10-6-2014; Does IL WC Really Want to Encourage/Reward Thieves?; "Hot Bin" Explosion Premises Liability Analyzed by Brad Smith, JD; The 800lb Pink Gorilla in Our Coming Election and more

Synopsis: Does the IL WC System Really Want to Encourage and Reward Thieves?

Editor’s Comment: As licensed Illinois attorneys and court-watchers, we confirm for our readers the strongest respect for the venerated members of our Appellate and Supreme Courts. The men and women on those judicial bodies are of the highest caliber and beyond reproach. They have to deal with civil litigation and criminal law at the highest level. They are entrusted with our safety and security in interpreting and creating our law.

That said, we consider the unexpected and odd turn that has occurred in IL workers’ compensation law and practice to be a problem for all judges, justices, lawyers and other participants in the system. This week, we read an appellate ruling which can only be characterized as surprising and unusual because it reverses the Commission and awards an admitted thief almost six months of temporary total disability benefits and almost completely ignores the crimes he committed. Having read the ruling several times, we don’t see any way to view this ruling in a fashion that doesn’t encourage and reward criminal behavior in the workers’ comp injury recovery process.

In Matuszcsak v. Workers’ Compensation Commission, No. 2-13-0532WC, issued September 30, 2014 Claimant worked for Wal-Mart for over three years as a full-time night stocker. His job duties included taking 5 to 100-pound boxes off skids and neatly placing products in proper areas. On March 7, 2010, there is no dispute Claimant injured his neck, back, and right arm at work when several fully stocked shelves of glass cleaner fell on top of him. On March 9, 2010, Claimant began seeking medical care. Thereafter, he received conservative treatment from various providers and was consistently given modified-duty work restrictions. Following his accident, Claimant returned to work for Wal-Mart in a light-duty capacity. On May 23, 2011, claimant saw Dr. Mark Lorenz, who recommended surgery on claimant’s cervical spine.

Claimant admitted under oath, on June 12, 2011, he was terminated from his employment at Wal-Mart for several incidents of theft wholly unrelated to his work injury. Thereafter, Claimant remained unemployed. On cross-examination Claimant agreed, at the time of his termination, he prepared a handwritten statement acknowledging he stole cigarettes from Wal-Mart on June 3, 2011, and on a “couple of days” in May 2011. He agreed, at the time he took the cigarettes, he understood that stealing is a crime and stealing from his employer could and did result in termination.

What is most challenging for our readers to contemplate, Claimant acknowledged under oath that, had he not repeatedly stolen cigarettes, he would still be working for Wal-Mart in a light-duty capacity at the time of arbitration. In effect, Petitioner admitted he should have been terminated for several crimes he committed. In states outside Illinois, when you admit you committed a serious crime, you lose your job and the pay that comes with it. In Illinois, it appears injured workers on light duty can lose their jobs for dangerous and anti-social behavior but keep the pay or benefits that come with the job, even though they have been fired. Claimant/Admitted Thief Wally Matuszcsak received an award of TTD amounting to over $7,550. As licensed Illinois lawyers sworn to uphold the Illinois Constitution and laws of this state, we completely disagree with this approach.

On January 25, 2012, the Arbitrator issued his decision and determined Claimant sustained accidental injuries and awarded

·         23-2/7 weeks TTD benefits from the date of termination for theft to the date of the Arbitration hearing;

·         $14,227.41 in medical expenses; and

·         Prospective medical expenses--the surgery recommended by Dr. Lorenz.

In awarding almost six months of TTD, the Arbitrator noted Claimant was subject to light-duty restrictions that were being accommodated by the employer at the time of his termination, Petitioner did not return to work elsewhere after being terminated, and Claimant testified he was looking for work within his restrictions. We note Respondent did not appear to demonstrate the availability of light work in the area around Petitioner’s home. From a defense perspective, we would have placed such evidence into the record either via lay or expert testimony.

The legal theory we consider flawed and lacking solid common sense comes from two closely related factual findings by the Arbitrator that follow the Illinois Supreme Court’s 2010 ruling in Interstate Scaffolding v. IWCC. The Arbitrator determined

1.    Claimant’s medical condition had not “stabilized at the time of arbitration” and

2.    Claimant had not reached maximum medical improvement or MMI.

In our view, those concepts are so closely aligned, they are effectively identical. When those factors were present in the record, the Arbitrator ruled temporary benefits were due on a continuing basis. Please understand Claimant’s condition was unquestionably “stable” to the extent he was able to perform light work and could have been doing so during the pendency of the litigation. The IWCC panel knocked out the TTD award in their decision, Judge Wheaton in DuPage County reinstated TTD and the Appellate Court affirmed reinstatement of 23+ weeks of TTD. In our view, the ruling of the Appellate Court, WC Division mandates an award of TTD as a “matter of law” without any regard for how egregious the conduct leading to termination might be.

The asserted lack of medical “stability” arises from the recommendation from a noted surgeon that a medical procedure needed to be performed at an unknown future time. The finding about maximum medical improvement or MMI is another aspect of dealing with IL WC law and practice—like medical stability, “maximum medical improvement” is a buzzword or legal term that doesn’t appear and isn’t defined in our IL WC Act or Rules Governing Practice. This means these two terms were judicially adopted or created and implemented by our reviewing courts. The courts can provide the definition of those not-particularly-clear terms, as they see fit. The problem with courts creating such concepts as “judicial legislation” is WC system participants only get the snapshot on the new legal terms that our courts provide on a relatively random and case-by-case basis—they have to wait for claims to reach them to outline their rulings based upon the new facts.

If you understand the basic precepts of workers’ compensation law, this relatively new and unprecedented legal requirement that TTD or lost time benefits are due until an injured worker reaches a medically stable situation or maximum medical improvement makes little sense to us. The term in the IL WC Act “temporary total disability” doesn’t appear to be challenging to interpret. To us, it means the worker can’t work at all due to a temporary, work-related medical condition. A significant percentage of workers with serious lost time injuries return to light work long before reaching a state of medical stability or maximum medical improvement. If you ask the great surgeons across our state, such as Dr. Michael I. Vender, Dr. Andrew S. Zelby or Dr. Brian J. Cole, they will confirm returning to light work following many serious injuries is an irreplaceable part of the medical recovery process. In short, if you can work light duty, you are no longer “temporarily totally disabled” from all work. We are also aware of a large number of workers who remain in light duty positions, awaiting approval or rejection of a request for surgery, as Plaintiff-Petitioner Matuszcsak did in the case we are reporting.

We ask all our readers including lawyers on both sides how it can make the slightest bit of common sense to reward a self-confessed thief who took himself out of the ongoing light work in the Wal-Mart work force for admittedly committing several crimes? Does anyone feel this is a good idea? We note the IWCC did not follow a “lock-step” approach in reaching their decision to award or deny TTD when someone on light work loses their jobs due to crimes. We salute these administrators for doing so. We note Plaintiff-Petitioner in the Interstate Scaffolding ruling did not admit to criminal behavior, as Claimant Matuszcsak did and there were many factual conflicts in the earlier claim—it was not clear-cut. We urge our reviewing courts to reconsider these rulings and give the great hearing officers at our Workers’ Compensation Commission the power to weigh such claims on their merits, particularly where clear evidence of criminal behavior is in the record.

The problem our IWCC Commissioners may have anticipated was what might have happened if Claimant Matuszcsak had committed a more serious crime and not just petty thefts. What if a worker on light duty “goes postal?” What if he/she killed, robbed or seriously injured an innocent victim? Would he or she still be entitled to TTD? What if they pled guilty and ended up in prison? Would they still be entitled to months or years of TTD benefits while behind bars? Does that make sense to anyone?

In our view, the ruling by the Appellate Court, WC Division in Matuszcsak which follows their view of the theories outlined by our Supreme Court in Interstate Scaffolding, has this significant legal concern. From our respectful view, if a Claimant on light duty in this state commits a job rule violation or misdemeanor or serious felony and thereby loses their job, these courts leave no “wiggle-room” for our administrators to deny TTD benefits. It is our further view such a strained legal rule rewards and thereby implicitly encourages Petitioners to commit crimes. It is our hope the Appellate Court, WC Division approves this claim for further review by our highest court and the members of that body take the case and provide the entire WC community with guidance on how to best handle such matters without implicitly or explicitly rewarding criminal behavior.

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

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Synopsis: Obtaining Expert Help For Premises Dangers Extinguishes Liability of Owner When The Expert’s Workers Are Injured. Analysis by Bradley J. Smith, JD. 

Editor’s Comment: In an intriguing and important premises-liability ruling that we consider required reading for risk managers, a recent opinion written by Judge Easterbrook, the federal Seventh Circuit Court of Appeals found a property owner was not liable for an independent contractor’s employees’ injuries, and further reversed the entry of punitive damages against the independent contractor. Please note this ruling may impact situations in which a safety engineer called to a premises to evaluate onsite dangers may not be able to sue the premises owner when they are injured due to the risk they were hired to prevent.

In Jentz v. ConAgra Foods, Inc., the problem was a “hot bin” or dangerous grain elevator. Explosions are a constant risk in grain storage, which produces not only a lot of combustible dust and carbon monoxide (which can oxidize explosively to carbon dioxide) but also, through the decay of a bin’s contents, heat that can set off a blast. In March 2010 ConAgra discovered a burning smell in bin C15, containing wheat pellets. ConAgra got in touch with West Side, which touts expertise in handling “hot bins.” ConAgra’s negotiations with West Side and its competitors delayed the start of work; West Side’s own busy schedule added to the delay.

Work finally began on April 20, 2010, and West Side hired A&J Bin Cleaning to do some of the necessary tasks. Two of the injured workers were employees of A&J; the third, Justin Becker, was employed by West Side itself. ConAgra wanted to salvage as much of the grain as possible, but as pellets were removed from the top more oxygen reached wheat composting at the bin’s bottom. West Side decided to remove some grain via side tunnels. On April 27, West Side employees detected smoke coming from the bin. Its crew sprayed water on the pellets and used an air lance to try to discover the smoke’s source; the effort failed. West Side’s foreman told ConAgra to call the fire department. Waiting for firefighters to arrive, the foreman for West Side  sent two of the Plaintiffs into a tunnel, instructing them to remove tools that might impair firefighters’ access. While they were there, the explosion occurred. They were severely injured in the blast.

After a seventeen (17) day trial, a jury awarded a whopping amount of nearly $180 million in compensatory and punitive damages against ConAgra Foods and West Side Salvage. ConAgra, which owned the facility, contended that liability rested on West Side, which it retained/hired the company to address the precise problems in the grain bin that led to the severe injuries to the West Side Salvage workers.. Both ConAgra and West Side contended the damages awarded were inappropriate and excessive. 

Normally, employees of an independent contractor cannot obtain damages from the owner of the premises at which the contractor or their employees were working. ConAgra contended Illinois law adopted the principle that someone who engaged an independent contractor to redress an unsafe condition is not liable when the feared dangerous event occurs.

West Side Salvage and the injured Plaintiffs unsuccessfully attempted to use the “firefighters’ rule.” However the Court quickly determined  West Side was not a volunteer, similar to a firefighter. In fact, they were hired to remediate the precise dangers leading to injuries. Accordingly, the normal rules of contract and tort law applied. Ultimately, the Seventh Circuit held ConAgra was not liable to these workers under tort law.

The Seventh Circuit also reasoned the $1 million punitive damages the jury ordered West Side to pay Jentz did not have proper evidentiary support. Particularly, under well-established Illinois law, an award of punitive damages requires willful and wanton conduct. The Seventh Circuit found the jury was presented with no evidence of willful and wanton conduct. 

Reasonably, contracting for help from an expert for a potential danger can and should shield a premises owner from liability if/when that feared dangerous event occurs.

This article was researched and written by Bradley J. Smith, J.D. Brad can be reached with any of your questions and concerns regarding general liability defense at bsmith@keefe-law.com.

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Synopsis: The 800lb Pink Gorilla in the Current Illinois State Election—Higher Income/Property Taxes Guaranteed with Doubling State and Chicago Government Pension Debt.

Editor’s comment: We are asking our readers a simple question—are you okay with Illinois state income taxes going to 8% on business income and personal income over $1M per year? Governor Quinn has already affirmed he wants state income tax to be 5% and House Speaker Madigan supports what we call the “Madigan-Hates-Millionaires-Tax” that will raise the top income tax rate in this state to 8%. Illinoisans are watching/listening to attack ads about silly things like nursing homes in 2003 and gift cards in 2005. No one appears to be addressing the major issues that are going to hit taxpayers very soon. Who can address any of it?

We are certain, if Governor Quinn is re-elected, significant state income tax hikes will happen next month, during the November veto session in our legislature. We will bet the legislation is already drafted. At the same time, Mayor Rahm Emanuel in Chicago is going to unleash millions in new property taxes that we assure you he is holding until the statewide election is over to avoid embarrassment to the Governor.

We just saw the Illinois Retail Merchants decide to sit on the fence and choose not endorse either candidate. We ask them to note an 8% income tax on their members is the equivalent of our State government grabbing one month or about 8% of gross annual income from all small, mid-sized and big businesses in our state. That can’t be a great idea for anyone who makes money in retail or health care or trading stocks/bonds or lawyers. We ask all the Plaintiff-Petitioner lawyers who read this KCB&A Update—are you ready to kick 8% of your gross income to the State of Illinois to fund our fake government pensions?

Democrats Need Republicans to Stay in This State, As We Are “Running Out of Other People’s Money”

Please also note Chicago Bears Quarterback Jay Cutler lives and is raising his family in Winnetka. The cost of an 8% state income tax to him will be $1,600,000 a year. He may be able to save substantial monies to move out of Illinois and return only for football practices and games. Lots of other businesses and successful individuals may also consider moving some or all of their operations outside Illinois to avoid the massive tax burden that may hit this state after the election. If the Democrats in power in this state push taxes/fees and tolls ever higher and higher, we are certain to see even more folks moving away from our state. As Illinois breadwinners and successful folks leave, the pressure on those who remain will heighten.

Even Dramatically Higher Taxes Probably Aren’t Going to Help Much—We Need a Groundbreaking Change in Illinois Government

As we advised, under Governor Quinn, Illinois State government debt was $54B just five years ago in 2009. It is over $105B right now. In five more years of mismanagement because nothing is being done to change the problem, it could be over $200B. The new spiraling taxes may fund some of the interest on all that debt but they won’t dent it. If/when it again doubles, we are going to be closer to a state government apocalypse. Are you okay with that?

Crain’s Chicago Business reported this week, the City of Chicago pensions' $37 Billion shortfall has doubled In 6 years under Democratic leadership in both Chicago and Springfield. This skyrocketing debt, according to a new report by the Civic Federation, is the total amount in unfunded liabilities for 10 local pension funds as of the end of fiscal 2012, two years ago. Total unfunded liability has been rising quickly, more than doubling since 2008, when it was $18.5 billion. But the increase from $32 billion in 2011 to $37.3 billion in 2012 was particularly large. If that doubles again and every indication is that it will, in the next five years, Chicago may be in federal bankruptcy court.

Why are they looking at 2012 figures? There's a lag in reporting because the watchdog group uses audited year-end financials from the 10 funds: the City of Chicago Police, Firefighters', Municipal and Laborers' funds; the Chicago Teachers' Pension Fund; and funds covering Cook County, the County Forest Preserve District, the Chicago Park District, Chicago Transit Authority and Metropolitan Water Reclamation District. In addition, Mayor Rahm Emanuel last year got through the Illinois Legislature and Governor Quinn a plan to revamp the much larger municipal and laborers' funds, an action that will require Chicago taxpayers to provide an additional $750 million in increased real estate taxes over the next five years. However, a related case involving state pension changes is headed to the Illinois Supreme Court, and if those are knocked out, Mr. Emanuel's recently approved changes could go, too. This will make the debt situation even more acute.

Even if those are upheld, no progress yet has been made on the Chicago teachers' pension fund, which was $8 billion short of having the assets required by the actuaries to meet its spending promises. And no progress has been made with the Chicago police and firefighter funds, which had just 30.8 percent and 24.4 percent of the needed assets on hand, respectively.

Please remember neither the participants in these funds are putting nearly enough money into the fake pensions nor are the respective governments putting enough in. As a single example, a Chicago school teacher only contributes 2% of their annual salary into their fake pension program. After twenty years, they are owed benefits for life and will get all their contributions back in less than a year on the pension.

As we tell our children, you have to fix things or the world will fix them for you. If you look at Governor Quinn’s campaign website right now, they aren’t addressing or even mentioning this 800lb pink gorilla. We hope Illinoisans are smart enough to see the treacherous path in front of us, find new leaders and not wait for the government apocalypse to start.

The election is on November 4, 2014. Please be sure to vote. We appreciate your thoughts and comments. Please post them on our award-winning blog.