10-10-2017; Odd Effort to Slash Claimant Attorney’s Fees on $300K+ Settlement Rebuffed by Courts; Shiny New Website for IL WC Commission, as Part of E-Filing Efforts and more

Synopsis: Effort to Slash Claimant Attorney’s Fees on $300K+ Settlement Smoothly Rebuffed by IWCC and IL Courts.

Editor’s comment: We agree with this outcome and dislike these sorts of shenanigans. This claim involved three of Illinois’ more prominent and successful Claimant firms that KCB&A respects as solid advocates for the injured workers they diligently represent. The firms handled the work comp aspect of a personal injury claim and at settlement, Claimant and current counsel tried to basically cut them all out of any fees for their work. While we are a defense firm, we always struggle to see solid Claimant firms do lots of work in claims with combined WC and PI issues to then have Claimants and personal injury plaintiff attorneys try to inappropriately strip them of even reasonable fees for their work.

Last week, in Joiner v. IWCC (Ceco Concrete Construction), No. 1-16-1866WC, issued 09/29/2017, Claimant Joiner filed a workers’ compensation claim in November 2008, with the assistance of attorney Neal Wishnick of Sostrin & Sostrin. After around two years of work by the Claimant attorney, in June 2010, Joiner discharged Wishnick and hired Andrew Leonard of the Leonard Law Group.

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

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

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

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

Nine days after Joiner fired Fishel, he entered into a settlement agreement with his employer. The terms of the agreement provided that Joiner was accepting gross payment of $750,000 with $430,000 to be paid by a third-party defendant and $320,000 to be paid by his employer in exchange for a dismissal of his civil action. At that time, the IWCC computer indicates a fourth advocate who was a PI specialist represented Claimant.

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

After Joiner agreed to the settlement, Claimant’s attorney advised his prior attorneys of a hearing for Arbitrator’s approval of the deal. In the letter, Counsel for Plaintiff appears to have offered  "20% of $1” or .20 cents under the terms of the IWCC fee agreement with Claimant. At the same time, current counsel for Joiner offered to pay Fishel $10,000 for her services, as a "professional courtesy,” if Fishel did not object to the WC or PI settlement.  Fishel declined the offer.

At the hearing, Arbitrator Kane determined attorney’s fees due each of Joiner’s comp attorneys would be calculated using the employer’s $320,000 contribution to the settlement. He further ruled since Claimant entered into agreements with each of his comp attorneys providing for a 20% fee, the Arbitrator ruled the three attorneys were collectively entitled to $64,000, representing 20% of the employer’s $320,000 contribution. Arbitrator divided that value into thirds and ordered Claimant and counsel to pay Sostrin, Leonard, and Fishel $21,333.33 each within 30 days of receipt of the settlement proceeds.

Joiner then fired Attorney Number Four! He then hired a new workers' compensation attorney and they filed a Petition for Review of Arbitrator Kane's decision as to the fees owed to his three prior attorneys.

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

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

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

The Appellate Court, WC Division said Illinois case law established strict compliance with obtaining a statutory appeal bond is required to vest subject-matter jurisdiction in the Circuit Court (and reviewing courts thereafter). If the bond is not obtained from an appropriate bonding company, the Appellate Court said, the Circuit Court had no jurisdiction to review a Commission decision. The Appellate Court, WC Division added the language Section 19(f)(2) makes it clear the appeal bond requirement applies to anyone the Commission has found liable for the payment of money, not just employers. “No rule of statutory construction authorizes us to declare that the Legislature did not mean what the plain language of the statute imports, nor may we rewrite a statute to add provisions or limitations the Legislature did not include,” the Appellate Court, WC Division said.

The Appellate Court also said it was not persuaded by Claimant’s argument the Commission lacked jurisdiction to award $64,000 in fees to his prior attorneys when he supposedly settled his workers’ compensation claim for $1. The Appellate Court, WC Division said the Circuit Court could not have considered this argument, since the Circuit Court lacked jurisdiction to consider this case. The Court’s members also agreed they could not decide the issue either but suggested the Commission’s award was appropriate, since the Commission has statutory authority to fix the amount of any fee payable to an attorney in a workers’ compensation case.

To read the decision, click here. We appreciate your thoughts and comments. Please post them on our award-winning blog.

Synopsis: IL Work Comp Commission Heralds Shiny New Website and E-Filing is Coming to a Computer Near You Soon.

Editor’s comment: The Illinois Workers’ Compensation Commission has unveiled their new website as the first phase of their effort to modernize and completely discontinue the use of paper documents with an online “portal” for filing e-claims and judicial documents.

The nice new website replaced the old home page that forced IL WC system participants to use a search engine to navigate. The new home page has six prominent buttons to direct the public and system users to needed information.

Titled the Digital Transformation Project, the next phase is an electronic filing system currently being designed by WorkComp Strategies in a two-year, $807,000 program, said the firm’s founder, Matthew Bryant. “We’ve been meeting with stakeholders such as insurance companies, the Illinois Chamber of Commerce, attorneys and arbitrators to find out their e-filing requirements. Phased implementation will be starting in January. Small portions will come online in the course of the next year,” Bryant said. “Our goal is to have most of the e-filing capabilities completed by the end of the next calendar year,” he said.

First up will be the e-filing of judiciary documents, including the submission and approval of draft settlement contracts. Those forms have always been called “pinks,” he said, because they were created and required to be delivered for approval by the IL WC Commission on pink paper. The colored paper thing was probably an analog effort to streamline technology from way back in the 50’s or 60’s. Most of the good ole “Industrial Commission” forms were on different colored paper.

“E-filing of pinks is a big deal in Illinois,” Bryant said. “That will be an online process. We’ll then do the rest of the judiciary stuff. Then first reports of injury and subsequent reports of injury will go online around the beginning of 2019. We’re also going to e-file self-insurance applications and claims for the Rate Adjustment Fund.”

The Rate Adjustment Fund was created in 1975 to pay cost-of-living increases to permanently and totally disabled workers or survivors of workers killed on the job. RAF payments are funded by payers and end when eligibility for PTD or survivor’s benefits cease. I am not shy to tell my readers I abhor the RAF and consider it one fashion in which Illinois hugely over-compensates some injured workers. Happy to explain to anyone that is interested.

Illinois currently allows the submission of only first reports of injury electronically through Release 1.0 by the International Association of Industrial Accident Boards and Commissions, but will move that process to the new e-system next year.

WorkComp Strategies is helping IWCC regulators get ready for procurement early next year of software vendors to take on small-scale projects that will contribute to overall web portal development and system integration, Bryant said.

Gov. Bruce Rauner created DoIT by executive order on Jan. 25, 2016, to modernize the information technology functions of every executive branch agency. Illinois has merged 38 IT silos under one roof — DoIT.

“It is past time for the Commission to update to today’s technology,” IWCC Chairwoman Joann Fratianni said in a press release a year ago. “Instead of having rooms and warehouses filled with millions of paper files, our new online record-keeping will help us significantly improve customer service, save costs and make the entire workers’ comp process more efficient.”

When completed by late 2021, the Commission’s new e-filing system will replace systems that are four decades old.

All of the money for the Digital Transformation Project comes from a settlement fund created when the state agreed to resolve a lawsuit filed by the Illinois Chamber of Commerce over new business fees imposed by Gov. Rod Blagojevich, who remains imprisoned for unrelated corruption. Blagojevich increased the fees to plug a $5 billion shortfall in the budget.

Once implemented, DoIT will maintain the Commission’s e-filing system, which regulators say will come with many benefits: easy online filing of claims and forms, standardized electronic data interchange submissions, reduced paper processing and storage, decreased mailing costs, and the ability to analyze data and metrics.

While I hate to be the bearer of bad news, once all these new automations are in place, we have to hope this Agency will start to someday streamline their work force and save IL businesses and small governments money. Yes, it might happen.

We appreciate your thoughts and comments. Please post them on our award-winning blog.