Appeal from the Circuit Court of Saline County. No. 94-MR-178. Honorable Bruce D. Stewart, Judge, presiding.
The Honorable Justice Rarick delivered the opinion of the court. McCULLOUGH, P.j., and Rakowski, Colwell, and Holdridge, JJ., concur.
The opinion of the court was delivered by: Rarick
JUSTICE RARICK delivered the opinion of the court:
Claimant, Edward Krantz, sought benefits pursuant to the Workers' Compensation Act (the Act) (820 ILCS 305/1 et seq. (West 1994)) for injuries sustained while in the employ of Sahara Coal Company (Sahara Coal). Krantz, a maintenance repairman, was injured on November 10, 1987, while working on a conveyor when a large rock fell, pinning his knees against the conveyor.
On October 28, 1991, the arbitrator found claimant, Edward Krantz, to be permanently partially disabled (PPD) to the extent of 40% of the person as a whole and entered an award pursuant to section 8(d)(2) of the Act (820 ILCS 305/8(d)(2) (West 1994)). Claimant sought review before the Industrial Commission (the Commission), which increased the award to 75% of the person as a whole. Sahara Coal appealed to the circuit court of Saline County, which on December 7, 1993, confirmed the decision of the Commission. On January 10, 1994, claimant filed a petition for compensation and attorney fees with the Commission, seeking attorney fees and penalties pursuant to sections 19(1) and 19(k) of the Act (820 ILCS 305/19(1)(k) (West 1994)).
In his petition, claimant argued that Sahara Coal's appeal to the circuit court did not present a real controversy but was merely frivolous and made for the purpose of delay. The basis for this allegation was the fact that Sahara Coal's appeal argued only that the Commission erred in increasing the PPD award to 75%, and that Sahara Coal's failure to tender the undisputed portions of the award during the pendency of the appeal constituted an unreasonable and vexatious delay in the payment of benefits.
The Commission ruled that the provisions of section 16 (820 ILCS 305/16 (West 1994)) and section 19(k) did not apply to proceedings before the circuit court. The circuit court confirmed.
The question before us, which appears to be one of first impression, is whether the Commission has the authority to determine whether an appeal to the circuit court is frivolous or made for the purpose of delay and, if so, to award penalties and costs thereon. Krantz argues that A.O. Smith Corp. v. Industrial Comm'n, 65 Ill. 2d 224, 357 N.E.2d 539, 2 Ill. Dec. 372 (1976), and the plain language of the statute authorize the Commission to grant such relief. He maintains that limiting the application of sections 16, 19(k), and 19(1) to proceedings at the administrative level would encourage frivolous and unfounded appeals to the circuit court. Sahara Coal counters that section 19 of the Act does not authorize the Commission to consider pleadings or matters which took place in the circuit court, and that such a construction would give the Commission power to review judicial proceedings, which it does not have. Sahara Coal maintains that Supreme Court Rule 137 (134 Ill. 2d R. 137) provides the proper remedy to parties subjected to frivolous appeals in the circuit court. Krantz replies that Supreme Court Rule 137 does not preempt sections 16 and 19 of the Act but only provides an alternate remedy to claimants. Given the facts of this case, we agree with Sahara Coal and affirm the circuit court's judgment.
We first note that the Commission has the power to enter section 19(k) awards, as well as section 19(1) awards and attorney fees, even after its initial jurisdiction has ended. Board of Education of City of Chicago v. Industrial Comm'n, 351 Ill. 128, 130-31, 184 N.E. 202, 203 (1932). We also note that it has been uniformly held that it is the function of the Commission to determine whether an employer has engaged in unreasonable or vexatious delay and award penalties thereon. See, e.g., Consolidated Freightways, Inc. v. Industrial Comm'n, 136 Ill. App. 3d 630, 633, 483 N.E.2d 652, 654, 91 Ill. Dec. 306 (1985). However, the question before us is much narrower: do sections 16 and 19(k) of the Act authorize the Commission to award penalties for vexatious delay when that delay is based on the taking of an alleged frivolous appeal in the circuit court? We hold that the Commission does not have such power, and claimants must seek such relief pursuant to Supreme Court Rule 137.
The penalty provisions of the Workers' Compensation Act provide in pertinent part:
"Whenever the Commission shall find that the employer, his or her agent, service company or insurance carrier has been guilty of delay or unfairness towards an employee in the adjustment, settlement or payment of benefits due such an employee within the purview of the provisions of paragraph (c) of Section 4 of this Act; or has been guilty of unreasonable or vexatious delay, intentional under-payment of compensation benefits, or has engaged in frivolous defenses which do not present a real controversy, within the purview of the provisions of paragraph (k) of Section 19 of this Act, the Commission may assess all or any part of the attorney's fees and costs against such employer and his or her insurance carrier." 820 ILCS 305/16 (West 1994).
"In case where there has been any unreasonable or vexatious delay of payment or intentional underpayment of compensation, or proceedings have been instituted or carried on by the one liable to pay the compensation, which do not present a real controversy, but are merely frivolous or for delay, then the Commission may award compensation additional to that otherwise payable under this Act equal to 50% of the amount payable at the time of such award. 11 820 ILCS 305/19(k) (West 1994).
Krantz points to the plain language of sections 16 and 19(k) which allows the Commission to award penalties for any unreasonable or vexatious delay of payment or where proceedings have been instituted or carried on by the employer where they do not present a real controversy bur are merely frivolous or for delay, and Krantz argues that as the language does not limit such relief to proceedings at the administrative level, it must include undue delay for meritless appeals in the circuit court. We recognize that the Commission has original jurisdiction to decide all disputed questions of fact arising under the Act. See Tal Rauhoff Construction Co. v. Industrial Comm'n, 149 Ill. App. 3d 892, 897, 501 N.E.2d 295, 299, 103 Ill. Dec. 274 (1986). However, we cannot find that the Commission's power extends to consideration of pleadings and matters which take place in the circuit court. In this regard, we note that Krantz's petition for additional compensation and attorney fees cited to the circuit court's affirmance of the PPD award and attached the briefs that were filed in the circuit court. In order to determine whether Sahara Coal's appeal to the circuit court was meritless and taken only for purposes of delay, the Commission would have to look to the circuit court's final judgment and the underlying merits of the appeal. This would amount to a review of judicial proceedings, clearly beyond the Commission's statutory powers. As our supreme court has noted:
"'The commission is an administrative body created by legislative enactment for the purpose of administering the Workmen's Compensation act. It is not a court and has no inherent powers of a court. It is a non-judicial body. It can only make such orders as are within the powers granted to it by the General Assembly.'" Michelson v. Industrial Comm'n, 375 Ill. 462, 466-67, 31 N.E.2d ...