10-31-2024;; Beneficial Ownership by John Campbell, JD; Illinois Supreme Court Expands Wrongful Death Claims by Bradley Smith, JD and more

Synopsis: What the heck is “Beneficial Ownership Information” and what is a “BOI Report”? Every U.S. company/LLC/corporation has to file this by January 1st

We are somewhat perplexed that this new federally mandated corporate reporting has not been more widely discussed in business and legal circles, yet most businesses throughout the country are required to comply by January 1, 2025. With less than 90 days before the reporting deadline, we wanted to be sure you, our subscribers, clients, and any friends or family with businesses are aware of this new layer of government red tape and avoid the potential penalties for non-compliance of up to $500/day.

Background and Legal Requirements:

The Corporate Transparency Act, enacted in 2021 to curb illicit finance and protect U.S. national security, requires many companies doing business in the United States to report information to the Federal government about their beneficial owners—in other words, the actual people who ultimately own or control them. The Financial Crimes Enforcement Network (FinCEN), a U.S. Treasury Department bureau, is implementing the law. The intended goal is to safeguard the financial system from illicit activity, counter money laundering and the financing of terrorism, which will advance national security. Secretary of the Treasury Janet L. Yellen explained “Corporate anonymity enables money laundering, drug trafficking, terrorism, and corruption. It harms American citizens and puts law-abiding small businesses at a disadvantage. Having a centralized database of beneficial ownership information will eliminate critical vulnerabilities in our financial system and allow us to tackle the scourge of illicit finance enabled by opaque corporate structures.”

Companies must report beneficial ownership information to FinCEN where:

• a corporation or limited liability company (LLC) was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or

• a foreign company that was registered to do business in any U.S. state or Indian tribe by such a filing.

Filing has been made relatively simple, secure, and free of charge. Companies that are required to comply (“reporting companies”) must file their initial reports by the following deadlines:

• Existing companies: Reporting companies created or registered to do business in the United States before January 1, 2024 must file by January 1, 2025.

• Newly created or registered companies: Reporting companies created or registered to do business in the United States in 2024 have 90 calendar days to file after receiving actual or public notice that their company’s creation or registration is effective.

Fortunately, the Beneficial ownership information reporting is not an annual requirement. A report only needs to be submitted once, unless the filer needs to update or correct information. Generally, reporting companies must provide four pieces of information about each beneficial owner:

• name;

• date of birth;

• address; and

• the identifying number and issuer from either a non-expired U.S. driver’s license, a non-expired U.S. passport, or a non-expired identification document issued by a State, local government, or Indian tribe. If none of those documents exist, a non-expired foreign passport can be used. An image of the document must also be submitted. 

The company must also submit certain information about itself, such as its name(s) and address. In addition, reporting companies created on or after January 1, 2024, are required to submit information about the individuals who formed the company (“company applicants”).

How do you get started?  Call KCB&A at 312 756 1800 for help or you can view informational videos and webinars, find answers to frequently asked questions, connect to the contact center, and learn more about how to report at www.fincen.gov/boi.

We appreciate your thoughts and comments. This article was researched and written by John P. Campbell, JD | Managing Partner, Keefe, Campbell, Biery & Associates, LLC

Passafiume v. Jurak, 2024 IL 129761: Expanding Recoverable Damages to Wrongful Death Actions; Research and written by Bradley Smith, J.D.

Synopsis:

In a landmark ruling, the Illinois Supreme Court held in Passafiume v. Jurak that a plaintiff can recover damages for the loss of material services beyond the date of remarriage in a wrongful death case. This decision clarifies how damages for loss of household services are treated under the Illinois Wrongful Death Act, expanding potential recoveries for plaintiffs and removing previous limitations tied to remarriage.

Editor’s Comment:

The Passafiume ruling represents a significant expansion in the scope of recoverable damages under Illinois' Wrongful Death Act. By allowing the loss of material services to be compensated beyond remarriage, the decision alleviates concerns about remarriage diminishing the value of a claim. This case is a crucial reminder for defense attorneys to reassess their strategies when dealing with wrongful death cases, as the scope of potential damages has widened.

Background

In 2014, Lois Passafiume tragically passed away due to negligent medical treatment by Dr. Daniel Jurak. Lois’s husband, Paul Passafiume, brought a wrongful death action against Dr. Jurak and others. Paul sought damages for the loss of Lois’s financial support and material services, such as household chores. The defendants argued that any claim for loss of material services should be limited to the period before Paul’s remarriage in 2015, under the theory that such damages fall under the umbrella of loss of consortium.

The Court's Ruling

The Illinois Supreme Court ruled in favor of the plaintiff, holding that damages for loss of material services are not limited by remarriage. The court clarified that these damages are a part of the pecuniary losses recoverable under the Illinois Wrongful Death Act and are not part of a loss of consortium claim, which traditionally terminates upon remarriage. This decision reinforces the distinction between pecuniary losses, which include household services, and consortium losses, which are more focused on companionship and emotional support.

Key Implications for Legal Professionals

The decision in Passafiume v. Jurak has profound implications for wrongful death litigation in Illinois. First, plaintiffs can now claim damages for household and material services even if they remarry. This widens the scope of recoverable damages and may result in higher awards for plaintiffs in similar cases. For defense attorneys, the ruling requires a reassessment of how damages are calculated in wrongful death actions, especially when remarriage is a factor.

Practical Takeaways for Wrongful Death Claims

1. **Loss of Material Services**: This ruling confirms that loss of household services is compensable beyond remarriage, significantly impacting the calculation of damages in wrongful death cases.
2. **Distinction from Consortium Claims**: Lawyers must recognize the clear separation between pecuniary losses and loss of consortium, particularly when remarriage is involved.
3. **Enhanced Recovery Potential**: Plaintiffs in wrongful death cases can now pursue greater damages, and defense attorneys must be prepared to argue against expanded claims in light of this ruling.

Conclusion

The Illinois Supreme Court’s decision in Passafiume v. Jurak is a pivotal moment in wrongful death litigation, expanding the scope of recoverable damages under the Illinois Wrongful Death Act. For claims professionals handling such cases, it’s critical to understand the implications of this ruling, both in terms of damages strategy and the legal framework surrounding remarriage. If you have questions about this decision or need guidance on how it may affect your current cases, feel free to reach out for a consultation.

Please contact Bradley J. Smith, JD at bsmith@keefe-law.com if you would like to discuss this decision or its implications.

Trivia Corner: 

This Edition’s Trivia:

• Was actress Margaret Hamilton (who played the amazing role as the Wicked Witch of the West) injured during the filming of the Wizard of Oz? She was burned when one of the lifts that was supposed to drop her malfunctioned.

• Was her stand-in Betty Danko also injured? Ms. Danko was injured twice. Reply if you need details.

• How was Buddy Ebsen (later Grandpa in the Beverly Hillbillies) injured? He was to be the Tin Man—turns out he was allergic to the paint and had to pass on the role.

• And while he didn’t appear in the movie, is Ebsen’s voice on the final soundtrack? Yep.

• What medical problem help Jack Haley get the job as Tin Man?

This Week’s Trivia:

• Who started the franchise known as Kentucky Fried Chicken?

• Who worked with the owner of Kentucky Fried Chicken, until he opened a competing and successful fast food restaurant?

• What was the “secret” to Kentucky Fried Chicken?

• Is the “secret” known to the public?

Synopsis: Free (or almost free) and Truly Handy Claims/Risk Management Stuff from Keefe, Campbell, Biery & Associates to our readers.

Editor’s comment: We do lots of things for this industry that you may not know about. Let us know if you have interest in any of these services.

1.            Send us a defense lead, any lead—we are always looking for new defense clients and contacts in Illinois, Indiana, Wisconsin, Michigan or Iowa. 

2.            Happy to help you on a 24/7/365 basis--send your claims inquiries and toughest questions to ekeefe@keefe-law.com for 24/7/365 answers to your toughest Illinois claims questions. Give us 24 hours and we will get back to you with reasoned thoughts and suggestions, recommendations on pro se settlements and best practices in handling difficult and complex claims concerns.

3.            We may be the most ethical firm in the U.S.—if you need a presentation on Ethics with CLE’s, we will come to your office, cater lunch and present an interesting and information program on Ethics.

4.            Next, take a look at actual winning results from the top defense firm in Illinois, Wisconsin, Michigan, Indiana or Iowa by going to this link: KCBA Successful Outcomes

5.            Shawn R. Biery does a continuously updated and very handy Illinois Workers Compensation Rate Sheet. It is available to anyone upon request. If you want it, send a reply or email Shawn directly at sbiery@keefe-law.com.

6.            We have a one-page document free to the industry called Keefe, Campbell, Biery & Associates Rules of Thumb that provides a quick reference for adjusters and risk managers with Illinois claims. Again, if you have interest, send a reply.

7.            We have a free presentation on the 2011 Amendments to the Illinois Workers’ Compensation Act. It is also available in a condensed form. If you would like a copy, send a reply. 

8.            We also have a free book on all aspects of Illinois Workers’ Compensation Law and Practice. If you are unfamiliar with the Act and Rules and want a resource book, please send a reply. 

9.            We provide answers to questions adjusters have about appropriate reserves on your claims, usually within 24 hours. We employ WestLaw© research in rendering our evaluation for your complete file. If you have interest in a legal opinion to support your reserve calculations, email ekeefe@keefe-law.com.

10.         We are happy to provide a free legal audit of up to ten of your worst litigated claims. Our goal is to advise how to best bring such claims to rapid closure within authority. We have had solid outcomes from such reviews. All of our handling is attorney-client privileged. If you have interest in a legal audit, send a reply to ekeefe@keefe-law.com.

11.         We have a strong list of medical, diagnostic, pharmacological, vocational, utilization review, nurse case managers, surveillance, accident reconstruction, ergonomics, safety and other top-notch experts for your consideration to use in Illinois workers compensation, general liability and employment law defense litigation. Such recommendations are free. We update such lists continuously. We can also provide research backing up the credentials of such experts. If you have a need for an expert, send a reply. 

12.         We are the only defense firm that has several workers compensation law professors on staff—we have read and analyzed every single IL WC appellate ruling for over three and one-half decades. For any of our readers, if you have a complex (or even a simple) question about any aspect of Illinois workers compensation law and practice, please send a reply and we will advise within 24 hours. If you have interest in attending or auditing the best workers compensation course in Illinois at one of our top law schools, let us know and we will provide details.

July 2024; New Laws from the WC Perspective in IL/Chicago--this is a must read for WC folks

Synopsis: Last Night, at 12:00 midnight, July 2024 started and there a new laws that are certain to change your day-to-day IL WC claims handling.

Editor’s comment: Please note the changes aren’t great for Illinois/Chicago businesses but “it is what it is”—we all have to follow the law.

Chicago and Cook County Minimum Wage Goes Up

This will have a direct impact on IL WC Section 8(d-1) wage loss claims.

While Illinois’ state-wide minimum wage will not go up until the end of the year 2024, residents in Cook County and Chicago will see higher minimum wages starting on July 1.

The minimum wage in Chicago will rise to $16.20 an hour, up from $15.80. That number increases annually according to the Consumer Price Index or a rate of 2.5%, whichever is lower, according to officials.

Please note one is making $648 a week if/when you work 40 hours at $16.20 an hour.

What’s more, the minimum wage for tipped workers will rise to $11.02 an hour, and over the next five years will continue rising until it is equal to the regular minimum wage, according to the City.

In suburban Cook County, the minimum wage will rise to $14.05 for non-tipped workers, according to officials. The rate will remain $8.40 per hour for tipped employees.

In the rest of Illinois, the minimum wage rose to $14 an hour on Jan. 1, 2024.

You may get claims for wage loss differential where Claimant’s counsel isn’t using the accurate minimum wage as the starting point for “what the worker could make in an light duty job.” Well, we again point out, “the law is the law”—it isn’t optional, if the worker goes back to work, they can and should be making at least whatever the applicable minimum wage is for their circumstance.

Paid Leave for Chicago Workers

Chicago workers will also have increased access to guaranteed paid leave, with employees who work at least 80 hours within a 120-day period eligible for up to five days of paid leave for whatever purpose and five days of paid sick leave.

As Chicago workers are guaranteed this time off, we may get less phony WC claims where a worker has financial needs—in earlier days, we did some some questionable claims when this benefits wasn’t present.

According to the City, employees accrue at a rate of one hour of paid sick leave for every 35 hours worked.

They must be allowed to use accrued sick leave no later than on the 30th day of employment.

Employees can carry over 80 hours of leave between 12-month periods.

If you have questions/concerns about the rules, please contact Bradley Smith of KCB&A at bsmith@keefe-law.com.

State of Illinois to offer driver’s licenses to undocumented immigrants

Like it or not, this may help your WC claims because an undocumented worker who can legally drive has a better chance of getting a job or returning to work following a work-related injury.

Starting on July 1, Illinois will have a program that will offer IL driver’s licenses to undocumented immigrants.

According to the new law, an undocumented immigrant must:

• Prove their name and date of birth;

• Prove their written signature;

• Prove that they have lived in Illinois for at least 12 months;

• Prove where they live in Illinois now;

• Affirm that they are ineligible to get a social security number;

• Provide a valid, unexpired passport or consular card issued by an approved country, or provide other proof of identity and residency the Secretary of State may require;

• Pass the vision, written, and road exams;

• Provide proof of insurance for the vehicle used for the road test;

• Provide proof (ages 18-20) of completing a 6-hour adult driver education course; and

• Pay a $30 application fee ($35 for motorcycles).

Freelance Worker Protection Act Starts July 1, 2024

This may or may not impact pending or future IL WC claims but it is important for your HR folks to be aware of it.

The Freelance Worker Protection Act provides protections for independent contractors

• who provide products or services in Illinois or

• who work for a hiring entity located in Illinois when the value of that work is equal to or greater than $500 in a 120-day period.

Under the law, freelance workers are entitled to all of the following: 

• A written contract that includes:  

• Name and contact information of both the hiring entity and freelance worker 

• Itemization of products and services 

• Rate and method compensation 

• Date of compensation due 

• Dates of services to be provided 

• Full payment for the services by the due date in the contract, or if the due date is not specified, within 30 days of completing the services outlined in the contract 

• Protection from retaliation and/or other negative action for exercising rights under the FWPA 

The law only applies to contracts taking effect after July 1, 2024.

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

June 2024; Staggering New Judicial Increase to PTD Claims in Illinois; New IL WC legislation and more

Synopsis: Navigating the Impact of American Coal Company v. Illinois Workers’ Compensation Commission: Important Insights for Defense Attorneys, Claims Handlers and Risk Managers. Please note, after 31 years of writing this “blog,” this is the first KCB&A Update that employed AI or Artificial Intelligence!!!

Editor’s comment: The recent ruling in American Coal Company v. Illinois Workers’ Compensation Commission et al. (2024) by the Appellate Court of Illinois, Workers Comp Division, marks a pivotal moment in our State’s workers' compensation law and practice. This decision, which upholds a comprehensive and extraordinary award to Claimant, David McCain Jr., has profound implications for WC defense attorneys, claims handlers and risk managers. As we delve into this case, we’ll explore the Court’s unusual legal reasoning, the implications for our industry, and practical steps for navigating similar claims in the future.

Case Snapshot: The Injuries and Claims

Petitioner David McCain Jr. was an underground coal miner for American Coal Company, and suffered life-altering injuries on November 5, 2016. Our sympathies go to him and his family.

The unfortunate accident led to total blindness, severe abdominal injuries requiring multiple surgeries, spine fractures, and psychological trauma. McCain’s pursuit of workers' compensation resulted in an IL WC Arbitrator awarding him both permanent total disability (PTD) and significant “unscheduled” permanent partial disability (PPD) benefits. This “dual award” was challenged by Respondent American Coal Company, leading to the recent IL Appellate Court, Workers Comp Division decision.

As a court observer, I strongly question why this serious but truly simple claim was tried/then unnecessarily appealed to three more levels to lose badly each time and create very poor precedent for Illinois businesses and local governments. I suggest to defense counsel in such claims—settle at the Circuit Court level to avoid having a “rubber stamp” which is then published (or non-published?) from a unanimous IL WC Appellate panel.

Key Legal Issues and the Court's Rationale

Nature and Extent of Injuries:

• McCain was awarded PTD benefits for his blindness under section 8(e)(18) of the Illinois Workers' Compensation Act. That part of this award is simple.

• In addition, he received unscheduled PPD benefits for his spinal, hip, abdominal, and head injuries under sections 8(d)(2), 8(c), and 8(e) of the Act. The “additional” benefits are impossible to predict/define and they are challenging. If you want to better understand the new challenge, please keep reading or reply via email.

Employer's Argument:

The American Coal Company argued Claimant McCain should not receive PPD benefits for non-scheduled body parts or “body as a whole” in addition to PTD benefits for blindness. Such benefits are now starting to appear more and more like “pain and suffering,” as a blind person doesn’t really have measurable industrial loss other than the obvious loss of vision.

And while we are on it, how does one accurately measure and/or reserve for loss of “body as a whole” in such a setting—does such claimant receive lifetime permanent total benefits and 100% BAW and 100% of all other affected body parts? Doesn’t the fact of blindness mandate 100% loss of everything?

The Appellate Court, WC Division cited the Illinois Supreme Court’s decision in Beelman Trucking v. Illinois Workers’ Compensation Commission, contending the Beelman ruling outlines the IL WC Act permits recovery under section 8(e)(18) and scheduled losses, but not for non-scheduled losses. In Beelman, claimant sadly lost both legs and one arm and after more than a decade of litigation, he was provided both a statutory total and perm plus 100% loss of some of the absent limbs. While that was a gigantic award, like this one, it was somewhat predictable and the insurer/employer could more accurately reserve for that loss.

From the outside looking in, this Respondent in McCain didn’t strongly mind paying for a PTD and 100% loss of use of the eyes that appear to “double” the award at a very high and unpredictable cost to the employer.

When the IWCC and courts know the award is doubling benefits to add lifetime benefits and the scheduled loss of the individual eyes and lots of other things, it is almost impossible to predict what a fair award might be. As I said above, for literally decades before these two rulings, a total and permanent award was the “highest” award a living Claimant could receive.

Please also note Illinois business and local governments also fund the IL WC Rate Adjustment Fund https://iwcc.illinois.gov/resources/raf.html that can exponentially increase permanent benefits for living Claimants and, in case of death, the spouse or dependents can get also obtain dramatically higher and spiraling benefits by making a claim against this Fund. This money isn’t paid directly by the employer/insurer to Claimant or remaining dependents—it comes from a fund all Illinois employers contribute to.

IL Appellate Court, Workers’ Comp Decision:

The IL Appellate Court upheld the Arbitrator and Commission’s decision, emphasizing the remedial purpose of the Act—to provide comprehensive financial protection for injured workers.

Gene Keefe’s Comments/Thoughts:

As a veteran defense attorney, I assure my readers for decades the IL WC Act was read to have a PTD or permanent total disability be an encompassing award that swept other statutory and non-statutory losses into the PTD award. The goal of the initial workers comp act in 1909 was to insure injured/deceased workers and their families were taken care of.

With that in mind, I ask the rhetorical question—What if David McCain were to pass from the injuries? Could his estate/dependents then claim 100% loss of use of his fingers, toes, hands, feet, legs, arms and Body as a Whole? Isn’t it a simple fact that a deceased claimant has lost 100% of the use of all of those “parts?” On top of Illinois’ high death benefits, would it provide “comprehensive financial protection” to award each and every part of a decedent’s body? I feel the rationale of both Beelman Trucking and this award would support such a staggering award that I am sure would cause WC claims to skyrocket.

What Happened to the IL Legislature and the Agreed Bill Process?

Please also note my feeling these staggeringly expensive and unexpected changes shouldn’t be “created” by our courts. Our Circuit, Appellate and Supreme Courts are making unpredictable and immense changes to the IL WC Act without even a nod to the folks we send to Springfield to work together to provide guidance. Part of the legislative process is to consider all the stuff I am writing about on one side or another and find the best path to protect our workers but also look out for the companies they work for. I feel the legislature should bet engaged on this path right now. I also call on the Illinois State Chamber and other business groups to find out what is happening and rein it in to make things reasonable and fair to all sides.

The American Coal Company case underscores the importance of a holistic approach in handling workers' compensation claims. As defense attorneys, claims handlers and risk managers, it is crucial to recognize the potential for combined PTD and PPD awards and adapt strategies accordingly. Staying informed about judicial interpretations of the IL WC Act is essential for effectively managing risks and ensuring compliance in an evolving legal landscape.

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

Synopsis: SB 1996, Workers Compensation was signed into law by Governor Pritzker. Guess what?—It doesn’t have anything of value for Illinois business or local governments.

Editor’s comment: This bill amends the Illinois Insurance Code and it provides for increases in the rate of the annual Illinois Workers' Compensation Commission Operations Fund Surcharge.

Please remember Illinois is going to remain a “blue state” for decades to come. In my view, this State is not a democracy. If you are not sure why I say that, send a reply. Things like this legislation that doesn’t help IL businesses or local governments at all will remain the norm.

Along with the changes above, the new legislation also amends the Workers' Compensation Act, as it provides for increases in the rate of the Illinois Workers' Compensation Commission Operations Fund Fee and payments to the Rate Adjustment Fund. I am fairly sure the first increase is going to cost Illinois business more to pay for the IWCC operations. The second part of the bill puts more money in the Rate Adjustment Fund that continues to force Illinois business to pay cost of living increases to death and total and permanent disability beneficiaries.

The bill also provides for transfers from the Self-Insurers Security Fund to the Illinois Workers' Compensation Commission Operations Fund, to the extent that there are insufficient funds in the Illinois Workers' Compensation Commission Operations Fund to pay the operating costs of the Illinois Workers' Compensation Commission or the salaries and benefits of employees of the Illinois Workers' Compensation Commission. You may recall our hearing officers got salaries that are tied, to some extent, with the salaries of Circuit Court Judges/Justices. If you aren’t sure this means all of these hearing officers are given substantial annual increases without having to ask the IL legislature to take action.

The legislation also makes changes in provisions concerning the collection of civil penalties or reimbursements for amounts paid by the Injured Workers' Benefit Fund due under an order of the Illinois Workers' Compensation Commission.

The bill makes changes to penalties for any person, company, corporation, insurance carrier, healthcare provider, or other entity that intentionally prepares or provides an invalid, false, or counterfeit certificate of insurance as proof of workers' compensation insurance or intentionally assists, abets, solicits, or conspires with any person, company, or other entity to intentionally prepare or provide an invalid, false, or counterfeit certificate of insurance as proof of workers' compensation insurance.

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