Keefe, Campbell & Associates, LLC

Editor’s Comment: Strict adherence to the language of the Illinois Employment Security Act brings likely unintended results in Emergency Treatment S.C. v The Department of Employment Security, No. 1-08-1437 (1st Dist. Sept. 30, 2009).This one reminds us of quality cheese, in that it is properly prepared and measured but undeniably smells foul. The Department of Illinois Employment Security seems intent on providing unemployment benefits to doctors and surgeons, and we can only assume mayors, governors, state senators and million-dollar executives are next. This case centers on whether administrative medical staff and medical professionals, doctors hired as independent contractors to work at a hospital emergency department, are employees as under the Illinois Employment Security Act, rendering Plaintiff liable for payment of unemployment contributions under the Act. The Department found they were and ordered Plaintiff to pay contributions on behalf of the employees hired under what is clearly an independent contractor relationship.

Plaintiff, an Illinois corporation, entered into an exclusive contract with Rush Copley Medical Center in Aurora, Illinois (Copley) to staff Copley’s ER department. Under the contract, Plaintiff was responsible to recruit physicians, provide physicians to staff Copley’s ER department, set hourly compensation and create schedules to ensure proper staffing. Plaintiff entered into independent contractor agreements with 15 physicians. Each physician worked as an independent contractor and not an employee of Plaintiff or Copley. Each physician was free to accept work assignments with other institutions, but was required to give prior notice of such employment and give Plaintiff first priority. Physicians gave scheduling requests to a scheduler, and schedules were submitted a month in advance. Physicians could be terminated with or without cause, and were required to attend continuing medical education, staff meetings and obtaining staff membership. Plaintiff could not terminate physicians until the end of each monthly schedule, but Copley could effectuate the termination of any physician at any time by withdrawing hospital privilege0. No physician could work for Copley within three years of ceasing tenure. Copley provided office space and supplies, liability insurance coverage for physicians and indemnification arising from physician negligence, but did not provide workers’ compensation insurance, liability insurance, health insurance or retirement benefits. Plaintiff did not withhold income taxes, nor pay for lost time for sickness, holiday or vacations.

Upon independent audit by the Department of Illinois Employment Security for fiscal year 2000, the Department’s Field Agent determined Plaintiff owed unemployment insurance contributions in the amount of $670.46, including statutory interest. Plaintiff filed a written protest and petition for hearing citing error in light of the independent contractor relationship. Upon hearing before the Department’s Director, Plaintiff established several of the physicians worked for other institutions concurrent with Plaintiff, as did the scheduler. The Director determined the Field Auditor’s report erred in excluding two of the physicians as not performing services for Plaintiff, and three others excluded as operating under a professional corporation despite being involuntarily dissolved prior to 2000. He determined the Field Auditor’s report under-calculated the amount of unemployment insurance contributions owed and that the Plaintiff failed to meet its burden of satisfying exclusion under Section 212. Plaintiff was ordered to pay $670.62, plus interest. The decision was affirmed by the Circuit Court and upon appeal to the First District Appellate Court; the matter was affirmed as outlined below.

Analysis: Section 206 of the Illinois Employment Security Act defines employment as any service performed by an individual by an employing unit. Section 204 defines an employing unit as any entity employing one or more individuals to perform services for it. Section 212 of the Act provides an exception to employment for service meeting all three of the following conditions:

1. The individual is free from the control of the employing unit in the performance of the service;
2. The service is outside the usual course of the employing unit’s business or is performed outside all the places of business of the enterprise for which the services are performed;
3. The individual is engaged in an independently established trade, occupation, profession or business.

The burden rests with the employing unit to prove satisfaction of these conditions to avoid obligation for unemployment insurance contributions.

The Director’s Decision noted Plaintiff controlled the employees by setting specific rules for the positions, setting the schedule for all physicians, requiring the scheduler to be available 24 hours a day and retaining the right to discharge these individuals, thereby failing to meet the first factor. The Director found the work performed by the physicians were essential to and in the usual course of Plaintiff’s business, and the fact the scheduler and auditor worked from home was insufficient to show compliance with the second factor. He further found Plaintiff could not establish the individuals were engaged in a service independent of Plaintiff’s trade, and the third factor could not be met. Plaintiff appealed to the Circuit Court, and ultimately to the Appellate Court alleging denial of Due Process because the Director held a pecuniary interest in the outcome of administrative hearings in that his department derived funding from the payment of unemployment insurance benefits paid to the department, and alleging the Director’s conclusion the physicians, Auditor and Scheduler were employees and not subject to the exception under Section 212.

Noting Plaintiff must satisfy all three requirement of Section 212 of the act and focusing specifically on the two alternative methods of satisfying the Section 212B of the Act, the Court determined Plaintiff failed to meet its burden. In analyzing Section 212b, the Court noted:

• Services which merely render the place of business more comfortable, such as window washing, or otherwise are not necessary to the employing unit’s business, are outside the usual course of business and meet the exclusion, but
• The performance of services outside the employing unit’s premises, such as a typist typing manuscripts from home, renders the place where those services are performed as the employing unit’s place of business.

Plaintiff argued the cases setting forth liability for unemployment insurance benefits were distinguishable, as they all involved employment of nonprofessionals or day laborers and not “highly trained, licensed and highly paid professionals acting on their own accord in voluntarily choosing a relationship of independent contractor and not employee.” Plaintiff argued its business focused on supplying physicians to hospitals and it is not qualified to render medical services, while the business of the physicians was treatment of emergent medical conditions. The Court noted Plaintiff did not only supply physicians, it created hospital staff schedules, established protocol and set salaries, and found the services of the physicians, Scheduler and Auditor necessary components of Plaintiff’s business, without which there would be no business. The Court found Copley’s ER department as the location of Plaintiff’s business to the extent it was the sole location from which Plaintiff’s physicians worked on Plaintiff’s behalf, and the homes of the Auditor and Scheduler were locations of Plaintiff’s business similar to the example of the typist above. The Court noted the preparation and maintenance of the work schedules were within the course and scope of Plaintiff’s business, and Plaintiff paid the schedules expenses in setting up her home office. Based on these factors, Plaintiff failed to satisfy the Act’s requirement of Section 212B to show the individuals’ services were outside the usual course of the Plaintiff’s business or performed outside all the places of Plaintiff’s business, and the Court affirmed the Department’s decision finding Plaintiff liable for unemployment insurance contributions of all its physicians, Auditor and Scheduler.

The problem with this result isn’t that it’s improperly reasoned in accordance with the specific language of Section 212 of the Illinois Employment Security Act, but that it’s simply wrong in its result. We find it impossible to believe unemployment benefits, the rescue of the recently unemployed, the hand up never regarded as a handout, were ever intended for the wealthiest of our society simply because they fit the build of a poorly molded statute. Such well-paid professionals are not on the same economic footing as typical laborers and factory workers, nor do such laborers and factory workers possess the same level of transferable skills, training and education as the members of Plaintiff’s staff, nor the same odds of acquiring alternative employment in the face of severance. To equate Plaintiff’s staff with such individuals is to defeat the inherent purpose of the Illinois Employment Security Act, meant to serve as a sort of earned welfare to those lower members of the Illinois workforce struck with temporary unemployment; assistance to the “little guy” to keep him on his feet during hard times.

This article was researched and written by Joe Needham, J.D. Please forward your thoughts and comments to Joe at jneedham@keefe-law.com.

Editor’s Comment: Understanding we are defense lawyers, we find it hard to disagree with this ruling. We always salute the Illinois courts when they follow the “plain English language” version of our laws and rules. While that sounds unusual to say, trust us, they don’t always follow such construction. If you want examples, send a reply. This case follows the simple meaning of a simple document.

We also caution all Illinois claims handlers and adjusters against what we consider the very silly claims practice of settling a claim without advice of defense counsel and then having Petitioners’ attorneys draft settlement contracts for you with the assumption Petitioner’s counsel will somehow “protect” you in doing so—their ethical demands are to protect their clients and not you. We assure you all knowledgeable claimant attorneys who are allowed to draft your settlement contracts will now check the “magic box” to insure they can always submit unpaid medical bills to you and claim payment is due.

In Thomas Hagene v Derek Polling Construction, (No. 5-07-0225 February 24, 2009), the Illinois Appellate Court was faced with a claim under Section 19(g) for enforcement of settlement contracts alleged to require payment of substantial medical bills that remained unpaid after settlement. The record indicates some of the bills were not paid and remained in dispute after closure of the claim. It appears the front of the contracts had the box checked to indicate “all medical bills” were paid and the back said the settlement was a compromise of all benefits owed under the Act. In contrast, the claim for TTD said it was disputed on the front and to refer to the reverse of the document for settlement terms.

This case involved an apparent stipulation by Respondent the unpaid medical bills in question were causally related to the work injury. Unfortunately, there was a presumption all medical bills had been forwarded to Respondent for payment by the time of settlement as well.  This decision raises concern for the defense industry that, upon indicating in settlement contracts the employer has paid all medical expenses incurred prior to contract approval, such an indication will include bills not yet submitted for payment as well. In light of this ruling, whether a settlement involves disputed bills or not, we recommend against checking the box to make a blanket statement in approved contracts “Respondent has paid all medical bills.” Respondents simply have no way of knowing the full extent of treatment sought by any given claimant.

The facts of this case are relatively simple. Petitioner settled his claim pro se or without advice of counsel. Respondent’s attorneys drafted the settlement contract. On the reverse page, the terms of the contract state Petitioner would receive $20,036.10, representing only permanency benefits valued at 30% of his injured arm. The first page of the contract indicates Respondent paid all medical bills without further elaboration. Under Terms of Settlement on the second page of the contract, Petitioner accepted $20,036.10 or 30% of the arm as the full measure of compensation for all issues, including TTD and all past, present and future medical expenses. Obviously, the document had conflicting language.

Sometime after settlement Petitioner learned $19,977.25 in medical expenses incurred prior to settlement remained unpaid by Respondent or anyone else. Roughly 18 months after settlement was approved by the Arbitrator, Petitioner brought suit in Circuit Court under Section 19(g) seeking to hold Respondent liable for these unpaid medical bills. Respondent defended on the position Petitioner was barred from seeking payment of medical expenses based on the terms of the settlement. As we indicate above, Respondent apparently raised no defense to causal connection of the medical charges to the work injury, and according to the decision Respondent agreed during oral argument the medical charges incurred and disputed were causally connected to the work injury.

The Circuit Court entered an order dismissing the complaint pursuant to Respondent’s motion, finding Respondent’s obligation had been satisfied through payment of the settlement proceeds. Following denial of Petitioner’s motion to vacate and reconsider, Petitioner appealed to the Appellate Court, Fifth District. Please note this is not the Appellate Court, Workers’ Compensation Division.

On appeal, Petitioner argued

• The settlement did not preclude his 19(g) petition for reimbursement in the amount of the medical bills,
• The contract did not relieve Respondent of its obligation to pay causally related medical expenses, and
• If the contract was deemed ambiguous, such ambiguity weighs in his favor because Respondent drafted the contract.

Respondent defended on the position the settlement contract unambiguously addressed Respondent’s obligation for payment of past, present and future medical benefits and because there was no ambiguity there was no need to resort to the rule of construction holding ambiguities to the detriment of the party which drafted the contract.

In analyzing the arguments of the parties, the Fifth District Appellate Court noted Respondent’s obligation to pay Petitioner’s medical bills stemmed not from the settlement contract but from Section 8 of the Act. Acknowledging parties can and do waive statutory rights in reaching settlement, the Court noted waiver of an important statutory right must be explicit. Respondent argued Petitioner explicitly waived his right to compensation for medical expenses related to the work injury according to the Terms of Settlement provision, agreeing to $20,036.10 as the full measure of compensation for all benefits including past, present and future medical expenses.

Refusing to consider the Terms of Settlement without consideration of all relevant contract language, the Court found the parties did not intend to discharge Respondent’s statutory obligation to pay Petitioner’s past medical expenses, as Petitioner accepted $20,036.10 as the full measure of compensation for all benefits under the presumption Respondent had already paid all past medical expenses incurred. Noting Petitioner’s agreement to settle his case for $20,036.10 was premised upon his belief Respondent had already paid all past medical expenses incurred, the Court stated relieving Respondent of its statutory obligation to pay the medical expenses it claimed it already paid would result in a windfall to Respondent by absolving Respondent of its Section 8 obligation without any consideration to Petitioner; terms to which Petitioner had not agreed nor had the parties intended. The Fifth District Appellate Court reversed the Circuit Court and remanded the case to the Circuit Court for entry of an order consistent with its ruling. We have to assume the defense firm now may face legal malpractice concerns for their drafting gaffe.

One can only wonder what would have happened if boxes on the front of the settlement contracts that mention medical bill payment had been left blank or said “disputed” see reverse. However, we suggest the better path to avoid this confusion would be to leave the boxes blank and put “disputed, see reverse” in that part of the contracts. In the alternative, the Terms of Settlement should clearly state, all medical bills submitted have been paid and any other medical bills are fully disputed, denied and will not be paid. The more certainty you can provide on the front and back of the contracts, the better chance the courts will apply the contracts as approved.

In handling/drafting lump sum settlement contracts, we suggest one of two approaches be taken. The easiest approach is to say on the front and the back of the document, all medical bills are disputed and denied and the settlement is a compromise to produce peace. If the Arbitrator approves such a contract, we feel the courts would enforce them.

The more complex issue is to close medical rights by agreeing to pay the applicable medical fee schedule amount of all reasonable, necessary and related medical bills submitted prior to settlement or of which Respondent or its insurance carrier/TPA has notice at or prior to settlement. This language, if approved by the Arbitrator, should protect both sides. Petitioner simply has to be sure Respondent is aware of medical care and billing; the employer or its representatives should be protected from “surprise” bills for care it was not given notice.

This article was written by Joseph R. Needham, J.D. We would appreciate your thoughts and comments about this new ruling and handling of medical bills at the time of settlement.

Editor’s Comment: Someone once said a camel was a horse designed by lawyers. Once again, the Illinois workers’ compensation community debates the plain meaning of another simple word, “trial.” We applaud our Appellate Court for the logic and reasoning of this brief decision, but note we feel there is one part of its reasoning that may allow for exclusion of medical opinion evidence precisely as occurred in Marks.

In City of Chicago v Workers’ Compensation Commission, (No. 1-07-2850WC December 23, 2008) the Illinois Appellate Court, First District, Workers’ Compensation Commission Division addressed the widely cited Circuit Court decision of Marks v ACME Industries, 02 IIC 0892 (2002) to determine at what point “trial” starts for the purpose of the 48-hour disclosure rule outlined in Section 12 and decided in the case of Ghere v Industrial Commission. As background, Section 12 of the Illinois Workers’ Compensation Act requires the parties to disclose medical opinion reports to the opposition no less than 48 hours prior to the start of trial. Section 8 provides a similar requirement for the disclosure of medical treatment records, and the Ghere ruling determined it appropriate to exclude opinion testimony of petitioner’s treating physician because those opinions had not been disclosed to the opposing party 48 hours prior to trial. In Ghere, “trial” was the event that commenced at the hearing before Arbitrator, at which time the parties were present to provide testimony and tender testimonial and documentary evidence.

In the case of Marks v ACME Industries, Respondent obtained a Section 12 examination and report, but did not disclose the report to Petitioner until after Petitioner’s treating physician tendered testimony by evidence deposition. For the first time in Illinois history, a Circuit Court judge ruled the “trial” commenced with the taking of the treating doctor’s evidence deposition, and therefore the report was inadmissible because it was not disclosed 48 hours prior to the deposition marking the start of “trial” as required by Section 12 and Ghere.

As an aside, we want all of our readers to understand, ten-fifteen years ago evidence depositions used to be taken after the “trial” or hearing before the Arbitrator. Some time in the 1990’s the trial practice switched to having depositions taken prior to the hearing to avoid delay. When depositions were taken after the hearing, doctors would then potentially change their written opinions based on the actual testimony of claimant. Under the various permutations of Ghere, such changed testimony might cause evidentiary concerns. Trust us, the Arbitrators used to work it all out and still found a way to award or deny benefits.

The substantive facts of the underlying claim for work-related injury in City of Chicago v Workers’ Compensation Commission are not germane to the analysis of the Court’s decision, and aren’t addressed in the Court’s analysis. The procedural posture reflects trial commenced as an emergency hearing under Section 19b. The claim was deemed compensable. When ripe for permanency, settlement was attempted and in May 2004 Petitioner’s treating physician testified by deposition. In September 2004 Respondent scheduled a Section 12 exam. Petitioner raised no objection and cooperated with the exam. Respondent tendered the report within two weeks of the Section 12 exam and roughly five months before the hearing before the Arbitrator with Petitioner’s testimony. Based on those facts, it is hard to imagine any evidentiary issues were raised.

Respondent questioned Petitioner whether the Section 12 physician’s deposition was required, received no response. Upon proceeding to trial in February 2005 Petitioner objected to Respondent’s Section 12 report on the basis it was not disclosed 48 hours prior to the start of “trial.” Petitioner argued “trial” started when Petitioner’s physician testified in a pretrial evidence deposition in May 2004 according to Marks v ACME Industries. The Arbitrator sustained the objection, rejected the report and found Petitioner permanently and totally disabled as Petitioner’s treating physician’s opinions were unrebutted.

Respondent appealed, the Commission affirmed, and the Circuit Court confirmed the Commission. Respondent appealed, arguing Marks was wrongly decided and Ghere sets the disclosure requirement as 48 hours prior to the first arbitration hearing, not depositions. On appeal, Respondent argued Ghere sets the standard for disclosure of medical opinion, which requires disclosure 48 hours prior to trial, and the meaning of trial in Ghere did not include evidence depositions conducted prior to full arbitration. In addressing this argument, the Court noted the intent of Ghere was to prevent presentation of surprise medical testimony at the hearing before the Arbitrator.

Citing the language of Ghere regarding the notice requirement of Section 12, the Court noted the “hearing” referred to in Section 12 was the “arbitration hearing.” The Court found “the purpose in having the employee’s physician send a copy of his records to the employer no later than 48 hours before the arbitration hearing is to prevent the employee from springing surprise medical testimony on the employer.” Because the Ghere court determined the purpose of Section 12’s disclosure requirement was to prevent surprise at the arbitration hearing, it found the Marks decision requiring disclosure of medical opinions prior to evidence deposition directly at odds with the holding in Ghere. Therefore, as a matter of law the Court determined it was error for the Marks court to refuse admission of medical opinions tendered more than 48 hours before the arbitration hearing but after the first evidence deposition.

So Marks is dead, right? It would appear expert medical opinion reports must be provided to the opposition 48 hours prior to the arbitration hearing regardless of when either party’s expert provides testimony by evidence deposition because the hearing referred to in Ghere is the arbitration hearing and not evidence deposition. Not so fast.

In its decision, the Appellate Court made special note of the fact Respondent in Marks possessed the Section 12 report prior to taking Petitioner’s expert’s deposition, but waited to disclose the opinion report to Petitioner until after the deposition. In City of Chicago, Respondent did not possess its Section 12 report at the time of deposing Petitioner’s expert. Noting this distinction, the Court indicated “the outcome may have been different” for City of Chicago had Respondent possessed but withheld (and therefore hid) the report prior to taking Petitioner’s expert’s deposition. While the Court’s decision explicitly states Ghere and Section 12 require disclosure of opinions 48 hours prior to arbitration hearing and not depositions, it also explicitly states the outcome in City of Chicago may have been different had the fact mirrored those in Marks. In factually distinguishing City of Chicago from Marks and finding the outcome may have been different had the report been possessed prior to the evidence deposition but disclosed, Marks appears more distinguished than overruled. Such a possibility remains directly at odds with this decision, which definitively states “trial” as addressed in Ghere is the “arbitration hearing” and not depositions.

Looking at the bigger picture, we agree with the Court. The focus of all of this is to avoid delay and keep the Illinois workers’ compensation process open, fair and moving smoothly. When attorneys “hide” medical opinions from each other to gain some perceived advantage, it is silly and counterproductive. Full and timely disclosure of any and all expert medical evidence isn’t hard to see as a requirement for workers’ compensation practice in this state. No one wants to try to write a global rule about what needs to happen in each situation but, if the shenanigans continue, the attorneys on both sides may have to undertake such a task. Until then, we are happy to see what is typically our highest reviewing court employ common sense in supervising the Commission and Circuit Courts, which is their sworn task.

We also like the evidentiary approach of experienced Arbitrators who typically let all reasonably competent evidence in and then used their experience and acumen to weigh it and rule fairly. We are certain such Arbitrators would readily point out to both sides in the City of Chicago claim the obvious fact claimant could not have been “surprised” by an IME conducted after the first deposition was taken or the opinions of the IME expert. To see this Arbitrator and the Commission exclude such evidence and then award total and permanent disability is, in our opinion, overly technical. We feel the Arbitrators and Commission should carefully consider all evidence, give it whatever weight it is due and then make a sound and fair ruling. We assure all of our readers and Commission-watchers, the vast majority of time, they do so.

If we seem some time to be running in circles, it’s because we are. This article was written by Joseph R. Needham, J.D. If you have thoughts and comments, please direct them to Joe at jneedham@keefe-law.com.

Editor’s Comment: As we reported last week, in Smalley Steel Ring Company v. Illinois Workers’ Compensation Commission (No. 2-07-1050WC December 12, 2008) the Appellate Court, Workers’ Compensation Division reached a unanimous ruling in which they clearly determined workers’ compensation benefits have to be paid by the insurance carrier to someone they identify as a dead person who perished during the calendar year prior to the supposed “accident.” For a variety of reasons, we consider it one of the more quizzical outcomes in Illinois legal history. The way this happened is the party who testified was an imposter named Alejandro Atilano who took on the name of the dead person Harry Diaz at the first hearing (and all subsequent appeals). While we feel the court reached the correct technical conclusion, we think it was a total waste of everyone’s time and, sadly, the insurance carrier’s money—the impersonator shouldn’t get any benefit from the ruse.

Defense counsel apparently found out about the subterfuge and tried to have the Arbitrator reverse his award—the problem is the award in the name of the dead person was already final and non-appealable. When the Arbitrator recalled his decision and denied the claim, three unsuccessful appeals followed. As we pointed out last week, we don’t think the appeals were necessary and were effectively worthless—we feel there is no circumstance in which the impersonator Atilano would be allowed by a circuit court judge to collect any monies from an award in the name of the dead man, Diaz.

Please note our readers have inundated us with both criminal and ethical concerns we did not anticipate in first reviewing this decision. One comment from a noted Petitioner’s attorney is the impersonating claimant clearly perjured himself—Alejandro Atilano had to be asked his name under sworn oath and answer “Harry Diaz.” Mr. Atilano had to know he was lying and impersonating the dead Diaz.

Our reader also pointed out if counsel for claimant knew of the ruse prior to the first hearing, he should be subject to criminal investigation for subornation of perjury for his role in misleading the Arbitrator. As a secondary concern, such actions have to be reported to the Attorney Registration and Disciplinary Commission for their investigation and input. All lawyers have a duty to report misconduct when we become aware of it under the ruling in In re: Himmel.

Following that line of thought, we point out there is no question counsel for claimant knew his client was at least arguably lying about his identity after the motion to recall the decision was heard. Despite the clear presence of evidence indicating an impersonation was being foisted upon the courts, counsel for claimant had to sign and file not one but three knowingly false pleadings at the Commission, Circuit Court of Lake County and Illinois Appellate Court. Illinois Supreme Court Rule 137 states (in pertinent part):

The signature of an attorney or party constitutes a certificate by him that he has read the pleading, motion or other paper; that to the best of his knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good-faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.

How can a pleading, knowingly signed by counsel of behalf of an impersonator be “well grounded in fact?” Our reader felt the transcript of that hearing should be sent to the Lake County prosecutor for investigation and possible criminal charges.

Another reader asked the question: can Petitioner’s attorney continue to act on this claim? Does he have a valid representation agreement with Mr. Atilano if his agreement was made to represent decedent Harry Diaz? While we believe an attorney/client relationship would be perceived, we find most curious the question in what fashion can his attorney continue to act on his behalf in accordance with the Code of Professional Responsibility.

Rule 1-102(a)(4) of the Code of Professional Responsibility requires a lawyer refrain from engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation.

A number of readers suggested a draft in payment of the award be issued to Harry Diaz and his attorney. If it were cashed, the insurance carrier should then seek prosecution for mail fraud and bank fraud. We don’t recommend knowingly “entrapping” anyone by such a scheme. But it does beg the question: what can Petitioner’s attorney do with a draft payable to Harry Diaz and his attorney? Would negotiating such a draft, duly obtained through a hearing and ruling from the Commission, constitute acts of fraud or other illegality by the attorney? Wouldn’t Petitioner’s attorney know his client forged the endorsement to negotiate the draft? Would assisting Petitioner in accessing the proceeds of the Commission award amount to assistance in the client’s pursuit of fraud in violation of Rule 1-102(a)(4)? We cannot see how it wouldn’t.

What about the entitlement of the medical care providers to receive payment for their services rendered to Petitioner, on whose behalf an award of medical payments was made? Innocent of any fraud, are they entitled to payment for services rendered out of proceeds from the award? If so, how do they access those proceeds? Can Petitioner’s attorney ever obtain a draft in payment of the award already rendered which he can legally negotiate to pay for the medical services awarded when he currently knows of his client’s fraud? Can Petitioner’s attorney ever move forward with the permanency aspect of this claim, awarded as compensable in a decision now irreversible by the Commission? As Petitioner’s fraud is patent and recorded in court documents, we feel the prohibition against fraudulent attorney activity set forth in Rule 1-102(a)(4) precludes any attorney from further action on any further claim for Harry Diaz, decedent regardless of its procedural posture.

As we have noted above, there is no indication Petitioner’s attorney knew of Petitioner’s fraud prior to issuance of the arbitration award, nor is there any fact in the record suggesting Petitioner’s attorney made any misrepresentations to the Arbitrator or Commission subsequent to trial. There is no indication the hearing officer had any reliable information of Petitioner’s fraud prior to recalling his decision. But moving forward, we all have knowledge of Petitioner’s fraud through the factual findings of these court decisions. So how does this case move forward from its 19(b) status to a final order? If Petitioner’s attorney does pursue additional measures on Petitioner’s behalf, what is the obligation of the rest of us watching from the sidelines?

Where do we go from here?

Well, to our knowledge this is a case of first impression. We have done substantial research and there are not a lot of cases involving ethical concerns related to civil claims brought by impersonators who are doing so to fraudulently hide their backgrounds. We sincerely hope this case doesn’t start a trend.

First, we urge all of our Arbitrators and Commissioners to follow the civil litigation rule which outlines claims brought in the name of dead people are a nullity. Once the Commission or anyone knew and confirmed Harry Diaz had passed some time earlier, a claim brought and appeals maintained in decedent’s Harry Diaz’ name should have been dismissed sua sponte or on the Commission or Court’s own motion. We feel it was a complete waste of the Commission and reviewing court’s limited resources to waste time with such a claim. We don’t know if there needs to be a Commission rule to that effect but if there isn’t one, there should be such a rule.

Second, if the person whose identity has been stolen is alive, we truly feel the caption of the case has to be modified in some meaningful way to make sense moving forward. The caption should have been changed to Alejandro Atilano appearing as Harry Diaz, deceased.

Third, we assert the claim of perjury has to be forwarded to the Lake County State’s Attorney for prosecution. While we have not seen the actual hearing transcript, the Appellate Court’s decision clearly indicates claimant committed perjury. The question of subornation of perjury by counsel should also be investigated. We will let the insurance carrier and its defense counsel make the call on that potential.

Fourth, we are sending this week and last week’s article to the Attorney Registration and Disciplinary Commission to see if they feel there are any other ethical concerns we have not addressed. We want to stress we are not filing a complaint; we are simply seeking ethical guidance on an issue of first impression.

This article was drafted by Joe Needham and Gene Keefe. Please direct your replies to jneedham@keefe-law.com or ekeefe@keefe-law.com. We welcome your comments.

Editor’s comment: Refusing conduct on moral grounds without a belief the conduct is illegal does not render the refusal protected from retaliation under Title VII. In Tate v. Executive Management Services, Inc., the Seventh Circuit overruled the lower court ruling dismissing the appeal. If you review this decision, we ask the rhetorical question: would this happen if Plaintiff was a woman? The evidence appears to clearly establish this male Plaintiff was terminated for refusing to continue an intimate relationship with his female supervisor. It appears the court looked at the perception of the parties and not their actions in ruling.

Plaintiff worked for Defendant until his termination January 14, 2004. He brought suit under Title VII alleging sexual harassment and retaliation for his refusal to continue a relationship with his supervisor. In trial by jury he prevailed only on the claim of retaliation, and Defendant appealed that verdict alleging Plaintiff did not engage in protected conduct sufficient to establish retaliation, nor did he prove his termination was due to a refusal to engage in sexual conduct with his supervisor where his termination followed an independent investigation. They argued the issue of retaliation never should have been given to the jury due to the absence of protected conduct. The Appellate Court reversed, finding Plaintiff failed to show he engaged in protective conduct.

Plaintiff was a male subordinate of a female field supervisor with whom he alleged a romantic relationship. The field supervisor denied there was ever a physical relationship, while Plaintiff alleged a relationship wherein they had intimate meetings 2-3 times per week, either at work or at the home of a co-worker.

When hired in 2002, the supervisor picked Plaintiff to be on her work team, and a week after being hired, recommended him for promotion to supervisor, which involved a pay raise. Plaintiff married another woman in August 2003, and tried to end the relationship with the field supervisor in October 2003 for the sake of his marriage. The field supervisor rebuked his efforts to end the relationship, and threatened Plaintiff with termination if he did not continue the relationship.

On January 13, 2004 the field supervisor summoned Plaintiff to her office and demanded Plaintiff’s decision regarding their ongoing relationship. Plaintiff informed there would be no relationship, and following a loud altercation was told to get out of her office. The discussions spilled into the break room, where the field supervisor informed Plaintiff she would have him fired for refusing to perform work assigned to him. The field supervisor placed a call to her supervisor but did not allow Plaintiff to speak to him. The management member instructed the field supervisor to tell Plaintiff to go home, and he was escorted from the building by a security officer.

Plaintiff left and the field supervisor called the company’s general manager and indicated Plaintiff had refused assigned work and prepared an insubordination report alleging Plaintiff was sent home for repeatedly refusing a work assignment, and that a security officer was heard the entire exchange.

The next day Plaintiff called management, but was intercepted by an HR representative who informed Plaintiff he was fired and was to return his work items. He was given no opportunity to explain his position.

The jury found the investigation was tainted by the field supervisor’s bias and found for Plaintiff on the retaliation claim.

On appeal Defendant argued the jury never should have been given the claim of retaliation because Plaintiff could not establish his termination regarded protected conduct. Title VII renders illegal an employer’s discrimination because of the employee’s refusal to perform an unlawful employment practice. A Plaintiff claiming retaliation must show he engaged in a statutorily protected activity and suffered an adverse reaction because of the activity. To engage in protected conduct Plaintiff must show he reasonably believed the practice he opposed, in this instance, intimate relations with his supervisor, violated Title VII. Analyzing testimonial evidence, the Court concluded Plaintiff did not believe the relationship was illegal, and therefore was not protected conduct.

The Court noted Plaintiff’s objections to the relationship were not based on legal grounds but because he and his field supervisor “were not good together” and because he wanted to “keep the slate clean” within his marriage. Because he did not sincerely believe the behavior was illegal, he could not establish his opposition to it was protected conduct under Title VII. Therefore, Plaintiff could not establish the necessary requirements of retaliation under Title VII, and the verdict was reversed.

This article was researched and written by Joseph R. Needham, J.D. Please direct your thoughts and comments to Joe at jneedham@keefe-law.com.