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08/13/97 EMMA SCOTT v. (NO. 2-96-0805WC) INDUSTRIAL

August 13, 1997

EMMA SCOTT, WIFE AND WIDOW OF HUGHIE SCOTT, JR., DECEASED, APPELLANT,
v.
(NO. 2-96-0805WC) THE INDUSTRIAL COMMISSION, ET AL. (TRAVELERS INSURANCE COMPANY, APPELLEE). EMMA SCOTT, WIFE AND WIDOW OF HUGHIE SCOTT, JR., DECEASED, APPELLANT, V. (NO. 2-96-0969WC) THE INDUSTRIAL COMMISSION, ET AL. (TRAVELERS INSURANCE COMPANY, APPELLEE). EMMA SCOTT, WIFE AND WIDOW OF HUGHIE SCOTT, JR., DECEASED, APPELLEE, V. (NO. 2-96-1037WC) THE INDUSTRIAL COMMISSION, ET AL. (TRAVELERS INSURANCE COMPANY, APPELLANT).



Appeal from Circuit Court of Du Page County. Nos. 95MR0641, 95MR641, 95MR754. Honorable Bonnie M. Wheaton, Judge Presiding.

Rehearing Denied November 17, 1997. Released for Publication November 17, 1997.

Presiding Justice McCULLOUGH delivered the opinion of the court. Rakowski, Colwell, Holdridge, and Goldenhersh, JJ., concur.

The opinion of the court was delivered by: Mccullough

PRESIDING JUSTICE McCULLOUGH delivered the opinion of the court:

Claimant Emma Scott and Travelers Insurance Company (Travelers) appeal separately from an order of the circuit court of Du Page County confirming a decision of the Illinois Industrial Commission (Commission) awarding additional compensation and attorney fees to claimant for an insufficient tender of an earlier award by Travelers.

The issues are whether (1) this court has jurisdiction of the "cross-appeal" (appeal) of Travelers, which claimant contends was untimely; (2) the Commission improperly denied Travelers' requests to determine amounts due under its July 15, 1992, decision and for allocation of funds; and (3) the assessment of additional compensation pursuant to section 19(k) of the Workers' Compensation Act (Act) and attorney fees under section 16 of the Act (820 ILCS 305/19(k), 16 (West 1994)) was against the manifest weight of the evidence because (a) the petitions filed by Travelers were not frivolous and presented a real controversy; (b) the Commission should have calculated the additional compensation and attorney fees based on the entire 1992 award plus interest under the theory that the proceedings were frivolous and that there was an intentional underpayment of the award; (c) burial expenses under section 7(f) of the Act (820 ILCS 305/7(f) (West 1994)) should have been included in the compensation of additional penalties and attorney fees; (d) previously awarded section 19(k) and section 19(l) (820 ILCS 305/19(k),(l)) additional compensation should not have been included in the computation of the section 19(k) and section 16 attorney fees in this proceeding; and (e) there was a mathematical error in calculating the amount of the award due at the time of the underpayment by Travelers. We affirm.

Prior to oral arguments, claimant moved to strike those portions of Travelers' appellee's brief referring to a January 15, 1993, order of the circuit court of Cook County in case No. 87-L-22400 instituted by Dartha Osley, administrator of the estate of Hughie Scott. That order distributed and approved a settlement in the amount of $438,557.05 as a result of a third-party action. Travelers points to that order as the reason for instituting new proceedings before the Commission to determine not only the correct amount of the 1992 awards by the Commission to claimant, but also to allocate some of the $438,557.05 as a credit against the 1992 awards. As a result, Travelers argues its delay in payment was not frivolous.

In support of her motion, claimant cites Chambers v. Industrial Comm'n, 139 Ill. App. 3d 550, 552, 487 N.E.2d 1142, 1144, 94 Ill. Dec. 265 (1985), which stated that matters outside the record before the Commission are not properly before this court. Travelers responds that it quoted this order in its petition to the Commission for allocation and would have presented the order as evidence had the Commission not summarily denied it the opportunity to present evidence.

Since Travelers is not trying to supplement the record on appeal, but is only referring to the order as part of a factual situation in support of the same argument made to the Commission, the motion to strike is denied. However, this court will consider only matters of record.

The underlying workers compensation proceedings involved multiple claims filed by Emma Scott, wife and next friend and/or widow of Hughie Scott, Jr. (claimant), and Dartha Osley, administrator of the estate of Hughie Scott, Jr. Respondents were Illinois Wrecking Company (employer-subcontractor), Capitol Construction Group, a division of Capitol Construction Companies, Inc. (general contractor), and Travelers. The Commission issued two corrected decisions on July 15, 1992. In case No. 92-IIC-0728, dealing with claim No. 86-WC-17126, the Commission noted it had found the employer was insured by Travelers in the companion case (No. 92-IIC-0727) and determined claimant was entitled to the following: temporary total disability (TTD) in the amount of $266.67 per week for 6 5/7 weeks; $186,435.84 medical expenses; $895.21 in section 19(k) additional compensation from Travelers; $2,500 in section 19(l) additional compensation from Travelers; and $358.08 in section 16 attorney fees from Travelers. 820 ILCS 305/8(b), 8(a), 19(k), 19(l), 16 (West 1992). The Commission dismissed Osley as a party. In the companion case (No. 92-IIC-0727), dealing with claim Nos. 86-WC-21114, 86-WC-21115, 86-WC-39382, 86-WC-39383, 86-WC-39384, and 86-WC-39385, the Commission explained fully why it found no cancellation of Travelers' policy because of underpayment of a premium by the employer. The Commission also explained that no award to the estate was permissible where the widow had filed an application for adjustment of claim and dismissed 86-WC-39382, 86-WC-39383, and 86-WC-39384. The Commission further awarded claimant $32,857.61 additional compensation under section 19(k) and $13,143.04 attorney fees under section 16 from Travelers, $1,750 for burial expenses under section 7(f) of the Act, and a lifetime surviving widow's benefit of $266.67 per week pursuant to section 7(a) of the Act. 820 ILCS 305/7(f), (a) (West 1992).

The circuit court of Kane County confirmed the Commission's decision. This court affirmed. Scott v. Industrial Comm'n, Nos. 2-93-1110WC, 2-93-1171WC, 2-93-1172WC cons. (August 9, 1994) (unpublished order under Supreme Court Rule 23).

On December 23, 1994, Travelers filed with the Commission a petition for leave to file a special and limited appearance to present two motions. Travelers asked the Commission to interpret its earlier decision issued in 1992 and for a credit for and the issuance of an equitable lien in the proceeds of the third-party wrongful death action. Claimant filed a petition for additional compensation and attorney fees.

The Commission observed that Travelers was not a participant in the January 15, 1993, settlement of the third-party action because it had voluntarily withdrawn its lien, claiming it had no liability in the workers' compensation case, and failed to refile a lien after the Commission decisions in 1992. The settlement in the third-party action included $139,787.50 medical expenses and $3,000 funeral expenses. Distribution was made to the estate and the next of kin.

The Commission found that, as of December 14, 1994, the total amount due on the 1992 Commission awards, including section 19(n) interest[1] was $430,723.36. On December 12, 1994, Travelers tendered to claimant a check in the amount of $281,259.34 with a calculation sheet showing credits claimed, including those for amounts paid in the settlement of the third-party action. Travelers also denied liability for additional compensation and attorney fees in two of the workers' compensation cases, as well as section 19(n) (820 ILCS 305/19(n) (West 1994)) interest on awards made by the arbitrator directly against it, which the Commission later affirmed. In response to claimant's motion, Travelers stated it did not make full payment on December 12, 1994, because (1) it would be unreimbursable if it was later determined that Travelers was entitled to a credit and (2) it had covered all the compensation due under the Act. Travelers contended it could not protect its lien in the third-party action and deny jurisdiction and liability in the ...


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