12-5-11; Uninsured motorist claim combined with WC claim make for strange legal bedfellows—in our view, a pro-Plaintiff Appellate Court engaged in judicial hair-splitting to insure...

In Burcham v West Bend Mutual Insurance Company, 2011 Il.App.2d 101035 (November 21, 2011) the Illinois Appellate Court, Second District established pursuit of recovery by an injured IL worker for injuries sustained in a work-related automobile collision does not contradict the exclusive remedy provision of the Illinois Workers Compensation Act (WC Act) and can be pursued against the employer’s motor vehicle insurance policy as long as the recovery sought in that uninsured motorist claim is not specifically provided under the Illinois Workers Compensation Act.

While one could argue this decision creates no new right of recovery, it does pose an interesting wrinkle in the exclusive remedy provision of the WC Act and potentially greatly expands an employer’s liability for Circuit Court claims arising out of injuries to their employees, specifically proscribed by the exclusive remedy provision. If the exclusive remedy provision applies only to those remedies actually provided under the WC Act, what “losses” is an injured worker precluded from pursuing at common law that are not awarded under the WC Act?

Plaintiff Burcham was involved in a work-related motor vehicle collision with an uninsured motorist while driving his employer’s vehicle. Burcham and his attorney simultaneously brought a claim before the Illinois Worker’s Compensation Commission and a separate contract claim pursuant to his employer’s uninsured motorist insurance policy. That policy specified the uninsured motorist provision would not pay for any element of loss if that loss constituted a workers compensation or disability benefits loss. The policy language made it clear, claimants would not be entitled to receive duplicate payments for the same elements of loss.

Burcham’s employer and/or his WC insurance carrier continued to pay Plaintiff lost wages. They also paid roughly $490,000.00 in medical expenses, discounted by the IL WC Fee Schedule or other policy requirements from initially medical billing of roughly $680,000.00. At the time of litigation of the instant claim, his workers compensation claim had not been fully resolved.

As we indicate above, Plaintiff brought a claim for recovery under his employer’s uninsured motorist provision of its general vehicle insurance policy, claiming disfigurement, pain and suffering, roughly $188,000.00 in discounted medical expenses, increased risk of harm, loss of a normal life and loss of earnings. He sought a declaratory judgment against Defendant West Bend pursuant to the uninsured motorist coverage, demanding arbitration and moved for summary judgment. Defendant filed a cross-motion seeking summary judgment Plaintiff could not recover losses under the uninsured motorist provision for claims compensable under the WC Act.

The trial court allowed Plaintiff to proceed to arbitration in an effort to recover damages under the Defendant/Employer’s uninsured motorist policy for disfigurement, loss of a normal life, the discounted amount of his medical expenses, and loss of earnings, ruling those benefits were not provided for under the WC claim, and therefore proceeding against the uninsured motorist policy did not constitute a double recovery or the same elements of loss as those covered by the WC Act. Defendant appealed the trial court’s ruling, arguing error in allowing Plaintiff to collect damages for disfigurement, loss of a normal life, the discounted amount of his medical expenses, and loss of earnings for injuries compensable under the WC Act.

In a detailed but straightforward decision, the Illinois Appellate Court, Second District issued its decision finding the WC Act covered only Plaintiff’s claim for medical expenses, and for permanent partial disability akin to his claim for loss of a normal life, but because the claimed losses pertaining to disfigurement were not available to him under the WC Act because a Plaintiff cannot recover simultaneously under both Section 8(c) disfigurement and Section 8(e) scheduled loss for injury sustained to the same body part, he was allowed to pursue his claim for disfigurement under the uninsured motorist provision of his employer’s motor vehicle insurance policy. The Appellate Court also ruled because Plaintiff was entitled to recover medical benefits pursuant to the WC Act, he was barred from pursing recovery on the balance of medical expenses under the uninsured motorist policy. Plaintiff was therefore permitted to proceed to arbitration against Defendant’s uninsured motorist provision to recover disfigurement and for loss of earnings, suggesting neither could be recovered under the WC Act.

Why do we call this judicial “hair-splitting” above? Well, if an injured WC claimant undergoes a surgical intervention, most surgeries create surgical scarring. It makes great sense to limit a claimant to one of two paths to recovery—they can ask for disfigurement related to the surgical scarring or disability from the surgical intervention itself. They can’t get both under the IL WC Act. Now, by “splitting the hair” where there is an uninsured motorist policy, the worker can get the disability related to the surgery and the disfigurement arising from the same surgical scars. All of that will cost more money for Illinois employers and their insurance carriers.

While the decision makes technical sense, we cannot help but question whether this will render moot the exclusive remedy provision of the WC Act. If a Plaintiff is free to pursue losses that arise out of a work injury but not recoverable under the WC Act by attacking the employer’s contractual liability pursuant to an uninsured motorist’s policy, what prevents him/her from seeking uninsured motorist benefits under all sorts of odd and crazy paths? Will we now see every Plaintiff injured in an MVA seeking uninsured motorist benefits for loss of consortium, emotional distress, disfigurement, and every other theory of recovery not provided for or successfully awarded by the Commission?

While it might be true such recovery is viable only under the limited circumstances provided for by an employer’s uninsured motorist provision and therefore does not extend to claims for negligence against the employer, we also question whether the Appellate Court put the cart before the horse in allowing Plaintiff to recover loss of earnings at a point where his WC claim was not final. A wage differential or permanent total disability claim brought by Plaintiff before the Commission would necessarily constitute a loss of earnings. Is Plaintiff now barred from seeking a wage differential or permanent total disability award before the Commission, relegated only to 8(e) scheduled loss or 8(d)(2) person-as-a-whole recovery, because he has been allowed to pursue loss of earnings recovery in the circuit courts? Once again we feel the Illinois Courts have circumvented the clear intentions of the WC Act with technicalities designed to maximize Plaintiff’s recovery in direct contravention to the language of the Illinois Worker’ Compensation Act.

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. We do want to disclose we represent Defendant West Bend Mutual Insurance Company but not in the claim reported above.