12-14-11; "When it is the governor who goes bad, the fabric of Illinois is torn and disfigured and not easily repaired." U.S. District Court Judge James Zagel, Chicago, IL on December 7, 2011

What did Blago do to the WC system in IL? Well, there is no question the fabric of the system was torn and repairs may be ongoing.

In 2002, Blagojevich was locked in a three-way primary fight and the race was basically a toss-up. Blago met with the aggressive millionaire Plaintiff lawyers from Madison and St. Clair County and struck a deal—they would give him their full support in the primary and he would give them political control of the IWCC. We want our readers to understand there is nothing illegal about such a transaction—it just stinks to see government agencies become chess pieces in elections. Well, we all know what happened. Blago’s roots were in Chicago but he magically got 55% of the vote in southern IL and won the primary. He then trounced Jim Ryan in the gubernatorial election and took office. After the 2002 elections, Illinois Democrats took control of the Governor’s mansion, the Illinois Supreme Court along with the Illinois House, Senate, and all but one statewide office. Illinois Democrats have retained plenary control of all three branches of Illinois government for about a decade and have recently won a redistricting fight that may keep them in control for years to come.

As fast as the election came to a close, we “suddenly” had the first IWCC chairman from Madison County in Illinois history, a claimant lawyer with no prior administrative or government experience. As fast as he landed, he and his other managers

·         Changed the name of the place from “Industrial Commission” to “Workers’ Compensation Commission”

·         Changed the funding in a scheme borrowed from Missouri where business pays a workers’ comp levy—the money to run the IWCC doesn’t come from the taxpayers but from business;

·         The secret-powers-that-be used the new money to more than triple the budget of the IWCC and start funding new benefits;

·         They also used the money to start hiring lots of Plaintiff-Petitioner attorneys as Arbitrators and Commissioners;

·         Existing Arbitrators who might be mildly conservative were told to start towing the new liberal party line or find other employment;

·         Tried to pass the 2004 Amendments to the IL WC Act that lots of business observers, including KC&A helped put the kibosh on; and

·         Passed the 2005-6 Amendments to the IL WC Act which they actually trumpeted as supposedly saving Illinois business money

We are still chagrined to remember and recount of all it. As quickly as the 2005-6 Amendments were passed, IL WC benefits began to rise to the point they are considered the highest in the United States (if you skip Montana and Alaska where the number of folks eligible for WC benefits are few and far between). News of the spiraling WC costs brought the 2011 Amendments to the IL WC Act that basically put the thumbscrews to doctors and hospitals with some promise in cost-cutting on other fronts. The “other fronts” will show diminished benefits if and only if the IWCC administrators want them diminished. The ball is clearly in the air on that one--no one has any true idea if this “shaken but not stirred” IWCC administration will bring benefit levels down a dime. We are watching new decisions very closely and will continue to report.

We are still hoping global coverage for any injury that ever occurs is going to stop with defined and sensible limits on

1.    “Repetitive work” claims where everything anyone does at work magically “aggravates” or accelerates any pre-existing/existing problem including conditions of life and aging; and

2.    The now impossibly expanded “traveling employee” concept where no one knows what “traveling” might be but once you deign anyone as “traveling” every activity of daily life that such a worker does when they leave their home until they return is now a compensable “accident.”

On the judicial side, the Illinois Supreme Court didn’t truly have any direct relationship to what happened with Blago and his shenanigans but there is no question the Court matched the new Democratic bent of this State and probably rode in on Blago’s crooked coattails to some extent. Our highest court became very, very Pro-Plaintiff and remains that way today. As we have advised, the forces of ITLA have a very strong role in judicial fundraising and we have heard rumors the newly elected or recently retained justices and judges remember who donates monies to their successful campaigns. What does this have to do with WC? Well, the IL Supreme Court controls the make-up of what became the five-member Workers’ Compensation Division of the Appellate Court.

Right after Blago got into office, the Workers’ Compensation Division of the Appellate Court issued two decisions considered by defense observers to be solid and well-reasoned denials. In Twice Over Clean v. IWCC, the Appellate Court denied benefits to a claimant who suffered a heart attack basically because his own doctor stated his arteries were 95% occluded (blocked) and claimant could have suffered the attack brushing his teeth. In Sisbro v. IWCC, the Appellate Court denied benefits to a claimant whose badly diseased ankle snapped in the act of stepping down from a truck. The Appellate Court pointed out claimant was injured in an act of daily life and such acts don’t lead to increased risks.

In a fascinating legal turnaround, both claims bounced up to the Supreme Court and down to the Appellate Court and no one knew for a time what was going to happen. At the end of all of it, the Supreme Court said the two rulings had nothing to do with the law but reinstated benefits based on the facts as the IWCC initially found them. Legal observers in some quarters remain baffled to see the Appellate Court apply what they obviously felt was the law and the Supreme Court trumped that with the facts—most of the time, reviewing courts feel their province is to adhere closely to the law, as they see and shape it. And with deference to all the respected members of both courts, there wasn’t much confusion about the majority of the facts when the claims were first appealed.

In the ten years or so since Blago was elected, it is our view there has been one pro-business WC decision at the Supreme and Appellate Court level. If we see another one, we will let you know.

So where are we at now? Well, the same party is still in power and controls all three branches of IL government. They may be trying hard to deal with the “torn fabric” of our system and may actually be trying to repair it. And they may not. If Illinoisans want change, they are going to have to vote for it.

We saw an article from the Associated Press last week where downstate facilities for the State of Illinois have eight-figure benefits being paid over the last four years. Illinois’ state facilities may be among the most dangerous places on the planet to work because literally hundreds of new litigated lost-time WC claims are being filed every day of the year—NOT. OSHA isn’t conducting hearings into all these purported accident claims because they know what is happening--the problem isn’t poor safety, the problem is a WC system run amok which awards workers with millions for “non-accident accidents.” At 12 southern State of Illinois work sites, $40.7 million was paid for 861 “accident” claims filed from 2007-2010. If you are doing the math, that number is over 200 claims every year. Illinois taxpayers put out $24 million on 963 claims at 51 similar facilities elsewhere in Illinois.

Please remember if there was about $65 million in benefits paid on the state claims listed above, it means about $13 million in legal fees was paid to the lawyers for those workers or about $3 million each year. And that money is just on State of Illinois claims—that money funds more claims against private businesses and other government bodies. If you aren’t sure, that is why and how campaign money is funneled to the folks who pick the hearing officers and administrators who run the IWCC. That is also a reason Governor Quinn appears to be moving with concrete boots to get reforms into place in the State of IL WC system.

If you want to review the AP article, send a reply and we will forward it. We certainly hope future Governors and all politicians in this state remember not only are George Ryan and Rod Blagojevich going to be in federal prison at the same time, most of the members of their staffs and political pals will also be in prison or dead from suicide. We hope they all enjoy the delicious prison cuisine. We appreciate your thoughts and comments. Please do not hesitate to post them on our award-winning blog.

12-5-11; Solid and cost-conscious ruling from the IL Supreme Court on PSEBA technical issue.

As we have advised in the past, it is our strong feeling there are lots of benefits paths out there that get started and then seem to wildly expand in our reviewing courts without any scintilla of what the rulings cost taxpayers.

In Nowak v. City of Country Club Hills, 2011 IL 111838, issued December 1, 2011, the question of when does a disabled police officer’s employer have to begin picking up the cost for the health insurance of the injured officer and his family? Construing the Public Safety Employee Benefits Act (“PSEBA”), the Illinois Supreme Court reversed an appellate decision and affirmed the circuit court in ruling that the obligation attaches only when the officer is legally declared permanently disabled. The benefit is not retroactive to the date he or she suffers the injury.

Plaintiff Nowak, a full-time police officer for the City of County Club Hills, participated in the health insurance plan his local police union bargained for. Under the plan, Officer Nowak paid 20% of the insurance premium. After Nowak sustained serious injuries in the line of duty, by statute, he received his full salary for one year. After this one-year period and concomitant salary replacement benefit expired, and more than two years after the accident, Nowak applied for a line-of-duty disability pension. During the periods outlined above, Officer Nowak had continued to pay his 20% share of the family’s health insurance premium. The police pension board heard the matter and awarded Officer Nowak a line-of-duty disability pension. Once that decision was rendered, the City of Country Club Hills immediately began paying 100% of Nowak’s personal and family health insurance premium. However, they refused Officer Nowak’s request for reimbursement of the premiums Nowak had been paying since the date of the career-ending injury.

The statute pertains to an officer who “suffers a catastrophic injury,” but Section 10(a) of PSEBA is silent as to the event that triggers the employer’s obligation to pay. Therefore our highest court found the statute to be ambiguous. In reaching its conclusion, the IL Supreme Court considered the legislative history, which indicates an intent to “continue” an officer’s employer-sponsored health insurance coverage after he has been forced to take a line-of-duty disability, and considered the public policy goal of providing the mandated benefit at the lowest possible cost.

We also note this officer received full salary and continued to make precisely the same level of income by continuing to pay health care premiums until the line-of-duty disability pension kicked in. We consider that a solid outcome that shouldn’t disadvantage an injured officer and also shouldn’t put an onerous burden on taxpayers.

We appreciate your thoughts and comments. Please do not hesitate to post them on our award-winning blog. We want to disclose we represent the City of Country Club Hills but not in relation to this litigation. We also thank the folks at IRMA or the Intergovernmental Risk Management Agency who provided their expert insights into this important municipal ruling.

12-5-11; Uninsured motorist claim combined with WC claim make for strange legal bedfellows—in our view, a pro-Plaintiff Appellate Court engaged in judicial hair-splitting to insure...

In Burcham v West Bend Mutual Insurance Company, 2011 Il.App.2d 101035 (November 21, 2011) the Illinois Appellate Court, Second District established pursuit of recovery by an injured IL worker for injuries sustained in a work-related automobile collision does not contradict the exclusive remedy provision of the Illinois Workers Compensation Act (WC Act) and can be pursued against the employer’s motor vehicle insurance policy as long as the recovery sought in that uninsured motorist claim is not specifically provided under the Illinois Workers Compensation Act.

While one could argue this decision creates no new right of recovery, it does pose an interesting wrinkle in the exclusive remedy provision of the WC Act and potentially greatly expands an employer’s liability for Circuit Court claims arising out of injuries to their employees, specifically proscribed by the exclusive remedy provision. If the exclusive remedy provision applies only to those remedies actually provided under the WC Act, what “losses” is an injured worker precluded from pursuing at common law that are not awarded under the WC Act?

Plaintiff Burcham was involved in a work-related motor vehicle collision with an uninsured motorist while driving his employer’s vehicle. Burcham and his attorney simultaneously brought a claim before the Illinois Worker’s Compensation Commission and a separate contract claim pursuant to his employer’s uninsured motorist insurance policy. That policy specified the uninsured motorist provision would not pay for any element of loss if that loss constituted a workers compensation or disability benefits loss. The policy language made it clear, claimants would not be entitled to receive duplicate payments for the same elements of loss.

Burcham’s employer and/or his WC insurance carrier continued to pay Plaintiff lost wages. They also paid roughly $490,000.00 in medical expenses, discounted by the IL WC Fee Schedule or other policy requirements from initially medical billing of roughly $680,000.00. At the time of litigation of the instant claim, his workers compensation claim had not been fully resolved.

As we indicate above, Plaintiff brought a claim for recovery under his employer’s uninsured motorist provision of its general vehicle insurance policy, claiming disfigurement, pain and suffering, roughly $188,000.00 in discounted medical expenses, increased risk of harm, loss of a normal life and loss of earnings. He sought a declaratory judgment against Defendant West Bend pursuant to the uninsured motorist coverage, demanding arbitration and moved for summary judgment. Defendant filed a cross-motion seeking summary judgment Plaintiff could not recover losses under the uninsured motorist provision for claims compensable under the WC Act.

The trial court allowed Plaintiff to proceed to arbitration in an effort to recover damages under the Defendant/Employer’s uninsured motorist policy for disfigurement, loss of a normal life, the discounted amount of his medical expenses, and loss of earnings, ruling those benefits were not provided for under the WC claim, and therefore proceeding against the uninsured motorist policy did not constitute a double recovery or the same elements of loss as those covered by the WC Act. Defendant appealed the trial court’s ruling, arguing error in allowing Plaintiff to collect damages for disfigurement, loss of a normal life, the discounted amount of his medical expenses, and loss of earnings for injuries compensable under the WC Act.

In a detailed but straightforward decision, the Illinois Appellate Court, Second District issued its decision finding the WC Act covered only Plaintiff’s claim for medical expenses, and for permanent partial disability akin to his claim for loss of a normal life, but because the claimed losses pertaining to disfigurement were not available to him under the WC Act because a Plaintiff cannot recover simultaneously under both Section 8(c) disfigurement and Section 8(e) scheduled loss for injury sustained to the same body part, he was allowed to pursue his claim for disfigurement under the uninsured motorist provision of his employer’s motor vehicle insurance policy. The Appellate Court also ruled because Plaintiff was entitled to recover medical benefits pursuant to the WC Act, he was barred from pursing recovery on the balance of medical expenses under the uninsured motorist policy. Plaintiff was therefore permitted to proceed to arbitration against Defendant’s uninsured motorist provision to recover disfigurement and for loss of earnings, suggesting neither could be recovered under the WC Act.

Why do we call this judicial “hair-splitting” above? Well, if an injured WC claimant undergoes a surgical intervention, most surgeries create surgical scarring. It makes great sense to limit a claimant to one of two paths to recovery—they can ask for disfigurement related to the surgical scarring or disability from the surgical intervention itself. They can’t get both under the IL WC Act. Now, by “splitting the hair” where there is an uninsured motorist policy, the worker can get the disability related to the surgery and the disfigurement arising from the same surgical scars. All of that will cost more money for Illinois employers and their insurance carriers.

While the decision makes technical sense, we cannot help but question whether this will render moot the exclusive remedy provision of the WC Act. If a Plaintiff is free to pursue losses that arise out of a work injury but not recoverable under the WC Act by attacking the employer’s contractual liability pursuant to an uninsured motorist’s policy, what prevents him/her from seeking uninsured motorist benefits under all sorts of odd and crazy paths? Will we now see every Plaintiff injured in an MVA seeking uninsured motorist benefits for loss of consortium, emotional distress, disfigurement, and every other theory of recovery not provided for or successfully awarded by the Commission?

While it might be true such recovery is viable only under the limited circumstances provided for by an employer’s uninsured motorist provision and therefore does not extend to claims for negligence against the employer, we also question whether the Appellate Court put the cart before the horse in allowing Plaintiff to recover loss of earnings at a point where his WC claim was not final. A wage differential or permanent total disability claim brought by Plaintiff before the Commission would necessarily constitute a loss of earnings. Is Plaintiff now barred from seeking a wage differential or permanent total disability award before the Commission, relegated only to 8(e) scheduled loss or 8(d)(2) person-as-a-whole recovery, because he has been allowed to pursue loss of earnings recovery in the circuit courts? Once again we feel the Illinois Courts have circumvented the clear intentions of the WC Act with technicalities designed to maximize Plaintiff’s recovery in direct contravention to the language of the Illinois Worker’ Compensation Act.

This article was researched and written by Joseph R. Needham, J.D. Please direct your thoughts and comments to Joe at jneedham@keefe-law.com. We do want to disclose we represent Defendant West Bend Mutual Insurance Company but not in the claim reported above.