 N.E.2d 918 (2006)
The claimant testified that she first noticed carpal tunnel syndrome (CTS) symptoms in September or October 1997 and told her supervisor she believed these were work-related. No treatment was sought until August 15, 2000, when her family doctor recorded symptoms that had existed for 1.5 years and ordered an EMG. On September 8, 2000, the EMG showed bilateral CTS, and the claimant ultimately underwent bilateral release surgeries. The treating surgeon opined that the CTS was work-related, based on keyboarding activities. Dr. Pomerance examined the claimant for the respondent and reviewed a videotape of her work duties. He opined that the claimant's work activities did not cause or aggravate her CTS. The application
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was filed on January 12, 2001, listing the date of accident as September 8, 2000. The arbitrator found a compensable accident and awarded benefits. The Commission reversed, finding the manifestation date to be in September or October 1997, the date the petitioner testified she believed she had a work-related injury. Therefore, the application was time-barred (not filed within 3 years.) No decision was rendered on the issue of causal connection. The circuit court and appellate court both affirmed.
The Illinois Supreme Court reversed, finding that the Commission too narrowly interpreted the term "manifestation date," which admittedly means the date on which a reasonable claimant knew or should have known he sustained a work-related injury. In analyzing some prior case law, and Professor Larson, the court concluded that the last date worked or the first date of medical treatment were more reliable accident dates than trusting the opinion of the claimant. Therefore, the Commission's finding of accident date was against the manifest weight of the evidence. The case was remanded for a further hearing on the issue of causation. (So at least there is still some hope for a just result in the end.)
Hayes v. University of Illinois, 98 WC 35041, 2006 IWCC 651 (August 3, 2006)
The claimant alleged work-related carpal tunnel syndrome due to use of hands for data entry, answering phones, writing messages, making copies and sending faxes. Medical evidence showed the claimant had previously suffered non-occupational carpal tunnel syndrome during pregnancy and that her current diabetes also provided an explanation for her current symptoms. It was further noted that her symptoms worsened during the three-and-a-half-year period between her last day of work and when she underwent surgery. The claimant’s physician opined causation, whereas the employer’s examiner, who had more information than the treater, opined there was no connection between the work activities and the carpal tunnel syndrome. The Commission found the evidence did not support her allegation that her duties were repetitive to the extent that they would cause carpal tunnel syndrome. Case dismissed. This is a good example of a thorough investigation enabling the respondent’s expert to be better prepared than the claimant’s.
Montgomery v. Genuine Parts Co., 01 WC 47877, 2006 IWCC 493 (June 6, 2006)
The claimant worked for the employer for only 24 days as a driver delivering auto parts. She also used a computer, answered phones, stocked, swept and took out trash. She alleged quit due to problems with her hands and a year later underwent left carpal tunnel release surgery. Medical records showed that two years before she began her employment, she sustained an injury to her left elbow requiring surgery and resulting in a prior workers’ compensation settlement. The claimant reported to her current surgeon that her symptoms were first noticed just recently before the surgery (i.e., over a year after she left the job.) Both treating physicians admitted they did not know how often or to what extent the claimant performed certain work activities. The employer’s examining doctor, however, had a thorough job description and the prior medical treatment records, which together with his exam led him to opine there was no causal connection between the work activities and the carpal tunnel syndrome. The arbitrator
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found that the claimant’s description of her job duties was not consistent with repetitive trauma and chose to rely on the employer’s physician’s opinions. The claim was dismissed. The Commission affirmed. This is another good example of how a thorough investigation and preparation of the employer’s medical expert enabled the defense to achieve a rare victory.
Employer-Employee Relationship: Independent Contractor Roberson v. Industrial Comm’n, No. 102723, (Ill. 2007)
Claimant was over-the-road truckdriver/employee until 2000, when he bought his own truck and entered into an agreement with the respondent entitled, “Independent Contractor Contract.” This contract provided for the claimant to be paid 78% of the gross revenues produced by his truck. The claimant was responsible for all costs and expenses associated with operating the truck, including fuel, tolls, licenses and taxes. He was permitted to have employees and required to provide workers’ compensation insurance for himself and his employees. The contract further provided that it was “not intended to create and employee/employer relationship,” and that the respondent “shall have no direction or control” of the claimant “except in the results to be obtained.” Witnesses for the respondent further detailed the contract relationship and distinguished it from the claimant’s prior employment. The arbitrator found the claimant had failed to prove an employer-employee relationship and dismissed the claim. The Commission reversed, holding that there were provisions in the contract that allowed the respondent to right to direct and control the claimant, even if it did not actually do so. Furthermore, the Commission pointed out that the respondent’s compliance with federal regulations (such as those requiring the respondent’s name on the claimant’s truck) were further “indicia of control.” The Commission also stated that the claimant was providing services that were part of the respondent’s regular business, not some “special service,” and that this also indicated an employment relationship. The Commission awarded benefits for the injury, ruling that it was work-related.
The circuit court reversed, reinstating the arbitrator’s decision. On further appeal, the appellate court reversed again, reinstating the Commission’s decision. The appellate court found that the issue of employment relationship was fact specific, and that there were sufficient facts to support the Commission’s decision. The supreme court agreed and affirmed.
Exclusive Remedy: Direct liability exception Forsythe v. Clark USA, Inc., No. 101570 (Ill. 2007)
In a case that will surely be discussed by the business community, the Illinois Supreme Court, in a 5-0 decision (Justices Thomas and Kilbride did not participate) has adopted the legal theory of "direct participant liability." This case involved an explosion at a Clark Refining facility that killed two employees. After receiving death benefits from Clark Refining pursuant to the Workers' Compensation Act ("the Act"), the estates of the two employees sued Clark USA, the parent corporation of Clark Refining. The theory of the lawsuit was that Clark USA had adopted a budget and business model characterized as "survival mode" that required Clark Refining to skimp on or eliminate expenditures to ensure the safety of employees on the jobsite. Clark USA moved for summary judgment and the circuit court granted it, apparently without any
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explanation. The appellate court reversed and remanded the case for trial. Before the supreme court, two issues were decided: whether Clark USA could legally be held responsible under the theory of "direct participant liability" and whether Clark USA was protected by the "exclusive remedy" provision of the Act.
Recognizing the first issue as one of first impression in Illinois, the court analyzed case law from the federal courts and surrounding states. The general consensus was that a parent corporation could be held liable for the acts of its subsidiary where the parent independently interposes its hand in causing the subsidiary to act (or fail to act). Applying this general concept to this case, the supreme court held that direct participant liability is a viable theory of recovery in Illinois. The court imposed two elements under the facts of this case: "[w]here there is evidence sufficient to prove that a parent company mandated an overall business and budgetary strategy and carried that strategy out by its own specific direction or authorization, surpassing the control exercised as a normal incident of ownership in disregard for the interests of the subsidiary, that parent company could face liability." (Slip. Op., p. 12 [emphasis in original].) Because there were two possible conflicting inferences in this case involving the testimony by a joint officer of both corporations, the court ruled that summary judgment was improper.
On the second issue, the court held that because under the "direct participant liability" theory the parent acted independently in controlling the subsidiary, the parent was not entitled to protection under the exclusive remedy provision of the Act. To allow protection, according to the court, would be the same as allowing Clark USA to pierce the corporate veil of Clark Refining, and this practice, according to the court, has been rejected in Illinois in the past.
What was not discussed by the court, but will undoubtedly concern our clients will be the impact of this decision on the subsidiary's workers' compensation lien. I would suggest that in this case, the lien remains viable based on the following dicta: "It was Clark Refining, not defendant [Clark USA], who paid workers' compensation benefits to the decedents' families. It was Clark Refining, not defendant, who actually employed the decedents. As such it is Clark Refining, not Clark USA, that should enjoy the exclusive remedy provision of [the Act]." (Slip. Op. at 18-19. This appears to mean that it is Clark Refining, not Clark USA, that retains its lien under the Act, as well.
Justice Freeman wrote a concurring opinion (joined by Justice Burke) stating that this decision should only be construed as "a very narrow exception to the general rule" of limited liability for corporate shareholders. The concurrence also underscored that this ruling was made in the context of a summary judgment motion and should not be construed as an indication of the merits of the case itself.
Interest on awards Radosevich v. Industrial Comm’n, 367 Ill.App.3d 769, 856 N.E.2d 1 (2006), leave to appeal denied, 222 Ill.2d 623, 862 N.E.2d 238 (Table)(2007)
This opinion is a long read, especially the convoluted procedural history, including a prior remand. The first part deals with an employer getting slammed with attorneys’ fees for not
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paying an arbitration award in full within 30 days, despite its claim that it was trying to negotiate a lump-sum settlement. The circuit court further found that this refusal to pay subjected the employer to additional attorneys fees under Section 19(g) (the provision for judicial enforcement of Commission awards.) The appellate court affirmed all of this. Next, the appellate court addressed the issue of interest.
The arbitration award consisted of TTD and PTD that accrued prior to arbitration, as well as future PTD, maintenance, and home healthcare to be paid in fixed monthly amounts after the arbitration. No review was taken to the Commission. The 19(g) proceedings were filed one month after the arbitration decision became final. The employer made partial payments of the award over the next six months, but never did pay any interest prior to the circuit court's judgment. The judgment order included Section 19(n) interest on the benefits that accrued prior to arbitration. This interest was calculated for the period between the arbitration decision and the entry of the court judgment. However, the court applied interest under the Code of Civil Procedure Section 2-1303 on the weekly/monthly benefits payable after arbitration but prior to the circuit court judgment, up until the date of actual payment. On appeal, the claimant argued that Section 2-1303 interest should apply to the entire award entered by the arbitrator beginning the date that the award became final. The respondent agreed with the circuit court's calculation.
The appellate court had to answer two questions. The first: Was section 19(n) interest chargeable to the benefits that were not payable until after the arbitration award? Past decisions of the court indicated this was not the case. However, the court now has stated:
“A claimant is entitled to section 19(n) interest on all awards of arbitrators and decisions of the Commission. 820 ILCS 305/19(n) (West 2004). Interest pursuant to section 19(n) is "drawn from the date of the arbitrator's award on all accrued compensation due the employee through the day prior to the date of payments." 820 ILCS 305/19(n) (West 2004). Cases such as Ballard v. Industrial Comm'n, 172 Ill. App. 3d 41, 526 N.E.2d 675 (1988), and Folks v. Hurlbert's Wholesale Siding & Roofing, Inc., 93 Ill. App. 3d 19, 416 N.E.2d 745 (1981), are cited for the proposition that a claimant is not entitled to section 19(n) interest on benefits that accrued after the arbitrator's award. However, upon further review of these cases and the clear language of section 19(n), specifically that "[i]nterest shall be drawn from the date of the arbitrator's award" (820 ILCS 305/19(n) (West 2004)), we decline to follow Ballard, Folks, and cases with similar holdings.”
This should be interpreted as overruling Ballard and Folks. Therefore, it appears that interest does now accrue even though the benefits were not due until after arbitration.
The next question: When does Section 19(n) interest end and Section 2-1303 interest begin? The court stated that in 19(g) proceedings the 2-1303 interest is retroactive to the date the arbitration award became final. This holding was based on the language of 2-1303:
“Section 2-1303 provides that judgments shall draw interest at the rate of 9% per annum from the date of judgment, and "[w]hen judgment is entered upon any award, report or verdict, interest shall be computed at the above rate, from the time when made or rendered to the time of entering judgment upon the same, and included in the judgment."
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735 ILCS 5/2-1303 (West 2004). Once a claimant implements section 19(g) 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.”
Because this changed the amount of interest liability, the case was remanded (again) for further determination of interest by the circuit court.
Please note that this is different from the situation where the Commission decision is appealed to the circuit court under Section 19(f). In that case, the 19(n) interest continues until the date the circuit court decision is entered. The 2-1303 interest then begins after the circuit court decision, and is not retroactive.
Jurisdiction/attempted waiver P.I. & I. Motor Express, Inc. v. Industrial Comm’n, 368 Ill.App.3d 230, 857 N.E.2d 784 (2006)
The claimant entered into a contract for hire in Illinois. At the time of hiring, he signed an agreement that any workers' compensation claim would be handled under Ohio law. He injured his neck in a motor vehicle accident in Pennsylvania. The claim was initially handled under the Ohio system, and TTD and medical benefits were paid. Seven months after the accident, the claimant was diagnosed with herniated cervical and lumbar discs and surgery was recommended. The claimant then filed an Illinois Application for Adjustment of Claim. Two weeks later, he filed a request for authorization of the surgery by the Ohio Bureau of Workers' Compensation. An IME by the employer resulted in the opinion that the petitioner had no demonstrable disk herniations. The Ohio Bureau also referred the petitioner for an examination that resulted in a similar opinion that there were no herniated discs. In a letter, the administrator of the Ohio Bureau objected to the proposed surgery and referred the matter for hearing by the Ohio Industrial Commission. There was no evidence presented whether the Ohio Commission ever entered a decision.
At arbitration and on appeal in Illinois, the employer argued that the petitioner was precluded from recovering benefits in Illinois either because of the agreement to be bound by Ohio law, or due to res judicata. Alternatively, it argued that two out of three doctors found no herniation or need for surgery. The arbitrator awarded the surgery, the Commission and circuit court affirmed. In affirming, the appellate court held that Section 23 of the Illinois Act precluded enforcement of the agreement. Because the employer failed to provide evidence of a final decision in Ohio, res judicata did not apply. Lastly, the award was not against the manifest weight of the evidence, because the Commission was entitled to give more credibility to the treating doctor than to the examiners.
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Maintenance Morgan v. Continental Airlines, 97 WC 09766, 2006 IWCC 65 (January 25, 2006)
Claimant, a college student and part-time baggage handler, suffered a fractured pelvis and closed-head injury, including memory deficits, word-finding difficulty, visual/spatial and organization deficits. The arbitrator awarded temporary total disability through the date when the claimant’s physiatrist indicated she was going to attempt a trial return to work with minimal physical restrictions: breaks as needed, lifting as tolerated by obstetrician (claimant was pregnant.) In fact, claimant did not return to work until ten months later, claiming her cognitive deficits made classes so difficult that she left school. The Commission modified the decision to award the extra maintenance, finding that with such cognitive deficits, it was not unreasonable for her to fail to find a job, especially where she had no assistance. Because no vocational rehabilitation was provided by the employer, and because the need for rehabilitation was apparent, the claimant was entitled to maintenance benefits.
Maintenance: Formal request for VR Holofchak v. Morton Buildings, 01 WC 04216, 2006 IWCC 741 (January 17, 2007)
Where the employer never offered assistance to find employment or access to vocational rehabilitation (VR), the claimant needs merely to formally request VR to be entitled to maintenance. This claimant, a construction worker, sustained multiple injuries to his back, wrists, and legs, eventually requiring permanent restriction to light to medium duty. The claimant was subsequently hired as a cashier at Wal-Mart for $6.25 per hour. Claimant’s VR counselor (Joseph Belmonte) found few transferable skills due to limited experience. He stated: “it is clearly evident to anyone with common sense that Petitioner has a vocational future that is clearly impaired.***as Wal-Mart is willing to accommodate him (Petitioner), this certainly seems to be realistic employment for him." The arbitrator awarded TTD until the date the claimant reached maximum medical improvement and then wage differential benefits after his hire at Wal-Mart. The Commission awarded maintenance (12 weeks) for the period in between those two events. There was evidence the petitioner’s attorney had requested formal VR. The Commission, citing Section 7110.10 of its regulations, stated that a vocational report is required after any claimant is off work for 120 days. The Commission further noted that a claimant need not participate in VR and does not have to formally request VR. Generally, a claimant is entitled to VR if he sustains a work-related injury that causes a reduction in earning capacity and there is evidence that rehabilitation will increase that capacity.
Maintenance: No formal request for vocational rehabilitation Adams v. Murray Development Center, 01 WC 24768, 2006 IWCC 384 (May 8, 2006)
Claimant, a mental health technician, injured her neck in an altercation with a resident at employer’s mental health facility. After two surgeries, claimant was released to restricted work, but did not look for alternative work until one year later. Employer’s examining physician also opined that claimant had multiple permanent restrictions and could not resume working for the employer or any mental health facility where she might be exposed to physical confrontation.
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The claimant never requested vocational rehabilitation. The Commission awarded maintenance during the year between the last date of treatment and the beginning of the job search. Citing case law and statutory provisions, the Commission found that the evidence showed that it was apparent the claimant could not return to her former employment. It was therefore incumbent on the employer to provide both maintenance and vocational rehabilitation, even in the absence of a demand. The claimant further introduced testimony by a vocational counselor that the claimant needed job-seeking skills and placement assistance. The Commission also vacated the PPD award, stating that until the claimant returned to suitable employment and determined her earning capacity, such an award was premature.
Maintenance: Non-cooperation with vocational rehabilitation Hansbraugh v. NACCO, 98 WC 64930, 2006 IWCC 32 (March 13, 2006)
The Commission terminated maintenance benefits after the claimant stopped cooperating with the employer’s efforts to assist her in finding gainful employment. After a work injury to her hands, the claimant was provided vocational rehabilitation by the employer. The claimant sabotaged three specific job offers and rejected each one during the interview process. The first offer was a position as a jewelry retail salesperson, which the claimant felt she could not do because her hands pains prevented her from doing inventory. The second offer was as a clerk at a restaurant, but the claimant refused because it was full-time and she only wanted part-time. The third position was a job as manager of the house wares department at a retail store, but the claimant turned this down because she believed she would have to do stocking. The VR counselor then sent the claimant to a job broker who tested her, showed her a video and identified several full-time positions available within her restrictions. The claimant rejected these leads because she wanted only part-time work. The claimant testified that if she heard anything during an interview that she thought she could not do, she immediately refused the job. The VR consultant stated that on further discussions with the prospective employers, accommodations were available that would have addressed the specific issues and would insure the claimant would succeed at the positions. The counselor stated that if the claimant had followed her instructions, she would have been employed. The counselor believed the claimant was employable but for her self-limiting and non-cooperative behavior. Based on this evidence the Commission reduced the arbitrator’s award of 169 weeks of TTD/maintenance down to 32 weeks, ending when the claimant first failed to cooperate with the VR counselor.
Vresh v. Judge & Dolph, Ltd., 97 WC 32745, 2005 IWCC 785 (October 7, 2005)
Arbitrator denied claim for 60 weeks of temporary total disability/maintenance and Commission affirmed. Claimant was given permanent restrictions and met with vocational counselor. One month later, he refused to continue with job search. Vocational counselor testified to 29 new leads that would have led to employment. Stating that a claimant must prove that not only did he not work, but that he was unable to work, the Commission found the petitioner had a duty to explore obtaining other employment in order to continue receiving benefits.
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Manifest weight: Claimant’s credibility in absence of medical opinion University of Illinois v. Industrial Comm’n, 365 Ill.App.3d 906, 851 N.E.2d 72 (2006)
Claimant testified she tripped over a metal strip across the bottom of a door between the parking garage and the medical building where she worked. Some conflicting evidence suggested she may have slipped on ice or otherwise twisted her knee without tripping. Also, the claimant had a pre-existing knee condition (but no treatment for over a year before this accident), and respondent pointed out that no medical experts testified on the issue of causation. The arbitrator denied the case, finding the claimant's version of events to be contradicted by the evidence. The Commission reversed, finding the claimant credible as to the accident, as well as to the fact that she had no problems with the knee immediately prior to the accident. The circuit court affirmed. The appellate court affirmed, giving a brief review of the case law on "arising out of" and causation, but essentially holding that there was sufficient evidence to support the Commission. Therefore, the Commission decision was not against the manifest weight of the evidence.
Manifest weight: Expert credibility Pinckneyville Community Hospital v. Industrial Comm'n, 365 Ill.App.3d 1062, 851 N.E.2d 595 (2006)
This case contained no major legal surprises in a manifest weight issue where two physicians, the claimant’s treating physician and her records examiner, disagreed with the employer's expert on the question of whether nervousness about giving a speech at a retirement dinner caused the petitioner's brain hemorrhage during the speech. The arbitrator believed the employer’s doctors, but the Commission reversed, ruling that the petitioner's doctors were more credible. The circuit court and appellate court affirmed. Of interest, however, is the length to which the appellate court went in order to adhere to the manifest weight doctrine. Fact summary: the petitioner, the nursing director of the hospital/employer, was under apparent stress from leading the hospital's accreditation efforts when she was asked to give a speech at the retirement dinner for one of the hospital's doctors. Dr. Fozard, mentioned in the following excerpt, was the treating physician and a colleague of the petitioner's at the hospital: The employer contends that Dr. Fozard was biased. Indeed, one cannot read his testimony without concluding he held claimant in high esteem. This, however, does not mean he was an untrustworthy witness. The Commission was in a better position to assess his credibility. See Edward Hines Precision Components v. Industrial Comm'n, 356 Ill. App. 3d 186, 196, 825 N.E.2d 773, 782 (2005). Dr. Fozard's expertise is a more difficult question. Unlike the other experts, Dr. Fozard was not a specialist in the relevant fields. Dr. Fozard admits this. On the other hand, Dr. Fozard was the only treating physician to testify. Thus, the weight given to his testimony was a matter best decided by the Commission. See Electro-Motive Division, General Motors Corp. v. Industrial Comm'n, 240 Ill. App. 3d 768, 774, 608 N.E.2d 162, 166 (1992). So, one can conclude that neither bias nor lack of expertise were sufficient to overcome the Commission's decision on credibility. There is no doubt in reading this decision that if the Commission had backed the respondent's doctors, the court would have similarly affirmed. The true lesson, of course, is that conflicting medical testimony is ultimately decided at the
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Commission level. Therefore, in similar cases, we need to focus on convincing the Commissioners, because there is little likelihood of prevailing at the subsequent levels on credibility issues.
Manifest weight: overlooked evidence Morton's of Chicago v. Industrial Comm’n, 366 Ill.App.3d 1056, 853 N.E.2d 40 (2006)
(This case involved an appeal from a decision issued by our own Valerie Peiler during her tenure as an arbitrator.)
Facts: The claimant, a restaurant server, injured her knee on the job. After arthroscopic surgery, her physician determined that she could not return to waiting tables. Her earnings the year before the accident (1998) were $44,400.
According to the Court opinion, there were two other servers who had the same level of seniority as the petitioner. They earned $44,300 and $43,700 in 1998. The petitioner had previously earned a bachelor's degree in paralegal studies, but had never worked as a paralegal because she made more waiting tables. In 2000, she secured a paralegal job at $34,000. In 2000, the two co- workers at Morton's were earning $50,000 and $54,500.
In reality, there was evidence submitted of other co-workers with approximately the same seniority and assignments as the claimant. The assignments also dictated wages—i.e., they would earn more on weekend nights. The other servers omitted by both the Commission and the courts actually earned less in those following years than they had in 1998 - so two servers earned more but the other two earned less. On that basis, Arbitrator Peiler found the claimant had not proved her case by a preponderance of the evidence, since her wages could have gone up or down. Ergo, no wage differential benefits were awarded. The Commission majority ultimately reversed, awarding a differential based on the incremental increase in the two selected co- worker's wages between 1998 and 2000. The circuit court affirmed.
Appellate Court Decision: On appeal, there were three issues. The substantive issue was the employer’s argument that the claimant had failed to prove her earnings capacity after the injury. The court agreed with the Commission, finding that the co-workers' wages were valid evidence of earnings capacity and also criticizing the employer's apparently numerous mathematical errors in its proposed calculation of the benefits. However, the Court neglected to even mention the other co-workers whose earnings decreased after the claimant’s accident. The other two issues concerned procedural questions about the number of commissioners who signed the award and about the employer’s compliance with the bond requirements to perfect the appeal. The court ruled that both the commission decision and the employer’s appeal were valid.
Analysis: Apparently, the employer's appeal strategy here was to try to get the arbitrator's original decision reinstated. The result demonstrates (yet again) the paramount importance of winning at the Commission level, as this sets the standard for subsequent appeals. Here, the Commission overruled the weight assigned by the arbitrator to the varying evidence, but it also apparently overlooked a significant portion of the evidence itself. This is perhaps an instance
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where a results-oriented Commission reached its decision notwithstanding a large body of evidence seemingly to the contrary. As various commentators have noted, the increasing irrelevancy of the arbitrators' decisions calls into question either the continued necessity of even having arbitrators or else the necessity of having an appeal to the Commission, where the Commissioners are one step removed from being able to make legitimate credibility determinations. Such determinations would be best made by the trier, who is able to actually observe the witnesses firsthand. Although this issue remains unresolved, it should always be considered in any litigation plan for the foreseeable future.
Penalties: Reasonableness of reliance on defense evidence Gray v. Yellow Freight Systems, 04 WC 7249, 2006 IWCC 157 (March 13, 2006)
A truckdriver was injured while installing a CB radio antenna on his truck. The employer denied the claim, based on its position that the CB was an optional piece of equipment. The claimant claimed that the employer used the CB to change routes or delivery instructions. Although the employer’s own witness (the claimant’s supervisor) admitted that the employer’s goal was to deliver freight as quickly and safely as possible, and that he would be unable to communicate with a driver who did not have a CB radio or a cell phone, he also testified that he only spoke to the claimant on his cell phone, not the CB. The claimant testified he did not own a cell phone. Given this evidence, the arbitrator concluded that the claim was compensable, but denied penalties. The Commission majority (Pigott and Demunno) affirmed employer’s denial of liability, but awarded penalties and attorneys’ fees, finding the employer’s defense was unreasonable and vexatious. Commissioner Basurto dissented, noting that this case involved a case of one man’s word against another’s and implying that the employer was acting reasonably by relying on the supervisor’s testimony. This unfair result will hopefully be the subject of further judicial opinion.
Medical Benefits: Refusal of surgery Jones v. Sun Chemical, 01 WC 16726, 2006 IWCC 730 (August 30, 2006)
The claimant sustained a full-thickness of the rotator cuff tear of the right shoulder. The treating physician recommended surgical repair, but the claimant refused the surgery. The employer argued that by refusing the surgery, the claimant had created a danger to his life and health. An award of 20% MAW plus 25% loss of use of the right arm at arbitration was summarily affirmed by the Commission. The arbitrator found that the claimant’s fear of dying (the reason for his refusal) was reasonable.
Permanent Partial Disability: Loss of use vs. Loss of occupation Blackwell-Harvey v. State of Illinois Dept. of Corrections, 01 WC 17842, 2006 IWCC 528 (June 27, 2006)
After sustaining a knee injury, the claimant voluntarily retired from her position as a corrections clerk. Later, she underwent a total knee replacement and sought benefits under 820 ILCS
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305/8(d)2 for loss of the “person as a whole” based on her loss of occupation. Relying on Connor v. Granite City Steel, the arbitrator found that the claimant’s voluntary removal from the workforce prevented her from demonstrating any permanent reduction of earning capacity as was required to show a loss of occupation. Therefore, benefits were awarded for loss of use of the leg only. The Commission affirmed. This case shows how exposure can be mitigated by continued thorough investigation after a compensable injury occurred.
Permanent Partial Disability: Wage differential First Assist, Inc. v. Industrial Comm'n, No. 4-06-0206WC (Ill.App. 2007)
The arbitrator denied a wage differential claim; the Commission unanimously awarded the wage differential and the courts affirmed. There was a dispute whether the claimant's job at the time of injury was properly defined as "operating room nurse" or just "nurse." The more specific definition led to the conclusion that the claimant's permanent restrictions required a change of job. There was also a dispute whether the claimant's earnings capacity was significantly impacted. The employer had a labor market survey that showed earnings potential up to $24.44 per hour. The claimant's VR expert called the employer's corporate headquarters and spoke with a "nursing recruiter" named "Glen." Glen advised that operating room nurses were paid $43.00 per hour by the respondent. At the time of trial, the claimant was earning $19.00 per hour. The Commission's wage differential was based on the difference between $43.00 and $19.00 per hour.
On appeal, the employer argued that the claimant was properly categorized as a "nurse," without regard to her specialty. The court pointed out that the employer's own divergent pay scale for different nurses underscored the fallacy of its argument. Therefore, the claimant was deemed an "operating room nurse," and the court affirmed the Commission's finding of an inability to return to this previous position. On the amount of earnings capacity, the employer argued that the comments by Glen were inadmissible due to foundation and hearsay objections. However, the court stated that the claimant's expert had adequate foundation by calling the employer’s number in the telephone book and asking Glen to identify himself as the nurse recruiter. As an agent of the employer, Glen's hearsay testimony was admissible as an admission of a party opponent. (The court did not address whether the employer presented evidence that Glen did not exist or was not an employee.) Lastly, the employer argued that the $24.44 figure, and not the $19.00 figure should have been used. However, at the statutory maximum rate, this ended up not making any difference. The court did, however, correct the Commission's award of benefits at $640.00 per week, and ordered the Commission to enter the award at the effective maximum of $465.85.
Although a lot of energy was seemingly spent on doomed arguments here, please note that the last argument alone saved the respondent over 1/3 of the value of the Commission's original award, and this was not corrected until the appellate court level. Please also note that the petitioner "agreed" at that level, but apparently did not feel the same way below. It is not stated in the opinion why the Commission did not correct this earlier (either in its original decision or in a motion to correct clerical error), but the message between the lines is: you had better
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carefully read every decision, because the Commission is now awarding more than what the Act provides!
Procedure: Chairman substituting as Commissioner Piasa Motor Fuels v. Industrial Comm’n, 368 Ill.App.3d 1197, 858 N.E.2d 946 (2006)
The claimant allegedly ruptured his spleen when a gasoline riser (essentially, a giant nozzle used to fill a semi-truck tanker trailer) struck him in the lower back. He didn't "remember" this trauma until after one month of treatment records were generated. The arbitrator found no accident or causal connection. The Commission, comprising Commissioner Rink, Commissioner Sherman, and Chairman Ruth (i.e., no representative of the employer's class) reversed, awarding medical, TTD and 25% MAW. The circuit court affirmed. The employer's appeal disputed the composition of panel and whether the decision was against the manifest weight of the evidence. The appellate court affirmed, making the dubious holding that Section 13 does not preclude the chairman from hearing cases as long as he doesn't have "final authority” over the "determination of cases." (The court did not explain how a “final” award of benefits somehow differed from its concept of “final authority” or “determination of cases.”) Additionally, the court held that the employer was not entitled to advance notice of the chairman's involvement in this apparently "non-final" decision. The court found there was no presumption that the chairman unduly influenced the other Commissioners, just because he had supervisory authority over them. Also, since Section 13 does not say the chairman cannot decide cases, he apparently may appoint himself to a panel, even though this would contradict the requirement of gubernatorial appointment or temporary fill-in by a "certified" arbitrator. (This is the type of case that we can only pray this goes before the supreme court, if for no other reason than to have a clearer final version for future legal precedent
Procedure: Reinstatement vs. declaratory judgment Nestle USA v. Dunlap, 365 Ill.App.3d 727, 852 N.E.2d 282 (2006)
This is an odd kind of case with an ultimately predictable result. The petitioner fired his first attorney and hired a second attorney. In 2001, a substitution was executed by all and the second attorney mailed it to the Commission for filing, but there was no file-stamped copy returned, nor did the Commission change its records to reflect the substitution. The first petitioner’s attorney (PA) tried a couple of times to get the second attorney to produce a file-stamped copy. Both attorneys appeared periodically at Commission hearings. The claim was dismissed for want of prosecution in November 2003 and notice was sent to the first PA. In February 2004, the employer’s attorney wrote to the first PA, advising that since the case was not reinstated, the employer’s attorney was closing his file. The first PA then faxed the dismissal notice to the second PA, who filed a petition to reinstate exactly 60 days later. Arbitrator White believed the second PA's statement, as an officer of the court, that he had mailed in his appearance back in 2001. Therefore, she found that the petitioner did not receive notice until the second PA did and the petition was filed timely. The case was reinstated. No appeal was taken to the Commission at that time.
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Instead, the employer’s attorney then filed a declaratory complaint in circuit court against the petitioner, the Commission, PA No. 1 and PA No. 2, seeking to enjoin the Commission from reinstating the case. After both PAs were dismissed for obvious reasons, both the Commission and the petitioner (separately represented) filed motions to dismiss. The employer filed a motion for summary judgment. The circuit court granted the Commission's motion, finding that the employer had failed to exhaust its administrative remedies at the Commission. Therefore, the court lacked jurisdiction. The appellate court, 4th District (not the usual Commission panel due to the type of lawsuit, but ironically including Justice McCullough, the presiding justice of the court’s Workers’ Compensation Commission Division panel) affirmed, finding that Arbitrator White's decision involved resolution of a fact issue (the credibility of PA#2) and therefore was subject to review only after a final Commission decision under Section 19(f). So, two years later, the employer had to go back and follow the rules. Because this case did not involve any novel legal issues, it is difficult to determine the rationale for this unusual tactic of pursuing the declaratory complaint. It is anticipated that there will be further litigation after the Commission finishes its final determination of the underlying claim.
Procedure: Section 5(b)—Medical benefits Crispell v. Industrial Comm’n, 369 Ill.App.3d, 861 N.E.2d 1026 (2006)
Section 5(b) provides: “there shall be paid to the employer the amount of compensation paid or to be paid by him to such employee * * * including amounts paid or to be paid pursuant to paragraph (a) of Section 8 of this Act.” 820 ILCS 305/5(b). Section 8(a) states: "The furnishing of any such services or appliances or the servicing thereof by the employer is not the payment of compensation." 820 ILCS 305/8(a). The claimant here tried to argue that this meant that medical bills were not to be included in the lien recoverable by the employer against the civil settlement proceeds. In an interestingly twisted syllogism, the appellate court argued that the above line from Section 8(a) only applies to the issue of limitations, and otherwise medical bills are always considered compensation. In other words, medical bills are not compensation for determining limitations, but are compensation for other issues. At this point, the court acknowledged its previous decision in Legris v. Industrial Comm’n (323 Ill. App. 3d 789, 792 (2001), where the court had held that bills are also compensation for purposes of the statute of limitations. This time, the court “explained” itself as follows: "But see Legris v. Industrial Comm'n, 323 Ill. App. 3d 789, 792 (2001) (concluding that payment of medical expenses is payment of compensation for purposes of determining the limitations period, although stating, "this court need not decide what the last paragraph of section 8(a) means")."
Understandably, the puzzlement caused by this decision will likely continue until the next time the question makes it to the supreme court level.
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Procedure: Section 5(b)—Settlement contracts Gallagher v. Lenart, 367 Ill.App.3d 293, 854 N.E.2d 800 (1st. Dist. 2006), leave to appeal granted, 222 Ill.2d 570, 861 N.E.2d 654 (Table)(2006)
Harder v. Kelly, 369 Ill.App.3d 937, 861 N.E.2d 673 (2nd Dist. 2006)
Recently, in the case of Borrowman v. Prastein, 356 Ill.App.3d 546, 826 N.E.2d 600 (2005), pet. for leave to appeal denied, 216 Ill.2d 680, 839 N.E.2d 1021(2005), the Fourth District of the appellate court had held that where the workers' compensation settlement contract failed to mention the employer's lien rights, those rights were waived upon approval of the settlement by the Workers' Compensation Commission. In Borrowman, the employer was thus precluded from seeking enforcement of its lien in a malpractice action by the injured employee against his treating physician. The Illinois Supreme Court denied the employer's petition for leave to appeal the Borrowman decision.
In Gallagher, the same issue was presented to the First District with a nearly identical set of facts: the employer was seeking to intervene in the employee's civil settlement with a third-party tortfeasor after the workers' compensation claim had already been settled. The workers' compensation settlement contracts made no mention whatsoever of rights or obligations under 820 ILCS 305/5(b). The trial court denied the employer's petition to intervene, citing Borrowman. The First District reversed, methodically deconstructing the Borrowman decision as contrary to the Workers' Compensation Act and well-established principles of both tort and contract law. The Gallagher court concluded that the Barrowman decision was incorrect and stated that the First District would not follow it.
In Harder, the Second District has also chimed in, holding that specific language is not required in settlement contracts to preserve Section 5(b) lien rights. This jives with the First District decision in Gallagher, but contrasts with the ruling in Borrowman.
Because these cases now create a conflict in holdings between the appellate districts, the Illinois Supreme Court has accepted the Gallagher case for appeal. The Gallagher appellate court did a much better job of backing up its holding with solid statutory language, case law, and legal treatises. The Borrowman opinion, on the other hand, was not actually supported by any cited legal authority. Hopefully, this will bode well for the defense at the next level!
Procedure: Section 19(h) Behe v. Industrial Commission, 365 Ill.App.3d 463, 848 N. E. 2d 611 (2006)
The claimant received a PPD award. Later, the claimant timely filed his first 19(h) petition, alleging additional disability, but Commission denied the petition. No appeal was taken by the claimant. The following year, more than 30 months after the original award, the claimant filed a second 19(h) petition. The employer moved to dismiss on the grounds that the 30-month filing deadline had expired. The Commission agreed, stating that to hold otherwise would render Section 19(h) meaningless. The case of Hardin Sign Co. v. Industrial Commission was discussed. In Hardin, the claimant's first 19(h) petition was granted and additional benefits
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awarded. The second 19(h) petition was filed over 30 months after the original award, but less than 30 months after the 19(h) award. Under that fact pattern, the court held that the first 19(h) decision constituted an "award" that tolled the 30-month period. In this case, because the first 19(h) was denied, there was no new "award," and therefore the Hardin holding did not apply. On appeal, the circuit court confirmed, and the appellate court affirmed based on a similar interpretation of Hardin.
Settlement contracts: resolution of medical bills Kinn v. Prairie Farms/Muller Pinehurst, 368 Ill.App3d 728, 859 N.E.2d 99 (2006)
Plaintiff-petitioner sued the employer to rescind the workers' compensation settlement contract. Count I of the complaint alleged a unilateral mistake of fact, Count II alleged a mutual mistake of fact, and Count III alleged fraud. At issue were some medical bills that were not covered in the contracts and were therefore never paid by the employer. The circuit court found it lacked jurisdiction over Counts I and II and that the plaintiff had insufficiently pleaded Count III. In affirming this dismissal, the Appellate Court noted the following terms in the contract:
"Issues exist between the parties as to whether petitioner has incurred injuries to the degree alleged and whether or not such injuries are compensable, and this settlement is made to amicably settle all issues. This settlement includes liability for temporary total compensation and all medical, surgical, and hospital expenses, past or future, for all of which petitioner expressly assumes responsibility."
The "has not paid" blank on the front of the contract was checked.
The court stated that under Section 19(f) of the Act, the settlement contract became a final decision of the Commission when it was not appealed within 20 days. Thereafter, the courts lost subject matter jurisdiction. As for the fraud complaint, the plaintiff failed to allege that the employer made any false statement of material fact, much less that the plaintiff relied on it to his detriment. Specifically, the court stated that it failed to see how an express statement that all bills had "not been paid" could possibly be construed as misrepresentation of fact. In fact, the language expressly stated that the plaintiff, not the employer, was going to pay any bills.
The point of this decision is clear: language in the contracts counts for everything. The language needs to shut out the possibility of future payments in order to truly "close" the case. Brady, Connolly & Masuda, P.C. recommends using language identical to the above excerpt, in addition to further terms (depending on the particular case) to prevent future liability after the settlement is approved.
Temporary Total Disability: No evidence of disability Glenn v. Bailey d/b/a DC Construction, 99 WC 66746, 2006 IWCC 448 ( May 26, 2006).
While working with a saw, a construction worker lacerated his right hand and fingers, requiring surgery. The arbitrator awarded 52 weeks of temporary total disability, but the Commission
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reduced this award to 19 5/7 weeks. The Commission noted that the petitioner last saw his treating physician on January 18, 2000 and was released to restricted duty. Although the employer did not accommodate this, there was no further medical evidence of disability. The claimant failed to attend a follow-up appointment on February 14, 2000 or any time thereafter. The Commission ruled that after February 14, 2000 there was no proof of disability, and it therefore cut off temporary total disability as of that date. This decision is good reason to keep a tight rein on updated medical records.
Temporary Total Disability: Evidence of ability to work Jackson v. Airborne Express, 04 WC 33444, 2006 IWCC 433 (May 22, 2006)
Following a knee injury, the claimant was awarded 71 weeks of temporary total disability by the arbitrator. The Commission reduced this to 19 weeks after noting that the claimant admitted he began working for his father’s moving business, assisting his sister in the office of that business after the father’s illness. The claimant spent four to twelve hours per day setting movers’ schedules, taking telephone orders, and running errands. He denied being paid, but records showed he was authorized to use a business checking account from which he wrote checks to himself, including one for $6,000. During this time, the petitioner was on a light duty restriction which the respondent was not able to accommodate. An investigator also testified that he observed the petitioner assisting customers. The Commission concluded that the petitioner’s activities were neither occasional nor voluntary. As such, the petitioner was not entitled to temporary total disability while he was gainfully employed. If this case survives appeal, it will serve as a good example of thorough investigative work making the difference for the defense.
TTD: FMLA leave Repa v. Roadway Express, Inc., No. 06-2360 (7th Cir. 2007)
The federal Court of Appeals for the 7th Circuit upheld summary judgment in favor of a plaintiff-employee in an action alleging that defendant-employer violated the Family Medical Leave Act (FMLA) by requiring that the plaintiff use sick and vacation leave while she was using FMLA leave and receiving temporary disability benefits. Holding: under 29 CFR 825.207(d)(1), the FMLA provisions that normally would permit defendant to substitute plaintiff's paid leave for FMLA leave did not apply where plaintiff was receiving temporary disability benefits. This decision should be noted by all Illinois employers with FMLA policies that include requiring use of sick and vacation benefits. If an employee is determined to be temporarily totally disabled under worker’s compensation law, the employer must allow the employee the opportunity to reinstate the sick and vacation benefits (usually by having the employee “buy back” the time by returning the payments.) Put another way, however, TTD benefits cannot be withheld by a carrier or third-party administrator merely because vacation or sick pay was paid under an FMLA policy. Rather, TTD should be paid separately and independently in order to avoid exposure under this decision for violation of the FMLA.
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AVOIDING AWARDS OF PENALTIES AND ATTORNEY’S FEES: A DEFENSE PERSPECTIVE
Julia B. McCarthy BRADY, CONNOLLY & MASUDA, P.C. 705 East Lincoln Suite 202 Normal, Illinois 61761 (309) 862-4914 (309) 862-4205 - FAX
May 3, 2007 6th Annual Spring Seminar
PENALTIES
Section 19(k) of the Illinois Workers’ Compensation Act provides as follows:
PENALTY FOR DELAY
In case where there has been any unreasonable or vexatious delay of payment or intentional underpayment of compensation, or proceedings have been instituted or carried on by the one liable to pay the compensation, which do not present a real controversy, but are merely frivolous or for delay, then the Commission may award compensation additional to that otherwise payable under this Act equal to 50 percent of the amount payable at the time of such award. Failure to pay compensation in accordance with the provisions of Section 8 Paragraph (b) of this Act, shall be considered unreasonable delay.
When determining whether this Subsection (k) shall apply, the Commission shall consider whether an arbitrator has determined that the claim is not compensable or whether the employer has made payment under Section 8 (j).
Section 19(l) of the Illinois Workers’ Compensation Act provides as follows:
PENALTY FOR DELAY
If the employee has made written demand for payment of benefits under Section 8(a) or Section 8(b), the employer shall have 14 days after receipt of the demand to set forth in writing the reason for the delay. In the case of demand for payment of medical benefit under Section 8(a), the time for the employer to respond shall not commence until the expiration of the allotted 60 days specified under Section 8.2(d). In case the employer or his or her insurance carrier shall without good cause and just cause fail, neglect, refuse for unreasonably delay the payment of benefits under Section 8(a) or Section 8(b), the arbitrator or the Commission shall allow to the employee additional compensation in the sum of $30.00 per day for each day that the benefits under Section 8(a) or Section 8(b) have been so withheld or refused, not to exceed $10,000.00. A delay in payment of 14 days or more shall create a rebuttable presumption of unreasonable delay.
Section 16 of the Illinois Workers’ Compensation Act provides in part:
(b) With respect to any and all proceedings in connection with any initial or original claim under this Act, no claim of any attorney for services rendered in connection with the securing of compensation for an employee or his dependants, whether secured by agreement, order, award or a judgment in any court shall exceed 20 percent of the amount of compensation recovered and paid, unless further fees shall be allowed to the attorney upon a hearing by the Commission fixing fees, and subject to the other provisions of this section. However, except as hereinafter provided in this section, in death cases, total disability cases and partial disability cases, the amount of an attorney’s fees shall not exceed 20 percent of the sum which would be due under this Act for 364 weeks of permanent total disability based upon the employee’s average gross weekly wage prior to the date of the accident and subject to the maximum weekly benefits provided in this act unless further fees shall be allowed to the attorney upon a hearing by the Commission fixing fees.
In the current climate of the Illinois Workers’ Compensation Commission, penalties and
fees under Section 19(k), 19(l) and 16 have become a significant issue for respondents and day to
day handling of workers’ compensation claims.
In reviewing recent cases by the Illinois Workers’ Compensation Commission, various
areas come to attention wherein the Commission has awarded and/or is likely to award penalties.
1. IMPROPER CALCULATION OF AVERAGE WEEKLY WAGE AND TTD
PAID AT THE WRONG RATE
In the case of David Crain v. Chatman Corporation 06 IWCC 0296, the Industrial
Commission awarded penalties and fees on the basis that respondent knowingly underpaid TTD for approximately five years.
This case was heard before Arbitrator Giordano who awarded the penalties and fees. The basis for the award of the penalties and fees was the testimony at trial by petitioner of an average work-week being 60 hours. Petitioner’s rate of pay was $22.02 per hour. Petitioner had requested wage records from the respondent and respondent refused and/or failed to produce such wage records at the time of trial. Thus, the arbitrator noted the only basis for calculation of petitioner’s average weekly wage was petitioner’s testimony at the time of trial. Based on that testimony, the evidence reflected respondent had underpaid TTD from April 1998 through July
2003. The respondent voluntarily in August 2003 corrected the rate of pay however there were also periods of non-payment of TTD. Thus, at the time of the arbitrator’s award in February
2004, the arbitrator found that TTD had been underpaid by $109,752.57.
1
The arbitrator assessed penalties pursuant to Section 19(k) of $54,876.26. The arbitrator
also awarded attorney’s fees pursuant to Section 16 totaling $10,975.26.
In addition the arbitrator’s award found an additional $53,697.97 in medical as well as an award
of permanent and total disability for the petitioner.
On review, Commissioners Rink, Ulrich and Sherman, made only a slight adjustment in
petitioner’s average weekly wage. Further, the Commissioners corrected the TTD and PTD rate
pursuant to the maximum allowable at the time of petitioner’s injury. The assessment of
penalties and fees was affirmed with slight modification for the corrected rate.
It is noted that in this case penalties were assessed only based on non-payment of TTD.
Non-payment of medical was not included in the assessment of penalties. Further, there were no
penalties assessed pursuant to Section 19(l). Additionally, attorney’s fees were assessed at
20 percent of the penalties awarded. Please note in various other cases, attorney’s fees are
assessed at 20 percent of the entire award.
2. IMPROPER TENDER OF AN AWARD WHICH IS THE EQUIVALENT OF
NO TENDER
In various cases, the Commission has repeatedly found that partial and/or improper tender constitutes no tender and subsequently assessed penalties based on the entire amount of
the award.
In the case of Virgilio Carreno v. Cambridge Homes No. 06 IWCC 0531, the arbitrator
awarded the following:
A. TTD 165 weeks at $260.67
B. Medical expenses $114,368.85
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C. PPD 250 weeks at $186.00 per week.
The case was then reviewed by the respondent. The Industrial Commission affirmed the arbitrator’s decision only modifying the award by $589.00 based on a miscalculation.
Respondent again reviewed to the circuit court and the circuit court confirmed the decision of the
Industrial Commission effective September 28, 2004. Respondent appealed to the appellate court and that appeal was dismissed due to a defective appeal. Dismissal was February 2005.
Respondent’s petition for reconsideration was denied by the appellate court. Further, respondent’s petition for leave to appeal to the Supreme Court was denied June 16, 2005.
On June 7, 2005, multiple checks were issued to the petitioner and his attorney for payment of the TTD, PPD and medical awarded plus interest. It is noted that the drafts for TTD and PPD were made payable to petitioner and his attorney. Separate drafts were issued to each medical provider naming petitioner, petitioner’s attorney and the medical provider for payment of the medical award.
Subsequent to this tender, petitioner again reviewed to the Industrial Commission for penalties. The basis of the review was that the subsequent filings following the circuit court decision were frivolous and for the purpose of delay and further petitioner was seeking penalties based on improper tender as the medical providers were named on the drafts.
In the decision of the Industrial Commission by Commissioners Sherman, Rink and
Ulrich, with regard to Issue No. 1 the Commission found they had no authority to determine if these subsequent appeals were frivolous and thus they found the award became final June 2005 based on denial for the petition for leave to appeal by the Supreme Court.
However, with regard to the second issue, improper tender, the Commission found that the tender was improper and thus the same as no tender at all. The Commission specifically
3
noted that award of medical expenses is an award of compensation. Pursuant to Section 21 of the Workers’ Compensation Act, no lien attaches. Thus, respondent cannot direct payment to the providers. Respondent has no right to interfere with petitioner’s determination of how he distributes the proceeds of his award. The Commission noted that petitioner has an obligation to pay his medical providers for their services; however, that is not to be per the direction of the respondent. The Commission went on to note that respondent had cited no legal authority for their action and the Commission was aware of no such authority. Thus they found petitioner was correct that respondent’s tender was improper and thus no tender at all. The entire award should have been payable to the petitioner.
Based on no tender, the Commission then assessed penalties on the unpaid or medical portion of the award as follows:
A. Pursuant to Section 19(k) - 50% of $113,779.85 penalties $56,889.93
B. Fees pursuant to Section 16 - 20% of $113,779.85 total fees $34,133.96
Additionally the Commission noted interest was due pursuant to Section 19(n) on the full award
$197,696.22 until full payment was made. (Note: It appears there is issue of whether the
Commission retained jurisdiction at this point. There is no indication the issue was raised).
3. REPEATED DELAYS AND NON-PAYMENTS NECESSITATING
HEARINGS BEFORE THE ARBITRATOR
In the case of Herman Parker v. Newburg, et al. 06 IWCC 0442, the 19(b) award of the
arbitrator was affirmed by the Commission. This award provided for payment of medical,
totaling $108,774.89, penalties of $54,387.44 pursuant to Section 19(k) and fees of $5,000.00
pursuant to Section 16.
4
In his decision, the arbitrator noted this was the fourth time the petitioner had been before
an arbitrator in the same case. The initial hearing was October 2003 at which time an arbitrator
found casual connection between petitioner’s condition and his work injury. With regard to the
necessity of further medical treatment, specifically a fusion surgery, the arbitrator noted
petitioner should be examined by another physician for a second opinion. If he agreed in the
recommendation for the fusion surgery, the fusion surgery was awarded and respondent liable.
Subsequent to that decision but before a second opinion was obtained, the petitioner underwent
the fusion surgery.
A second hearing was held before an arbitrator January 2003. At that time, the arbitrator
found the surgery was reasonable. Additional TTD and medical were again awarded.
A third hearing was held before an arbitrator February 2004. Again, further TTD and
medical were awarded plus penalties and fees.
At the time of the fourth hearing in December 2004, petitioner was seeking payment for
the bill from the fusion surgery of $108,774.89. The arbitrator noted the surgery had previously
been awarded by the arbitrator. The arbitrator specifically awarded the medical as well as the
penalties pursuant to Section 19(k) and fees for petitioner’s attorney as noted above.
The decision was affirmed by Commissioners Ulrich, Sherman and Rink.
4. NON-PAYMENT OF TTD BASED ON THE AVAILABILITY OF LIGHT
DUTY
In the case of John Robert Poole v. Roadway Express 06 IWCC 0820, the matter was initially heard before arbitrator Williams who awarded a period of TTD of 21 4/7 weeks despite
5
the defense that light duty was available. Petitioner did not work light duty as he was terminated
for cause, falsifying his employment application.
It was noted that initially following his injury petitioner returned to work, light duty. He continued to work in a light duty capacity until he was subsequently terminated for falsifying records. It was the position of the respondent that no TTD was owed as petitioner was terminated for cause, dishonesty. Light duty was available but for petitioner’s termination.
The arbitrator found that petitioner was entitled to TTD if he was not at maximum improvement. Whether or not he can perform light duty is not dispositive regarding the issue of entitlement to TTD. It was found that the dispositive test was whether the petitioner’s condition had stabilized, i.e., whether petitioner had reached MMI.
On review, Commissioners Sherman, Ulrich and Rink affirmed the decision regarding the period of TTD when light duty was available. They also found petitioner was entitled to
maintenance benefits during the period of time he did work light duty. Further they awarded
penalties on the basis that respondent’s defense was not based on a theory found in law.
Penalties were awarded of $5,263.75 pursuant to Section 19(k), $1,480.00 pursuant to
Section 19(l) and $2,105.50 for petitioner’s attorney’s fees pursuant to Section 16.
(Note: This case settled November 2006 following this decision by the Commission,
which was rendered September 2006. This issue has been before the Commission in subsequent
cases and TTD awarded.)
6
5. NO MEDICAL OPINIONS TO SUPPORT DENIAL OF BENEFITS
In the cases of Edith Vaca v. Meijer-Aurora 06 IWCC 0398 and Natividad Delgado v.
Clear Shield National 06 IWCC 0364, penalties were awarded on the basis that respondent did not have a reasonable basis for denial of benefits.
In the Vaca case, Arbitrator Falcioni awarded TTD and medical benefits however denied
penalties. On review, Commissioners Basurto, DeMunno and Pigott affirmed the decision
regarding TTD, increased the medical award and also awarded penalties pursuant to
Sections 19(k) and (l) and attorney’s fees pursuant to Section 16.
The Commission awarded penalties only for the period up until respondent obtained their
IME, which provided a basis for denial of benefits. However, the Commission found that prior
to that medical opinion respondents did not have evidence to support denial of benefits.
In the Delgado case, the Commission again assessed penalties. In this case, the penalties
were assessed for the period subsequent to respondent’s IME. It was noted that respondent’s
IME physician provided casual connection regarding petitioner’s carpal tunnel syndrome.
Subsequent to that report there was no basis for denial of ongoing benefits. Thus, the award of
penalties was for the time period subsequent to obtaining that report. (Please note Commissioner
Pigott dissented in part noting she would have assessed penalties for the entire time period.)
6. NO GENUINE ISSUE OF DISPUTE AND NO PRECEDENTIAL CASE
LAW FOR DENIAL
In the case of Ronald Stagg v. The City of Chicago, 07 IWCC 0023, the arbitrator found
accident, awarded TTD, medical and PPD; however, denied penalties.
7
The decision was reviewed by the respondent on all issues. Respondent denied this
matter on the basis that petitioner did not sustain an accident arising out of and in the course of his employment. Petitioner was director of building services for the City of Chicago Fire
Department. He was a 29 year employee. His job covered direction of 166 different buildings, day-to-day operations and repairs. Petitioner would make 10 to 12 calls per day regarding services at various sites. On the date of the accident, he had a meeting with supervisors at a firehouse. Following the meeting, he went outside to check some outside lights. He was going to his city car parked across the street when he noticed the fire hydrant in front of the firehouse was leaking. He stated that the curb and surrounding area had a little gravel. He made notes regarding the leak to report, stepped off the curb and twisted his ankle. Petitioner testified the fire hydrant was in front of the firehouse that was part of his responsibility and job duty to inspect it regarding repair. From photographs presented at trial, the curbing and sidewalk were a little looser by the water leak. Petitioner did undergo surgery on the ankle. During the course of his medical treatment, some other issues arose as to the condition of his foot. However, respondent had denied the accident approximately two weeks after the incident, finding that it did not arise out of and in the course of his employment and was not causally related to his employment.
The arbitrator found petitioner did sustain a work-related injury and awarded benefits.
On review, the Commission affirmed and adopted the decision of the arbitrator with some modifications as to PPD findings. The Commission noted petitioner was at a greater risk than the general public. The Commission noted that based on the circumstances of the accident and his job, which necessitated him being out of the office the majority of the day, it clearly questioned respondent’s reasoning based on case precedence and found respondent’s denial to be
8
vexatious and unreasonable. The Commission found there did not appear to be any real genuine
issue regarding the accident based on well-established case law. Thus, the Commission awarded penalties as follows:
A. Section 19(k) - $25,176.85;
B. Section 19(l) - $2,500.00;
C. Section 16 - $10,070.74.
The calculation of penalties and attorney’s fees was based on the unpaid award of medical expenses, $25,006.14, plus unpaid TTD of $25,347.57, total award - $50,353.70.
7. FALL IN EMPLOYEE PARKING LOT, THREAT OF TERMINATION OF
TTD BENEFITS
In the case of Timothy Dixon v. Village of Arlington Heights, 06 IWCC 0108, the
petitioner was a sewer laborer in respondent’s public works department. On the date of the
accident, petitioner arrived at work, parked in the employee parking lot, which was restricted from public access. He attended a morning meeting and received job assignments for the day.
As he exited the building to begin his assignments, he slipped on black ice in the employee parking lot. It was noted there was a drainpipe approximately three feet from the door he exited and the patch of ice was approximately ten feet from the mouth of the drainpipe.
Initially, the matter was accepted, TTD and medical were paid. Petitioner returned to
work with restrictions. Both petitioner’s treating physician and respondent’s examining
physician found petitioner had permanent restrictions.
A meeting occurred between petitioner and respondent advising that due to his
restrictions, he could not continue to work in his previous position. He was offered a different
9 position with the Village at a lower rate of pay. At that time, petitioner advised the Village that he wanted the difference in wages between his previous position and the current position being offered. He was advised by the respondent’s representative they would speak with their attorneys and insurance company.
Subsequently, there was a second meeting, at which time petitioner was advised the
Village would be litigating the claim. Petitioner then received a letter from the respondent advising of the respondent’s position that if he chose not to accept the job, the Village would consider its options, one of which included the immediate termination of his TTD benefits. The letter did advise him that by accepting the position he was not waiving any of his rights under workers’ compensation, he was not foreclosed from bidding into other positions or pursuing other opportunities.
Petitioner accepted the lower paying job with the Village.
At the time of trial, Arbitrator Cronin found petitioner did not sustain an accident arising out of and in the course of his employment and all benefits were denied.
On review, Commissioners Sherman, Rink and Ulrich, found petitioner did sustain a work-related accident. The Commission found petitioner sustained his injury in an employee parking lot owned and maintained by the respondent, which did not permit parking by the general public. The Commission noted the employee lot is not an area to which the general public had access and petitioner was exposed to a greater risk than that to which the general public was exposed. The Commission cited case law supporting their decision.
The Commission further found that respondent’s conduct warranted penalties under
Section 19(k) and attorney’s fees under Section 16. The Commission noted respondent placed petitioner in his current position within his restrictions under a threat of termination of his TTD
10 benefits if he refused to accept the position. The Commission found that the respondent’s argument that the current employment was not suitable was not well founded. Further, respondent’s argument that petitioner’s accident did not arise out of and is not causally related to his employment was not based on case law involving germane facts. They found that the case law on which respondent relied was distinguishable as those parking lots were available to the general public.
The Commission awarded petitioner a wage differential pursuant to Section 8(d)(1) at
$241.06 per week. The Commission subsequently awarded penalties and fees based on non- payment of the wage differential beginning with petitioner’s change of employment up to the date of his trial, 25 2/7 weeks, totaling $6,095.50; Section 19(k) penalties, totaling $3,047.69 and
Section 16 attorney’s fees, totaling $1,219.10.
CONCLUSION
In comparing awards by the Workers’ Compensation Commission for penalties under
Sections 19(k) and 19(l) and attorney’s fees pursuant to Section 16, with decisions of the
Appellate Court regarding assessment of attorney’s fees when a Section 19(g) petition has been filed, it is interesting to note that the court takes the following factors into consideration as relevant to assessing unreasonableness of failure to pay:
A. Length of time transpired between Workers’ Compensation Commission decision and filing of the 19(g) Petition;
B. Whether the parties undertook negotiations during that time period;
C. Whether the Workers’ Compensation Commission decision leaves room for a good faith disagreement as to the amount owed by the employer;
11
D. Whether and when the employer made a good faith offer of settlement;
E. Whether the employee ever made a demand for payment.
From review of the Workers’ Compensation Commission assessment of penalties and fees, one cannot conclude that such relevant factors are taken into consideration in the determination of assessing penalties.
12
BRADY, CONNOLLY & MASUDA, P.C. One North LaSalle Street Suite 1000 Chicago, Illinois 60602 (312) 425-3131 ______
705 East Lincoln Suite 202 Normal, Illinois 61761 (309) 862-4914
FRANCIS M. BRADY (Partner)
Martindale Hubbell rating A.V.
BORN: July 5, 1956
EXPERIENCE:
LEGAL:
1997 to present, Brady, Connolly & Masuda, P.C. All aspects of Workers’ Compensation defense including trial and Appellate work.
1990-1997, Associate (1990-1994) and Partner (1994-1997), Sweeney and Riman, Ltd., Chicago, Illinois. All aspects of Workers’s Compensation defense including trial and Appellate work.
1983-1988, Partner, Brady & Brady 1981-1983, Associate, Dunn, Brady, Goebel, Morel, Kombrink & Hundman Civil Litigation in State and Federal Courts involving products liability, personal injury, (including wrongful death), medical malpractice, contract disputes, and employment law (retaliatory discharge and age discrimination). Six cases to jury verdict and countless bench trials to decision. Criminal defense including felonies and service as McLean County Public Defender (Misdemeanors), 1983-1984. Appellate work (briefing and Oral Arguments) in State and Federal Courts.
INSURANCE:
1988-1990, State Farm Fire and Casualty, Schaumburg, Illinois, adjusting injury and property damage claims and determining coverages under various policies.
EDUCATION:
Tulane University of New Orleans (1974-1975), Freshmen Honors Program, University of Illinois, Urbana-Champaign (1975-1978, B.A., 1978), Honors Student, History and English; Loyola University, Chicago, Illinois (1978-1981, J.D. 1981) Moot Court Competition.
Admitted to bar, 1981, Illinois
Author of amicus brief on behalf of Illinois Manufacturers Association; Illinois Construction Industry Committees; and Illinois Insurance Association in Sylvester v. Industrial Comm’n, 197 Ill.2d 225, 756 N.E.2d 822 (Ill. 2001), seminal Supreme Court Decision on average weekly wage.
PROFESSIONAL ACTIVITIES:
Frequent lecturer to numerous groups on history, interpretation, and application of the Illinois Workers’ Compensation Act, The Americans with Disabilities Act, and the Family Medical Leave Act. JOHN P. CONNOLLY (Partner)
EXPERIENCE:
Admitted to Bar, 1984; Illinois and U.S. District Court Northern District of Illinois;
Martindale Hubbell rating: A.V.
Emphasis in defense of workers’ compensation, employer liability, insurance coverage, premises liability, professional liability, and Appellate experience;
Admitted to Trial Bar of the United States District Court for the Northern District of Illinois
Arbitrator, Circuit Court of Cook County Mandatory Arbitration Program, 1992-Present;
EDUCATION:
Loyola University of Chicago (B.A., 1981); DePaul University College of Law (J.D., 1984);
PROFESSIONAL ACTIVITIES:
Lecturer to insurance industry and self-insured clients on various topics of employer liability, workers’ compensation and employment law;
Member, Illinois Association of Defense Trial Counsel, 1992-Present;
Member, Illinois Association of Defense Trial Counsel Seminar Planning Committee, 1994-1997;
Member, Illinois State Bar Association;
Member, Illinois State Bar Association; Workers’ Compensation Law Section Council (1996- Present);
Member, American Bar Association;
Member, Workers’ Compensation Lawyers Association (1990-Present);
REPORTED CASES:
Hayden v. Illinois Industrial Commission, 214 Ill.App.3d 749 (1st Dist. 1991) Roadside v. Miller, 220 Ill.Dec. 724, 673 N.E.2d 1145 (2nd Dist. 1996)
BEVERLY N. MASUDA (Partner)
EXPERIENCE:
Admitted to bar, 1981, Illinois and U.S. Federal Court, Northern District of Illinois;
Engaged in trial and appellate practice before the common law courts and the Illinois Industrial Commission;
Martindale-Hubbell rating A.V.;
1989-1990, Commissioner, Illinois Industrial Commission;
Lecturer to Chicago Bar Association, Illinois Trial Lawyers Association, Illinois State Bar Association, Council on Education in Management, insurance companies, claims associations, corporations, and the commissioners, arbitrators, and legal staff of the Illinois Industrial Commission on various topics involving workers’ compensation issues and the inter-relationship between workers’ compensation and common law cases;
Author, “When Are Employers Liable for Non-Work and ‘Excluded’ Injuries?” presented to the Council on Education in Management, February 15, 1996 and June 7, 1996;
Author, “Claims Based Upon Stress and Mental Disabilities,” presented to the Council on Education in Management, August 18, 1998;
Retained as legal expert for Kotecki opinions;
Retained for legal opinion and testimony in legal malpractice cases.
EDUCATION:
University of Hawaii, Honolulu, Hawaii (B.A., 1974);
Illinois Institute of Technology Chicago-Kent College of Law, Chicago Illinois (J.D., 1981).
PROFESSIONAL ACTIVITIES:
Member, Workers’ Compensation Lawyers Association Board of Directors, 1992 to 2000;
Illinois State Bar Association. ANDREW R. MAKAUSKAS (Partner)
EXPERIENCE:
Admitted to bar, 1991 Illinois and U.S. District Court, Northern District of Illinois;
Engaged in Corporate Defense Litigation with emphasis on Product Liability, Employer Liability, Premises Liability and Insurance Coverage;
Author, “Erosion of Limited Employer Liability And Its Impact on Insurance Coverage,” presented to the Workers’ Compensation Claims Association;
Author, “Effective Handling Of Employer Liability Cases,” presented to Accident Fund Insurance Company;
Author, “Subrogation Rights and Third-Party Exposure,” presented to Secura Insurance;
Arbitrator, Circuit Court of DuPage County, Mandatory Arbitration Program.
EDUCATION:
University of Michigan (B.A., 1988);
University of Illinois College of Law (J.D., 1991);
PROFESSIONAL ACTIVITIES:
Lecturer to Corporations and the Insurance Industry on various topics of Employer Liability and Workers’ Compensation;
Member,
Illinois Defense Counsel
Defense Research Institute
DuPage County Bar Association
JULIA B. McCARTHY (Partner, Bloomington-Normal Office)
EXPERIENCE:
Admitted to Illinois Bar 1987;
Practice concentrated in workers’ compensation defense since 1987;
1995 - 2000: House counsel for EBI Companies, Bloomington, Illinois Defense of Workers’ Compensation cases through Central and Southern Illinois
1991 - 1995: Claims attorney, Country Mutual Insurance, Bloomington, Illinois Managed Workers’ Compensation cases through Illinois and Civil cases in Lake County, Illinois. Training presentations to claims personnel, underwriting, and agents on Workers’ Compensation issues.
1987 - 1991: Associate, Wiedner & McAuliffe, Ltd., Chicago, Illinois Defense of workers’ compensation cases from arbitration through Appellate Court
EDUCATION:
Loyola University School of Law (J.D., 1987)
St. Ambrose College - B.S. Business Administration (1982)
PROFESSIONAL ACTIVITIES:
Illinois State Bar Association
Workers’ Compensation Claims Association Board of Directions, 1996 - 2000 Central Illinois Program Committee, 1995 - 1998 PETER J. STAVROPOULOS (Partner)
EXPERIENCE:
Admitted to Bar, 1996; Illinois and U.S. District Court Northern District of Illinois.
2001 - Present Brady, Connolly & Masuda, P.C. All aspects of Workers’ Compensation Defense.
1998 - 2001 Anesi, Ozmon, Rodin Novak, & Kohen, LTD. All aspects of Workers’ Compensation practice, including trial and appellate work.
1996 - 1998 Law Offices of Alan Sangiacomo: Civil Litigation in State Court, focusing on personal injury. Jury trial in Law Division, over 30 Mandatory Arbitration Hearings.
EDUCATION:
Northeastern Illinois University, Chicago, Illinois (B.A., 1992);
The John Marshall Law School, Chicago, Illinois (J.D., 1996).
PROFESSIONAL ACTIVITIES:
Member, Workers’ Compensation Lawyers Association;
Member, Illinois Trial Lawyers Association;
Member, American Trial Lawyers Association;
Member, Hellenic Bar Association;
Member, Illinois State Bar Association;
Member, American Bar Association
VALERIE J. PEILER (Partner)
EXPERIENCE:
Admitted to Bar, 1981: Illinois and U.S. District, Court Northern District of Illinois.
Arbitrator, Illinois Workers’ Compensation Commission, conducting pre-trials and litigation in workers’ compensation matters.
Hearing Examiner, Illinois Commerce Commission, conducting evidentiary hearings in cases pertaining to utility regulation and consumer complaints.
Assistant Attorney General, Office of the Attorney General of the State of Illinois, handling appellate matters for all constitutional officers and administrative agencies in the State of Illinois in the Appellate Court and Supreme Court of Illinois and the United States Seventh Circuit Court of Appeals.
Director, Research Department of the Third District Appellate Court, preparing and supervising the preparation of appellate court decisions in civil and criminal matters.
EDUCATION:
IIT/Chicago-Kent College of Law (J.D., 1981)
Valparaiso University (B.A.S.W., 1974)
PROFESSIONAL ACTIVITIES:
Member, Illinois Industrial Commission Arbitrators Association (1990-2002)
President, Illinois Industrial Commission Arbitrators Association
Treasurer, Illinois Industrial Commission Arbitrators Association ROBERT J. WINSTON (Partner)
EXPERIENCE:
2004 Brady, Connolly & Masuda, P.C., Chicago, Illinois (Partner)
1997 - 2004 Pretzel & Stouffer, Chartered, Chicago, Illinois (Partner) 1993 - 1997 Jerome G. McSherry & Associates, Chicago, Illinois (Senior Trial Attorney) 1987 - 1993 Brenner & Moltzen, Ltd., Chicago, Illinois (Senior Associate)
1985 - 1986 Kelly, Olson, Pusch, Rogan & Siepker, Chicago, Illinois (Associate)
EDUCATION:
Ohio State University College of Law (J.D., June 1984)
Ohio State University (B.A. History, cum laude, 1980)
PROFESSIONAL ACTIVITIES:
Member of the Illinois State Bar Association. Sections: Construction, Medical Negligence, and Products Liability.
Bar Admissions:
1997 United States Court of Appeals for the Seventh Circuit
1984 United States District Court, Eastern District of Ohio
1985 United States District Court, Northern District of Illinois
1985 Illinois Supreme Court
1984 Ohio Supreme Court
More than twenty first chair verdicts to date in favor of the client in the areas of construction, medical malpractice and automobile.
More than eighty arbitrations to date, tried before the Circuit Court of Cook County and the American Arbitration Association.
MICHAEL BRANDOW (Associate)
EXPERIENCE:
Admitted to Bar, Illinois, 1981 U.S. District Court, Northern District of Illinois, 1981 Central District of Illinois, 1981 Southern District, 1985.
Mr. Brandow brings twenty years of worker’s compensation experience.
2004 to Present: Associate, Brady, Connolly & Masuda, P.C., Workers’ Compensation Defense
2002 to 2004: Law Office of John E. Mitchell, P.C., Workers’ Compensation Defense in all areas
1999 to 2002 Smith Hughes Brandow, Ltd., Partner
1989 to 1999 Personal Injury firm, Associate, concentrating in plaintiff’s personal injury cases and petitioner’s worker’s compensation cases; social security and estate matters, experience in both jury and bench trials.
1986 to 1989 Peoria County State’s Attorney Office - Assistant. Prosecution of Misdemeanor, D.U.I. and traffic cases.
1981 to 1986 Michael K. Brandow - Sole Practitioner, General Practice.
EDUCATION:
John Marshall Law School, 1981 Bradley University, 1976
PROFESSIONAL ACTIVITIES:
Peoria Bar Association WILLIAM D. BREWSTER (Associate)
EXPERIENCE:
Admitted to Bar, Illinois Supreme Court, May 1992 Admitted to Bar, Northern District of Illinois, June 1992
2003 - Present Associate, Brady, Connolly & Masuda. All aspects of workers’ compensation defense.
1996 - 2003 Associate, Inman & Fitzgibbons, Ltd. Concentrating in the areas of workers’ compensation, general insurance defense and employers liability. 1993 - 1996 Associate, Brilley & Lake. Practiced in the areas of personal injury, insurance defense, subrogation, medical malpractice, workers’ compensation and general law. Handled all aspects of civil and commercial litigation from client interviews through trial. Fourth District Appellate practice.
1992 - 1993 Associate, Barinholtz, Holzman & Gault. Experience with general practice firm in all areas including personal injury, insurance defense and workers’ compensation.
EDUCATION:
The John Marshall Law School: Juris Doctor Degree Conferred January, 1992 University of Illinois: Bachelor of Arts Degree Conferred May, 1988
PROFESSIONAL ACTIVITIES:
Member, Workers’ Compensation Lawyers Association Member, Illinois Trial Lawyer Association CARRIE A. BUDZIEN (Associate)
EXPERIENCE:
Admitted to Bar, Illinois Supreme Court - 2005 Admitted to Bar, U.S. District Court Northern District of Illinois - 2006
2005 - Present: Associate. Brady, Connolly & Masuda, P.C.
2004: Clerk. Milwaukee County Circuit Court, Felony Division, Wisconsin.
2004: Clerk. Office of the District Attorney, Milwaukee, Wisconsin.
2003: Clerk. Office of the Illinois Attorney General, Chicago, Illinois.
EDUCATION:
Loyola University Chicago School of Law (J.D., 2005)
University of Wisconsin (B.B.A., 2002)
PROFESSIONAL ACTIVITIES:
Member, Chicago Bar Association
Member, Illinois State Bar Association
Member, Illinois Association of Defense Trial Counsel
Member, American Bar Association KELLY N. GROSS (Associate)
EXPERIENCE:
Admitted to Bar, Illinois and U.S. District Court of Northern Illinois, 2001.
2003 to Present: Associate-Brady, Connolly & Masuda, P.C., civil litigation, insurance defense.
2002: Associate-Jacobson & Riseborough, construction insurance defense.
2000-2001: Clerk-Kralovec, Jambois & Schwartz, personal injury and wrongful death.
1998: Independent study: “The Limits of Menominee Culture on Implementation of Federal Law.”
1997-1998: Interned with the United States Attorney’s Office of the Eastern District of Wisconsin, Victim Witness Unit and Menominee Indian Reservation.
EDUCATION:
Marquette University, Milwaukee, Wisconsin (1994-1998): B.A., Summa Cum Laude, Phi Beta Kappa.
Thames Valley University, Ealing, London, England (1997): Criminology.
Loyola University Chicago School of Law, Chicago, Illinois (1998-2001): J.D.
PROFESSIONAL ACTIVITIES:
Member, Chicago Bar Association
Member, Illinois Bar Association
Member, American Bar Association
Member, Association of Trial Lawyers of America
Member, Illinois Association of Defense Trial Counsel
Member, Phi Alpha Delta Legal Fraternity
Member, Phi Delta Phi Legal Fraternity ROBERT A. HOFFMAN (Associate)
EXPERIENCE:
2004 Brady, Connolly & Masuda, P.C.
2001 - 2004 Office of the Illinois Attorney General (Assistant Attorney General [2004], Regional Director - East Central Illinois [2002 - 2004], Assistant Attorney General [2001 - 2002])
1989 - 2001 Thomas, Mamer & Haughey, Champaign, Illinois (Partner [1993 - 2001] Associate [1989 - 1992])
1983 - 1989 Ryan, Cini & Bennett, Mattoon, Illinois (Associate)
1978 - 1983 Hayes & Moore, Champaign, Illinois (Associate)
EDUCATION:
John Marshall Law School, Chicago, Illinois (J.D., 1977)
University of Illinois, Chicago, Illinois (B.A., 1974)
PROFESSIONAL ACTIVITIES:
Member of the Illinois and Champaign County Bar Associations and the Illinois Defense Counsel.
1998 - Present Member of the Illinois State Bar Association Section Counsel for Workers’ Compensation
1985 - 1989 Member of the Illinois State Bar Association Section Counsel for Civil Practice and Procedure
Lecturer for Illinois State Bar Association and private businesses on Workers’ Compensation matters SHANNON K. OWEN (Associate)
EXPERIENCE:
Admitted to Bar, Illinois Supreme Court - 2005
2005 - Present: Associate. Brady, Connolly & Masuda, P.C. Workers’ Compensation Defense
EDUCATION:
University of Illinois, Champaign-Urbana, College of Law (J.D., 2005)
Loyola University, Chicago (B.A., 2001)
PROFESSIONAL ACTIVITIES:
Member, Chicago Bar Association
Member, Illinois Bar
PAUL W. PASCHE (Associate)
EXPERIENCE:
Admitted to Bar, Illinois, 1991 U.S. District Court, Northern District of Illinois (General), 1991 U.S. District Court, Northern District of Illinois (Trial Bar), 1993 U.S. Court of Appeals (7th Circuit), 1994
2001 - Present Associate, Brady, Connolly & Masuda, P.C. All aspects of workers' compensation defense.
1995 - 2001 Associate, Anesi, Ozmon, Rodin, Novak & Kohen. All aspects of claimant's workers' compensation, social security disability, and police/fire pension fund litigation.
1993 - 1995 Associate, Bernard R. Nevoral & Associates. All aspects of plaintiff's personal injury and workers' compensation litigation and appeals in state and federal courts.
1991 - 1992 Associate, Presbrey & Amoni. All aspects of workers' compensation and general civil practice.
EDUCATION:
Valparaiso University: B.S. (Psychology), 1988 J.D., 1991
PROFESSIONAL ACTIVITIES:
Practice concentrated in workers' compensation and related areas of law since 1991. Frequent lecturer and author on workers' compensation issues for various bar associations, professional organizations, insurance companies, and civic groups. Member of Illinois State Bar Association (Workers' Compensation Section), Workers' Compensation Lawyers' Association, Illinois Association of Defense Trial Counsel, Defense Research Institute.
REPORTED CASES:
Gilbert v. Sycamore Mun. Hospital, 156 Ill.2d 511, 622 N.E.2d 788 (1993) Ratledge v. Industrial Commission, 311 Ill.App.3d, 726 N.E.2d 134 (2000) RAYMOND C. PERSIN (Associate)
EXPERIENCE:
2002 - Present Associate, Brady, Connolly & Masuda, P.C. All aspects of workers' compensation defense.
1990 - 2002 American International Group - Senior Trial Attorney and Managing Attorney (1998 - 2002) for Chicago staff counsel office. Concentration in construction accidents and other complex civil and workers’ compensation litigation.
1984 - 1990 Sole practitioner having a general practice with concentration in all forms of personal injury litigation.
1982 - 1984 Leonard M. Ring & Associates. Trial Attorney concentrating in representing plaintiffs and petitioners in complex litigation and significant injury cases. Represented insurance carriers in RICO actions against accountants and insurance brokers.
1979 - 1982 Associate Attorney with private firms concentrating in all forms of civil and workers’ compensation litigation.
EDUCATION:
Norwich Military University, Northfield, Vermont (B.A., 1976)
Vermont College, Montpelier, Vermont (A.S., 1976)
John Marshall Law School, Chicago, Illinois (J.D., 1979)
PROFESSIONAL ACTIVITIES:
Certified Arbitrator for the Circuit Court of Cook County, Mandatory Arbitration Program;
Volunteered time as Chairperson of an Inquiry Panel (1984 - 1987) and as Hearing Officer (1987 - 1993) with the Illinois Supreme Court Attorney Registration and Disciplinary Commission;
Faculty member for AIG Workers’ Compensation College from 1997 - 2002. ELENI POLALIS (Associate)
EXPERIENCE:
2007 - Present: Associate. Brady, Connolly & Masuda, P.C.
January, 2006 - April, 2006: Clerk. Illinois Attorney General’s Office, Workers’ Compensation Bureau.
October, 2005 - April, 2006: Clerk. Cook County State’s Attorney’s Office, Narcotics Division, Illinois.
Admitted to Bar, Illinois Supreme Court – 2006.
EDUCATION:
The John Marshall Law School, Chicago, Illinois (J.D., 2006).
Loyola University, Chicago, Illinois (B.A., 2002).
PROFESSIONAL ACTIVITIES:
Member, Chicago Bar Association.
Member, Illinois State Bar Association.
Member, American Bar Association.
Member, Hellenic Bar Association.
RYAN M. REGAN (Associate)
EXPERIENCE:
2006 – Present Associate. Brady, Connolly & Masuda, P.C.
2006 Associate. Law Offices of Bradley S. Dworkin
Admitted to Bar, Illinois Supreme Court - 2005
Admitted to Bar, U.S. District Court Northern District of Illinois - 2006
EDUCATION:
Saint Louis University School of Law (J.D., 2005)
University of Notre Dame (B.A., 2002)
PROFESSIONAL ACTIVITIES:
Member, Chicago Bar Association.
Member, Illinois State Bar Association.
Member, American Bar Association.
MATTHEW P. SHERIFF (Associate)
EXPERIENCE:
2005 – Present Brady, Connolly & Masuda, P.C. All aspects of Workers’ Compensation Defense
2001 - 2005 Power & Cronin, Ltd. All aspects of Workers’ Compensation Defense.
1995 - 2001 Pollina & Earl. Specializing in automobile personal injury defense, including 15 jury trials and over 200 mandatory Arbitration Hearings.
Admitted to Illinois Bar, 1994; Admitted to Missouri Bar, 1993.
EDUCATION:
Washington University School of Law, St. Louis, Missouri (J.D., 1993)
University of Iowa (B.A., 1990)
PROFESSIONAL ACTIVITIES:
Member of the Illinois State Bar Association.
Member of the Missouri State Bar Association.
Certified Cook County Mandatory Arbitrator. MARK F. VIZZA (Associate)
EXPERIENCE:
Admitted to Bar, Illinois, 1981 U.S. District Court, Northern District of Illinois, 1981. U.S. Court of Appeals, 7th Circuit, 1981
2003 to Present: Associate, Brady, Connolly & Masuda, P.C., Workers’ Compensation Defense
Mr. Vizza brings sixteen years of workers’ compensation experience. He headed the Workers’ Compensation Practice Group for Querrey & Harrow, Ltd, and served as a Trial Attorney for American International Group handling various workers’ compensation matters. He also served as both an Assistant Attorney General in the Industrial Commission Division and Special Assistant Attorney General in the Medicaid Fraud Division.
EDUCATION:
DePaul University College of Commerce, B.S.C., 1978 DePaul University College of Law, J.D., 1981
PROFESSIONAL ACTIVITIES:
Member, Federal Trial Bar Member, Workers’ Compensation Lawyers Association
OTHER:
Arbitrator, Cook County Mandatory Arbitration Program Investigator, Chicago Bar Association Judicial Evaluation Committee, 2000 - 2002 Board of Directors, Chicago Legal Clinic, 2000 - 2002 Arbitrator for various insurance carriers in Un-Insured matters and Under-Insured matters Brady, Connolly & Masuda, P. C. Brady, Connolly & Masuda, P. C.
One N. LaSalle Street, Suite 1000 705 E. Lincoln, Suite 202 One N. LaSalle Street, Suite 1000 705 E. Lincoln, Suite 202 Chicago, IL 60602 Normal, Illinois 61761 Chicago, IL 60602 Normal, Illinois 61761 (312) 425-3131 (309) 862-4914 (312) 425-3131 (309) 862-4914
MEDICARE QUICK SUMMARY CARD MEDICARE QUICK SUMMARY CARD
REPORT ALL ILLINOIS WORKERS’ COMPENSATION REPORT ALL ILLINOIS WORKERS’ COMPENSATION CASES IF PETITIONER IS RECEIVING MEDICARE: CASES IF PETITIONER IS RECEIVING MEDICARE:
✓ Send first report of WC case to: ✓ Send first report of WC case to:
Medicare - Coordination of Benefits Contractor Medicare - Coordination of Benefits Contractor MSP Claims Investigation Project MSP Claims Investigation Project P.O. Box 5041 P.O. Box 5041 New York, NY 10274-5041 New York, NY 10274-5041
✓ What to include in report: ✓ What to include in report:
□ Petitioner’s name, address, age, telephone & SSN □ Petitioner’s name, address, age, telephone & SSN □ Petitioner’s attorney’s name, address & telephone □ Petitioner’s attorney’s name, address & telephone □ Name of employer, WC carrier, attorney data □ Name of employer, WC carrier, attorney data □ Written authorization from petitioner to CMS □ Written authorization from petitioner to CMS □ Date of injury and type of injury/illness □ Date of injury and type of injury/illness □ Brief description of recommended treatment □ Brief description of recommended treatment □ Diagnosis codes (ICD), if known □ Diagnosis codes (ICD), if known
✓ Contact the Illinois CMS contractor to find out if ✓ Contact the Illinois CMS contractor to find out if Medicare already paid conditional payments (lien): Medicare already paid conditional payments (lien):
AdminaStar Federal – MSP Liability Unit AdminaStar Federal – MSP Liability Unit 225 N. Michigan Avenue, 22nd Floor 225 N. Michigan Avenue, 22nd Floor P.O. Box 812912 P.O. Box 812912 Chicago, IL 60601 Chicago, IL 60601
IDENTIFY ILLINOIS W.C. CASES REQUIRING A IDENTIFY ILLINOIS W.C. CASES REQUIRING A MEDICARE SET-ASIDE (W.C.M.S.A.) AS PART OF MEDICARE SET-ASIDE (W.C.M.S.A.) AS PART OF SETTLEMENT: SETTLEMENT:
✓ Class 1: Petitioner is a current Medicare beneficiary ✓ Class 1: Petitioner is a current Medicare beneficiary AND settlement more than $10,000 AND settlement more than $10,000
-OR- -OR-
✓ Class 2: Reasonable expectation of claimant’s ✓ Class 2: Reasonable expectation of claimant’s Medicare enrollment within 30 months AND Medicare enrollment within 30 months AND settlement amount is greater than $250,000 settlement amount is greater than $250,000
✓ Where to send request for approval (Illinois cases): ✓ Where to send request for approval (Illinois cases):
Centers for Medicare and Medicaid Services Centers for Medicare and Medicaid Services c/o Coordination of Benefits Contractor c/o Coordination of Benefits Contractor P.O. Box 660 P.O. Box 660 New York, NY 10274-0660 New York, NY 10274-0660 ATTN: WCMSA Proposal ATTN: WCMSA Proposal
CMS website: http://www.cms.hhs.gov/ CMS website: http://www.cms.hhs.gov/ CHECKLIST FOR W.C.M.S.A. PROPOSAL: CHECKLIST FOR W.C.M.S.A. PROPOSAL:
✓ Required Information for Cover Letter to CMS ✓ Required Information for Cover Letter to CMS □ Petitioner’s name, address, birth date, telephone & SSN □ Petitioner’s name, address, birth date, telephone & SSN □ Entitlement information (Part A or B; expectation basis) □ Entitlement information (Part A or B; expectation basis) □ Petitioner’s attorney’s name, address & telephone □ Petitioner’s attorney’s name, address & telephone □ Employer, WC carrier, attorney addresses & telephone □ Employer, WC carrier, attorney addresses & telephone □ Date of injury □ Date of injury □ Type of injury/illness (with diagnosis codes (ICD-9)) □ Type of injury/illness (with diagnosis codes (ICD-9)) □ Description of total WC settlement □ Description of total WC settlement □ Proposed WC Medicare Set-aside Arrangement (WCMSA) □ Proposed WC Medicare Set-aside Arrangement (WCMSA)
✓ Documents to submit to CMS (required items in bold) ✓ Documents to submit to CMS (required items in bold) □ Written authorization from petitioner to CMS □ Written authorization from petitioner to CMS □ Life Expectancy Statement □ Life Expectancy Statement ·Rated age as documented by life insurance company, or ·Rated age as documented by life insurance company, or ·Centers for Disease Control website: ·Centers for Disease Control website: http://www.cdc.gov/nchs/data/nvsr/nvsr51/nvsr51_03.pdf http://www.cdc.gov/nchs/data/nvsr/nvsr51/nvsr51_03.pdf □ Life care plan (for extensive/serious injuries/diseases) □ Life care plan (for extensive/serious injuries/diseases) □ Copy of proposed IWCC settlement contract (include □ Copy of proposed IWCC settlement contract (include attorney fees/costs, itemize all categories of settlement) attorney fees/costs, itemize all categories of settlement) □ Current medical treatment/WC benefits records □ Current medical treatment/WC benefits records ·Petitioner’s current health condition (state if stabilized) ·Petitioner’s current health condition (state if stabilized) ·Medical records for past 2 years (or from injury date) ·Medical records for past 2 years (or from injury date) ·Relevant prior medical history/pre-existing conditions ·Relevant prior medical history/pre-existing conditions ·Itemization of all WC benefits paid to date ·Itemization of all WC benefits paid to date □ Future Medical Requirements □ Future Medical Requirements ·Anticipated treatment (specify details with ICD-9 codes) ·Anticipated treatment (specify details with ICD-9 codes) ·Report or recommendations of treating physician(s) ·Report or recommendations of treating physician(s) ·Living/housing costs impacting settlement ·Living/housing costs impacting settlement ·Anticipated Medicare-covered costs of treatment ·Anticipated Medicare-covered costs of treatment ·Anticipated non-covered costs of treatment ·Anticipated non-covered costs of treatment ·If no further treatment necessary, support with ·If no further treatment necessary, support with physician report stating so. physician report stating so. □ Petitioner’s Medical Recovery Prognosis □ Petitioner’s Medical Recovery Prognosis ·Expected recovery: full or partial ·Expected recovery: full or partial ·Projected recovery period and MMI date ·Projected recovery period and MMI date ·Possibility of medical deterioration ·Possibility of medical deterioration □ WC Settlement Amount Allocated for Medical Benefits □ WC Settlement Amount Allocated for Medical Benefits ·If no allocation, specify reasons ·If no allocation, specify reasons ·Separately identify non-Medicare vs. Medicare-covered ·Separately identify non-Medicare vs. Medicare-covered future expenses, and how long each will be needed future expenses, and how long each will be needed ·Specify calculations, including future cost projections ·Specify calculations, including future cost projections □ Proposed WCMSA Amount (can be “zero set-aside”) □ Proposed WCMSA Amount (can be “zero set-aside”) ·Specify basis for proposal, including computations ·Specify basis for proposal, including computations □ Designated Administrator of WCMSA □ Designated Administrator of WCMSA ·If petitioner is not the administrator, include address ·If petitioner is not the administrator, include address □ WCMSA Account Information □ WCMSA Account Information ·Specify administrative fees charged to arrangement ·Specify administrative fees charged to arrangement ·Specify that arrangement is interest bearing ·Specify that arrangement is interest bearing □ Final approval by Industrial Commission □ Final approval by Industrial Commission ·After CMS authorizes proposal in writing, copy of IWCC- ·After CMS authorizes proposal in writing, copy of IWCC- approved settlement contracts must be sent to CMS. approved settlement contracts must be sent to CMS.
©2007 Brady, Connolly & Masuda, P.C. ©2007 Brady, Connolly & Masuda, P.C.