Keefe, Campbell & Associates, LLC

Editor’s comment: An injured worker whose Illinois workers’ compensation claim was dismissed due to his lawyer’s negligence may recover after all. A southern Illinois jury considered the case against a St. Louis lawyer in the face of allegations a claimant was left high and dry when his claim was dismissed for want of prosecution.

After deliberations, the jury handed down a verdict ordering the St. Louis lawyer and her firm to pay $338,000. The worker sued his former attorney and her law firm in 2007, claiming he would have received nearly $400,000 in benefits had his lawyer properly handled his case. The defense claimed he would have only received $75,000 for BAW—sounds like a typical oral argument at the IWCC.

Plaintiff alleged his counsel allowed his case to be dismissed by the Illinois Workers’ Compensation Commission for lack of prosecution in August 2005, and then she failed to timely file for reinstatement. He also claimed the attorney failed to advise him of the adverse action until approximately November 2006; more than a year after his claim was permanently barred.

We note another veteran Petitioner’s attorney; Jon Rosenstengel was the lead expert for Plaintiff in the case against a fellow attorney. Ouch.

Our vote for everyone reading this is to get ready and go–try your cases!! What may be most painful to the lawyers reading this article is that prior to trial, the Circuit Court granted Plaintiff summary judgment on the issue of the lawyer’s negligence. Then jurors deliberated just over an hour on damages only before arriving at their six-figure verdict. Hey, at least Defendant didn’t get hit with penalties/fees!!!

We thank our reader for the tip on this ruling. The complete article is on the web at: http://madisonrecord.com/news/216947-jury-awards-monetary-damages-in-legal-malpractice-trial. Please don’t hesitate to provide your thoughts and comments.

Editor’s comment: We want our readers to understand our view Mr. Blagojevich was the worst “governor” to include governors of universities, school boards, governors on furnaces or golf-cart engines; any “governor” you ever heard of. As we approach the end of the road for Milorad “Rod” Blagojevich’s political career this week, we have had a number of readers respond to his many public diatribes to ask if he is being treated fairly and whether the Senate trial is unfair. We want to provide you this short reminder of all the many, many, many things this man did that led him to being (hopefully) removed from all public office.

The impeachment resolution pending for hearing tomorrow cites abuses of power that included

• He conducted allegedly completely political hiring at all levels of state government—much of it in exchange for campaign contributions the Gov then got to keep. An individual named Ali Ata testified under oath in federal court in the Rezko trial, that he provided $50K in campaign cash to be appointed by this Governor to a job paying about $125K per year. With deference to Mr. Ata, his qualifications to get the important state post were giving the $50K. If it was a crime from Mr. Ata to pay for the job, it should also be a crime for the Gov to appoint him to the job.

• To those of us who laughed to hear an individual named Stuart Levine repeatedly admit during the Rezko trial that for several decades he used and abused most forms of illegal drugs/narcotics including horse tranquilizers, please remember this admitted drug addict was quickly anointed by the Gov to the Illinois Hospital Planning Board and effectively put in charge of planning for institutional medical care across our state. Mr. Levine’s qualifications for the post were his orchestration of contributions to the Gov and his then-fundraiser, Tony Rezko.

• Soon-to-be citizen Blagojevich allegedly took $50K from a company that later got $500K in state business to do, among other things, spray-cleaning of the state’s road salt domes. If you think about it, there is no discernable reason to clean road salt containment facilities, as we take road salt and throw it under cars, cabs and buses—who cares if they are clean?

• This Governor allegedly acted on his own to illegally purchase and attempt to import foreign flu vaccines with your state tax dollars in the amount of several million dollars. He was supposedly told before he made the purchase the vaccines could not legally be imported into the U.S. and anyone who tried would be arrested and charged with a crime under federal law. The Gov went forward to purchase on his own authority. Those vaccines sat during discussions/negotiations that went nowhere; they don’t “bend” federal law because you are a Governor. The Gov then donated the vaccines you paid for to Pakistan—however, the negotiations and tomfoolery took so long the vaccines became outdated and had to be destroyed. No, he didn’t offer to pay the state or you back.

• The Governor was invited to speak at a fund-raiser for a foundation for the arts—he got a standing ovation for boldly promising $1 million in state monies to boost their fund-raising efforts. We were told he then completely refused to answer calls or take any actions to back up his braggadocio in front of the audience. No, we were advised they never got the money.

• During his initial campaign, the Governor promised not to randomly replace state workers with his political pals. Blagojevich was then sued by several former state employees who thought that he was sincere in his campaign promises. Specifically, they noted his pledge good workers need not fear losing their state jobs only to have them filled with lackeys. Yet some prison officials, Republicans and Democrats alike, found themselves suddenly unemployed. When they sued, the governor’s lawyers made an astonishingly candid argument and noted Blagojevich’s promise was nothing more than “classic political puffery.” Where we grew up, the priest and nuns taught us puffery = lying.

• The Gov keeps bragging he was elected twice to the position by Illinois voters. Please remember the monies he “raised” for his campaigns didn’t come from Oprah or you and me. During his second election, he raised $27 million dollars and outspent his opponent by a three-to-one margin. We argue when you allegedly break just about every campaign and ethics law to raise that huge war chest, it is hard to say you were fairly and freely elected.

• Probably the most despicable thing he will be remembered for is trying to intentionally stall millions due in state funds for Children’s Memorial Hospital. The partners of this firm have donated money to this charitable institution that doesn’t turn away infants/babies who need major surgery like heart transplants and other emergency, life-threatening problems. Milorad tried to “hold up” the CEO/President for $50K in exchange for releasing monies already due the facility. When the Gov didn’t get the $50K in his coffers, we are told he tried to find a way to get the state payments back.

Please don’t think this is a complete list—it goes on and on and on. We laugh to hear he is now seriously comparing himself to Nelson Mandela, Martin Luther King and Mahatma Gandhi, as political prisoners. While we haven’t researched it, we don’t remember any of those folks trying to extort monies from children’s hospitals. We agree with the characterization by Mayor Richard M. Daley who referred to the Gov as “cuckoo.” We salute Republican State Sen. Matt Murphy who drafted the rules for the impeachment hearings and his statement that Blagojevich was creating “a little bit more of the theater of the absurd.” Mr. Blagojevich was first sworn in as Gov on January 13, 2003 and won’t make it to the end of January 2009. One of these days, we hope he understands his wife Patti’s voice is on the tapes and she is at risk to also be indicted, leaving their young children without a parent to care for them. He might be better served to stop the public relations “puffery” and plead guilty and quietly move along to enjoying delicious prison food.

We promise to stop writing about him when the Senate reaches its verdict and will move on to other things of more importance to you, as our readers. We look forward to the administration of Lieutenant Governor Pat Quinn who actually is a reformer; he worked to cut the size of the Illinois legislature. Pat Quinn isn’t a main-stream political back-slapper. Please don’t hesitate to send your thoughts and comments.

Editor’s comment: If you have been watching the news, you may note Ingenix ran into a little trouble with the fraud-busters in the New York Attorney General’s office in the last year. About ten days ago, New York Attorney General Andrew Cuomo announced a “victory” in his battle with the insurance industry over how out-of-network physician claims are paid. Cuomo argued the industry’s use of its out-of-network “customary and reasonable” database “defrauded” consumers and he sued the database’s manager, United Health’s Ingenix, over the controversy. It appears they have reached a resolution that may affect all Ingenix customers across the U.S.—if you rely on the IWCC Medical Fee Schedule to pay bills, this will probably affect you in the long-term.

Here’s how the settlement will work:

• Ingenix will pony up $50 million to set up an independent not-for-profit organization to define and operate a “customary and reasonable” database.

• The health care and insurance industry gets to continue determining what customary and reasonable physician charges are through this not-for-profit setting.

• Exactly how they do it will continue to be done by computer geeks in the way systems gurus do things–pretty much in their own minds using slide-rules, nano-bytes and data-crunching.

While an undetermined university will operate the system, the industry that will finance it will presumably have a great deal of input into it. The industry’s use of the database may be more defensible and therefore less “fraud-like” to the public since one of its own is no longer arguably directly controlling the entity.

Most observers note $50 million is pennies compared to the out-of-network customary and reasonable cost-cutting any one of the big health plans achieves every year. This settlement is designed to render the ability of state medical societies and class-action trial lawyers to attack the system much harder. What may also be better is consumers, presuming they know about the new “transparency” website, will be able to go on-line to see what their allowable charges for a specific service may be in advance of consenting to treatment by a physician. So, if John Q. Public is on vacation in Sarasota and needs to go out-of-network to the emergency room, prior to rushing off for treatment they can go find a computer, find the website and potentially shop around for emergency rooms that have the lowest out-of-network payments. Please note this will require lots of computer acumen and the need to care about such things in what may be an emergency setting.

From the perspective of out-of-network physicians, they will still be the subject of the mysterious abuse caused by “reasonable and customary” cost-cutting of their fees. The result is going to be about the same and their state medical societies may now have less reason to challenge the customary and reasonable system than before.

How this will affect the Illinois Workers’ Compensation Medical Fee Schedule is hard to fathom. At the first glance, it is our understanding most carriers bypass the higher cost Medical Fee Schedule and go right to the lower “reasonable and customary” charges. Obviously, this practice renders the Medical Fee Schedule worthless and, at best, a fall-back position for litigation only. If the “reasonable and customary” system is accepted by Illinois physicians in the workers’ compensation system, it results in more certainty and faster payments for the docs and concomitant savings for Illinois business.

There is also the possibility Ingenix numbers, upon which the Medical Fee Schedule may be based will be more accurate and independently verifiable. We see that as a plus. We would appreciate your thoughts and comments.

Editor’s comment: With respect to the members of the Court, if our suspicions are correct, we feel this award is preliminarily confusing and potentially strains credulity. We do not feel the legislature intended this result and we feel there is nothing clearly outlined in the legislation upon which the Court relies to reach this outcome. It is also may be a matter of unnecessarily generous largesse for every widow or widower in this state for anyone related to someone injured severely while living who later passes from related conditions. We also feel it may be a business-destroying, premiums-about-to-skyrocket decision that will again push jobs away from our state. Underwriters for Illinois claims beware!

In light of this ruling, we are petrified of what to expect in the Beelman Trucking ruling currently being considered by the Illinois Supreme Court. In Beelman Trucking, claimant suffered severe injuries and lost both arms. The Arbitrator accurately ruled he was a statutory total and permanent disability and such benefits are unquestionably due for life. On top of that, she also ordered 100% loss of use of the limbs so as to require PPD to be paid weekly at the same time the total and permanent benefits were being paid—the outcome requires a number of years of “double PPD.” We are unaware of any legislative scheme in all of the U.S. workers’ compensation systems that foster such outcomes. Now, Illinois may not have one but two different scenarios where double-payment is perceived by our Courts to be the law. Defense observers note there was no compelling reason for the Supreme Court to consider the Beelman Trucking decision that overruled the double-payment scenarios. The ruling in this case we analyze today now leads us to feel the pro-plaintiff jurists on the reviewing courts may want double-payment of benefits to become the law in as many settings as possible.

In Freeman United Coal Mining Company v. Van Houten, (No. 4-07-0905WC & 4-07-0907WC September 29, 2008), an Application for exposure to coal dust was filed by a living coal miner named Kenneth Van Houten on March 10, 2000 for a February 2, 1998 exposure. He died on May 19, 2000 of what were later determined to be work-related causes. After his passing, on August 2, 2000, the widow filed a separate Application for death benefits. We consider the second Application the confuser and consider it wholly unnecessary—he died of the same cause; exposure to coal dust.

There is no dispute Decedent worked as a coal miner for 38 years and was exposed to coal dust. He developed chronic lung disease in the form of hypoxemia, chronic obstructive pulmonary disease, long-standing heart disease and chronic bronchitis. The Arbitrator found Decedent’s exposure to coal and rock dust a causative factor in the development of his maladies and eventual death. He awarded the widow benefits under Section 7 of the Act and ordered the employer to pay for decedent’s funeral expenses.

The confusion begins when the Arbitrator did not award benefits in the decedent’s claim that he filed while living, ruling the claims abated on his passing. We cannot tell if the parties sought TTD from February 2, 1998 until his passing on May 19, 2000. From our review of the ruling, the condition was work-related and claimant was disabled from February 2, 1998 until his passing, if Petitioner asked for it, we assert the Arbitrator could have awarded TTD from the date of his disablement on February 2, 1998 until death occurred in May 2000. The Commission effectively affirmed and found the condition abated at death and the widow was entitled to death benefits only.

On appeal, the widow argued the Commission’s finding which ruled Decedent’s claim brought while living abated by virtue of Section 8(h) was “legal error.” The Appellate Court reviewed this issue de novo as one of statutory construction. Delivering the opinion of the court, Justice McCullough found Section 8(h) unambiguously “provides that benefits to which the employee would have been entitled but for his death are to be paid to the employee’s survivors upon his death from any cause.” The Court further held if a claimant “dies during the pendency of the claims process, the claim shall proceed as if the death had not occurred.” If the claim prevails, “all compensation that would have been awarded to the claimant shall be paid to the dependents of the deceased claimant” and “any other claims any dependent might have as a result of the claimant’s death shall proceed unaffected.”

We point out the statute doesn’t say what the Court says it does—the words “the claim shall proceed as if the death had not occurred” aren’t in Illinois law. We also point out all Illinois workers’ compensation benefits are to be paid weekly. There is no indication our legislature wanted double weekly payments to be paid at any time to widows or anyone else. One reading of this challenging decision may allow for double weekly checks to be awarded—we consider that to be anomalous and inconsistent with most U.S. workers’ compensation systems and legislative intent.

So our worry is a hypothetical claimant who smokes a “clove cigarette” at lunch and then falls from a ladder at work. During emergency care, the physicians amputate his/her arms and legs. Claimant survived but never recovered consciousness and he/she dies one week later of the injuries. In such a scenario, it would appear his/her widow(er) would be entitled to one week of TTD (less the waiting period) and then the full death benefit. To the contrary, in this unanimous decision, the Court appears to rule the widow would get the full death benefit that is a minimum in this state of at least $560K up to about $1.6 million dollars and on top of that, the widow could also file a second Application for the same accident/exposure and would also get 100% loss of use of each leg and each arm. Such a scenario would add at least an additional 936 weeks of benefits or potentially over $1 million more to the death benefit. If the Commission truly felt generous, they could dump in another 500 weeks for 100% loss of use of the “person as a whole” which would give the estate another $325K. In such a scenario, the award could exceed $3 million! We will leave all of that to your imaginations because that is where we feel this is coming from.

We feel the accurate ruling in this matter is claimant had one case for one exposure on February 2, 1998—the second filing is duplicative and unnecessary; you can’t and shouldn’t be able to file and maintain two Applications for one exposure on one day. We assert the second Application should have been dismissed and urge Respondent’s counsel to move to dismiss it right now to protect the record. We also feel it may or may not have confused the reviewing court because the plain reading of their decision is confusing us. We note the Court specifically rules “Any other claims any dependent might have as a result of the claimant’s death shall proceed unaffected.” (emphasis added; we also note the decision is referring to dependents when they appear to actually refer to the widow who isn’t necessarily a dependent). We have no idea what, why and how a widow of a deceased injured worker has “any other claim” arising out of one exposure on one day.

Under the statutory provision cited by the Court in their decision, we feel the widow(er) unquestionably takes any workers’ compensation benefits be it medical bills, TTD or PPD due to claimant while living. Upon passing, the living claim for any pending benefits would shift/abate/whatever-you-want-to-call-it to allow the widow(er) to then be entitled to the full weekly death benefit. Please note the death benefit might be dramatically higher for a lower wage individual than PPD rates for scheduled injuries. Under our view, using a “plain English language” reading of the Act, he/she would never be entitled to both weekly PPD for the claim to be paid after the passing of claimant with weekly death benefits at the same time.

If the Court simply intended to allow for an award of TTD from February 2, 1998 until May 19, 2000 and remanded the matter for that purpose, the decision should say so. As we read the ruling, it would appear the Court wants double payment of weekly benefits when they refer to “any other claims” and say “the claim shall proceed as if the death had not occurred.” We feel this is wholly inconsistent with the legislation and hope the anomaly is clarified.

We hope the legislative gurus at the Illinois State Chamber read this one carefully and put it on the list of stuff that may need to be reformed. This article was drafted by Matthew A. Wrigley, J.D. and Eugene F. Keefe, J.D. We invite your thoughts and replies.

Editor’s comment: As we have told our readers, this is a concern in the area of independent medical examinations where we feel there may be administrative fees and costs being “bundled” into the IME fee that aren’t being disclosed to insurance carrier and TPA accounts. We caution everyone involved in IME billing to disclose such fees in an open fashion and avoid unnecessary litigation like this one.

Fourteen Illinois MRI/radiology centers settled a lawsuit last week alleging they paid illegal kickbacks to doctors in exchange for referrals. The settlement requires the 14 MRI centers, which are owned by Virginia-based Midi LLC, to pay a total of $1.2 million in damages, restitution and penalties, according to Attorney General Lisa Madigan’s office. The State of Illinois will receive $840,000 of the settlement, which it plans to use for grants to provide health care for low-income patients.

The lawsuit, filed in 2007, alleges the radiology centers entered into questionable agreements with doctors under which the doctors paid a reduced rate for MRI and CT scans, billed patients’ insurance a higher rate and pocketed the difference. “This settlement sends a strong message that medical professionals cannot engage in schemes to line their pockets at the expense of the best patient care,” Ms. Madigan said in a statement. The attorney general also settled with five other imaging companies, according to the release.

The companies that also settled are:

1. •           National Medical Imaging of Palos Heights.
2. •           Rand Imaging Center, LLC of Arlington Heights.
3. •           Central States Imaging, LLC of Lake in the Hills.
4. •           Gurnee Radiology Center, LLC in Gurnee and Libertyville.
5. •           Bannockburn Radiology Center, LLC of Bannockburn.
6. •           Open MRI of Northern Illinois.
7. •           Nydic Open MRI of America – Westchester.

We thank the reader who gave us the “heads up” on this topic. To read more, go to the web at: http://www.illinoisattorneygeneral.gov/pressroom/2009_01/20090114.html

Please send your thoughts and comments.

Editor’s comment: This lengthy decision also exhaustively analyzes the state of Illinois construction law and is a must-read for general contractors. In Grillo v. Yeager Construction, (No. 1-07-2335 December 31, 2008), the Illinois Appellate Court considered a claim where a stone mason fell off a scaffold erected on the perimeter of a house. Plaintiff supervised his own employees in the building of the scaffold. He alleged part of the reason the scaffold failed was due to a failure of the general contractor to backfill the property. Further, he had to use the unsafe scaffolding as he was under pressure to finish the work. He sued the homeowners and the general contractor alleging negligence. The homeowners’ motion for summary judgment was granted.

Plaintiff alleged Yeager Construction (“Yeager”) was the general contractor of the construction site and David Yeager (“David”) was an employee or agent of Defendant with whom he entered into a contract to perform the work. Yeager denied this. Following trial, the jury returned a verdict against Yeager. On appeal, Yeager contends, among other things, the trial court erred in denying its motion for judgment notwithstanding the verdict (judgment n.o.v.) where Plaintiff failed to establish a prima facie case of negligence.

Yeager argued Plaintiff failed to establish that it owed a duty of care pursuant to Section 414 of the Restatement (Second) of Torts, because there was no evidence David was Yeager’s employee or agent and there was no evidence Yeager was the general contractor for the project. The court disagreed finding Plaintiff introduced sufficient evidence to dispute Defendant’s claims. Although there was conflicting testimony with respect to what occurred surrounding the project, the court found the following salient facts:

Plaintiff testified he was hired by David to perform masonry work and David indicated Yeager would guarantee his payment. The homeowner testified Scott Yeager (“Scott”) told him David worked for Yeager and would supervise the project. Scott testified he prepared a schedule and outline for the construction project that listed “Yeager Construction Project Management Costs” and David would be the Superintendent and receive a monthly salary for project management and job supervision which included tasks such as acquiring subcontractor bids, procuring contracts for subcontractors, scheduling and organizing subcontractors and quality control. Monthly invoices for David’s work were prepared on Yeager letterhead, and that contract which Scott signed, identified Yeager as the Contractor and David as its representative.

There was also testimony the bank released loan money directly to Yeager. Further, Scott visited the construction site every month and provided weekly updates to the homeowners that Scott would obtain from David, who was at the construction site daily. There was also an insurance policy listing Yeager as the insured for the project.

Accordingly, the court found Plaintiff introduced sufficient evidence to dispute Defendant’s claims that David was not an employee or agent and Yeager was not the general contractor .The jury assessed the credibility of the witnesses in favor of Plaintiff by determining Yeager was the general contractor, which employed or granted authority to David. Since Plaintiff demonstrated a substantial factual dispute, involving the assessment of credibility of the witnesses and the determination regarding conflicting evidence is decisive to the outcome, the court reasoned a grant of judgment n.o.v. was not appropriate.

Yeager next contended it did not owe Plaintiff a duty of care where Plaintiff failed to prove the existence of a contract for masonry work between Plaintiff and Yeager as the evidence showed Plaintiff was hired by the homeowners. After considering the facts, along with the contradictory evidence presented by Plaintiff, the court held Yeager’s motion for judgment n.o.v. was properly denied on this basis as well.

Yeager next contended it owed no duty to Plaintiff under Section 414 of the Restatement (Second) of Torts, where Plaintiff, himself, was an independent contractor rather than the employee of an independent Contractor. Section 414 of the Restatement provides an exception to the general rule that one who employs an Independent Contractor is not liable for the acts or omissions of the independent contractor which states:

One who entrusts work to an independent contractor, but who retains the control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care. (emphasis added).

The court found there was sufficient evidence of control and supervision for the jury to decide whether Yeager was liable under the applicable section. The court also found evidence Yeager’s actions on the jobsite indicated Yeager retained more than a general right of supervision. Accordingly, based on the evidence presented at trial, the court found it cannot be said that no contrary verdict could ever stand. Thus, the court concluded the evidence supported the circuit court’s denial of Yeager’s motion for judgment n.o.v.

This article was researched and drafted by Brian J. Kaplan, J.D.. Please direct inquiries and comments to Brian at bkaplan@keefe-law.com.

Editor’s comment: This case reiterates and is arguably a potential expansion of a theory already noted in various areas of Illinois law which generally holds a party who controls the work/worksite potentially liable for injury to subcontractors’ workers, even though they are not direct employees of the controlling party. It should be noted—the “control” exerted here involved removing an essential “tool” of the job which was to be contractually provided. In Carcia v. Wooton Construction, LTD (No. 1-07-1883 December 29, 2008), the Illinois Appellate Court, First District, First Division was presented with two questions: (1) whether Wooton retained sufficient control over the work by Cullen to impose a duty of reasonable care under section 414 of the Restatement (Second) of Torts) and (2) whether a material question of fact existed as to the proximate cause element of Plaintiff’s negligence claim against Wooton.

By way of background, in August 2002, a condominium complex known as “Kingsbury on the Park” in Chicago was being developed. The property was owned by Smithfield Properties. Wooton Construction, the general contractor, was a subsidiary of, or otherwise affiliated with Smithfield. Wooton contracted with Zalk Josephs Fabricators, to fabricate structural steel. Zalk subcontracted with Plaintiff’s employer, JP Cullen & Sons, to erect the steel. A crane was to be provided, however at some point Wooten indicated they were taking the crane for use by another party. Shortly before his lunch break on August 28, 2002, Plaintiff, an ironworking apprentice with the Cullen raising gang, was in the process of unloading a crane basket containing approximately 10 kegs of bolts which weighed between 100 and 200 pounds and plaintiff felt something “pop” in his back and he experienced severe pain. He reported the injury and, on September 4, 2002, went to Northwestern Hospital and was eventually diagnosed with a herniated disc for which he underwent surgery, but was not “cleared” by his doctor to return to ironworking.

On August 10, 2006, Plaintiff filed a second-amended complaint. Plaintiff alleged Defendants committed nine instances of negligence. The Court noted Defendants failed to provide a crane or other mechanical device to move the kegs of bolts. Subsequently, Plaintiff voluntarily dismissed Smithfield. Zalk’s motion was also granted and was not raised on appeal. Ultimately, Wooton filed a motion for summary judgment. Wooton contended it did not owe a duty to Plaintiff because it did not retain control over Cullen’s work under section 414 of the Restatement (Second) of Torts. Wooton also argued Plaintiff could not establish its acts or omissions proximately caused injury.

In its written order granting summary judgment, the trial court gave two grounds. First, Wooton owed no duty of care to Plaintiff. Second, in any event, Plaintiff could not show his injury was proximately caused by Wooton’s alleged breach of its duty of care. This Court noted the general rule—one who employs an independent contractor is not liable for the independent contractor’s acts or omissions. Section 414 provides an exception to this general rule. “One who entrusts work to an independent contractor, but who retains the control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care.” Restatement (Second) of Torts §414, at 397 (1965).

This exception, known as the “retained control exception,” was recognized by our supreme court in Larson v. Commonwealth Edison Co. In order for this exception to apply, it must be shown the general contractor retained sufficient control over the work of the subcontractor so the law recognizes the existence of a duty to exercise “supervisory control with reasonable care.” In this claim, the analysis focused on whether Wooton retained a level of control sufficient to give rise to a duty of reasonable care. In essence, Plaintiff contended a sufficient degree of control over the work by Cullen was exercised by Wooton’s control over the only crane available at the work site. The Cullen raising gang, of which Plaintiff was a part, required the use of a crane to perform its work. The contract between Wooton and Zalk, which was incorporated into the contract between Zalk and Cullen, expressly stated Wooton would provide the crane and, in accordance with industry practice, would control its use. Plaintiff argued Wooton, in controlling the use of the crane, had a duty to exercise reasonable care in taking the crane from use by Cullen. With Wooton assuming control over the only crane at the work site and in light of the conceded need for the use of the crane for the raising gang to perform its work, it followed Wooton retained some degree of control over the manner in which the work of the Cullen raising gang was done. Wooton controlled the “means and methods” of the work contracted to be done by the Cullen raising gang, by Wooton depriving Cullen of the use of the crane to do crane-dependent work. The Court noted direct evidence was presented of Wooton’s exercise of control over the unloading of the kegs of bolts by Plaintiff when a Wooten representative directed the basket full of kegs of bolts be unloaded manually. The Court noted this holding did not mean Wooton was liable for Plaintiff’s injuries; the alleged breach of the duty remained a question for the jury.

On the second question of proximate cause, the Court found Plaintiff presented sufficient evidence to support his claim—he would not have lifted the kegs manually but for Wooton’s control over the crane, which it sought to take from Cullen to give to another subcontractor. Based upon their findings, the Court noted the facts could give rise to a duty of care and it was for a jury to decide the question of proximate cause so they reversed and remanded for those determinations.

This case should be important to most general contractors. It may now be important to note to your various foremen and supervisors that they not only may create liability by “directing” the subcontractors in the manners by which duties are performed, but they now also may be creating liability by actions which affect the ability for the subcontractor to perform the duties such as moving equipment to other areas of the job. Our initial suggestion would be to review agreements with subcontractors to avoid providing equipment if possible or by allowing for the use of the equipment with a penalty for use past certain deadlines to cover the cost of delays caused by deadline overruns involving shared equipment. Obviously all new contracts would have to be reviewed on a case by case basis to make determinations of any potential “control by subtraction”. 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.

Editor’s comment: As we prepare for tomorrow’s historic inauguration, we are amazed to see Governor Blagojevich continue to mishandle the affairs of government for about two-three more weeks from the “ivory tower” of his north side home. He clearly is dug in and not listening to anyone. Having blown off his first patron in a scandal over a garbage dump two years ago, the Gov’s last patron, Emil Jones is now out of the Illinois senate and can’t directly support or protect him.

We are similarly fascinated to see his defense lawyer effectively drop the case in the Illinois Senate and potentially leave the Governor both unrepresented and not even present to hear the charges and evidence against him. He has already indicated he is taking the protection of the Fifth Amendment and will not testify. This may be the shortest trial to oust a Governor in U.S. history—all the state senators have to do is to read and present the evidence from the bill of Impeachment and vote. As things currently sit if the Gov isn’t going to fight other than his occasional ramblings to the media, why the heck not simply resign?

We want all of our readers to know the Governor heralded in the low era of workers’ compensation as it relates to government in Illinois. We hope soon-to-be citizen Blagojevich’s doings can be undone. We remain chagrined to see “Senator-by-Humiliation” Roland Burris take office last week, after having mortified himself to beg the recently-arrested Blagojevich for the appointment and then embarrassed the U.S. Senate into approving him after the Democrat leaders all initially vowed not to accept anyone appointed by the disgraced Governor. We salute Secretary of State Jesse White for sticking to his guns and staying above all of it.

What most of our readers don’t know or remember is from memory lane. If you look it up, in 2002, then-gubernatorial hopeful Milorad Blagojevich was in a three-way primary against now-Senator Roland Burris and former Chicago Schools superintendent Paul Vallas. What put Blagojevich over the top was financial and related primary support from the big Plaintiff firms in southern Illinois—the men and women who brought you fun things like the World’s Largest Asbestos docket or about 5,000 pending asbestos filings in a tiny rural county of 260,000 folks.

The zillionaire lawyers in that area aren’t shy about making as much money as they can off of their political contributions. As we reported, a judge from Madison County awarded a Plaintiff legal fee of $1.17 billion dollars or what we were certain was over $100,000 per hour as part of the verdict against the tobacco companies; later wiped out by the Illinois Supreme Court. From that shining example, understand the Plaintiff bar in that area isn’t bashful about wanting a return-on-investment with hand-picked hearing officers. Some of those lawyers have claims before the IWCC.

Similarly, in dealing with Mr. Pay-to-Play, the big-money southern Illinois Plaintiff firms got almost-complete control of the Illinois Workers’ Compensation Commission. They immediately picked a Plaintiff lawyer to be the Chairman they wanted, switched funding of the Commission out of general tax revenues onto a new fee levied exclusively on Illinois business, more than doubled the budget, changed the name of the joint and starting adding Arbitrators who would tow the new line of their political patrons. Most of the new Arbitrators were former Plaintiff lawyers; some of them would seemingly rule only for one side of the bar—what we started to call 99.44% Petitioner-pure. We are happy to report many of them are now into the high 80’s but the place still remains wildly imbalanced toward Illinois labor.

What then started to happen were all sorts of hi-jinks. First, we saw one of Illinois’ largest defense firms strangely get a Commission post from the pro-labor Democrat Governor. Then almost as fast as she got the appointment, rumors and investigations of “pay-to-play” began and she quietly resigned from the position. It is fascinating to see this “puzzle wrapped in a conundrum surrounded by an enigma” has never again been investigated or mentioned by either the U.S. Attorney or the media. We also later saw another Commission appointment and her political patron hit the “Rezko list” which was an Excel spreadsheet faxed to the Governor with a listing of who got what jobs and who their political sponsors were. Trust us; the only thing that surprised anyone is they were stupid enough to write it all down; this again emphasized the Commission remained highly politicized.

Finally, we saw the silly PR battle of the 2004 and later 2005 Amendments to the Workers’ Compensation Act in which Illinois’ already sky-high rates and benefits were again raised and new benefits instituted. As part of the strange bargain, Illinois business got

• A clunky and partial medical fee schedule,
• Non-mandatory utilization review the Commission sometimes considers and most times ignores and
• A workers’ comp fraud provision that has no real “teeth” in the face of wide-spread prosecutorial indifference.

We remain particularly troubled to hear:

1. While we assure you the vast majority of current Arbitrators are intelligent, honest and professional hearing officers, our readers remain infuriated to see so many former claimant attorneys acting as Arbitrators in this state. We still feel the Commission remains completely out of kilter on a simple issue of locating and appointing actual “civil servants” in these positions by employing a secret political selection and retention system. We feel such systems lead directly to the “pay-to-play” mentality that is the current sewer of Illinois politics. While police and fire testing for open positions is posted on the web in this state, you and I and the man-in-the-moon can’t find the results of civil service testing for the Arbitration posts. We assure you the best candidates get selected only if they have the political pull to get the appointments—that is not what civil service is supposed to be.

Some of our top hearing officers also continue to work under the continued threat of immediate removal from office if they simply do their jobs but issue rulings or conduct their calls/hearings in a fashion not considered favorable to the politically connected attorneys across the state. We are told the former Chairman would routinely call Arbitrators at home to threaten them with immediate removal if they conducted too many pre-trial hearings, rather than try claims. Again, that is not how civil service is supposed to work. If the jobs are going to be political, make them openly political appointments. If not, they should be available to the best possible candidates who match the requisite qualifications. And when we great solid hearing officers their jobs should come with civil service protections and not be subject to the whim of the administration of the moment. We hope the continued politicization of these posts gets media attention and is reformed.

1. Many Illinois government entities, including some departments of the State of Illinois, refuse to provide light work or institute mandatory light duty return to work programs. Outside Illinois, lots of states, counties and municipalities have their modified duty programs on the web—you will not find such programs listed for the State of Illinois, County of Cook or City of Chicago. It is not a coincidence such government entities are now taxing Illinoisans at record rates. The lack of modified work programs leaves hundreds of state and local government workers off all work and collecting Illinois’ generous and tax-free TTD rates paid for by you and me, when they could otherwise be working. If you don’t know and understand how critical modified duty and return to work programs are to cutting WC costs, please send a reply. We feel we need leadership in the various government entities who will actually start to understand running good government and avoiding truly unnecessary waste means running aggressive workers’ compensation programs.
2. We are also told and infuriated to hear there are state, county and municipal risk managers who quietly turn over lists of non-litigated but accepted work injury claims for their employees with addresses of potential claimants to Plaintiff law firms. The law firms then send letters to the injured workers to seek to initiate attorney-client relationships and file Applications. To our knowledge, if no money or other “favors” are changing hands, there is nothing specifically “illegal” about such practices but the ethics of it are deplorable. We truly feel there should be a law passed to make such referrals illegal—it is completely contradictory to every concept of good government and sound business practices for this to occur.

We will never forget the joke from the comedians at Saturday Night Live where they told our Governor, “if you are too corrupt for Illinois politics, you are too corrupt.” We want all parts of Illinois government, particularly the Workers’ Compensation Commission, to learn the lesson from the past administration and start to move to being a place where honesty, fairness and an aversion to fraud are the name of the game. Please do not hesitate to reply with your thoughts and comments.

Editor’s comment: We didn’t say it would be easy and we hope he is up to the difficult tasks we have given him. He inherits the highest U.S. debt of all time and the worst economy of our lifetimes. We call on all of our readers and all Americans to unite behind our leader to help and protect him in any and every way possible. We are confident he has the brains, guts and drive to get us out of the current mess but he needs our help, constructive criticism and support. Expect to see such support and constructive criticism from us. Let’s hope the inauguration sends a message to the world the U.S. is coming back strong.

Editor’s comment: We note IME charges in Illinois are really starting to escalate—the costs have gone from $300-500 for a simple exam and report to $1,500-2,300. It is getting to the point where the expense of the IME is becoming one of the major costs in smaller claims. What we are also starting to see are lots and lots of IME services, all of who will handle all aspects of the IME process from start to finish. We also note some insurance carriers and TPA’s sign on to exclusive contracts with IME services.

Our understanding is some IME doctors are charging more money for the exams but may be paying some of it back to the IME services. In turn, the services may be quietly passing some of the monies “earned” back to the carriers/TPAs that use them. If this is accurate, we feel there may be something of a conflict coming in the industry with all the IME services who are charging “hidden fees” to simply refer folks to IME doctors.

Here is how we understand this may work:

1. Dr. Example wants to get more IME’s and signs up with XYZ IME Services, Inc.
2. XYZ has an agreement with Sample Insurance and its TPA.
3. Sample has a claim for ABC Company, one of its accounts. The claim needs an IME.
4. Rather than just call Dr. Example and set the IME themselves, they call XYZ.
5. XYZ charges $1,200 for the IME and keeps $400 for its “services” that it splits with Sample Insurance for using XYZ’s services.
6. Dr. Example gets $800 for doing the IME.
7. No one tells ABC Company the actual cost of the IME is $800 and they are paying a hidden “commission” of $400.

If the higher IME fees are being split between the carrier and “service” and quietly passed along to the account, there may be a potential for the sort of problems former Governor of New York, Eliot Spitzer found when he exposed questionable tactics being used by the insurance industry to charge hidden commissions and pass along costs without telling the insurance accounts. If what the IME situation we outline above is accurate, we understand no one appears to be telling the businesses they are paying the insurance carrier and IME service hefty additional fees for simply selecting and calling a doctor and setting an appointment.

The other potential problem is insurance carriers and TPA’s in this situation will never try to control or push IME costs down because the carriers and IME doctors may be in on this deal together. One other facet of the situation is no one is ever going to use what we consider a much better way to control medical expense—utilization review.

Please understand all the names listed in the example above are purely fictitious. Please don’t hesitate to forward your thoughts and comments.