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McMahan v. Industrialcommission

October 22, 1998

ROBERT MCMAHAN, APPELLEE, V. THE INDUSTRIALCOMMISSION ET AL. (FARMER'S ELEVATOR, APPELLANT).


The opinion of the court was delivered by: Justice Harrison

Agenda 17-May 1998.

Claimant, Robert McMahan, sought benefits pursuant to the Workers' Compensation Act (Act) (820 ILCS 305/1 et seq. (West 1992)) for injuries to his back sustained on May 20, 1992, while in the employ of Farmer's Elevator (employer). The arbitrator awarded claimant 13 6/7 weeks of temporary total disability (TTD), medical expenses, attorney fees under section 16 of the Act and penalties under sections 19(k) and 19(l) of the Act (820 ILCS 305/16, 19(k), (l) (West 1992)).

On review, the Industrial Commission (Commission) modified the amount of medical expenses awarded by the arbitrator and eliminated the award of attorney fees and section 19(k) penalties. One commissioner Dissented, arguing that claimant is entitled to penalties under section 19(k) and attorney fees under section 16. The circuit court subsequently confirmed the Commission's decision. Claimant then appealed, challenging only the Commission's refusal to award attorney fees and section 19(k) penalties. The Industrial Commission division of the appellate court, with one Justice Dissenting, affirmed in part and reversed in part, reinstating that portion of the arbitrator's decision awarding section 16 attorney fees and section 19(k) penalties. 289 Ill. App. 3d 1090. Two members of the appellate court filed a statement that the case involves a substantial question warranting consideration by the supreme court. 166 Ill. 2d R. 315(a). We granted claimant's petition for leave to appeal. On this appeal, there is no dispute as to claimant's entitlement to temporary total disability and medical benefits. The employer is not contesting the amount of such benefits claimant is entitled to receive. There is also no dispute as to claimant's entitlement to penalties under section 19(l) of the Act or the amount of such penalties. The sole issue for our consideration is whether claimant is also entitled to an award of penalties under section 19(k) of the Act and attorney fees under section 16. For the reasons that follow, we hold that he is. We therefore affirm the appellate court's judgment, with one modification. The pertinent facts were stated succinctly by the appellate court. At the time of his accident, claimant, then age 36, worked as a laborer doing such things as climbing, shoveling, painting, and lifting at the employer's grain elevator. Claimant began working for the employer full time in March 1990 and, although he had undergone back surgery in August 1985, he experienced very little difficulty with his back while working for the employer. Claimant admitted that he periodically experienced mild left leg pain and pain down his left foot, but said that the pain did not keep him from working.

On May 20, 1992, while attempting to shut a large gate at the elevator, claimant slipped on some loose rock and fell on his buttocks. He immediately felt a sharp pain in his left buttock that extended down his left leg to his knee. Because it was the end of the day, claimant limped to his vehicle and went home. The pain did not resolve itself, however, and claimant reported the incident the next day to his supervisor, Jenny Colburn.

On Colburn's advice, claimant went to see a doctor about his pain. The doctor gave claimant several prescription medications, but the pain did not subside. Claimant remained on the job despite the pain, although he often had to lie on a couch with a pillow under his legs when he went home after work.

On July 15, claimant returned to his chiropractor complaining of continued low-back pain on the left side. He also sought treatment from Springfield Urgent Care (Urgent Care). X rays of the lumbar spine taken on August 25, 1992, at Urgent Care revealed narrowing at the L4-L5 interspace. A computerized axial tomography (CAT) scan conducted on September 11 showed a mild posterior central bulging disc at L5-S1. From September through October claimant underwent physical therapy three times a week during his lunch hour. When this did not work either, claimant was referred to a neurosurgeon, Dr. Russell. Claimant first saw Dr. Russell in November and was referred to Memorial Medical Center for epidural injections. The injections proved unsuccessful. Dr. Russell then recommended that claimant undergo a lumbar myelogram. The myelogram revealed an extradural defect at L4-L5 with some compression of the nerve root sleeve.Claimant was next referred to an orthopedic surgeon, Dr. Walter Baisier, who recommended surgery. Claimant did not immediately schedule surgery because of his fear of surgery and because it was harvest time, the employer's busiest time of the year.

Surgery was ultimately performed in January of 1994, when the pain had become intolerable. Dr. Baisier performed a lumbar laminectomy and diskectomy at L4-L5 on the left. Dr. Baisier opined that surgery was necessary to relieve claimant of his symptoms and that claimant's condition was causally connected to his fall of May 20, 1992. No other physician gave a contrary opinion.

Claimant's attorney contacted the employer on January 5, 1994, and requested that temporary total disability benefits commence on January 7, 1994, to coincide with claimant's having to miss work due to the back surgery. Several weeks later claimant's attorney contacted the employer again requesting that temporary total disability benefits be started and that claimant's medical bills be paid. The employer did not comply with these requests.

Jenny Colburn, claimant's supervisor, testified that claimant informed her of his accident on May 21, 1992. Colburn faxed the information to the superintendent who was in charge of workers' compensation claims for the employer. The superintendent denied any knowledge of the accident until he was contacted by the employer's attorney in March 1994. Colburn testified it was the employer's policy to take care of small workers' compensation claims internally and not to submit accident reports on such claims to the insurance company. The superintendent confirmed this practice.

By November 1992, Colburn realized claimant's condition was more serious than first believed and therefore completed an accident report that was forwarded to the insurance carrier. The carrier informed her there was a problem with coverage on the accident because the employer had not complied with its policy provisions. As a result, the carrier refused to pay any of claimant's medical bills. Colburn was also told not to pay any more of claimant's bills internally. Claimant was left to deal with those bills on his own.

Claimant initially filed an application for adjustment of claim with the Industrial Commission on April 7, 1993. When the employer refused to pay the benefits to which claimant was entitled, he filed a petition with the Industrial Commission on March 7, 1994, requesting an immediate hearing pursuant to section 19(b-1) of the Act (820 ILCS 305/19(b-1) (West 1992)). In that petition, claimant indicated his intention to seek penalties under sections 19(k) and 19(l) of the Act (820 ILCS 35/19(k), (l) (West 1992)) and attorney fees under section 16 of the Act (820 ILCS 305/16 (West 1992)).

Section 19(k) provides:

"In case [sic] 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. Failure to pay compensation in accordance with the provisions of Section 8, paragraph (b) of this Act, shall be considered unreasonable delay." 820 ILCS 305/19(k) (West 1992). Section 19(l) states:

"In case the employer or his insurance carrier shall without good and just cause fail, neglect, refuse or unreasonably delay the payment of weekly compensation benefits due to an injured employee during the period of temporary total disability the arbitrator or the Commission shall allow to the employee additional compensation in the sum of $10 per day for each day that a weekly compensation payment has been so withheld or refused, provided that such additional compensation shall not exceed the sum of $2,500. A delay in payment of 14 days or more shall create a rebuttable presumption of unreasonable delay." 820 ILCS 305/19(l) (West 1992).

According to section 16, "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 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 1992).

Following a hearing, an Industrial Commission arbitrator issued a decision finding that claimant was temporarily totally disabled for a period of 13 6/7 weeks and that his disability was causally related to his injury at work on May 20, 1992. The arbitrator further held that the employer was liable for $23,477.04 in medical expenses. In addition, the arbitrator ruled that the employer's failure to pay temporary total disability benefits was "without good and just cause, vexatious and for mere purposes of harassment and delay." Accordingly, he sustained claimant's request for penalties under sections 19(k) and 19(l) of the Act and ...


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