Appeal from the Circuit Court of Madison County; the Hon.
Norman Kinder, Jr., Judge, presiding.
PRESIDING JUSTICE WEBBER DELIVERED THE OPINION OF THE COURT:
The basic question posed by this appeal is whether a lump-sum settlement contract entered into between a claimant and his employer is binding upon the Second Injury Fund (Fund) (Ill. Rev. Stat. 1983, ch. 48, par. 138.8(f)) when the contract is approved by the Industrial Commission over the objection of the Fund and the contract specifically provides that the Fund is not a signatory to the contract and is contesting the same. We hold in the negative and reverse the circuit court of Madison County.
A subsidiary issue on appeal is the finding and order of the Commission that the claimant had failed to prove a permanent loss of 100% of the use of his left arm. This issue was not reached by the trial court and is not addressed by the claimant on review.
Some recitation of the factual background is required for a full understanding of the issues.
In 1954 claimant sustained a work-related injury which resulted in the amputation of his right arm. He received compensation for permanent and complete loss of the use of that arm. On July 30, 1976, claimant sustained an injury to his left arm in the course of his employment with respondent Consolidated Aluminum Company (Consolidated). On February 14, 1980, the Industrial Commission awarded claimant benefits for 70% disability of the left arm; this award was confirmed by the circuit court of Madison County. It is not contested in this appeal.
On May 13, 1981, claimant filed a petition under sections 8(a) and 19(h) of the Workers' Compensation Act (the Act) (Ill. Rev. Stat. 1983, ch. 48, pars. 138.8(a) and 138.19(h)), naming Consolidated and the Treasurer of the State of Illinois as custodian of the Fund as respondents. The petition alleged that claimant's disability had increased to the point of total disability since the award of 70% disability.
On October 26, 1982, a hearing was held on the petition before Commissioner Miller; both respondents were represented at the hearing by counsel. Claimant testified that he had been unemployed since his prior testimony before the Commission in July 1979. He stated that since that time there had been further deterioration in the condition of his left arm, resulting in weakness and numbness in the left hand. He had constant numbness in the little and ring fingers. Claimant described further shrinkage or atrophy in his hand and arm muscles. He had lost some ability to grip and lift things, although he had driven himself to the hearing that day. Claimant also complained of very sharp pains in his elbow, for which he took medication.
The deposition of Xamnan Tulyasthien, an orthopedic surgeon, was introduced at the hearing. The deposition was taken on August 20, 1982; counsel for the Fund was not present at the deposition hearing. Dr. Tulyasthien began treating claimant in 1976 following the injury to claimant's left elbow. After a couple of visits, the doctor diagnosed ulnar nerve palsy and carpal tunnel syndrome. Claimant was advised to undergo surgery to correct those problems but declined. Claimant continued to have numbness and weakness in the hand, and the elbow pain also persisted.
Dr. Tulyasthien reexamined claimant in June 1981, at which time electromyogram and nerve conduction tests were performed. The test results confirmed the diagnoses of ulnar nerve palsy and carpal tunnel syndrome. The examination revealed tenderness of the ulnar nerve in the left elbow with positive Tinel Sign. However, there was full flexion and extension of the left elbow and full range of motion in the left shoulder. Claimant had atrophy of the thenar hypothenar eminence of the hand and atrophy of the first dorsal interosseous muscle and abductor digiti quinti of the hand. There was slight weakness of abduction and adduction of the fingers and decreased superficial sensation of the little and ring fingers. It was Dr. Tulyasthien's opinion that the injury to claimant's elbow in 1976 was not causally related to the carpal tunnel syndrome. The deponent indicated that the atrophy in the hand muscles seemed worse since 1976. He was still recommending surgery and indicated that if no operation were performed, there would be continued atrophy in the hand muscles.
At the conclusion of the hearing, the matter was set for oral argument before the entire Commission on February 22, 1983. Prior to the hearing claimant and respondent Consolidated entered into a settlement contract which provided that Consolidated pay an award of $11,844 to claimant, representing an additional disability of 30% in claimant's left arm. The award was to represent a full and final settlement of all issues between Consolidated and claimant; the Fund was explicitly excluded from the terms of the agreement. The following handwritten language was incorporated into the otherwise typewritten terms of the settlement contract:
"The Petitioner and Respondent[*] expressly acknowledge that the Respondent `Second injury Fund' (Illinois State Treasurer) is not a signatory to their agreement herein as to the nature and extent of Petitioner's permanent disability and is at this time actively contesting the same, but this settlement is neither contingent upon nor to be defferred [sic] pending a determination of the issues involved in that contest, and as between Petitioner and Respondent[*] it is `intended to be and upon approval by the Commission shall become a full and final settlement of all issues between them in this case'. [Respondent Consolidated Aluminum, only.]"
The settlement contract was presented to Commissioner Miller for his approval. He neither approved nor disapproved of it, but rather scheduled a hearing on it for February 22, 1983. That hearing was held with all parties represented by counsel, and the matter was taken under advisement. No transcript of that hearing is in the record.
The contract was approved by the full Commission on February 25, 1983. It was then agreed that arguments would be taken before the full Commission to determine what effect the approval would have on the claimant's entitlement to benefits from the Fund.
Those arguments were presented and a decision was rendered by the Commission dated October 31, 1983. In ...