5-12-2011; Employer who paid full salary to teacher while she was injured entitled to credit for such payments to the extent of its duty to pay total temporary disability liability

The Appellate Court reversed the Circuit Court and the Commission on the issue of whether an employer was entitled to a credit for a section 8(j)2 credit for salary paid to Petitioner in lieu of TTD benefits in Elgin Board of Ed. V. IWCC and Linder Weiler, No. 1-09-3446WC (April 25, 2011). The Commission and Circuit Court rulings on causation and Petitioner’s average weekly wage calculation were upheld.

Petitioner was a teacher and underwent an arthroscopic procedure on her right knee which was unrelated to her work duties on November 7, 2002. After returning to work on November 13, 2002 she struck her knee on a desk and the surgical incision opened up and the knee began to swell. Her doctor diagnosed hemarthrosis which is “blood in a joint creating some inflammation.” Petitioner was not released until March 31, 2003.

During the year preceding the injury Petitioner was required to work 40 weeks and the parties stipulated she received an annual salary of $61,459.00. She received her annual salary year round even though she had the option of only being paid during the academic year. Petitioner testified she received her regular salary through the use of accumulated sick pay for the period of time she was off work. She claimed her sick pay had not been reinstated.

The Arbitrator ruled Petitioner sustained a compensable accident on November 13, 2002 and the hemarthrosis was causally connected to the accident. In calculating Petitioner’s average weekly wage the Arbitrator inexplicably determined Petitioner worked 42 weeks during the school year and therefore divided her annual salary by 42, yielding an AWW of $1,463.31. The Arbitrator also determined Respondent was entitled to a credit for the salary paid to the extent of its TTD liability pursuant to section 8(j)2 of the Act.

The Commission modified the arbitration ruling with respect to the AWW calculation and the 8(j)2 credit. The Commission noted Petitioner only was required to work 40 weeks during the school year and the relevant inquiry was the number of days an employee worked, not the fact he or she may have an annual contract. Therefore, Petitioner’s annual salary was divided by 40 yielding an AWW of $1,536.48.

Regarding the credit, the Commission examined the decision in Tee-Pak, Inc. v. Industrial Comm’n, 141 Ill.App. 3d 520 (1986) and stated an employer receives no credit for benefits which would have been paid irrespective of the occurrence of a workers’ compensation accident. Petitioner testified she had to utilize earned sick pay to receive her full salary and her sick pay carried value as it impacted her retirement benefits. The Commission held Respondent was not entitled to a section 8(j)2 credit for salary paid to Petitioner in lieu of TTD benefits. The Circuit Court confirmed the Commission’s ruling. This appeal followed.

In regard to the AWW issue the Appellate Court examined the language of Section 10 of the Act which notes in relevant part:

[3] Where the employment prior to the injury extended over a period of less than 52 weeks, the method of dividing the earnings during that period by the number of weeks and parts thereof during which the employee actually earned wages shall be followed.

The Court noted Petitioner’s employment prior to the injury extended over a period of less than 52 weeks and Petitioner was required to devote or apply her time and energy teaching for less than 52 weeks. See Washington District 50 Schools v. Workers’ Compensation Comm’n, 394 Ill.App.3d 1087 (2009). As such, the Commission did not err in dividing Petitioner’s annual salary by 40 to calculate her AWW. The Court noted its ability to address Respondent’s position Petitioner was employed pursuant to an annual contract was “hampered” because the contract was not made a part of the record.

Regarding the 8(j) credit issue, Respondent argued it was entitled to a credit because Petitioner received full salary payments in lieu of TTD benefits. The Court looked to Section 8 of the Act and noted,

“The first clause of section 8(j)2 states that an employer is entitled to a credit only for compensation payments made pursuant to the Act. 820 ILCS 305/8(j)2 (West 2002); see also World Color Press, 125 Ill. App. 3d at 471 (“The statute clearly credits the employer with any payments made by the employer as compensation payments”). The second clause of section 8(j)2 states when an employer pays money other than compensation payments under the Act, the employer “shall receive credit for each such payment only to the extent of the compensation that would have been payable during the period covered by such payment.” (Emphasis added.)

The Court discussed its decision in Tee Pak, Inc. and noted it determined because the employer in Tee Pak “failed to show that the salary payments the employee received were limited to occupationally-related disabilities, the employer was not entitled to a credit under section 8(j) or the Act.” The Court stated in Tee Pak there was evidence the employer intended its employees to collect both TTD and salary for the same period of time. There was no such evidence in the present case. As such, Respondent was entitled to credit for the salary paid, but only to the extent of its TTD liability.

Justice Holdridge dissented regarding the credit issue. He noted, according to Tee Pak, an employer can receive credit for benefits paid to an employee only where the benefits “are limited to occupationally related disabilities.” He stated because Petitioner, in the present case, could access her sick leave benefits without regard to the occupational nature of her disability Tee Pak should apply and prohibit the employer from taking the credit.

We are pleased with the majority decision as we feel the school should be given credit due to the fact it paid Petitioner for the time she was off. We note the majority did not address the reimbursement of Petitioner’s sick time which is likely an issue which will require litigation outside of the workers’ compensation arena.

Matthew Ignoffo, J.D. researched and wrote this analysis. Please do not hesitate to contact Matt at mignoffo@keefe-law.com.

4-26-2011; Illinois WC Reform Update

At present, the Illinois legislature is on an Easter/Passover break until next week. Enjoy the break!! We assume things may start cooking again next week. Again, we point out the best place to reform the Illinois WC system isn’t in the legislature.

Crain’s Chicago Business provided its thoughts in what we consider a somewhat heavy-handed editorial approach. They claim:

·         Illinois workers compensation system is the most expensive in the nation.

o    We have no idea what metrics support that comment; to our knowledge and based upon national research, Illinois is number three.

·         The complaints by Illinois business made no impact on the combination of Democratic politicians, unions, doctors and lawyers who profit from the system.

o    We point out there are Republican politicians, doctors and lawyers who profit too.

o    And “profit” is okay and completely legal in the good old USA; we are just trying to get the profits down to a more reasonable level.

·         Governor Quinn’s cuts in medical reimbursements would cut as much as $500M and then leave Illinois with the second highest medical costs in the country

o    Again, we are unsure of the metrics or measurements upon which this claim is made. The Governor hasn’t released his research on this fascinating claim and we urge his staff to do so.

o    We caution everyone, if medical reimbursements are cut to levels below what companies like Blue Cross/Blue Shield© pay, you may have problems getting Illinois docs and hospitals to take WC patients.

Don’t take our word for it. Take a look for yourself at:

http://www.chicagobusiness.com/article/20110416/ISSUE07/304169991/editorial-quinn-backed-workers-comp-bill-must-go-further

The Chicago Tribune outlined its report of the events in Springfield last week. They clearly attacked the failure of the Democrat Senators to vote on SB1349 by simply announcing they were “present.” The Tribune’s editorial staff noted the "present" vote has a long and storied history in our legislature, enabling Illinois lawmakers to block bills while avoiding the political fallout from actually voting against them.

We were happy to see a national news source finally confirm our determination the 2005-6 Amendments to the Illinois WC Act did not help Illinois business and increased IL WC costs. The Tribune said actions in 2005 for the legislature to “just-do-something…led to nothing but window-dressing in 2005: A law described as a landmark reform of workers' compensation turned out to be just a head-fake. Illinois' costs only got worse in its aftermath, especially compared with states like Missouri that enacted real reform.”

As we have said many times, one easily definable way to enact immediate and definable WC reforms would be to roll back the PPD, death benefit and wage differential increases from the 2005 Amendments to our Illinois Workers’ Compensation Act. You could also end the five WC funds that only help a very, very limited group of folks and cost Illinois business millions. We also point out the IWCC’s budget tripled while the speed of claim resolution remained virtually unchanged.

You can read their editorial and “draw your own contusions” at:

http://www.chicagotribune.com/news/opinion/editorials/ct-edit-workcomp-20110419,0,4379580.story

Risk and Insurance Magazine weighed in with its thoughts; focusing on Governor Quinn’s as-yet undrafted legislative proposals.

They cite the same report from the Governor with the claim that even with a 30% cut in WC medical reimbursements, Illinois would still have the second highest WC medical costs in the country. As one can imagine the President of the Illinois State Medical Society doesn’t feel it would be “reform” to bring WC medical costs down. We have no idea what he might mean.

Again, don’t take our word for it, here is the link:

http://www.riskandinsurance.com/story.jsp/storyid=533336209

For all the lawyers who feel compelled to repeatedly tell us to limit reporting of current status and news of Illinois WC reform, please send your letters and comments to the editors of these national news organizations. If you want us to publish your side of the reform issue, forward your thoughts and we will consider them for publication.

We are committed to continue to report what is happening for our readers who continually ask for progress on issues they clearly feel critical to their companies and careers. Every single link above was forwarded to us by a reader and we thank them for their input.

We appreciate your thoughts and comments. Please do not hesitate to post them on our award-winning blog at www.keefe-law.com/blog.

4-26-2011; Can we get a “mulligan” on this one?

As Larry the Cable Guy says, you can’t write this stuff—the name of the ruling is Mulligan v. IWCC. If you don’t know what a “mulligan’ is; in golf parlance, it is a “do-over” without penalty due to a poor golf stroke. Having read what we consider a somewhat baffling ruling by the Appellate Court, Workers’ Compensation Division, we are wondering if there might be the legal equivalent of about four mulligans out there somewhere for the reasons we outline.

From a purely academic perspective, we feel this ruling criss-crosses all over the WC block. The majority ruling indicates the main dispute is the disclosure requirement in Section 12 of our WC Act. If you aren’t aware of the requirement, when either party gets a Section 12 medical evaluation of a claimant, they have to disclose it 48 hours prior to the “hearing” of the claim or it is potentially inadmissible.

Then let’s review a truly odd set of facts. Claimant asserts he was injured in two separate events waaaaay back in 1994. The Applications for Adjustment of Claim were filed waaaaay back in 1995. If you are wondering how claims from prior to Y2K are still dragging on, please understand our view claimant hired one of the sloooooowest claimant attorneys of all. If you want some idea of how slow this claimant attorney is, please go to any Quincy, Illinois status call and look at the oldest claims. If you look at the March 2011 status call online at http://www.iwcc.il.gov/pdfs/dwnscall/jan-jun/tobi0105.pdf, you will note this attorney has seven of the ten oldest and moldiest claims. The oldest claim is thirteen years old and still pending at arbitration. Numerous Arbitrators have dealt with this attorney and fought and fought to get him to move claims faster with limited success.

Arbitration hearings on these 1994 accidents and 1995 filings started more than ten years after the first claimed event in 2004. The hearings ended two years later in 2006—again, a strikingly slow trial pace which we assure you was not the Arbitrator’s fault. The facts of the claim indicate claimant had a total knee replacement prior to slipping and falling at Chicago’s Midway Airport in 1994 and straining the leg. He did not produce any medical records of care and did not lose any time from work. In the second accidental occurrence, claimant again fell and suffered soft tissue injuries. Again, while he started treating more frequently after the second occurrence, it does not appear he lost time from work. Three years after the occurrence, claimant’s total knee prosthesis was replaced. Four years after these events, claimant’s cervical spine underwent what the decision says is a four-level “laminectomy.” This is somewhat odd from a medical perspective because a laminectomy is a procedure performed in anticipation of a discectomy.

Claimant’s attorney presented two doctors as experts. One doctor felt the accidents caused the knee revision and cervical surgery. The second doctor provided a similar opinion and asserted claimant was totally and permanently disabled from all work.

The defense attorney sought to present two physicians as experts. The first was an IME doctor who examined claimant in 1999. Six months after the first hearing in 2004, the defense attorney requested the right to depose his expert and the Arbitrator conducted a hearing and granted the request. The deposition was then conducted.

There is no question the second expert for Respondent was retained after the first hearing started in 2004. He did not examine claimant at any time—he simply reviewed records and provided an expert medical opinion. The second expert testified in July 2005. Proofs on the claim weren’t closed for another full year!!! At the final hearing, the evidence deposition of the other defense expert was admitted into evidence.

The Arbitrator found the first accident occurred but wasn’t the cause of any permanent problem. As to the second event, the Arbitrator found the cervical condition related and awarded 35% BAW and a limited amount of TTD. The Commission carefully considered the entire record and found the cervical condition related and increased the award to 50% BAW. The Circuit Court confirmed their ruling.

Then the need for the equivalent of a “mulligan” might begin. Our Appellate Court, Workers’ Compensation Division looked at the language of Section 12 which clearly relates to independent medical examinations or what are called by many veteran WC practitioners “Section 12 examinations” and expressly found the “48-hour rule” for disclosure also applies to records reviews by experts which do not involve examination of the patient. With respect to the members of the Court, we completely disagree with that view of the Act and assert a records review is a records review and not an examination of a patient. Expanding the statutory disclosure requirement for examinations to peer-to-peer medical record reviews isn’t something our Act states and therefore it is hard to imagine that is the outcome our legislature intended. But we caution our readers, they are the Appellate Court and like it or not, this is clearly the new rule in this state.

The second concept we feel might need a “mulligan” is the Appellate Court majority’s new and unprecedented finding the start of any “hearing” cuts off the ability of either party to get further medical evidence even if there is no dispute between the parties “proofs remain open” at the end of a given arbitration hearing. The majority ruling clearly states on page 9 of their decision: “[t]he hearing did not conclude on April 20, 2004, and the proofs remained open at the conclusion of the proceedings that day.” To us, “proofs remained open” should mean additional “proof” of any kind could be offered by either side. Now, seven years after the April 2004 hearing, these parties are supposed to have known proofs weren’t actually open for medical evidence!

Based upon the fact the second expert was retained after the first hearing, the Appellate Court majority struck his opinions from the record. We assert there is nothing in this decision to indicate claimant’s counsel was not fully apprised of his report and didn’t have a full and fair opportunity to cross-examine this witness in front of the Arbitrator to his heart’s content. We assert this is a new and unprecedented evidentiary rule and again, this is being applied seven years after the hearing complained of.

Please note claims such as this take twists and turns. We can foresee an instance in which either side, after a hearing has started and been continued “with proofs open” might want to get updated medical reports or respond to medical evidence offered by the other side. It is also very possible a different attorney might get the claim midway through the litigation and want to change gears from their predecessor(s) and get a top-notch expert or three if settlement discussions broke down. Any change in medical evidence or request for new opinions and experts has to be cleared through the Arbitrator assigned who bears responsibility for fairness to all sides. We find it difficult to imagine the practice of law at the Commission has to be wildly changed with new and unprecedented rules such as this.

The next “mulligan’ could be the majority ruling striking the evidence deposition of the second defense medical expert. This expert testified following the Arbitrator’s ruling on what is called a petition for dedimus potestatem. Basically, the Arbitrator considered the delay in disclosure of this expert’s report and understanding claimant’s counsel had literally months and months to prepare for cross-examination, allowed the deposition to be conducted and the transcript was entered into the record and considered at the time the decision was rendered almost two years later! Following their ruling above, the Appellate Court felt this was violative of the rules because there was no specific finding by the Arbitrator of “good cause shown.’ We assure our readers prior to this ruling, very few Arbitrators might have thought seven years after their failure to specifically outline “good cause shown” in considering a ruling on a dedimus potestatem that failure would cause evidence they felt probative to be stricken. We are fairly confident the minutiae in the last sentence hasn’t been in the statutorily-required annual training of our veteran arbitration staff. We would also bet the vast majority of Illinois arbitrators would assume/presume/expect if they made a ruling on such an evidentiary issue, the concept of “good cause shown” would be implied and not subject to reversal in a situation in which they felt both sides rights were respected.

The final and most amazing “mulligan” is the conclusion by the Appellate Court majority ruling the now-stricken opinion of the second defense expert poisoned the proceedings and required the whole claim to be returned to the Commission for reconsideration without that opinion. We remain amazed, dazed and confused to see such a ruling for a simple and patent reason—expert medical evidence have never been required for the Commission to make a ruling. Longstanding Illinois law says they can draw their own conclusions from the facts and treatment records. The Appellate Court majority says: “the only medical opinion admitted at the hearing that supported the Commission's finding was the testimony of [the second defense expert].” From a purely academic perspective, expert medical opinions are simply that—the physician looks at the medical records and facts and draws a scientific conclusion. In this state, the Workers’ Compensation Commission itself can look at the same medical records and facts and draw its own conclusions! The majority ruling clearly states: “[t]he arbitrator and the Commission found that the claimant's knee conditions were not causally connected to the work accidents, and neither the arbitrator nor the Commission expressly relied on the employer's medical testimony.” From that perspective and with respect to the members of our Appellate Court, we cannot fathom why the Court feels there was a need to provide claimant’s counsel a “mulligan” on the claim for total and permanent disability and send the claim back to the Commission to again review it without an expert medical opinion they could have either accepted or rejected and drawn their own conclusions.

We also note the Appellate Court majority did not feel it necessary to remand the claim for a specific finding in relation to the ruling of the Arbitrator and later the Commission about “good cause shown” in considering the petition for dedimus potestatem. The failure to remand for this reason might cause some criticism as to judicial balance in this ruling. We also feel the failure to remand for that reason might give some observers the impression the Court’s main concern is to implement new and unprecedented evidentiary rules to then have the Commission weigh the claim for total and permanent disability having stripped out all previously admitted evidence for the defense. We will let our readers draw their own conclusions on these academic issues.

The ruling is on the web at: http://www.state.il.us/court/Opinions/WorkersComp/2011/March/1092507WC.pdf

We hope to watch and see what the Commission does when they take a fresh look at this claim at a future time. We appreciate your thoughts and comments. Please do not hesitate to post them on our award-winning blog.