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Travelers Insurance v. Precision Cabinets

March 16, 2012

TRAVELERS INSURANCE,
PLAINTIFF-APPELLEE AND CROSS-APPELLANT,
v.
PRECISION CABINETS, INC.,
DEFENDANT-APPELLANT AND CROSS-APPELLEE ILLINOIS WORKERS' COMPENSATION COMMISSION; ISAK KLEIN; EMPLOYERS CONSORTIUM, INC.; AND ALEXI GIANNOULIAS, STATE TREASURER AND EX OFFICIO CUSTODIAN OF THE RATE ADJUSTMENT FUND,
DEFENDANTS- APPELLEES.



Appeal from Circuit Court of Kane County No. 10-MR-288 Honorable Thomas E. Mueller, Judge Presiding.

The opinion of the court was delivered by: Justice McCULLOUGH

JUSTICE McCULLOUGH delivered the judgment of the court, with opinion.

Justices Hoffman, Hudson, Holdridge, and Stewart concurred in the judgment and opinion.

OPINION

¶ 1 On January 27, 2004, the claimant, Isak Klein, filed an application for adjustment of claim (No. 04WC03879) pursuant to the Workers' Compensation Act (Act) (820 ILCS 305/1 through 30 (West 2002)), seeking benefits from the employer, Precision Cabinets, Inc. (Precision), for injuries suffered on January 10, 2003. On January 16, 2008, the claimant filed an application for adjustment of claim (No. 08WC02037) pursuant to the Act (820 ILCS 305/1 through 30 (West 2006)), seeking benefits from Precision for injuries suffered on December 13, 2003.

¶ 2 Following a consolidated hearing, an arbitrator found that the claimant proved he sustained injuries arising out of and in the course of his employment with Precision on January 10, 2003. The arbitrator awarded the claimant temporary total disability (TTD) benefits in the amount of $572 per week for a period of 62 4/7 weeks; permanent total disability (PTD) benefits in the amount of $572 per week "for a further period of life"; and medical expenses in the amount of $5,586.34.

¶ 3 The arbitrator found the December 13, 2003, accident "a temporary exacerbation" of the injuries suffered on January 10, 2003, and "not an intervening accident breaking the chain of causal connection." Therefore, the arbitrator did not award the claimant additional benefits.

¶ 4 Further, the arbitrator found a borrowing/lending employer relationship between Precision, the borrowing employer, and Employers Consortium, Inc. (ECI), the lending employer. Precision contracted with ECI for outsourced employee-related services to Precision, including workers' compensation coverage. Based on her examination of Workers' Compensation Commission (Commission) records, the arbitrator determined that on January 10, 2003, Precision had workers' compensation coverage through West Bend Mutual Insurance Company and ECI had no workers' compensation coverage.

¶ 5 On review, the Commission modified the arbitrator's decision specific to workers' compensation coverage. The Commission found that ECI had workers' compensation coverage through Travelers Insurance (Travelers) on January 10, 2003, and further that "all employees of ECI during the effective dates of the policy are covered by that policy, regardless of any provisions, endorsements, or lack thereof, attempting to limit or modify the liability of Travelers." The Commission found ECI and Precision "jointly and severally liable for Petitioner's work related injuries."

¶ 6 Further, the Commission denied Travelers' "Motion For Commission To Take Judicial Notice Of Proceedings Involving ECI And To Spread ECI Bankruptcy And Liquidation Proceedings Of Record," stating that the Commission was not permitted to accept additional evidence on review. In all other respects, the Commission affirmed and adopted the arbitrator's decision.

¶ 7 The circuit court reversed that portion of the Commission's decision concerning workers' compensation coverage, finding that "Precision was not endorsed as an insured on the Travelers policy until August 29, 2003," and therefore "Travelers owes no coverage."

¶ 8 Precision appeals, arguing that the Commission's finding that "all employees of ECI during the effective dates of the [Travelers'] policy are covered by that policy, regardless of any provisions, endorsements, or lack thereof, attempting to limit or modify the liability of Travelers" was not contrary to law. Travelers cross-appeals, arguing that the Commission erred in denying Travelers' "Motion For Commission To Take Judicial Notice Of Proceedings Involving ECI And To Spread ECI Bankruptcy And Liquidation Proceedings Of Record." For the reasons that follow, we reverse the judgment of the circuit court and reinstate the Commission's decision.

¶ 9 The parties do not dispute the fact that the claimant suffered an injury arising out of and in the course of his employment on January 10, 2003, nor do the parties contest the nature and extent of the claimant's injuries or his period of disability. Consequently, we will present only those facts necessary to an analysis of the issues.

ΒΆ 10 The 61-year-old claimant testified that he began work for Precision in 1999, as a cabinet-maker. On January 10, 2003, the claimant sustained back ...


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