Appeal from the Circuit Court of Cook County. The Honorable William Maddux, Judge Presiding. No. 06 L 5892
The opinion of the court was delivered by: Justice Lampkin
JUSTICE LAMPKIN delivered the judgment of the court, with opinion.
Presiding Justice Hall and Justice Hoffman concurred in the judgment and opinion.
This case involves a worker's compensation lien. The State of Illinois ex rel. the Department of Central Management Services (CMS) intervened in a negligence action brought by plaintiff, Loryann Johnson, against third-party tortfeasors, Ayalnesh Tikuye and Amigo Driving School, following a car accident. After Johnson was awarded proceeds in an arbitration, CMS filed a motion to enforce its worker's compensation lien against that award pursuant to section 5(b) of the Workers' Compensation Act (Act) (820 ILCS 305/5(b) (West 2004)). The circuit court awarded CMS limited lien recovery.
On appeal, CMS contends the circuit court erred in conducting an evidentiary hearing to determine whether Johnson's injuries were work-related or attributable to another source where no such hearing was necessary because the arbitrator determined in an evidentiary hearing that the work-related car accident proximately caused Johnson's injuries and set the arbitration award accordingly. In the alternative, CMS contends the circuit court erred in relying on the testimony of Johnson's sole witness. Based on the following, we reverse and remand.
On June 8, 2004, Johnson, a license examiner for the Secretary of State, was injured when Tikuye backed up over a curb and hit a light pole. Johnson sought treatment for neck and back injuries. Johnson was diagnosed with an L5/S1 disc herniation. Johnson continued treatment and did not return to work until March 2007. Johnson filed a worker's compensation claim and was awarded a total of $123,147.53, which included $75,038.64 for medical payments, $34,338.95 for lost wage payments, and $13,769.94 for settlement of the claim.
Johnson brought a negligence action against defendants, Tikuye and Amigo Driving School.*fn1 On June 15, 2009, a binding arbitration was held in which Johnson sought $250,000 based on $77,833.66 in medical bills and $84,000 in lost wages because the "motor vehicle accident caused the L5-S1 [bulge], or at least aggravated her degenerat[ive] facet disease." Defendants countered that Johnson was entitled to recover only $40,000. CMS filed a petition to intervene to protect its worker's compensation lien rights in the amount of $123,147.53.
The arbitrator conducted a hearing to determine the proximate cause of Johnson's injuries. The hearing consisted of the testimony of Johnson and defendants as well as "extensive material and medical evidence." In a written opinion, the arbitrator concluded that the majority of Johnson's medical bills, namely, $42,375 for "304 visits for doctor care," were "excessive" in light of the diagnosis. Without elaborating, the arbitrator further found Johnson's lost wages, namely, $28,000 per year, were subject to reduction. The arbitrator noted that plaintiff had a prior back injury requiring care in October 2001 and that defendants argued the "facet injections" Johnson received were for a "degenerative condition." The arbitrator ultimately awarded plaintiff a gross amount of $118,700, but reduced the award by 20% because of Johnson's comparative fault for failing to use her second brake to avoid the accident, ultimately awarding her $94,960. The arbitrator did not provide a breakdown of the award.
CMS filed a motion to enforce its subrogation lien recognizing that, because Johnson was awarded less than paid in worker's compensation proceeds, CMS was entitled only to $71,220, which was Johnson's arbitration award less 25% for statutorily prescribed attorney fees in bringing the negligence claim. Johnson filed a response arguing that the trial court should scrutinize the arbitration award to determine what portion was related to her injuries resulting from the accident because CMS's lien could attach only to those proceeds.
On November 17, 2009, the trial court entertained arguments regarding whether it should enforce the entirety of the lien or adjudicate the eligible proceeds for the lien. CMS stated, on more than one occasion, that it was willing to engage in an evidentiary hearing even though it was unnecessary. Relying on Fret v. Tepper, 248 Ill. App. 3d 320, 618 N.E.2d 526 (1993), and the fact that there was no transcript from the arbitration, the trial court ruled that it would hold an evidentiary hearing.
On December 1, 2009, the trial court conducted the evidentiary hearing. CMS's expert, Kevin Kulczyski, a chiropractor at the Taylor-Ogden Medical Center, testified that he treated Johnson following her June 2004 accident. During that treatment period, Dr. Kulczyski referred Johnson to Dr. Gale Rosseau for an electromyography and a nerve conduction velocity test and to Dr. Fink, an orthopedic spine surgeon. Dr. Kulczyski testified that the referrals were necessary and reasonable due to Johnson's L5/S1 injury, which he described as "the worst condition for the disc." Dr. Kulczyski saw Johnson for approximately 300 outpatient visits. According to Dr. Kulczyski, the 300 visits were necessary to provide Johnson with relief while awaiting future treatment plans from the specialists. When asked whether Johnson's injury resulted from a work-related accident, Dr. Kulczyski said "[w]hen she came into my office [Johnson] said she got hurt at work in a motor vehicle accident. That's all I know." Dr. Kulczyski submitted all of his bills to Johnson's employer for worker's compensation. Dr. Kulczyski testified that it was reasonable and necessary for Johnson not to return to work for three years pursuant to the injury and her job requirements.
On cross-examination, Dr. Kulczyski testified that he based his opinion of the cause of Johnson's injury on what she told him. Dr. Kulczyski stated that he could not know what portion of the condition for which he gave treatment was attributable to the accident or to a preexisting back condition. Dr. Kulczyski testified that, after reviewing the medical records of the specialists, there was an indication that Johnson had a degenerative back condition. Dr. Kulczyski, however, ...