Quizzical Appellate Court ruling which finds prior rulings cannot be altered despite unquestioned fraud by claimant.
Editor’s comment: As we warn clients on a regular basis, you need to make sure you have all evidence in place before any hearing in a claim because you generally only get one bite at the defense apple. This is one of the reasons KC&A performs background research on every case to determine all potential evidence which may aid in defense of a claim. In this case, the fraud appears to have occurred after the causal connection issue was determined and the determination became final. The earlier ruling on the issue could not be ignored or subsequently reversed even though impeachment at the subsequent hearing revealed Petitioner’s fraud in his efforts to continue to obtain workers’ compensation benefits. While the decision does not sit well due to the significant PPD award even with evidence of fraud, there is some unhappy solace for Illinois employers as the Arbitrator and the IWCC terminated Petitioner’s benefits going forward while Petitioner was attempting to prove permanent and total disability.
In Ming Auto Body v. Industrial Commission, (No. 1-07-1125WC November 18, 2008), the Illinois Appellate Court, Workers’ Compensation Division considered a claim for an accident on October 5, 1990. In November 1995, a 19B hearing was held. At the 19B hearing, claimant testified he was a 29-year-old mechanic and sustained a work-related injury to his back lifting in order to perform repairs on a car. Claimant did not report the injury to his employer until the following Monday, and he sought medical treatment after reporting the event. About a year later, claimant underwent a spinal fusion. There was conflicting evidence as to whether the claimant injured his back helping a neighbor repair a grain auger, the day following his alleged work accident.
In their evidence depositions, two of the claimant’s treating physicians felt the condition was related to work and a spinal fusion was performed. Claimant was later released to permanent medium restrictions. Rod removal surgery was recommended. A second treating physician felt claimant was unable to return to his previous occupation as a mechanic. The Arbitrator ruled surgery to remove the rods should proceed. The Commission affirmed and adopted the award, including findings claimant had sustained an accident and his condition of ill-being was causally related. The Commission ruling was not appealed.
Some time later, the parties appeared before a different arbitrator seeking additional medical expenses, TTD benefits, and permanency. It appears from the record claimant lied on his job resume and lied when he testified he wasn’t working. It appears claimant not only returned to work at the same levels worked prior to injury but he worked for lots of different employers.
Claimant was asked whether he had sustained any other serious injury or trauma since October 1990 and he affirmatively stated he had not. He asserted all of his back problems were attributable solely to the 1990 injury. On cross-examination, claimant admitted he was involved in a non-work-related automobile collision on October 30, 1996. He acknowledged he “felt additional discomfort” in his back due to this collision and filed a lawsuit that was eventually settled. Sworn answers to interrogatories in that lawsuit referenced his employment injury but also indicated he was seeking damages for medical expenses involved in his workers’ compensation claim.
The Arbitrator determined she could not alter the prior 19B decision awarding benefits but found claimant lied under oath and perpetrated a fraud on both Respondent and the Commission. The Arbitrator concluded claimant had not established causal connection between his October 5, 1990, work accident and his present condition of ill-being or the need for medical treatment rendered after February 2, 1993. Accordingly, the Arbitrator refused to award any further benefits under the Act. We salute her ruling.
The Commission concluded the doctrine of “law of the case” precluded a subsequent challenge or review of the earlier findings. In light of the prior final decision, therefore, the Commission modified the decision of Arbitrator Neal to find there was a causal connection between the claimant’s October 5, 1990, employment-related accident and the subsequent rod-removal surgery performed by Dr. Andersson in February 1996. The Commission awarded 25% of the person, TTD and medical to May 31, 1996 and no further benefits. Please note this is a modest PPD award for a claimant who underwent fusion surgery to the spine. With respect to our Commissioners, we feel this rewards fraud.
In analyzing the Commission’s ruling, the Appellate Court notes Section 19(f) of the Act states “[t]he decision of the Commission acting within its powers * * * shall, in the absence of fraud, be conclusive unless reviewed as in this paragraph hereinafter provided.” 820 ILCS 305/19(f) (West 2002). The Appellate Court ruled the Commission could not change its prior rulings and relief for the fraud could only come from a circuit court filing. The Court specifically found a party may maintain an action before the circuit court to procure relief from a judgment of the Commission based on fraud such as a declaratory judgment action seeking to vacate, as fraudulent, a settlement agreement approved by the Commission.
Since we do not have access to the defense strategy notes and preparation, in hindsight it is difficult to determine if the award is due to errors in defense strategy or simply a function of a flawed system which has no strong “fraud-deterrent” regardless of the 2006 changes. Since the evidence presented at the initial hearing was used to support the PPD award, it would appear the denial of PTD benefits was the “punishment” Petitioner received for his fraud, however a 125 week PPD award resulting in approximately $58,000 in benefits is not a bad payday for a claim which obviously had questions regarding a lack of reporting over a weekend in which another injury was highlighted and subsequent testimony at the second hearing which showed Petitioner was not ashamed to lie and seek to mislead both the Arbitrator and the Commission.
While this Court felt a circuit court action for fraud might lie, an aggressive risk manager has to consider if a circuit court claim against Petitioner would be successful in obtaining reimbursement of payments made based upon the evidence of Petitioner’s outright fraud and lack of credibility, which may be much greater than the Arbitrator could have known during the first hearing. To the extent this Court indicated workers’ compensation fraud was present in this record, we would recommend filing an action for both common law fraud and a count under the Illinois Insurance Fraud Act that might allow the employer to recover a judgment against the charlatan in amount of triple the benefits paid due to fraud plus your attorney’s fees and costs.
This article was researched and written by Shawn R. Biery, J.D. If you have thoughts and comments or need the case citation, please send a reply to sbiery@keefe-law.com.
