10-26-15; Two Big Wins in Court for Brad Smith, JD; Belleville News-Democrat Outs a Questionable Claim/Settlement for Fisherman/Hunter; John Karis, JD Reports on Important Construction Law Ruling...

Synopsis: Big Wins for Bradley J. Smith, J.D. KCB&A’s GL Defense Team Leader!

Editor’s comment: We are very happy to report two amazing success stories on challenging litigation by KCB&A Defense attorney Brad Smith.

Estate of Kroon v. Garda CL Great Lakes, Inc, 2013-L-2007 – Solid Jury Verdict in Multi-Million Dollar Claim Brought by Decedent’s Estate in MVA.

After a week and a half of trial and approximately five hours of deliberations, a Cook County Jury found Decedent 50% comparatively at fault for her own death and ultimately awarded only $15,000.00 in pecuniary damages in a case tried by Bradley J. Smith of Keefe, Campbell, Biery & Associates, LLC.  Decedent’s estate filed suit against Defendant Garda alleging its employee/driver was negligent in operating the armored truck at approximately 2:20 a.m. on New Year’s Day 2013 on East State Street in Rockford, Illinois. 

While the event occurred in Winnebago County, the litigation was brought in the much more Plaintiff-friendly Cook County. Motions to change venue were rejected by the trial court.

Plaintiff sought a range of pecuniary damages up to $3,500,000.00. Decedent made contact with the armored truck within the farthest left lane of the eastbound lanes of a six-lane highway. She entered the highway outside any marked crosswalk and had been drinking during New Year’s Eve festivities. The Garda employee/driver and his passenger did not see Decedent prior to the impact with the truck, but testified they were keeping a proper lookout and scanning the roadway for hazards.  

Attorney Smith successfully argued Defendant’s employee/driver was not negligent and further Decedent’s death was caused by her own lack of due care, including becoming intoxicated and impaired, crossing a dark area of roadway while wearing dark clothing, not keeping a proper lookout, and placing herself on a 6-laned roadway at 2:20 a.m. in the morning. The above matters are still subject to litigation and are subject to appeal.  This article is in no way meant to influence the outcome of any potential appeals.  

In David Gevas v. Boswell Pharmacy Services, Inc., et al., 12-cv-1297, Federal Judge, Northern District of Illinois John Z. Lee granted summary judgment for Keefe, Campbell Biery & Associates’ client, a pharmaceutical company. Defense attorney Bradley J. Smith argued in his motion for summary judgment Defendant is not subject to 42 U.S.C. § 1983 as it is not a state actor subject to liability. Smith further argued Plaintiff failed to bring forth any evidence demonstrating Defendant had a policy or pattern of practice that was deliberately indifferent to Plaintiff’s claimed seriousmedical needs.  

Plaintiff is a prisoner at Stateville Correctional Facility located in Crest Hill, Illinois. Plaintiff argued Defendant was deliberately indifferent to his alleged serious medical needs by failing to timely fill prescription medications for Plaintiff.  Plaintiff also argued Defendant was a state actor as it maintained contracts with a private company to fill pharmaceutical products for the Stateville prison population. In turn, the private company contracts with the Illinois Department of Corrections for the purpose of providing medical services to its prison population.  

Federal Judge Lee granted Brad’s motion for summary judgment and dismissed Defendant from the case. Judge Lee based the summary judgment decision on Plaintiff’s lack of evidence supporting a theory Defendant was deliberately indifferent to Plaintiff’s alleged serious medical needs. The above matters are still subject to litigation and are subject to appeal. This article is in no way meant to influence the outcome of any potential appeals or further litigation.

If you manage motor vehicle, general liability or employment law claims, Brad leads a team of five lawyers that capably handle such litigation with great success at very reasonable hourly rates. We provide cost-effective analysis and case management. We are approved by every major insurance carrier to handle your toughest claims. Feel free to reach out to Brad Smith for advice and counsel at bsmith@keefe-law.com.

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Synopsis: The Belleville News-Democrat Outs Another Questionable Southern IL WC Claim. When Will Mandatory Light Work Ever Be Required in This State?

Editor’s comment: We’ve had several readers forward news from Illinois’ top WC-reporting newspaper The Belleville News-Democrat and reporter George Pawlaczyk about another challenging IL work comp claim by a prison guard from their area. 

A Illinois Department of Corrections guard who became the target of a fraud investigation after he participated in a fishing tournament while out on full-pay disability collected about $65,000 while off and then $48,000 in permanency or PPD on a tax-free basis for his injury. Former IDOC Director Salvador Godinez launched the investigation after pictures surfaced last year of Claimant Fancher out on a boat in a fishing contest while he was being paid full pay. It appears Fancher is now back to work, earning $66,000 per year as a guard at the Vienna, IL Correctional Center.

At the time, Godinez was quoted as saying his administration had "absolutely zero tolerance for employee misconduct of any type." The Corrections Department won't say anything about the investigation, even whether it is ongoing—we vote not to hold your breath for the final report. The investigation was ordered because at the time of the fishing contest, Fancher was collecting his full salary under a regulation called "extended benefits," which allows a corrections officer who has been injured by an inmate to recuperate without losing pay. Claimant Fancher spent 352 days off work, but on full pay, after asserting he was incapable of full duty work following intervention to stop a fight between inmates in October 2013. An emergency room exam of Fancher showed no injuries at the time, according to a physician's report and other medical records.

The Belleville News-Democrat just reported, last month, Fancher’s work comp claim was settled for $48,000 tax-free, minus 15 percent to his lawyer. We have no idea why Tri-Star, the TPA for the State of Illinois or the Attorney General’s office would pay that much money in permanency based on the information reported. It appears the defense side of this claim found an IME physician who felt the “non-injury” claim still required shoulder surgery. There was no dispute this Claimant continues to fish but he now claims he has to change hands a lot. There was photographic evidence of Claimant both fishing and bow hunting. Due to asserted loss of strength, Claimant now says he has to change the type of hunting bow he uses.

IWCC records confirm Fancher lost two earlier IL WC claims, both for alleged repetitive trauma to his hands and elbows after hearings where, despite the testimony of physicians, the hearing officer denied any benefits, stating job information provided to the medical experts by Fancher and a witness was not accurate. According to the Arbitrator’s decision Fancher claimed the “repetitive trauma” to his wrist and elbow based on duties such as "turning keys, writing reports and driving." We consider that a classic “repetitive working” claim that should usually be fought. We salute the Arbitrator for her ruling denying such claims. The denial of these claims has been appealed to the Workers Compensation Commission and is pending oral argument. This article isn’t intended to affect the outcome of that litigation, it is simply our opinion.

There Oughta Be a Law

Our problem with this pending claim isn’t just “employee misconduct.” The defense team at KCB&A remains livid about government “employer misconduct”—shame on everyone who allowed this man and others to be off all work without putting them back to available light work. All of it gives the sense IL taxpayers are being totally ripped off by this system. How many other correctional workers are out there fishing, hunting, running taverns, going to car shows and living off our tax dollars when they could be employed at light work?

We ask the rhetorical question, why wasn’t this worker given light work by the Corrections Department? Why was he allowed to fish and hunt and enter contests on our taxpayer-dollars? Here are open and well-paid jobs available right now for any corrections officer who needs a light duty assignment to allow them to continue working. Yes, Officer Fancher might have needed a month or three of training but remember he was off fishing and hunting and doing whatever fun stuff he wanted for almost an entire year—couldn’t they have put him into a couple of months of training to get him back to work and off your dime? Doesn’t the Americans With Disabilities Act or ADA require our State to do so and accommodate restrictions? Can other Illinois Corrections Officers who are off work right now on full pay be put into jobs at available and empty desks?

·         Account Technician I                                  Full-Time       $3,250.00 - $4,594.00 Monthly             10/28/15

·         Accountant Supervisor                               Full-Time       $4,377.00 - $6,878.00 Monthly             10/28/15

·         Administrative Assistant I                           Full-Time       $4,159.00 - $6,500.00 Monthly             11/03/15

·         Clinical Services Supervisor                     Full-Time       $6,698.00 - $9,894.00 Monthly             11/03/15

·         Correctional Counselor I                            Full-Time       $3,957.00 - $5,854.00 Monthly             10/26/15

·         Correctional Counselor II                           Full-Time       $4,338.00 - $6,500.00 Monthly             10/26/15

·         Corrections Food Service Supervisor      Full-Time       $3,994.00 - $5,867.00 Monthly             10/26/15

·         Corrections Supply Supervisor I               Full-Time       $3,994.00 - $5,867.00 Monthly             11/03/15

·         Corrections Vocational Instructor             Full-Time       $4,161.00 - $6,228.00 Monthly             10/28/15

·         Executive I - Opt M1                                    Full-Time       $4,377.00 - $6,967.00 Monthly             10/29/15

·         Executive II - Opt M1                                   Full-Time       $4,873.00 - $7,729.00 Monthly             10/29/15

·         Executive II - Record Office Supervisor   Full-Time       $5,092.00 - $7,729.00 Monthly             10/26/15

·         Executive Secretary I                                  Full-Time       $3,371.00 - $4,793.00 Monthly             10/27/15

·         Health Information Associate                    Full-Time       $3,250.00 - $4,594.00 Monthly             11/04/15

·         Internal Auditor Trainee                              Full-Time       $2,464.00 - $4,731.00 Monthly             10/29/15

·         Office Assistant - Opt 2                               Full-Time       $2,889.00 - $3,933.00 Monthly             11/03/15

·         Public Service Administrator - Opt 7         Full-Time       $7,135.00 - $10,617.00 Monthly             10/28/15

·         Senior Public Service Administrator Opt Full-Time       $4,295.00 - $12,128.00 Monthly             11/02/15

We are not making this up, folks. These jobs are a small part of a total of 77 such light duty corrections jobs are currently posted on the CMS website at

http://agency.governmentjobs.com/illinois/default.cfm?action=jobs&sortBy=&sortByASC=ASC&bHideSearchBox=1&PROMOTIONALJOBS=0&TRANSFER=0&SEARCHAPPLIED=1

As we have said before and will say again until Governor Rauner, Speaker Madigan or Senate President Cullerton or their successors will hear and act on it, we need a state law mandating light duty be implemented for Illinois state workers, universities, local governments and taxing districts. Taxpayer dollars are going to continue to be thrown away under questionable circumstance until this is enacted. The goal of such a law mirrors ADA and protects taxpayers by insuring their hard-earned tax dollars are used wisely—get injured government workers back to full work or light work or some work as soon as they can.

We salute The Belleville News-Democrat and reporter George Pawlaczyk for reporting this important development. We appreciate your thoughts and comments. Please post them on our award-winning blog.

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Synopsis: General Contractor Skirts Liability By Avoiding Control! U.S. District Court finds construction manager not responsible for the alleged negligence of a supplier and installer in the building of a sports venue owned by the City of Bloomington. 

Editor’s Comment: On September 14, 2015 the United States District Court for the Central District of Illinois in Rivers v. Central Illinois Arena Mgmt, Inc. et al, issued a decision granting Defendant’s motion for summary judgment. The Federal Court held the construction manager under contract with a city to build a sports venue was not liable, either on a theory of vicarious or direct liability, for the alleged negligence of a supplier and installer of a dasher board system.

Facts of the Case: On May 17, 2013, Plaintiff was playing professional football in U.S. Cellular Coliseum (“the Coliseum”), a sports venue owned by the City of Bloomington, Illinois (“the City”).  At some point during the game, Plaintiff collided with and fell through a gate built into dasher boards surrounding the football field. According to Plaintiff, the latch mechanism on the gate failed to keep the gate secure. Plaintiff suffered injuries from the collision and subsequent fall.

Plaintiff filed a four count complaint against four separate Defendants, one of them being Johnston Contractors, Inc. (“Johnston”). Johnston was engaged by the City to serve as the construction manager for the construction of the Coliseum. Plaintiff charged Johnston with general negligence in constructing the Coliseum and installing the dasher boards which allegedly caused Plaintiff’s injuries. 

Johnston contended since its contract with the City limited their duties to a construction manager to only ensuring a safe work place for other employees engaged in building the Coliseum, to provide general administrative oversight to the construction site during the construction of the Coliseum and to assist in obtaining bids from sub-contractors and advise the owner as to the appropriateness of the bids, there was no duty upon them to ensure the dasher board system was properly designed or installed. Johnston filed a motion for summary judgment asserting Plaintiff had not produced evidence demonstrating Johnston exercised the type of control necessary to make a general contractor liable for an independent subcontractor’s negligence.

The Federal Court noted in Illinois, the general rule is a party that entrusts work to an independent contractor is not liable for that independent contractor’s acts of negligence. However, there is an exception to this rule known as the “retained control exception” and it allows a general contractor or construction manager who has entrusted work to an independent contractor to be liable for acts of negligence when such a contractor retains sufficient control over any part of the work which causes an injury. The “retained control exception” allows for both vicarious and direct liability depending on the degree of control the allegedly negligent defendant retained over the subcontractors. 

U.S. District Court Decision: The Court found Plaintiff had not presented enough evidence on the issue of retained control to survive summary judgment. In their ruling they noted the construction manager did not exercise the type of control over the work of the supplier and the installer of the dasher board system, as required to be subject to liability for the supplier's and installer's alleged negligence. Although Johnston received the drawings of the dasher boards and requested the fabrication of the dasher boards be delayed, the Court still found this did not establish Johnston was the decision maker over how the subcontractors performed their work. The court reasoned in order for the “retained control” exception to apply, it is not enough that the party against whom liability is sought merely to have retained a general right to order the work stopped or resumed, to inspect its progress or to receive reports, to make suggestions or recommendations which need not necessarily be followed, or to prescribe alterations and deviations. 

Furthermore, the Court noted control is not the only requirement, there must be evidence the principal entrusted the subcontractor with its work. The Court found neither party had produced such evidence. The Court pointed to Johnston’s contract with the City, which provided the construction manager was the City's representative on all subcontracts for construction work to be performed by subcontractors. This did not demonstrate the construction manager entrusted the supply, delivery, and installation of the dasher board system to supplier and installer. This provision did not convey it was the construction manager's duty to actually select or retain the subcontractors. The contract also specifically provided the City "shall determine, with the advice of construction manager, and subject to the reasonable objection of the Architect, which bids will be accepted," and the city, and not the construction manager, would enter into contracts with subcontractors.

Where Illinois state court decisions appear to always be expanding general contractor’s liability, this case finally seems to limit the liability to the amount of control a general contractor has over a construction project. In this case, the construction manager was supervising the project but never really had control over the installation or fabrication of the dasher boards. Therefore, we agree with the Court’s decision to deny Johnston’s liability for the alleged negligence of others. 

This article was researched and written by John Karis, JD. You can reach John 24/7/365 for questions about general liability and workers’ compensation at jkaris@keefe-law.com

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Synopsis: Important News on Ever-Changing IL Arbitration Dockets—Who is Actually on First? 

Editor’s comment: The IL WC Commission announced in order to comply with Section 14 of the Illinois Workers Compensation Act, the dockets of all existing downstate arbitrators will be reassigned to another arbitrator effective January 1, 2016. Due to the necessity of sending out notices, the IWCC website will begin to list the name of the new arbitrator well in advance of the January 1, 2016 docket transfer. Please be aware that these cases are still assigned to the original arbitrator. If you have settlement contracts or motions, including 19(b)s,  they should be directed to the arbitrator whose docket the case has been on and not the new arbitrator taking over in 2016. All cases will be transferred on January 1st, including those cases where a decision has been reached on a 19(b). The 19(b) cases will not follow the current arbitrator to their new assignment but will stay in the docket where it was originally assigned.

We looked and note Section 14 says this:

The Commission shall assign no fewer than 3 arbitrators to each hearing site. The Commission shall establish a procedure to ensure that the arbitrators assigned to each hearing site are assigned cases on a random basis. No arbitrator shall hear cases in any county, other than Cook County, for more than 2 years in each 3-year term.

We assume the confusion and hilarity that are sure to follow on January 1, 2016 is due to the last sentence. Let’s hope someone with a brain considers changing that law to avoid this craziness moving forward.

10-19-15; The Biggest IL WC News Nobody Noticed; John Campbell, JD on ACA and the Coming Cadillac Tax; Certificates of Insurance--Are They Phony? and much more

Synopsis: The Biggest IL WC News No One Noticed.

Editor’s comment: We love when major changes happen and the only party to notice appears to be the defense team at KCB&A. If you were paying attention, you might have heard IL Governor Bruce Rauner recently announced the James R. Thompson Center where the Illinois Workers’ Compensation Commission has been housed since 1985 is being sold. The word is our struggling state government is losing $10-20M a year, every year to keep this pink elephant of a building open. Gov. Rauner’s plan is to auction off the architecturally odd Thompson Center, which probably will lead to the emptying and razing of the 16-story glass-paneled building. Rauner called the building an "inefficient" and "wasteful" use of space with its huge basement-to-roof indoor atrium and backlog of maintenance projects equaling roughly $100 million. He wants to scatter downtown state employees/agencies and put the building up for a cash sale this year.

"We think it's a home-run decision in every regard," he said at a news conference. A spokesman for State government didn't have a list of the possible sites that could house these displaced state employees when the Thompson Center is sold. But he didn't rule out office space in the suburbs, saying Chicago, the suburbs and Springfield are all possibilities.

The building, designed by architect Helmut Jahn and named for a former Illinois governor, opened in 1985. It cost the state roughly $170 million. Marked by a half-dome with pinkish-red and blue panels, the 1.2 million-square-foot building sticks out, particularly next to its more stately granite neighbor, Chicago City Hall. To our understanding, both House Speaker Madigan and Senate President Cullerton are generally okay with the plan, although they remain locked up with the Governor on most other issues, including the lack of a state budget. Every indication is once the goofy Thompson Center is sold and closed, it will be rapidly demolished by the new owner so more functional commercial buildings can be built on the valuable real estate upon which it sits.

Is that going to be a major change for the IL WC community?

Youbetcha—basically, there are now over 2,200 state workers in the Thompson Center who are going to be displaced. Where will they go? There is commercial property all over the Chicago loop available for the right price. A few problems for the IWCC is they have relatively unique real estate needs. You need to remember the current IWCC floor of the Thompson Center was sort-of designed for the IWCC’s needs--even though the original architects made a mess of several obvious issues that later had to be corrected. The IWCC needs:

·         Security to avoid having guns/knives/poisons and other lethal stuff that might be snuck in by challenged folks;

·         Mid-sized hearing offices or “mini-courtrooms” to hold hearings;

·         They need large hearing rooms for oral argument and status calls;

·         Lots of admin room and

·         Executive offices for the Chairman and other Commissioners.

Where will the IWCC move to? How will they pay rent?

Gosh only knows. Again remember there are 156 current IWCC employees. They need space, space and more space for all those workers. We feel their new and unexpected rent is going to be a substantial annual expense. The IWCC is going to be instantly competing with other state agencies/departments with the same immediate rental and security needs. Please also note the IWCC isn’t funded by the IL General Revenue fund that comes from our tax dollars—as we have advised, the WC Commission has their own specific Operations fund that is paid for 100% by Illinois business and insurance companies. Those businesses and insurance carriers aren’t going to want to see higher levies than they currently pay. The IWCC is probably going to have to pay rent and other real estate costs out of their own money. This might mean payroll or other service cuts because most of their 2015-2016 budget is already spoken for.

We hope they move to the less-expensive office buildings in the west Loop near the CTA headquarters where there is lots of available and relatively cheaper space and easy access to Metra and CTA. We are sure lots of law firms that chose to move near the current IWCC location are also going to want to move near their new “courthouse.”

So what is the odd legend of the Thompson Center?

Well, there are lots of interesting stories and gossip. The Thompson Center has been a filming location in several motion pictures, including 2000's The Watcher and 1990's The Kid Who Loved Christmas, The building was seen at the end of the 1986 film Running Scared.

Our favorite dumb story about the Thompson Center was the plan by someone to create a giant snowball in the basement during the winter and then blow fans on it all summer as a low-cost central cooling system. That entire concept quickly and hilariously failed and a new air conditioning system had to be installed at high expense.

Another weird story is the “fatal attraction” of the Thompson Center because the architect made the odd decision to create a giant “target” in the center floor of the building. Combined with the railings that go up 17 floors, this design created an interior that gives the impression of startling, vertiginous height. At least five-six suicides were reported by the IL State Police with some indication the jumpers may have been trying to hit the “target.” Even when troubled folks weren’t jumping off the railings, pens, papers, briefcases and all manner of junk was unintentionally dropped to fall to the floors below, creating their own hazard.

The older veterans of the IWCC will remember in 1985, the IWCC had towers with pay phones in them for convenience of attorneys and the visiting public. For the youngsters among our readers, “pay phones” were a concept among old-timers where you put coins into the phone and could then call claims adjusters or office phones. The pay phones were removed when they were replaced by cell phones about ten-fifteen years ago.

The building also was designed with a water fall to a wading pond from the ground floor to the basement or concourse food level below. The eminent Arthur O. Kane, one of the most storied of all IL WC attorneys, was at the annual WCLA Christmas party one year and tripped on the low tiled edge of the pond. He was moderately injured and taken for care. He brought an insurance claim against the property and advised us he settled it favorably. Another attorney whose name will be shortened to Jim G, tripped and fell backwards into the same wading pond during a different Christmas gala. When he didn’t arise quickly from the shallow waters, the plucky Francis O’Byrne slogged into the pond to swiftly save him from a watery fate. The waterfall and wading pond were later removed at some expense. Obviously, the WCLA Christmas party will also have to move elsewhere.

In our view, this building was poorly conceived and badly designed. The inefficient property couldn’t have used a fifth of the available office space of an entire city block, requiring the state to continue to pay to rent offices all over the Loop, at an additional cost to IL taxpayers. Other than to forecast uncertainty and challenges when the IWCC moves, we don’t think anyone will miss this massive monstrosity.

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

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Synopsis: Affordable Care Act impending penalties on “Cadillac Health Plans” may compel many U.S. employers to radically change their healthcare options offered to employees in the not-so-distant future. Analysis by John P. Campbell, Jr., JD

Editor’s Comment: Defense attorneys at KCBA were dispatched to conduct a seminar recently on The Affordable Care Act or what many folks call “Obamacare”. As we peeled back the onion on this complex Federal Statute, we noted an annual layering of additional taxes each year designed to fund this massive national healthcare system. We have a simple and easy to understand presentation for you, your company and your managers on this complex but important topic—if you have interest in such a presentation at your office or work site, send a reply.

First and foremost, it should be understood that the Affordable Care Act is largely a function of our Federal tax laws. Individuals may be subject to tax penalties via their tax filings for not having coverage. Conversely, depending on income level, citizens may also enjoy tax credits for what they spend on health coverage they purchased individually. In a similar way, businesses may be penalized via the tax code for not providing coverage options for their employees (there are small business exclusions depending on size of a company).

One of the more troubling aspects of this tax-driven health system is the “Cadillac Health Plan” tax slated to take effect in 2018. This is a very heavy 40% non-deductible excise tax on employer-sponsored health coverage which are deemed “high cost benefits”.

What is a “high cost benefit plan”?

The threshold for high-cost plan qualification are currently set at $10,200 for individual coverage and $27,500 for family coverage. So as an example, an individual with $11,000 plan in 2018 would pay 40% tax on the extra $800 over the $10,200 threshold. Therefore, an additional $320.00 excise tax would be charged for such an individual plan. This added tax has a two-fold purpose. First, the additional tax revenue will help fund the overall health system by acting as a cost-sharing mechanism for insurers. It is no secret there will be many folks on very basic, low-cost plans where their health costs far out-pace the premium paid. The added tax will distribute this cost to the rest of us.

Secondly, there is a blatant “social engineering” aspect to this law. Those who created this complex system knew there were limits to healthcare resources. Everyone cannot have absolute 100% access to every level of care all the time without a shortage of resources. So what do we do? We tax the snot out of those who “over use” healthcare resources. When your premium tips over the Cadillac line, you pay a heck of a lot more for coverage in the following years.  This excise tax is designed to compel the healthcare consumer (read; all of us) to make careful choices so as to not “overuse” our healthcare access.

How do we avoid such a heavy tax?

Obviously, to goal for employers and employees alike is to remain below this trigger point for premiums and avoid the heavy excise tax. Many observers predict employers will promote “wellness plans” to compel better overall health of employees. Some reports even suggest nurse consultants will be made available for employees to “manage” their healthcare choices from year to year. We may see more people postponing major procedures to reduce their healthcare “footprint” if you will –thereby keeping their renewal  low and their plan below this Cadillac trip-line. We may also see employers offering far different plans to their employees with either reduced coverage options or simply transferring a significant portion of the additional cost on to their employees. This is an unfortunate result, to be sure.

Like it or not, national healthcare is here to stay, having survived two Supreme Court challenges. We are now faced with navigating these ongoing changes to healthcare law.  We will continue to report on implementation and changes to this law affecting all of us, offering our best suggestions to help employers and individuals manage the new world of healthcare this country.

This article was researched and written by John P. Campbell, J.D., Law Partner at Keefe, Campbell, Biery & Associates, LLC. You can easily reach him at jcampbell@keefe-law.com.

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Synopsis: Are COI’s or Certificates of Insurance Phony and Misleading?

Editor’s comment: We note COI’s are very important when you are hiring an “independent contractor” to perform any service for your company. We assure you most contractors aren’t truly “independent” in the workers’ comp arena if they can’t prove to you they have requisite WC coverage for themselves and their workers. We note the IWCC has staff and the statutory power to immediately shut down any job where there isn’t WC coverage for everyone on the site. We also want our readers to know one facet of workers’ comp fraud is to present a phony COI.

We also are asked if you should allow the owners or partners of an independent contractor to “opt out” of their own WC coverage that is otherwise provided for their employees. The IL WC Act allow owners to opt out. We consider this a very bad business choice. If you want all the reasons why, send a reply.

In a recent IRMI [International Risk Management Institute] Expert Commentary, David Dybdahl disclosed when his risk management firm audited hundreds of COIs and their underlying policies over a period of years, they found more than 90% had, in their estimation, at least one material misrepresentation between the insurance coverage shown on the COI and the coverage provided by the actual underlying policy. A major percentage of Dybdahl’s 90% was additional insured disconnects. His firm repeatedly found two key oversights relating to endorsements such as ISOs CG 20 33, CG 20 10 and CG 20 37 that led to gaps in additional insured (AI) status between what the COI stated and the reality:

·         Improper usage and evident misinterpretation of “blanket” additional insured endorsements such as the ISO CG 20 33. One problem is represented by the common reference to this and similar endorsements as “blanket.” That word is not only never used in the actual endorsement (the proper term is “automatic status”) but its misleading. “Blanket” implies every party asking to be an additional insured is covered. But automatic status as an AI only applies to those “for whom you are performing operations when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured to your policy.” Although that may cover quite a few potential AIs, it also leaves a lot of commonly requested AIs off the list. For example, consider an agreement in which your insured has a written contract with Company B, wherein B also requests AI status for its subs, vendors, affiliates, local municipalities, and so on. Because your insured only has a written contract with Company B, only Company B is automatically added as an AI—none of the rest. Company B is only an AI while your insured is actively performing operations for B. When those operations are completed or suspended—or perhaps, have not yet begun—the ISO CG 20 33 provides no AI status to B either.

·         Improper usage of scheduled AI endorsements. For situations in which it’s preferable to nail down specific AI status for any person or organization—or, in the case of completed operations, exposures not covered by the CG 20 33—ISO provides other endorsements. Some affirm AI status to entities (such as the CG 2010); others may address specific exposures (such as the CG 20 37 for completed operations). Although these endorsements have their own requirements and conditions for coverage to apply, Dybdahl’s firm found an abundance of errors resulting not from coverage technicalities but rather from simple failure to properly execute the endorsements.

To minimize confusing a COI with actual coverage, every agent who has frequented an E&O session should know the requirements: only use ACORD forms, never alter the language of the COI, do not represent coverages on the certificate — especially in the “Descriptions” section—that do not exist in the actual policies, et al. Follow the proper path and let the ACORD disclaimers provide the protection for which they were designed, and the agent is in as good a position as possible to defend against COI E&O claims.

But none of those precautions may protect an agent where the COI clearly states a certain coverage has been provided, and it hasn’t. It may simply be a clerical error, but to a certificate holder it sure looks like outright fraud. And no state regulation, insurance department memo or ACORD disclaimer, is going to protect you for fraud.

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

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Synopsis: KCB&A is Looking for an IL WC Defense Lawyer with three to five years’ experience. The position is open right now. Need resumes.

Editor’s comment: We are adding to our legal staff—if you are or know a candidate, have them reply to this Update!!

We have one opening for admin staff. If you have or know someone with litigation experience, send a reply with resume asap!

10-12-15; Six Ways to Close an IL Work Comp Claim; Analysis of a "Repetitive Working" Appellate Ruling by Pankhuri Parti, JD; Lindsay Vanderford, JD reports on a WC Fraud Conviction and much more

Synopsis: The Six Ways to Close an Illinois Workers’ Compensation Claim.

Editor’s comment: We keep having clients ask so we wanted to provide our expert legal guidance on this important topic for all sides of the matrix. When the defense team at KCB&A speak at local, regional and national conferences, we are routinely advised the cool thing about IL WC is a claims handler or risk manager can actually “close” files if you do things correctly. In our neighboring states, many systems don’t allow for “complete” closure and little annoying things can happen to cause claims to re-open. As much as our readers and other observers have issues with the IL WC system, they do like the sense of closure provided in our difficult WC claims.

To our understanding, there are six paths by which an IL WC claim closes:

1.    Lack of statutory 45-day Notice;

2.    Running of the statute of limitations in Section 6(c) of the IL WC Act;

3.    Voluntary dismissal of the claim by Claimant and counsel, if applicable;

4.    Dismissal of a claim for want of prosecution;

5.    Settlement;

6.    Final decision of the Arbitrator, Commissioner or reviewing court.

If any of our readers know of another path to close an IL WC claim, send your best thoughts and we will forward a free KCB&A visor.

Let’s take a closer look at the six paths for closing IL WC claims—Number one is lack of statutory notice of injury/exposure. If someone is injured and they know they are injured at work, they have 45 days for their employer to learn of the accident/exposure. Please note the employee doesn’t have to actively provide notice of accident/exposure, all they have to demonstrate is the employer learned of the accident by any means. If statutory notice becomes an issue, the employer is supposed to be able to demonstrate they are “unduly prejudiced” in such proceedings by such defect or inaccuracy in the notice of accident/exposure. To us, the easiest way to demonstrate undue prejudice is to claim your accident investigation protocols were blocked due to the failure of the employee to notify you and/or for you to learn of the accident/exposure in any other way.

In a more realistic sense, to the defense team at KCB&A, your better shot at defeating/blocking a claim due to lack of statutory notice is to treat it from a common sense perspective—if the employee was seriously/moderately injured at your workplace, how is it that you and your supervisors never learned of it? We feel most Arbitrators will ask the same question—if you broke your arm working for your employer but were regularly at or around work and in the continuing company of your supervisors and other co-workers, how come no one ever knew anything about your medical issues for more than six weeks?

In short, lack of statutory notice should close a claim but that doesn’t mean you aren’t going to have to fight to prove a lack of statutory compliance so it might be a challenge to truly call that “closing” a claim, as much as it is a valid defense.

Number two, the IL WC statute of limitations is also a gauntlet a defense lawyer might choose to run. The IL WC Act requires the Application be filed three years from the date of the accident/exposure. The statute of limitations can be extended or “resurrected” for two additional years, if there is the payment of any WC medical, lost time, permanency or death benefits. This extension or new period for the statute to run can include a medical bill for a work-related injury being paid by the employer’s group health carrier. As the last “twist” on the IL WC statute of limitations, you have to be aware of the IL Supreme Court’s “activist” ruling in Durand v. IWCC where the Court wouldn’t dismiss a claim based upon repetitive trauma where the worker alleged she “worked in pain” for four years prior to filing the Application. In our view, this controversial decision eviscerates the SOL because any and every worker who misses the deadline can simply claim to be “working in pain” to keep the statute open for a new claim. In our view, this legal concept might be more challenging if the delay in filing the Application was five to ten years or more.

Number three, voluntary dismissal of a claim by claimant is easy. This form needs to be completed by Claimant and their attorney, if applicable.

IC17

Motion to Voluntarily Dismiss Case   (rev. 12/04)

Word.doc

Adobe PDF

Once they have signed the form and filed it with the IWCC, the Arbitrator assigned should receive, review and sign the form. When that happens, you need to make the call on just closing your file or waiting for the running of the statute of limitations. Please remember a claim that has been voluntarily dismissed is done without prejudice—they can re-file any time during the SOL.

Number four, the dismissal of a claim for want of prosecution or DWP is a common and generally easy concept to understand. Illinois claims are set on a calendar for each assigned Arbitrator. The calendars can be reviewed on the great website for the IWCC. Each claim will trundle along and trundle along until they reach about two-and-one-half years. After that point, someone has to show up before the Arbitrator to ask for claims to be continued and the defense has to agree or at least, not fight continuances. If they don’t, the decision to DWP the claim is up to the Arbitrator. Sometimes they are tough, sometimes they wait and are tough later.

You can’t always blame your defense lawyer for cases getting endlessly continued but we do recommend you advise your defense lawyer in writing when/if they no longer have your authority to agree to continue claims. We have seen claims continued to the fourth, fifth and more years because defense counsel never puts their foot down to demand a hearing or otherwise demand trial or dismissal of old, moldy claims.

When a case gets dismissed, the IWCC is supposed to snail-mail notices of DWP to the parties or counsel for the parties. The notice indicates there is 60-days to file a Petition to Reinstate the claim. If the Petition to Reinstate is timely filed, it is possible it can sit for weeks, months and years—it is incumbent on defense counsel to demand the Petition be timely adjudicated so the matter is reinstated and then settled/tried. Please also note some defense attorneys “roll over” to allow claims to be reinstated—the team at KCB&A always asks our clients what they want first. Many Arbitrators will allow reinstatement and set the matter on a date certain—if the hearing is held, the matter remains reinstated. If the hearing doesn’t occur, the claim may be again dismissed.

Number five, an approved settlement ends IL WC claims. Please note the IWCC settlement process requires Arbitrator involvement—there clearly were concerns in the olden days that injured workers were being taken advantage of so a state official has to approve the deal to insure there is no funny business. We tell our readers, you can like the IL WC contract settlement approval process or hate it but we are sure it isn’t going to change soon.

For some of our clients, this is a new challenge because they want to close everything a year ago. Some clients now want to provide settlement authority to see their toughest claims close in a day or so—that isn’t slightly possible. We want all Illinois risk and claims managers to understand the IL WC settlement process usually takes about a month. To settle a claim and close a defense file, we have to:

      Reach a complete settlement of all issues

      Draft settlement contracts that cover all issues and completely protect you—the defense team at KCB&A can do this part of the process on a same-day, real-time basis;

      Send the contracts to the adjuster and/or employer for their review, saving-to-file and approval—again, it is sent asap;

      Then with client approval from you, we sign and send to opposing counsel via email;

      Opposing counsel will print, sign and then contact Claimant for their discussion and signature—this is of unknown duration but many times, Claimants will come to OC’s office to sign to speed things up;

      Then opposing counsel will snail mail or bring the contracts to the Arbitrator assigned with an SASE;

      Then the Arbitrator gets to the contracts in the normal course of business. We assure our clients all IL WC Arbitrators are diligent and professional—it is not a good idea to tell or demand an Arbitrator to put your contracts at the front of the line because they call them as they receive them;

      Thereafter the Arbitrators

o   Reject them for technical problems of whatever sort or

o   Snail mail them back to Claimant’s counsel who then email them to us to forward to you.

When we get them back, we immediately route them to our clients for payment. We can’t close our files the minute we send the approved contracts to you because we need to know you or your adjuster has paid them to insure you aren’t going to be the subject of either a penalty petition or an 19G Petition for a judgment against Respondent.

If you have any idea how to make IL WC settlements faster, please let us know. Yes, we wish the draft signed contracts could be emailed to and from the Arbitrators—that can’t happen yet.

Finally, Number six, the last of the six ways to close an IL WC claim is via a final decision by an Arbitrator, Commission panel or reviewing court. This means the Arbitrator heard the claim and filed the decision, the parties receive it and no one files an administrative appeal, called a Petition for Review within thirty days. If the Commission reaches a decision, the parties only have twenty days to perfect an appeal to the Circuit Court with lots of little details to be completed very, very rapidly—if you need the many nuances, send a reply. After a Circuit Court judge files an appeal, the parties then have thirty days to appeal to the Appellate Court, Workers’ Compensation Division. If that body decides a claim and you want to appeal to the IL Supreme Court, send a reply and we can explain the many rules that come with that test.

We appreciate your thoughts and comments. Otherwise, feel free to post your thoughts and ideas on our award-winning website.

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Synopsis: The IL Business Community Groans as a “Repetitive Working” Claim Approved by IL WC Appellate Court. Thoughts and Analysis by Pankhuri K. Parti, JD.

Editor’s comment: The decision of the Appellate Court, WC Division in S&C Electric Company v. The Illinois Workers’ Compensation Commission once again highlights the difficulties faced by Illinois employers in demonstrating a disputed condition may not have been work-related despite presenting equally convincing explanation of a non-work related event being the cause of the alleged symptoms. The decision also underscores the importance of carefully choosing which case to appeal and argue in front of this very liberal Appellate Court panel so as to prevent more precedents like this one being established and making an already difficult road even more tough for all Illinois Respondents and their attorneys.

On October 2, 2015 the Appellate Court, WC Division published its decision which, not surprisingly, affirmed and adopted the decisions of the Arbitrator and the Commission finding Claimant suffered an injury arising out of and in the course of employment and his current condition of ill-being was causally related to the alleged event

Claimant Cortez filed two separate Applications for Adjustment of Claim, one alleging a discrete work accident which occurred on February 4, 2011 resulting in “trauma” to his lumbar spine as a result of lifting and pulling equipment and the second one alleging injury to “man as a whole” caused by lifting, bending, and pulling in the performance of his employment and thus alleging a more repetitive trauma type condition and not an acute occurrence. If you think this sort of double-pleading is blurring the lines between what an “accidental injury” is supposed to be and what “repetitive trauma” is, we agree with you. If all typical work is now going to be “repetitive trauma,” work comp costs in this state are going to skyrocket, because any medical condition can now be mystically “related” to work. Please note this claim was decided by an IWCC panel from years ago—we hope our current hearing officers are going to take a stricter look at what an “accident” might be moving forward.

Both claims were adjudicated in a consolidated hearing on September 11, 2012 and the Arbitrator concluded Petitioner established compensability and awarded applicable benefits. Upon review the Commission affirmed and adopted the Arbitrator’s decision, and then later the Circuit Court affirmed the decision of the Commission.

Facts of the Case: During the arbitration hearing and all the appeals thereafter, the facts of the claim were significantly disputed with both sides putting on more than one witness to establish the veracity of their individual positions. Claimant alleged as a “mechanical assembler basic” his duties included assembling an average of three-four stainless steel tanks each shift and he worked 10 hour shifts and five day weeks. He claimed on February 4, 2011 he was using a manual hand jack with a steel extension to pick up a pallet and to do this he bent at the waist pulling up on the extension bars. This was when he claimed he felt a “click” in his back followed by pain. However, he continued to do his job and did not report the injury to anyone in leadership until ten days later on February 14, 2011, when he informed a co-worker the pain worsened and was going down to his left leg making it difficult for him to walk. The co-worker then told Claimant to report the event to supervisor who sent Claimant to the nurse allegedly saying in a “threatening manner” the symptoms were not work-related.

Claimant also presented an affidavit from his co-worker indicating the co-worker was working near claimant, when the co-worker saw claimant “injure his back” in the course of his employment. Although he could not recall the exact date of the incident, the co-worker stated in his deposition Claimant did not appear to have any back problems prior to the work onset.  

It was the testimony of the supervisor all employees were allowed to leave work early on February 1, 2011 due to a snow storm and when Claimant returned to work on February 3, 2011 he showed the supervisor a picture of the snow in his alley allegedly saying “he had to shovel the snow to get out to the street.” While Petitioner admitted showing the picture of the snow, he denied saying he shoveled snow, claiming instead he did not own a shovel at the time. The supervisor also testified Claimant denied injuring himself at work when he reported the symptoms on February 15, 2011 and later attributed them to work because another employee had also allegedly experienced the same symptoms.

The co-worker in his testimony stated Claimant informed him of getting similar pain when claimant was working at a liquor store and the pain would just come and go.

Respondent also presented the testimony of a nurse about a February 15, 2011 nurse’s note in which she wrote Claimant complained of pain which started “three weeks ago” and because other day shift employees asserted the same symptoms, he felt his pain must also be related to “work.”  

The medical records entered into evidence indicated Petitioner had a severe disc herniation at the L5-S1 level with impingement on the S1 nerve root and it was the opinion of his doctor the severe extrusion of the disc was indicative of a traumatic change. We note there is no indication of a “trauma” at work in the record. At the same time, during her deposition and upon cross-examination, the physician admitted a person could suffer from such a herniated disc from shoveling snow.

It was also the opinion of Dr. Malek that Petitioner’s ill-being and the eventual need for a lumbar fusion were the direct result of the February 4, 2011 work event. However, Dr. Soriano – the independent medical examiner – opined the herniated disc was not a result of the February 4, 2011 work incident and he based his opinions on the incident investigation report in which Petitioner admitted to not having been injured at work and the initial medical records in which Claimant did not attribute his complaints to lifting, pushing, or pulling at work.

Appellate Court Decision: Respondent’s appeal was based on three arguments: (1) Claimant’s co-worker’s testimony was not credible, (2) the discrepancies between the testimony of Claimant and Respondent’s own witnesses, and (3) claimant’s failure to initially provide the details of his alleged accident to the treating physicians.

In typical Illinois WC appellate fashion, it appears an “accident” was presumed despite the fact no accident appears to have been described in any record—Claimant did his normal work in a normal way. In our respectful opinion, this is a repetitive working claim without any description for the factual basis upon which Claimant might have suffered a severe herniated disc. Thus the Court affirmed the decisions of the lower courts and held the Commission’s determination of Claimant sustaining a compensable work-related accidental injury on February 4, 2011 was not against the manifest weight of the evidence.

We note this decision of the Appellate Court further highlights the difficulty Illinois employers face in denying a disputed onset of pain and the almost insurmountable burden they face in proving the negative – that an alleged medical problem was not caused by the work onset.

In the present case there was clearly conflicting testimony – Claimant and his witnesses were claiming it was the work onset of February 4, 2011 which caused his current condition of ill-being, while the witnesses from the Respondent’s side testified Claimant repeatedly contradicted himself and had not linked his back pain to an “accident” when he initially reported the condition and also when he initially sought treatment. Additionally, Respondent also provided a perfectly viable alternative explanation for the symptoms – shoveling of snow by Claimant after the historic blizzard in Chicago back in 2011. Even Petitioner’s own doctor – Dr. Brown – agreed the disc herniation seen in the MRI could have been caused by shoveling snow.

This article was researched and written by Pankhuri K. Parti, JD. The opinions Pankhuri is voicing are hers. Pankhuri can be reached 24/7/365 for questions about WC at pparti@keefe-law.com.

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Synopsis: Claimant Convicted of Workers’ Compensation Fraud. Thoughts and Analysis by Lindsay R. Vanderford, JD.

Editor’s comment: In an August 2015 announcement, Illinois Department of Insurance Acting Director Anne Melissa Dowling publicized an investigation by their Department’s Workers’ Compensation Fraud Unit (WCFU) which resulted in the conviction of an Algonquin woman, Tracy Williams (aka: Tracy Wanker). Williams, who was named in a ten-count indictment on charges of workers’ compensation fraud, insurance fraud, aggravated insurance fraud, and perjury related to her claims for benefits, was convicted and sentenced in Kane County, IL.

Williams, who pleaded guilty to felony workers’ compensation fraud on July 29, 2015, was sentenced to two years’ probation and ordered to pay $14,737.86 in restitution, as well as fines, fees, and court costs for obtaining nearly $90,000 in workers’ compensation benefits. Williams was also charged with three additional counts of workers’ compensation fraud, four counts of insurance fraud, and one count each of aggravated insurance fraud and perjury resulting from the investigation of three complaints related to claims she filed with the Illinois Worker’s Compensation Commission (IWCC).

“The Department takes accusations of WC fraud very seriously and will investigate to determine any wrong doing,” said Acting Director Anne Melissa Dowling. “Our reports about workers’ compensation fraud cases and convictions send a clear message that fraud will not be tolerated in Illinois.”

Williams filed false reports of work-related injuries; she subsequently misrepresented her medical condition and exaggerated her symptoms to her employers, medical treatment providers, and insurance companies. She created the impression the injuries she claimed to have suffered while at work were more extensive than they really were in order to collect temporary total disability (TTD) benefits, receive unnecessary medical care, and to remain off work. Since 1987, Williams has filed nineteen claims with the IWCC against multiple employers.

The Department’s Workers’ Compensation Fraud Unit (WCFU) conducted the investigation, which involved claims filed against three employers, proving several of the reported accidents did not happen as Williams claimed. The cases were referred to the Office of the Illinois Attorney General for prosecution.

"We are pleased to work closely with the Workers' Compensation Fraud Unit to prosecute instances of fraud," said Attorney General Lisa Madigan. "My office will continue to aggressively prosecute fraud."

In our experience, WC fraud investigations were not as tantalizing to pursue as the Attorney General may have made it sound. The WCFU generally takes over a year to assign an investigator to a claim, and the matter is likely to have reached a head at the Arbitration level by that point and more certainly so by the time an investigation has been completed. Additionally, settling a claim, even for a nuisance value, appears to negate any WC fraud claim filed by Petitioner’s employer. As with nearly any business decision, the decision to file a WC fraud action comes down to a cost-benefit analysis. Will litigation cost outweigh any hope of a return from the filing? Will a determination of fraud discourage other employees from following the same path? And how much is that worth?

We assure you, the conviction against Williams is the exception rather than the rule, but it makes us optimistic for the numerous fraud claims filed by our firm and our clients. We echo the Attorney General’s desire for aggressive prosecution of Petitioners who make false claims.

For more information about workers’ compensation fraud, including matters that may involve fraud perpetrated by a claimant, employer, or insurance agent, please visit the DOI website at http://insurance.illinois.gov/WCFU/default.asp. To report a claimant, employer, healthcare provider, attorney, insurance agent or company, contact the Workers’ Compensation Fraud Unit at 877-WCF-UNIT (877-923-8648) or DOI.WorkCompFraud@illinois.gov.

This article was researched and written by Lindsay R. Vanderford, JD.  Lindsay can be reached with any questions related to workers’ compensation defense and employment law defense at lvanderford@keefe-law.com.

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Synopsis: KCB&A is Looking for an IL WC Defense Lawyer with three to five years’ experience. The position is open right now.

Editor’s comment: We are adding to our legal staff—if you are or know a candidate, have them reply to this Update!!

We have one opening for admin staff. If you have or know someone with litigation experience, send a reply with resume asap!