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Decatur-macon County Fair v. Ind. Com.





Appeal from the Circuit Court of Macon County, the Hon. A.G. Webber III, Judge, presiding.


Fleta Morris, widow of Redvers Morris, filed on March 24, 1975, an application for adjustment of a claim under the Workmen's Compensation Act (Ill. Rev. Stat. 1975, ch. 48, par. 138.1 et seq.) arising from the April 3, 1974, death of her husband. An arbitrator heard the case on May 1 and on that date awarded compensation plus a penalty of "50% of the amount payable at the time of this award" for "unreasonable and vexatious delay in the refusal to pay benefits." The order entered by the arbitrator further found the compensation proceedings "do not present a real controversy, but are merely frivolous or for delay." The award was affirmed by the Industrial Commission except that the amount payable to the second injury fund was increased from $400 to $1,000 and the penalty eliminated. On review the Macon County circuit court held the arbitrator's award "blatantly biased and prejudiced," found the facts insufficient to support compensation and vacated the Industrial Commission's award without remandment. Claimant has appealed directly to this court pursuant to our Rule 302(a)(2). 58 Ill.2d R. 302(a)(2).

The proceedings before arbitrator Herbert Ross are well-nigh incredible. The May 1 hearing opened with a request by him for permission of counsel to amend the application by adding Country Mutual Companies, the insurer of the named respondent Decatur-Macon County Fair Association, as a respondent. The objection of counsel for respondent that there was no reason for the addition was overruled and the amendment made. Arbitrator Ross then made the following statement prior to the introduction of any evidence:

"This record should show that this Arbitrator has become actively interested in the issues involved in this pending case. It is on the insistence of this Arbitrator that this case is now on trial today's date.

This occurrence took place April 3rd, 1974. The circumstances, as will be reflected by the evidence, would indicate to this Arbitrator that this case is clearly compensable within the terms and meanings and provisions of the Illinois Workmen's Compensation Act.

The decedent was killed as a result of this accident. He left him surviving a widow, 65 years of age, seriously and permanently disabled with no visible means of support and one year and one month later, on April 30th, 1975, this Arbitrator is pursuing this insurance carrier, Country Mutual Companies, to voluntarily comply with the Illinois Workmen's Compensation Act and supply the dependency benefits to the surviving widow in that she has had no means of support. And after 13 months of delay, and with the thinnest, most improbable pretense of defense — and at the end of this trial I am going to supply both the insurance department of the State of Illinois and to the Chairman of the Illinois Industrial Commission the recommendation of this Arbitrator that every step and every means available to them be exercised to prevent such horrible discretion, horrible discrimination against a county employee who is working for this county, paying insurance premiums for Workmen's Compensation coverage, and having to resort to long and prolonged litigation with many delays to collect the benefits to which she is now entitled and has been so entitled for the past several months that has been so stated heretofore.

I have been hearing from everyone connected with this county organization of this great tragedy of the unreasonable and vexatious delay of this insurance company to pay benefits that were due. I believe, if need be, we could have 100 people come in voluntarily and testify for these petitioners that are connected with this Respondent company because they are incensed by this delay, this vexatious delay, and as I previously indicated, in addition to other benefits that I am going to award, I am going to further assess a 50 percent penalty against your company under the 19-K provision for this delay. * * *"

Following the arbitrator's announcement that "I have taken that judicial notice of the vexatious delay on behalf of both you and your client," the following occurred:

"MR. VELDE [respondents' counsel]: Well, I think that we have a right to know what the vexatious delay is that you are taking judicial notice of.

THE ARBITRATOR: Counsel, if you are not aware by now of the abuse and vexatious delay that has been inflicted on this nice lady, then you have had ear plugs in your ears for the past year, and certainly have heard nothing that has been said to you in the past two days.

MR. VELDE: Your Honor, I think that the vexatious delay will have to come if this case is a compensable case, which we are putting on evidence now to determine. The hearing today is to determine that, and this is the first time that evidence has been presented.

THE ARBITRATOR: You have not one scintilla of proof as a reasonable basis for failing to pay compensation as due.

All of your defense has been paper-thin, intended to build up fees, intended to avoid your obligation under the Illinois Workmen's Compensation Act. And as already indicated to you, I am making charges both with the insurance department and with the Illinois Industrial Commission on the question of whether or not a company that refuses voluntary compliance on cases of this type should be licensed to insure liability of people in organizations and corporations in this state.

This is a highly lucrative area of insurance business that you are privileged to handle, that you make a great profit on. You have been paid money by this county. You owe an obligation under this social legislation to make these payments, and I really had to chase you today ...

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