2-26-2018; Are You Interested in Interest? IL WC App Court Clarifies Post-Decision Interest for IL WC; John Karis on Important EPLI Claim with Bankruptcy Twist; IL Senate Subcomm Hearing--Wassup?

Synopsis: Are You Interested in Interest? IL WC Appellate Court Clarifies Post-Decision Interest for Your IL WC Claims.

Editor’s comment: I admit to being mildly surprised by this important ruling and I think our IL WC textbook might need updating.

In Dobbs Tire & Auto v. IWCC, Nos. 5-16-0297WC and 5-16-0342WC, issued 2/16/2018, the IL Appellate Court, WC Division reviewed claims by two Claimants who separately obtained decisions from IL WC Arbitrators awarding significant workers’ compensation benefits. The first Claimant received his award in January 2010, and the second received her award in March 2013.

Their respective employers appealed but were unable to obtain relief or any significant change from the Illinois Workers’ Compensation Commission, the Circuit Court or the Appellate Court, WC Division. In such a setting, I have been teaching students and lawyers of my opinion interest was due at the rate set by the Arbitrator during the appeal from arbitration to the Commission and after the Commission ruled, “judgment interest” at 9% was then due.

I want all my readers and colleagues to understand the legal advice above was incorrect and should no longer be followed. It is difficult for me to admit I was incorrect but let’s all update our handling and recommendations moving forward. I salute the august justices of the Appellate Court, WC Division for this ruling that provides clarity on this topic that is important to all IL WC system participants.

In Dobbs, at the end of all appeals, the employers or their insurance carriers timely paid the final WC awards to both Claimants, plus interest at the relatively low statutory rate set by the Arbitrator in the arbitration decision. The first Claimant’s employer attached interest of 0.11%, and the second employer attached interest of 0.13%, pursuant to Section 19(n) of the Workers’ Compensation Act. As I indicate above, that is a relatively low interest rate and it is what the IL WC Act provides.

Claimants both objected and filed motions under Section 19(g) of the IL WC Act to enforce their final awards but adding a new claim for “judgment interest” at the much higher rate of 9% on the second half of the appeals, with the first Claimant proceeding in the circuit court of Fayette County, and the second proceeding in the circuit court of St. Clair County.

The trial judge in Fayette County found the first Claimant’s employer had fully satisfied her final award in a timely fashion and dismissed the complaint, but the trial judge in ultra-liberal St. Clair County ruled the second Claimant’s employer should have paid him interest from the date of the IWCC decision to the end of the claim at 9%. The employer appealed. The first Claimant separately appealed the dismissal of her complaint against her employer, but the Appellate Court consolidated her case with the appeal from Adams’ employer.

The IL Appellate Court, WC Division explained the Illinois Code of Civil Procedure Section 2-1303 provides judgments recovered in any court will draw interest at a rate of 9% per year until satisfied. However, Section 19(n) of the IL Workers’ Compensation Act provides IWCC decisions reviewing an arbitrator’s award “shall draw interest at a rate equal to the yield on indebtedness issued by the United States government with a 26-week maturity next previously auctioned on the day on which the decision is filed.” This interest, that I characterize as “post-Arbitration interest” is per statute “drawn from the date of the arbitrator’s award on all accrued compensation due the employee through the day prior to the date of payments.”

The Appellate Court ruling explained an injured worker becomes eligible for interest under Section 2-1303 of our Civil Code only “if and when the arbitrator’s award or commission’s decision becomes an enforceable judgment,” because the employer failed to pay any benefits due.

An employer that makes payment of an award, accrued installments and Section 19(n) interest before the injured worker files a motion to enforce will not be subject to interest under Section 2-1303, the Court said.

Since both employers tendered payment of what was owed to both Claimants before they filed motions for enforcement, the Appellate Court ruled the circuit court of Fayette County did not err in refusing to award interest to the first Claimant pursuant to Section 2-1303, but the circuit court of St. Clair County erred in awarding such interest to the second Claimant.

Please update your handling instructions to reflect the clarity provided in this decision. To read the decision, Dobbs Tire & Auto v. IWCC

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Synopsis: Claims Adjuster Can Proceed on Personal Employment Claims Despite Failing to Report them on Bankruptcy Petition. Analysis and research by John Karis, J.D.

Editor’s comment: A federal trial court judge in Illinois ruled an insurance adjuster can proceed with his claims of discrimination and workers’ compensation retaliation against his former employer.

In the federal case of Buhe v. Amica Mutual Insurance Co., Timothy Buhe began working for the Amica’s Mutual Insurance Co. in 1994. His job involved investigating claims stemming from auto accidents and property damage to homes.

Buhe fell from a policyholder’s roof in February 2013, suffering injuries to his knee, ankle and shoulder. His supervisor informed Amica’s workers’ compensation insurance provider of the accident.

At the time of his injury, Buhe was on “probation” with Amica, having received an written warning of potential termination for dress code violations; missing an after-hours call while on on-call duty; slowness in completing auto expense reports, estimates and assignment downloads; and lax documentation in the claims files assigned to him.

In March 2013, Buhe requested an eight-week disability leave. In May, he requested an extension of his leave until late summer or early fall.

In September 2013, Amica contacted Buhe and informed him he had exhausted the six-months of disability leave allowed under the company’s leave policy, which was laid out in the employee handbook. Since Buhe had provided no indication that he might be able to return, Amica requested that he sign a separation agreement, resigning his position.

Buhe responded that he thought workers could obtain an extension of leave. Amica responded that it needed to fill his position soon and requested that he provide medical documentation to establish an anticipated date of return.

Buhe complied and verbally confirmed that he intended to return to work after his knee surgery in December 2013.

In November 2013, an adjuster from the comp carrier contacted Amica and reported that Buhe appeared to be working for Electra Mortgage Solutions (“EMS”). Buhe was the president and owner of EMS, which was in the business of originating mortgage loans. He had been operating the business as a second job since 2007, unbeknownst to Amica.

Amica asked Buhe about his operation of EMS. Buhe told Amica that he did not directly oversee EMS’ office activities and said he was unwilling to further discuss the matter without speaking to his attorney first. Amica later terminated Buhe for violating its policies on outside employment. It was noted in the last ten years, Amica had terminated two other employees for violating its policies on outside employment and holding an outside broker’s license. 

In October 2014, Buhe filed complaints with the Equal Opportunity Employment Commission and Illinois Department of Human Rights, asserting that Amica had discriminated and retaliated against him.

Three months prior to filing his complaints, Buhe filed a Chapter 13 bankruptcy petition. He did not disclose his discrimination claims against Amica in the bankruptcy proceedings, although he did disclose his workers' compensation claim. Buhe’s bankruptcy was discharged in July 2016.

After learning of the bankruptcy, Amica filed a motion for summary judgment dismissing Buhe’s claims of discrimination and retaliation, since he had failed to disclose them to the bankruptcy court. Buhe filed a motion to reopen his bankruptcy case, which the bankruptcy court granted. U.S. District Court Judge Jorge Alonso denied Amica’s motion for summary judgment, finding a triable issue existed as to whether Buhe had intentionally concealed his claims from the bankruptcy court.

Alonso further found there was a triable issue as to whether Amica had discriminated again Buhe by refusing to grant a reasonable accommodation. The judge said a rational jury could find that the extension of leave Buhe had requested was not excessive, as Amica had previously allowed other employees an extension of their disability leaves.

Alonso also said there was a triable question as to whether Amica’s stated reason for firing Buhe was a mere pretext for discrimination and retaliation, since there was evidence that the company did not always terminate employees for undisclosed outside employment that did not present a conflict of interest with Amica’s business.

The judge said Amica was entitled to summary judgment on Buhe’s claim of promissory estoppel, but only because Buhe requested dismissal of this claim.

As we have stated throughout our blogs it is always important to be consistent with how you treat employees. In this case the court found Amica’s history with other employees critical in finding a reasonable jury could conclude based on the company’s history that it may have discriminated. Furthermore, this court also found that simply failing to disclose employment claims during a bankruptcy proceeding is not enough for summary judgment. You have to show undisputed facts that these omissions were intentional to have judicial estoppel apply. 

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

Synopsis: IL Senate Subcommittee Meeting with IL WC Arbitrators???

Editor’s comment: It is an enigma, wrapped in puzzle surrounded by a conundrum. In short no one knows why 5 of our newest Arbitrators were called into a hearing in Chicago last week.

We are later advised by a reliable source Arbitrators Harris and Luedke will be appearing before the IL Senate Committee in Springfield on Feb. 27 or this Tuesday.

I am sure these are not confirmation hearings. These Arbs were appointed by the Governor and were confirmed and are now hearing claims and making important rulings.

In short, nobody knows what’s up.  

As this column is WC gossip central—if you know anything, please, please share!!!