Appeal from the Circuit Court of Will County. No. 10-MR-236 ) Honorable Bobbi Petrungaro ) Judge, presiding.
The opinion of the court was delivered by: Justice Stewart
NOTICE 2011 IL App (3d) 100807WC
The text of this decision may be changed or corrected prior to the filing of a Petition for Rehearing or the disposition of the same.
JUSTICE STEWART delivered the judgment of the court, with opinion. Presiding Justice McCullough and Justices Hoffman, Hudson, and Holdridge concurred in the judgment and opinion.
¶ 2 This appeal concerns the decision of the Workers' Compensation Commission (the Commission) not to award the claimant, Melinda Jacobo, penalties and attorney fees against the employer, New Breed Leasing of Illinois, Inc., pursuant to sections 19(l), 19(k), and 16 of the Illinois Workers' Compensation Act (the Act) (820 ILCS 305/19(l), 19(k), 16 (West 2005)), for unreasonable delay in payment of compensation under the Act. The employer refused to pay undisputed portions of the claimant's benefits until all appeals were exhausted on an unrelated issue. We hold that undisputed benefits must be promptly paid or the employer will be subject to penalties and attorney fees. Accordingly, we reverse and remand.
¶ 4 In December 2008, the claimant injured her back in a work-related accident when a forklift backed into her. The claimant filed an application for adjustment of claim as well as a petition for penalties and attorney fees pursuant to sections 19(l), 19(k), and 16 of the Act (820 ILCS 305/19(l), 19(k), 16 (West 2005)). This initial petition for penalties is not at issue in the present appeal.
¶ 5 The arbitrator found that the claimant's back condition was causally related to the work accident and that the claimant had become permanently and totally disabled as a result of the accident. The arbitrator awarded the claimant temporary total disability (TTD) benefits for a period of 203 2/7 weeks, awarded permanent total disability benefits (PTD) beginning May 23, 2003, and awarded reasonable and necessary medical expenses. The arbitrator also granted the claimant's petition for penalties, finding that the employer unreasonably delayed in paying the claimant TTD benefits and paying for necessary medical treatments. Specifically, the arbitrator found that there was no dispute that the claimant suffered from a back injury caused by the work accident and that the employer unreasonably relied on an independent medical evaluation in disputing the claimant's request for benefits under the Act.
¶ 6 The employer appealed the arbitrator's decision to the Commission. The employee, however, did not seek a review of the arbitrator's award. On April 10, 2007, the Commission affirmed the arbitrator's awards of TTD and PTD benefits and medical expenses. The Commission, however, reversed the arbitrator's award of penalties and fees against the employer for unreasonable delay in paying the claimant benefits under the Act. The Commission found that the employer's "denial of benefits after the initial independent medical examination was not unreasonable." In addition, the Commission determined that the employer was due section 8(j) credit (820 ILCS 305/8(j) (West 2005)), in the amount of $24,824.19, the net amount it paid to the employee for group disability benefits.
¶ 7 On May 10, 2007, the employer's attorney sent a letter to the claimant's attorney that stated as follows:
"Please be advised that respondent has decided not to appeal the Commission's award in this matter. Please advise as to your computations concerning the amount of the award presently due and owing so that we can agree on the amount.
Also, please advise as to your demand to resolve the entire matter.
Thank you for your attention to this matter. I look forward to hearing from you at your earliest convenience."
¶ 8 On May 21, 2007, the claimant appealed the Commission's decision to deny her petition for penalties. The employer did not seek any additional review of the Commission's awards for medical expenses and TTD and PTD benefits. The employer, however, did not pay the claimant the amount it owed for the undisputed awards for TTD, PTD, and medical expense benefits. On April 22, 2008, during a telephone conference, the claimant's attorney requested that the employer's attorney obtain payment of the Commission's awards. On April 28, 2008, the claimant filed her brief in her appeal to the circuit court, raising only the issue of penalties.
¶ 9 On May 21, 2008, the claimant's attorney sent an email to the employer's attorney that stated as follows: "Please let me know the status of payment on Jacobo. I am under pressure to get the substantive award paid, and would have to bring the matter up for a penalties hearing if not addressed immediately." The claimant's attorney followed up with another email on June 8, 2008, as follows: "FYI, I was just instructed to file petition on non-payment of the award. Please advise as to the status." On June 11, 2008, the claimant's attorney sent the following email to the employer's attorney: "Were you going to send a proposed payment on Jacobo? Please send it by fax or email to ensure speedy agreement."
¶ 10 On June 12 and 14, 2008, the parties' attorneys exchanged emails concerning their respective calculations of the Commission's awards. The claimant's attorney concluded his email with the following:
"If you agree [with the calculations], please have a check forwarded as soon as possible. We would prefer not to wait until the 30th. Please recall that since it was obvious we would only be appealing on penalties, the award should have been paid last year. I still have instructions to seek penalties, but we may drop that issue if the check is received promptly."
On June 17, 2008, the parties appeared in the circuit court for a hearing on the claimant's appeal from the denial of her first petition for penalties. On June 20, 2008, the claimant's counsel again emailed the employer's counsel about payment of the Commission's awards. On June 26, 2008, the circuit court entered a judgment that reversed the Commission on the penalties issue and reinstated the arbitrator's penalty award. In an email dated June 30, 2008, the claimant's attorney wrote to the employer's attorney: "Please advise as to payment. I believe you said to give you until today."
¶ 11 By July 3, 2008, the claimant still had not received a payment from the employer for the undisputed awards for TTD, PTD, and medical expense benefits. Therefore, the claimant filed a second petition for penalties and attorney fees pursuant to sections 19(l), 19(k), and 16 of the Act, alleging that the employer unreasonably and vexatiously refused to pay the undisputed portion of the Commission's awards. This second petition for penalties is the subject matter of the present appeal.
¶ 12 Meanwhile, the employer appealed the circuit court's judgment, and the only issue on appeal was the issue of penalties. On April 27, 2009, the appellate court reversed the circuit court and reinstated the Commission's decision on the issue of penalties. The appellate court held that the evidence at the arbitration hearing presented conflicting medical opinions and that the employer's reliance on its independent medical examiner's opinions was not unreasonable or vexatious. On June 24, 2009, the employer finally paid the claimant for the undisputed portion of the Commission's awards for medical expense, TTD, and PTD benefits. At that time, the claimant's second petition for penalties was still pending.
¶ 13 On September 15, 2009, the Commission conducted a hearing on the claimant's second petition for penalties. The claimant maintained that the employer's delay in paying the undisputed awards until June 24, 2009 was unreasonable and vexatious. The Commission denied the claimant's petition for penalties, ruling as follows:
"[The claimant] filed a writ of certiorari on the Commission's original decision. Eventually, the Appellate Court issued a decision on April 29, 2009 affirming the Commission's decision awarding a total permanent to ...