11-11-13; Gay-Lesbian Marriage Soon To Be IL Law-Can We Revisit Death Benefits?; Handling IL WC Hearing Loss Claims; Understanding Psych and much more

Synopsis: Now that Gay Marriage/Divorce Has Landed and is Off the Political Table, Should We Reconsider How IL WC Death Benefits are Awarded?

Editor’s comment: Not sure if you like or dislike gay marriage and divorce but we are certain one’s personal feelings have nothing to do with it any more—it is soon to be the law in our state, our elected leaders have spoken and we are all going to have to adjust. On some levels, we are thrilled to see this relatively minor issue taken off the political landscape so our Governor, General Assembly and other local leaders can move forward to manage and hopefully improve the numerous financial issues that are plaguing all citizens of this troubled state.

From the IL workers’ compensation perspective, there is no question in our mind all benefits previously accorded to widows and widowers will now be expanded to cover legally married gays and lesbians. This is certain to increase the number and premium cost of covered WC death claims in our state. What is ironic is one reason IL WC death benefits most recently increased is, about a decade ago, our former-Governor-Behind-Bars made a political deal to give away control of the IWCC to beat Paul Vallas in a primary—Paul Vallas was just tapped to be Governor Quinn’s running mate. The giant increase in IL WC death claims in 2005 was directly related to that 2002 political agreement which kept Mr. Vallas out of political office years ago. If you aren’t aware, Illinois workers’ compensation death benefits are among the top three WC death awards in the entire country. The minimum a widow or widower may receive is well over $600,000 and the maximum is over $1.7M.

In our view, the death benefit concept was created in 1909 when the first IL WC Act was formed basically as a life insurance policy that is owed regardless of levels of widow/widower dependency. By that we mean, if you are married and your spouse passes, you get a lot of money, whether you need it or not. We think the IL WC Act should be changed so all married couples should have to retain counsel and demonstrate to the Arbitrator assigned some minimal level of dependency before their employers are required to fill in the financial gap caused by the passing of a loved one.

If you stroll down memory lane, you might note the IL WC Act was created as the result of 259 men and boys being killed in the Cherry, IL mine disaster and leaving hundreds of widows and children without any means to pay for their homes, food and educations. Shortly thereafter, the IL General Assembly enacted WC death benefit coverage. As this all predated “Rosie the Riveter” and the movement of U.S. women from being homemakers only to currently being a strong, robust and vibrant part of the U.S. workforce, the life insurance model underpinning WC death benefits may have changed, as marriage has changed.

In our view, the legislative and administrator scheme might improve if we update it also. We feel it would be a solid idea to consider having all widows or widowers obtain legal counsel and then come to the Commission. A hearing could be conducted to demonstrate a need for all or an appropriate part of the death benefit by showing dependency on the spouse who recently passed at work. For one example, please assume we are considering a couple where a wife is very successful—she is a sportscaster and makes $500,000 a year. Her spouse takes care of the home and basically manages the couple’s affairs but only makes $25,000 a year in a part-time job. If the at-home spouse passes due to a work injury or illness, as IL WC law outlines today, the death benefit remains $600K+. We feel the employer should be able to respectfully challenge that high value where dependency is very low or non-existent.

The other WC anomaly is the abandoned marriage—a marriage in which a couple has moved apart from each other and stayed apart in separate homes for years and years. When one or the other spouse in an abandoned marriage has passed, dependency is non-existent. In such a setting, we consider it egregious for an employer to have to pay our generous IL WC death benefit basically as a gift to the survivor who had no recent contact with their former partner. We feel an employer should be able to retain counsel and appropriately challenge all or part of such a claim before the Arbitrator assigned.

Please note we don’t feel this would apply as smoothly to minors who remain legal charges of their parents. But again, we feel our Arbitrators could listen to the facts and insure the protection of the young and innocent offspring of a decedent. One of the most interesting and touching WC death claims we have ever handled was a claim by a widow who had three young girls and an elusive spouse with lots of personal issues who took off on her, never to return. Several years later, she was valiantly raising her girls as a single mom when their absent father was murdered in a robbery where he was working at a convenience store.

As part of handling of the WC death claim, we were asked to do a search for the spouse and dependent children and one of our crack surveillance operatives located the widow. By this time, the girls were ending high school and about to enter college; the mother was despondent about how to afford higher education for her beautiful children. When we called to advise that her troubled husband had passed, she cried for some time. When we advised her of the amount and value of the death benefit, she indicated she didn’t want a penny of it but wanted all of the money to be paid into three trust funds for the girls’ educations. With the approval of the Arbitrator assigned, we were able to put that request into place. To our understanding, several years later, all three of the young women wisely used the money to get their college degrees and move into great jobs. The mother told us the only thing her husband did for her in life was to give her the blessing of the three girls and the only thing he did for her in death was to finally provide for their schooling through our workers’ comp system.

In summary, we feel dependency and an appropriate level of a death benefit for any widow or widower should be an issue fairly litigated in the right IL WC death claim. Such litigation would insure the property parties are receiving fair and reasonable benefits and the cost to IL employers is similarly appropriate. We appreciate your thoughts and comments.

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Synopsis: Handling IL WC Hearing Loss Claims for Either Side of the WC System.

Editor’s comment: We are asked all the time about hearing loss claims and wanted to provide our expert thoughts. In our view, there are two kinds of IL WC hearing loss claims. Actually, two and one-half, if you include IL firefighters with 5+ years of service.

BOOM as a Hearing Loss Claim

The first type of hearing loss claim we call "BOOM" where there is a loud noise or explosion in the workplace that causes a hearing problem. We assume that concept is fairly simple for newbie lawyers and other student. Defending/presenting "BOOM" hearing loss claims are akin to defending any WC accident--did it happen, how bad was it, how bad were the results/effect on the hearing.

Hearing Loss as Occupational Exposure

Two, or the second type of IL WC hearing loss claim is statutory. You don't get hearing loss benefits if you aren't exposed to levels higher than provided in the IL WC Act—the exposure levels are below. If someone is exposed to decibel levels of a certain amplitude and loses some or all of their hearing, they get money. IL Employers have to insure their workers aren't so exposed—seems pretty simple, right?

Other than for 5+ year firefighters, there is no IL WC provision for hearing loss benefits for simply losing your hearing. What? Say that again? You don't get benefits if you simply start to lose your hearing. We all start to lose our hearing as we age. Hearing loss in 5+ year firefighters is presumed to be related to work, like lots of other conditions.

Finding Your Firefighters Something to Do All Day as Public Safety Officers

Our vote on saving money for those expensive and typically idle firefighters is to move to “public safety” officers. There are way less house fires than when our grandparents were young; we don’t actually remember seeing the remains of a house fire in the last ten years. Building codes and approved fire safety protocols have effectively eliminated fire risk but lots of municipalities and governments haven’t realized you don’t need to spend millions and millions on idle, unused and very expensive, round-the-clock firefighters. The National Fire Protection Association indicates over the past 35 years, the number of fires in the United States has fallen by more than 40% while the number of career firefighters has increased by more than 40%.

Some communities now have public safety officers that are police officers who fight the occasional kitchen fire and/or firefighters that are kept busy as police officers. The Village of Glencoe, IL is a model for this much more efficient path for all U.S. taxpayers to consider. The Glencoe Department of Public Safety is a combined public safety agency where officers receive combined training as police officers, firefighters, and paramedics. Glencoe has operated a combined Public Safety Department since 1956. The only conceivable reason not to move to this concept is your local fire union officials are certain to fight it.

5+ Year Firefighters Get Special WC Coverage

In the workers’ comp arena in Illinois and about forty states, firefighters with seniority are presumed to be globally covered for almost any on or off-work malady that befalls them—this causes a giant spike on WC costs for firefighters. In our view, the only reason for this heightened statutory coverage for firefighters is their union got the increased coverage they wanted for their members from our General Assembly. In this state, where the choice is extraordinary benefits for government workers at the sole cost of Illinois taxpayers, taxpayers always lose.

What the IL WC Act Provides for Hearing Loss

So other than for 5+ year firefighters, here is the language from the IL WC Act. You will note “BOOM” is covered at the bottom.

16. For the permanent partial loss of use of a member or sight of an eye, or hearing of an ear, compensation during that proportion of the number of weeks in the foregoing schedule provided for the loss of such member or sight of an eye, or hearing of an ear, which the partial loss of use thereof bears to the total loss of use of such member, or sight of eye, or hearing of an ear.

(a) Loss of hearing for compensation purposes shall be confined to the frequencies of 1,000, 2,000 and 3,000 cycles per second. Loss of hearing ability for frequency tones above 3,000 cycles per second are not to be considered as constituting disability for hearing.

(b) The percent of hearing loss, for purposes of the determination of compensation claims for occupational deafness, shall be calculated as the average in decibels for the thresholds of hearing for the frequencies of 1,000, 2,000 and 3,000 cycles per second. Pure tone air conduction audiometric instruments, approved by nationally recognized authorities in this field, shall be used for measuring hearing loss. If the losses of hearing average 30 decibels or less in the 3 frequencies, such losses of hearing shall not then constitute any compensable hearing disability. If the losses of hearing average 85 decibels or more in the 3 frequencies, then the same shall constitute and be total or 100% compensable hearing loss.

(c) In measuring hearing impairment, the lowest measured losses in each of the 3 frequencies shall be added together and divided by 3 to determine the average decibel loss. For every decibel of loss exceeding 30 decibels an allowance of 1.82% shall be made up to the maximum of 100% which is reached at 85 decibels.

(d) If a hearing loss is established to have existed on July 1, 1975 by audiometric testing the employer shall not be liable for the previous loss so established nor shall he be liable for any loss for which compensation has been paid or awarded.

(e) No consideration shall be given to the question of whether or not the ability of an employee to understand speech is improved by the use of a hearing aid.

(f) No claim for loss of hearing due to industrial noise shall be brought against an employer or allowed unless the employee has been exposed for a period of time sufficient to cause permanent impairment to noise levels in excess of the following:

Sound Level DBA  Slow Response Hours Per Day

90                                8

92                                6

95                                4

97                                3

100                             2

102                             1-1/2

105                             1

110                             1/2

115                             1/4

This subparagraph (f) shall not be applied in cases of hearing loss resulting from trauma or explosion.

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

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Synopsis: Handling Psych Claims in Workers’ Compensation.

Editor’s comment: As liberal/radical as our IL WC system can be, Illinois actually remains somewhat “conservative” about psych events/injuries. The IL WC system still hasn’t moved to what we call “California Stress” psych claims. By that we mean if your boss is mean to you or your customers are challenging, you still can’t get WC benefits for the discomfiture normally associated with regular or demanding work. The main reason we feel this focus continues is the reluctance of Plaintiff/Petitioner attorneys and most Arbitrators have about dealing with psych-challenged folks—in our view, Arbitrators listen to enough whining when real injuries are present; they don’t get paid enough money to listen to weeping, wailing and gnashing of teeth over normal or even extraordinary work stress.

In contrast to “job stress” claims, there is the sudden and unexpected shock that may occur when someone, other than claimant, is seriously injured or dies in the workplace. These cases fall under the parameters of an older ruling from our IL Supreme Court namedPathfinder. In the Pathfinder ruling, the worker making the claim was working next to a subordinate who had both hands traumatically amputated by a machine. The worker had to retrieve the severed hands from the machine. For reasons we will never understand, a defense lawyer took that case all the way to our Supreme Court to make law that was, in our view, bad for the defense industry—they would have been much better off paying for appropriate psych care and trying to amicably and quietly work something sensible out with the traumatized worker and their attorney.

Please note in any accepted or disputed psychiatric claim there are often no objective physical findings that can be measured.  With subjective mental symptoms, the question of their validity may be influenced by the opinion the employer had of the employee prior to the claim.  If the employee was known to be indolent or lazy prior to the WC psychiatric claim, supervisors are less likely to accept the claim of a mental injury. In contrast, a hardworking and effective employee may be given every benefit of the doubt when their psyche becomes an issue in a post-accident setting. Either way, a detailed investigation into the medical/psychiatric documentation and the other non-work related factors that could affect the employee’s mental state may be necessary.

The investigation into a psychiatric claim is unquestionably complicated by the inability to easily obtain psychological and psychiatric records—you can’t simply send a subpoena. The Illinois Mental Health Confidentiality Act renders traditional subpoenas worthless and an adjuster or attorney has to closely adhere to the Act to get such records. You are much better off to advise the worker or their attorney you need records to support any claim for compensation and without certified records, you are unable to consider any payment.

There are two types of mental injury claims, physical-mental and mental-mental.  In a physical-mental psychiatric claim, the employee had incurred a physical injury at work, and as a result of the acute or traumatic physical injury, has developed a related mental injury.  A common example is the employee who injured their back, and from worries about how they will support their family on reduced income or TTD, develops depression and melancholy. Please also remember employees with work injuries may be coached by a Plaintiff/Petitioner’s attorney to magically suffer post-traumatic stress disorder after their injury—the best way to defend such claims is to focus on the DSM-V or the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, which is the 2013 update to the American Psychiatric Association's classification and diagnostic tool.

Mental-mental claims are the “California stress” claims we mention above where your boss is mean or your customers are demanding and the worker becomes imbalanced. To date, we do not see such claims gaining traction in our state.

If you need legal assistance in dealing with the intricate nature of psych claims, please send a reply any time. We can recommend a number of solid psych experts for the psychiatric-legal opinions. We appreciate your thoughts and commen

11-4-13; Is the IL State Chamber Judicial Activism Report "Unfair"??; Bad Personal Habits are Clearly Compensable for "Travelers"; Matt Ignoffo Reviews Important Contribution Ruling and much more

Synopsis: Is the IL State Chamber Judicial Activism/Legislative “Inactivism” Report Fair or Unfair?

Editor’s Comment: We obtained and carefully read the seminal treatise from the IL State Chamber titled The Impact of Judicial Activism in Illinois—Workers’ Compensation Rulings from the Employer’s Perspective. We salute IL Chamber President Doug Whitley and Kathleen Bruns for drafting it. As we advised our readers last week, it is a “must-read” for all Illinois risk managers/claims handlers if you want to understand why our WC system is so challenging. If you want a copy of the report, surf to www.ilchamber.org; for clients of our firm, send a reply and we will get you a copy.

Our favorite passage is:

In conclusion, the essence of Illinois’ troubled workers’ compensation system is two-pronged (1) unfettered judicial discretion in interpreting the workers’ compensation law with the clear objective of expanding compensability of workers’ compensation claims; and (2) the failure of the Illinois General Assembly to pass legislation clearly expressing legislative intent and parameters of effectuation the provisions of the Act with the objective of ensuring the workers’ compensation system in Illinois is fair, predictable and benefits employers as well as injured workers.

We also read a quote from outgoing Illinois Workers’ Compensation Lawyers Association President Frank Sommario in www.workcompcentral.com where he says:

Whether WCLA members agree or disagree with a particular decision, we all agree that the Justices of the Appellate and Supreme Courts are diligent and hard-working judges, who apply the law impartially to the facts presented to them and who handle these extra workers’ compensation duties voluntarily in addition to their regular caseload.” Sommario said, “in our view, it is extremely unfair for the Chamber to draw such broad negative conclusions based on 17 cases out of the over 1,000 workers’ compensation cases that were decided by the Appellate and Supreme Courts during the period covered by the Chamber report.

We want to reply to highly respected WCLA President Sommario with our three different concerns/objections. First, IL Supreme and Appellate Court justices are among the best paid in the United States with guaranteed annual pay raises and generous pensions that also go up every year. We are certain they are diligent and hard-working and thank them for their intelligence, dedication and service.

As to the 17 cases out of a thousand being analyzed by the State Chamber report, we point out the IL State Chamber review analyzed the biggest cases—they looked at the rulings that formed the other 983 cases considered during the period of their analysis. By that we mean, prior to the E.R. Moore v. Industrial Commission ruling, IL WC didn’t have “odd lot” total and permanent disability claims. The IL WC Act doesn’t have an definition for the words “odd lot.” Due to the lack of a definition or any mention of the term, one could infer our legislature didn’t intend to provide the rights or responsibilities that come with this very, very expensive lifetime, tax-free benefit. The IL Supreme Court and Appellate Court rulings that create new laws like this foster ambiguity that generates more and not less certainty in what is supposed to be a simple and easy-to-understand area of benefits.

For an even better example, in the words of the IL State Chamber report, when our “unfettered” reviewing courts judicially “create” a legal concept, we are all left to guess what they mean by it. That generates lots more litigation to delve into the boundaries of the new hypothesis. For one simple example, the 1990 Edward Hines Lumber ruling judicially added overtime to the IL average weekly wage in contradiction to what we feel is the simple language in Section 10 of the Act. That ruling led to a 1996 decision named Ogle v. IIC which led to the Edward Donruling in 2003 which led to Freesen, Inc. v. IIC in 2004 with the most current statement in this line of overtime rulings being the 2007 decision in Airborne Express v. IWCC. At present, IL workers are required to demonstrate overtime has to somehow be “mandatory” which is another term not defined in Section 10 of the Act.

Regardless of your feelings about this plethora of rulings, our point is judicial activism creates more judicial involvement. As the IL State Chamber report accurately notes the IL General Assembly then effectively sits on their hands and does nothing to provide any guidance as to what to do about the new judicial models.

Aside from the new and unprecedented “traveling employee” concept, perhaps the simplest and most controversial legal ruling from an reviewing court your editor has ever read is Durand v. IWCC. In Durand, the worker admitted she suffered from carpal tunnel for four years and the IL WC Act required her to file the Application within three years—she admitted she didn’t do so. If you teach any schoolchild the law, it is our view such a claim should be denied 100 out of 100 times. We simply don’t see any “wiggle-room” or a path around the clear statutory language. In considering the facts of the claim, our highest court wrote they weren’t going to “punish” her for supposedly working with pain until the statute of limitations ran. What worker couldn’t make the claim they “worked with pain?” If you aren’t certain, such a ruling eviscerates the plain language in Section 6 of the IL WC Act. As court-watchers, we now have literally no idea when and how the statute of limitations might apply moving forward but we can be certain there may be lots more litigation over this previously simple and straightforward provision of the Act.

Our problem with that ruling and the 16 other such rulings outlined in the IL Chamber Report is they distill the frustration of all Illinois businesses in dealing with the ostensibly simple system of workers compensation benefits—the law is the law; if you follow the simple rules, you get what the law provides.

Please also remember the new Chief Justice of the IL Supreme Court is the revered Rita Garman who is a Republican. To the extent the Court she now leads picks the five-member Appellate Court, Workers’ Compensation Division, as a voice for Illinois business, we would love to see some new blood on this five-member panel with at least one or two members who have a strong pro-business focus. It is our opinion all five members of the current panel are excellent and knowledgeable jurists but not one of them strictly construes the IL WC Act or has a strong business focus. It is our reasoned opinion they all speak with a single voice of judicial activism in the interests of Illinois labor. It has been literally decades since there was a member of this panel that wrote a strong dissent.

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

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Synopsis: Yes, Folks, Lung Cancer, Cigarette Smoking and Lots of Personal Conditions and Bad Habits are Now Work-Related But Only For “Travelers.”

Editor’s comment: We had many long-time readers object to our conclusion in last week’s lead article. They assert the personal and bad habit of cigarette smoking cannot possibly be work-related for the millions of workers who now fit the wildly expanded definition of “traveling employees.” The main objection from our readers was the deleterious condition has to be “causally connected” in a fashion our courts aren’t requiring.

Four Appellate Court, Workers’ Compensation Division rulings, several of them now final, find IL employers now owe for all “reasonable and foreseeable” activities of “travelers.” We note the first case remains pending before the IL Supreme Court and was orally argued more than six weeks ago. We hope for a ruling from the Court by the end of this year.

In Admiral Mechanical v. IWCC, the Appellate Court ruling says:

The traveling employee retains the burden of proof regarding causation. Hoffman v. Industrial Comm’n, 109 Ill. 2d 194, 199 (1984). That burden is met where the employee shows his or her conduct was reasonable and foreseeable. Cox, 406 Ill. App. 3d at 545-46.

In Venture-Newberg-Perini Webster & Stone v. IWCC, Claimant Ron Daugherty’s actions leading to injury were sitting in a car seat while his buddy was driving. Now his employer is on the hook for all his personal and non-work-related medical issues effectively for life. By the time of the hearing, he had over $1M in medical bills. If/when he passes, it will almost certainly be due to related problems and multi-million-dollar death benefits will be due.

·         Let’s assume Ron Daugherty was not in a car but riding as a passenger on a motorcycle. Riding on a motorcycle is “reasonable and foreseeable.” The same accident would clearly be compensable under the same theories.

·         Let’s assume the same motorcycle didn’t crash but went over a lot of hard bumps and he developed intractable low back pain. Despite the absence of a “work-related accident,” the court’s new rulings make such “repetitive-trauma” back pain with medical care and lost time and permanency the responsibility of the employer, even though the true cause has literally nothing to do with work.

·         Let’s assume he was riding on a motorcycle and got bit by a West Nile mosquito which is a risk common to everyone. If all he has to do is prove his actions in riding the bike are “reasonable and foreseeable” he is entitled to full WC benefits.

·         Let’s further assume he was riding as a passenger on a motorcycle and didn’t dress properly for a cold November day. He develops pneumonia from riding on the motorcycle and his doctor said the lack of proper clothing caused the pneumonia. The new rulings make that illness and its sequalae the responsibility of the employer. Medical care, lost time and permanency would be due. If he were to pass from that now-compensable medical condition, it would clearly be a death claim.

Under the same reasoning, bad personal habits like smoking cigarettes, texting while driving, not dressing properly to account for cold or rainy weather, wearing six-inch high heels or other unsafe personal footwear, smoking in bed and lots of other unsavory or questionable personal activities are “reasonable and foreseeable,” causally connected to work and compensable. All such activities are now compensable for “travelers”—at the same time, there is no such coverage for “non-travelers.”

As a challenge to our readers, if you feel the IL employer is not responsible for everything a “traveler” does from when they leave their house until they return including bad/dangerous personal habits and bad clothing, you tell us what is and isn’t “causally connected.”

Please note all prior legal definitions of “traveling employees” are about business people on business trips where the employer is paying them for foreign travel and reimbursing expenses. Ron Daugherty, Stanislawa Mlynarczyk and the other folks recently found to be “travelers” were injured off the clock and miles from their jobs. They weren’t being paid expenses or compensated during travel.

In our view, this state can’t possibly make employers responsible for injuries, illnesses and deaths for personal risks and bad habits. It doesn’t make sense and can’t be made to make sense. If you want to be mad at us for talking about it, go ahead but we aren’t causing this impossible-to-sustain concept.

We appreciate your thoughts and comments.

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Synopsis: The Illinois Appellate Court Bars Defendant from Contribution/Indemnification claims in a later suit when such claims should have been alleged in the initial lawsuit filed by an injured worker. Analysis by Matt Ignoffo, J.D., MSCC.

Editor’s Comment: The underlying facts in Camper v. Burnside Construction involve Michael Camper, an employee of Neptune Construction, who fell and sustained injuries while working in a sanitary manhole on a construction site in Elgin, Illinois during January 2006. (No. 1-12-1589, October 28, 2013). Camper filed a four-count complaint against general contractors Burnside and Welch (Camper I). In Camper I, Camper alleged causes of action for construction negligence (count I) and premises liability (count II) against Burnside, and alleged two counts of product liability against Welch, as manufacturer of the manhole, under the theories of strict liability (count III) and negligence (count IV). Welch filed a third-party action for contribution against Neptune under the Joint Tortfeasor Contribution Act.

Camper settled his claims against Burnside and Neptune. The settlement agreement stated that Neptune agreed to waive its claim for reimbursement under the Workers' Compensation Act (the WC lien). The court's February 13, 2009 order expressly stated the settlement between Camper, Burnside, and Neptune was made in good faith pursuant to the Joint Tortfeasor Contribution Act; that Camper's action against Burnside, and Welch's third-party action against Neptune, were dismissed with prejudice; and that the court "bars any actions for contribution by any other defendants or tortfeasors against Burnside or Neptune." Camper's cause of action against Welch was to continue on as Welch was the sole non-settling defendant in Camper I.

On April 22, 2009, Camper voluntarily dismissed his complaint against Welch without prejudice. On February 5, 2010, Camper refiled his cause of action against Welch only, by alleging the same two counts of product liability based on strict liability (count I) and negligence (count II) (Camper II). On May 19, 2010, Welch filed a two-count third-party action, seeking contribution (count I) and "indemnification/breach of contract" (indemnification claim) (count II) against Neptune. Neptune filed a section 2-619 motion to dismiss Welch's third-party complaint for contribution and indemnification on the basis that the claims were barred by res judicata.

In separate orders the Circuit Court dismissed Welch’s contribution (count I) and indemnification (count II) claims against Neptune and Welch appealed.

Under section 2-619 of the Illinois Code of Civil Procedure, an action may be involuntarily dismissed on the bases that "the cause of action is barred by a prior judgment" under a theory of res judicata, or that "the claim asserted against the defendant is barred by other affirmative matter avoiding the legal effect of or defeating the claim." The doctrine of res judicata provides that a final judgment on the merits rendered by a court of competent jurisdiction bars any subsequent actions between the same parties or their privies on the same cause of action. Three requirements must be satisfied in order for res judicata to apply:

1.         a final judgment on the merits has been reached by a court of competent jurisdiction;

2.         an identity of cause of action exists; and

3.         the parties or their privies are identical in both actions.

Res judicata bars not only what was actually decided in the first action, but also those matters that could have been decided in that lawsuit.

With regard to Welch’s contribution claim (count I) against Neptune the Court only needed to decide the “on the merits” requirement as the second and third requirements were satisfied here. It noted, generally orders dismissing an action with prejudice constitutes a final judgment on the merits for the purposes of res judicata.

Welch's original third-party contribution claim in Camper I was dismissed for a reason other than for lack of jurisdiction, improper venue, or failure to join an indispensable party. The Court found the February 13, 2009 dismissal with prejudice of Welch's Camper I third-party contribution action against Neptune was an "involuntary" dismissal and, thus, operated as an adjudication upon the merits. Camper's settlement with Burnside and Neptune in Camper I was a final judgment on the merits for the purposes of res judicata, where the parties agreed to a resolution and the Circuit Court dismissed with prejudice Camper's action against Burnside and Welch's original contribution claim against Neptune.

With regard to Welch’s indemnification claim (count II) against Neptune, as the “on the merits” requirement was now met and the identical parties requirement was met the Court only needed to determine whether the indemnification claim (count II) sought by Welch in Camper II has an "identity of cause of action" with the contribution claim sought by Welch in Camper I.

Illinois applies the more liberal "transactional test" in determining whether identity of cause of action exists for the purposes of res judicata. Under the transactional test, separate claims will be considered the same cause of action for purposes of res judicata if they arise from a single group of operative facts, regardless of whether they assert different theories of relief. To determine whether there is an identity of cause of action between the first and second lawsuits, a court must look to the facts that give rise to plaintiff’s right to relief, not simply to the facts which support the judgment. An identity of cause of action is established if two claims are based on the same, or nearly the same, factual allegations.

Welch argued the Camper I contribution action was a cause of action arising out of potential tort liability, while the Camper II indemnification claim was based upon contract liability. Welch further asserted the contribution claim and the indemnification claim relied upon two different sets of factual allegations for support.

The Court held regardless of the fact Welch's contribution claim in Camper I and the indemnification claim in Camper II assert different theories of relief against Neptune, both actions relied upon the circumstances surrounding Camper's accident. Welch's Camper II indemnification claim against Neptune arose from the same group of operative facts as its Camper I contribution action against Neptune. Both actions arose out of the injuries suffered by Camper when he allegedly fell while working. As all three elements of res judicata were satisfied the Court held the indemnification claim (count II) was barred. The Circuit Court judgment was affirmed.

We can learn from this holding that any and all claims need to be addressed prior to settlement agreements and orders being entered. Claims should be alleged as early as possible or they may be barred. Extensive litigation was pursued in this matter in an attempt to bring claims which likely had value, but procedural issues precluded them from being heard by a trier of fact.

This article was researched and written by Matthew Ignoffo, J.D., M.S.C.C.  Please feel free to contact Matt at mignoffo@keefe-law.com.

10-28-13; Have IL WC Death Benefits for "Travelers" Morphed into Life Insurance?; Lack of SocSecurity Spread Language Leads to Lawsuit; State Chamber to Release Blockbuster WC Judicial Review and more

Synopsis: Could Arbitrator Neal’s and Arbitrator Holland’s Recent Passings Be Deemed “Compensable” under the New “Traveling Employee” Version of Illinois Workers’ Compensation “Law?” Have IL WC Death Benefits for “Travelers” Morphed into Term Life Insurance? How Far Will the Illinois Workers’ Comp System Go to Try to Catch Up to Global and Indefensible WC coverage like Kooky California?

Editor’s comment: We have discussed the untimely passing of these distinguished administrators and while considering the new “traveling employee” expansion, it compelled us to ask whether this new legal theory would make their passings indefensibly compensable, as a matter of law. At first glance, most of our clients, readers and observers on both sides may reject the concept, because neither hearing officer was actively on duty when they passed but we assure you that isn’t needed any more in our state. While the events leading to their passings clearly didn’t arise out of or in the course of their work, in our view, if you are a “traveler” you are entitled to global, no-fault and indefensible workers’ comp coverage.

In our reasoned legal view, the Illinois workers’ compensation system is trying to out-flank even the most liberal legislators who run California’s workers comp system on our “Left Coast.” News from California last week confirmed a former University of California, Davis police officer who casually pepper-sprayed “Occupy” protesters just reached a worker's compensation settlement with the University system, despite the lack of any defined injury, other than to his feelings. The Davis (California) Enterprise reports a judge on Oct. 16 approved a $38,000 settlement between former Officer John Pike and the University of California. The 40-year-old former official said he suffered depression and anxiety after death threats were sent to him and his family over the Nov. 18, 2011 event. University spokesman Andy Fell said the case was resolved in accordance with their goofy state laws.

It appears video of Pike pepper-spraying the protesters went viral online. His address and other personal information were posted online afterward, and he allegedly received scores of death threats. We find it hard to believe he would keep answering the phone after the first score of such calls. Pike was fired for using the pepper spray in July 2012 but not until receiving $70K plus in payments for eight months of paid administrative leave. To see the viral video, go to http://www.youtube.com/watch?v=uJb-LZGLOgU Again, this sort of workers’ comp handling indicates to us our workers’ compensation colleagues on the Left Coast won’t let any bad deed go un-rewarded and if you make a claim, you will get a settlement. Their benefits aren’t truly defensible—our concern is the administrators and reviewing courts in this state are going down the same silly “yellow-brick road.”

With deepest respect to the families, colleagues and friends of our recently departed administrators, one of them died of cancer and one died at home in bed. We do not feel the details of their passings are necessary for this article. What we do know is both Arbitrators were unquestionably “travelers” as travel was unquestionably an essential part of the Arbitrator job consistent with the Appellate Court, Workers’ Compensation Division’s definition in their ruling in Kertis v. IWCC. Neither Arbitrator conducted hearings anywhere near their homes and both would travel some distance to get to their work sites. To our understanding, all IL WC Arbitrators are provided expenses to make the trips to the hearing sites. Please also note all IL WC Arbitrators of whom we are aware diligently work at their home offices—downstate or out-state Arbitrators are scheduled to work both at their hearing sites and at their homes.

One of the two Arbitrators above was a cigarette smoker. She smoked on her way to work and smoked outside the hearing sites during work—every attorney who practiced before her knew she and her court reporter took regular smoking breaks during the work day. To the extent the new and unprecedented “traveling employee” concept makes the State of IL responsible for her actions basically on a 24/7/365 basis, if her survivors can prove her cancer was from smoking morning, noon or night, it is our view her untimely passing was compensable as a matter of law.

The other Arbitrator mentioned above, passed away recently at home and in his bed. Again, we don’t know the precise cause but we aren’t sure it makes the slightest bit of difference—we feel this new expansion of WC coverage makes such a worker covered on a 24/7 basis both at home, in transit and at work. To the extent this great man clearly and unquestionably fit the new definition of a “traveler” and worked in his home, wouldn’t he be covered for any and all injuries, illnesses and accidents while both at work and at home?

Please note in their ruling in Admiral Mechanical v. IWCC, the Appellate Court, Workers’ Compensation Division outlined the Commission and attorneys on both sides should be able to litigate IL WC claims over the issue of “reasonable and foreseeable” actions by the travelers. In our view, 99.44% of human behavior is “reasonable and foreseeable.” We consider the passings of both of these illustrious administrators to be the result of “reasonable and foreseeable” activities—there is nothing unreasonable or unforeseeable about smoking cigarettes or passing while in bed. Both things happen around the state every day of every year. In our view, once you define any IL worker as a “traveler,” you owe WC benefits and there are no true defined defenses for accidents, injuries and illnesses. Maybe one “traveler” case in a thousand might have a defense—in our view, WC death coverage for all IL “travelers” is identical to term life insurance. If you think it isn’t just like term life insurance, please reply to tell us your thoughts.

At a recent meeting we had with a current client, she became incensed to hear our suggestion that such global and indefensible WC coverage might exist for millions of IL workers—we advised her of our opinion she was “shooting the messenger” to get mad at us to even consider this potential. We want to emphasize we are completely opposed to this unsustainable expansion of our state’s already generous workers’ compensation benefits. We simply feel our readers, clients and everyone in the system needs to understand where this clunky WC caravan is now moving. In our view, there is no defined “limit switch” once our State’s WC system starts to openly and unquestionably award WC benefits outside what the legislation provides—if you aren’t crystal-clear about it, we are happy to copy and paste to you the section of the ruling inAdmiral Mechanical where the Court’s majority confirms they are no longer constrained by the statutory requirement that an injury “arise out of and in the course of employment.” If you want that language, please send a reply.

Please note the WC death benefits for such workers would be $1,331.20 per week on a tax-free basis for 25 years or $1,730,560.00. The family will also get an $8,000 burial benefit and COLA increases. All of that money will come from IL taxpayers and businesses. As there are probably tens of thousands of IL state, city and local government workers who are “travelers,” please understand our governments’ workers’ compensation costs may triple or more as these claims start to be filed and indefensible benefits will be due. Taxes are going to have to rise to meet these new and unexpected costs. Your editor and others will be discussing this at the IL State Chamber’s Annual Confab tomorrow—for details or to register, please see their advertisement for it below.

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

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Synopsis: Insurance Employee Cries Foul over Conduct of Her Petitioner’s Attorney While Lack of Social Security Spread-Language Rider to IL WC Contracts Allegedly Costs Petitioner $100,000.00. Analysis by Joe Needham, J.D.

Editor’s comment: The enemy of your enemy is your enemy? Curious is a circumstance where an employee sues first her employer, then the attorney she hired to sue her employer.   

This past week the Madison-St. Clair Record reported the story of a legal malpractice lawsuit brought by an Illinois workers’ compensation claimant against her former WC attorney for mistakes made in the settlement of her claim. Plaintiff Barbara Boda’s case is filed in St. Clair County under case number 13 L 430 and the Madison-St. Clair Record article can be accessed at http://madisonrecord.com/issues/889-legal-malpractice/260112-attorney-sued-over-work-comp-case-denies-allegations in the event you want greater detail of the allegations and parties involved. The claim of legal malpractice centers around Petitioner’s Social Security Disability status and the fact a lump-sum settlement payment was considered income for SSDI purposes. Common in the industry is the use of Social Security “spread language” wherein a lump-sum settlement payment is extrapolated out over the expected life-span of the recipient to minimize the annual total received, as nominal earnings will not reduce SSDI payment amounts.

Apparent in Ms. Boda’s case is her settlement did not include a spread language rider extrapolating her settlement payment over time, and the lump sum payment resulted in a reduction of her SSDI recovery, consistent with U.S. law. The Complaint also alleges Petitioner was counseled to accept only a third of her original claim suggesting her attorney undervalued her claim in reaching settlement, and alleges damages of $100,000.00 which is curious in its own right.

Ms. Boda either is or was a Broadspire Insurance Company employee alleging a work-related motor vehicle collision resulting in injury and lumbar fusion surgery. It is not clear in what capacity she was employed or what level of claims sophistication she possesses, but the Madison-St. Clair Record article notes she hired a local workers’ compensation attorney to represent her in the claim. The malpractice suit is still in litigation and to our knowledge there is no records in the WC case other than the settlement contract, so the full facts of either suit are not yet known and the outcome of the malpractice suit has not played out, but while the chips are waiting to fall the matter raises a number of obvious and subtle cautions about the Illinois Workers’ Compensation claims and settlement process.

Obvious is the caution to the claimant’s bar to always know your client’s Social Security status upon settlement, and apply amortizing Social Security approved spread language when necessary to circumvent the reduction of SSDI benefits upon lump sum settlement payment. We can only assume it was ignorance or oversight of the facts of a client’s status and not ignorance of the law and the need for spread language that leads to this type of error, preventable through a detailed but rather simple interview of the client. Between the possible need for Medicare Set-Aside allocation considerations, four separate methods of computing permanency values, additional maintenance entitlement issues, and the SSDI spread language considerations present in this case, there are numerous potential pitfalls on an unwary attorney’s path to case settlement, most if not all of which are avoidable through a single re-interview of the client at the time of settlement negotiation. The alternatives are an ounce of prevention or a pound of pain. If you are interested in reviewing our Social Security spread language to incorporate it into future settlements, please send a reply to the email address below.

Whether there is merit to the claim Boda was counseled to take a short settlement we cannot say without knowledge of the value of the WC claim and Broadspire’s possible defenses, but it raises another less-obvious caution to our insurance community and readers at large; the caution that a legal claim may make for strange bedfellows. There is a certain irony to an employee of a workers’ compensation insurance company claiming to be wronged by an attorney in the business of suing her employer’s clients; the changing of hats does not necessarily make for a better fit. It makes sense Boda’s attorney would negotiate the greatest possible recovery if for no other reason than to maximize his fee and we assume a sounds assessment of the value of the case and the defenses impeding or discounting recovery was employed before counseling Boda on the fair settlement value of her claim. With an employer and a legal advocate comprising notches in her belt and additional litigation pending, we further assume Ms. Boda’s current attorney has made a point to update his own malpractice insurance policy.

It is not our intention to comment on the strengths and weaknesses of Plaintiff’s claim and/or defenses of the parties Defendant. This article was researched and written by Joe Needham, J.D. You can contact Joe about it at jneedham@keefe-law.com.

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Synopsis: Illinois State Chamber to Release A Blockbuster Report on IL WC Judicial Activism—We Consider It a Must-Read for All IL WC Risk and Claims Managers.

Editor’s comment: The Illinois Chamber will release its latest public policy research document when their Annual Workers' Compensation Conference convenes Tomorrow, Tuesday, October 29 at the Lisle Hilton. The report "The Impact of Judicial Activism in Illinois: Workers' Compensation Rulings from the Employer's Perspective" was created earlier this year. The report was created in recognition of the fact that while significant progress has been made with our Governor's office and with members of the Illinois General Assembly toward improving Illinois' workers' compensation climate for business, there has been little progress in our reviewing courts. At the same time, the IL Courts have had a dramatic influence upon rising workers' compensation costs and our business climate.

In this report, the Illinois State Chamber analyzes numerous workers' compensation rulings from the Appellate Court, Workers’ Compensation Division and our highest court, the IL Supreme Court. The rulings analyzed are generally considered as expanding employer liability and creating Illinois' growing reputation for having a costly workers' compensation system. In about a decade, we note the IL workers’ compensation system’s ranking in relation to other states has moved from about the middle to what is now number 4 highest of all 50 states. As we have advised our readers, the new court-created “traveling employee” expansion is almost certain to take us to no. 1, as the concept becomes more widely known and understood. All but two of the 19 decisions reviewed in this epic report have been decided within the past ten years, eleven of the decisions have been handed down within the past five years.

Illinois' general economic woes - incremental recovery from the recession, continued job losses, and years of high unemployment are highlighted in multiple studies and reports about the high cost of doing business in Illinois and poor showings on numerous competitive business evaluations.  Illinois' high workers' compensation costs are a major contributor to low economic development rankings. Media coverage of scandals and abuse in the workers' compensation system and a very candid expose' on the part of Lisa Madigan and her Attorney General's staff provide important and irrefutable evidence of a system in need of administrative and judicial reform. We join with the State Chamber to confirm our view many of the appellate rulings in workers' compensation cases have effectively rewritten the IL Workers’ Compensation Act in new and unprecedented ways. We are certain some rulings have undermined administrative and legislative efforts to improve the state's standing in the eyes of Illinois and U.S. employers.

The full report "The Impact of Judicial Activism in Illinois: Workers' Compensation Rulings From The Employer's Perspective" will be available on line at the Illinois Chamber's web site www.ilchamber.org after November 1. A limited number of hard copies will be available. We urge you to get a copy for your WC library.