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Millennium Knickerbocker Hotel v. Illinois Workers' Compensation Commission

Court of Appeals of Illinois, First District, Workers' Compensation Commission Division

April 14, 2017

MILLENNIUM KNICKERBOCKER HOTEL, Plaintiff-Appellant,
v.
THE ILLINOIS WORKERS' COMPENSATION COMMISSION and RUDY GUZMAN, JR., Defendants-Appellees.

         Appeal from the Circuit Court of Cook County No. 15-L-50663 Honorable Kay M. Hanlon, Judge, Presiding.

          HUDSON JUSTICE delivered the judgment of the court, with opinion. Presiding Justice Holdridge and Justices Hoffman, Harris, and Moore concurred in the judgment and opinion.

          ¶ 1 OPINION

          HUDSON JUSTICE

         ¶ 2 Claimant, Rudy Guzman, Jr., sought benefits pursuant to the Workers' Compensation Act (Act) (820 ILCS 305/1 et seq. (West 2006)) for an injury he allegedly sustained while working for respondent, Millennium Knickerbocker Hotel. The parties executed a lump-sum settlement contract, which provided, in part, that respondent had paid all of claimant's medical bills. Almost 2½ years after the Illinois Workers' Compensation Commission (Commission) approved the settlement contract, claimant filed a "Motion to Enforce Contract and Penalties." In the motion, claimant alleged that some of his medical bills remain unpaid and respondent "has refused to honor the [settlement] contract and pay the outstanding medical bills." Claimant requested that respondent be ordered to pay "any and all medical bills that are pending." Claimant also requested the imposition of penalties and attorney fees for respondent's failure to pay the outstanding charges. Following a hearing, the Commission entered an order granting claimant's motion and directing respondent to pay claimant $16, 618.88 in medical expenses. The Commission also awarded claimant $8, 309.44 in penalties pursuant to section 19(k) of the Act (820 ILCS 305/19(k) (West 2012)) and $3, 323.78 in attorney fees pursuant to section 16 of the Act (820 ILCS 305/16 (West 2012)). On judicial review, the circuit court of Cook County confirmed the Commission's order. Respondent then initiated the present appeal.

         ¶ 3 On appeal, respondent argues that the Commission lacked jurisdiction to hear claimant's motion. Respondent asserts that even if jurisdiction lies with the Commission, the Commission misinterpreted the settlement contract in finding that respondent was obligated to pay claimant's outstanding medical bills. Respondent also argues that the Commission erred in assessing penalties and attorney fees against it. Alternatively, respondent asserts that claimant's motion was barred by equitable estoppel and laches. For the reasons set forth below, we find that the Commission lacks jurisdiction to enforce a final award and that the proper venue for a claimant to seek enforcement of a final award of the Commission is in the circuit court pursuant to section 19(g) of the Act (820 ILCS 305/19(g) (West 2012)). Moreover, although the Commission is authorized to assess penalties and attorney fees under the Act against a party who fails to comply with the terms of a final settlement contract approved by the Commission, we conclude that claimant abandoned his request for the imposition of penalties and attorney fees in this case. Accordingly, we vacate both the judgment of the circuit court confirming the order of the Commission and the Commission's order awarding medical expenses, penalties, and attorney fees.

         ¶ 4 I. BACKGROUND

         ¶ 5 On December 19, 2006, claimant filed an application for adjustment of claim alleging that on October 7, 2006, he sustained an injury to the "rear of head" while in the employ of respondent. Claimant initially treated at Northwestern Memorial Physicians Group, where he was diagnosed as having a contusion to the neck with cervico-thoracic pain. At that time, claimant was authorized to return to work with restrictions until his next appointment. Claimant returned to respondent's employ, but ceased working after one day due to pain.

         ¶ 6 On October 26, 2006, claimant began chiropractic treatment with Melvin D'Souza of St. Anthony's Spine and Joint Institute (St. Anthony's). D'Souza's notes contain the following history of injury:

"The patient stated that on 10/07/2006, he was working, moveing [sic] a box weighing about 50 pounds. While he was placing the box on the floor, a ple [sic] of boxes [was] about [to] fall on him. However he was able to manage the pile of boxes to stabilize [sic] with his right arm. But, one of the boxes from the pile, weighting [sic] 20 pounds, fell on his back.
Upon impact, he felt *** pain in [the] neck and also he felt a popping sound in his lower back. From this incident he developed pain in his neck, upper back and lower back. He has also been experiencing headaches in the back of his head and sometimes on the top."

         D'Souza diagnosed claimant with a cervical sprain/strain, a lumbar sprain/strain, a thoracic sprain/strain, and myospasm. Claimant treated with D'Souza until August 2007. At that time, claimant's account balance was $16, 618.88.

         ¶ 7 Meanwhile, on February 6, 2007, claimant underwent an independent medical examination (see 820 ILCS 305/12 (West 2006)) by Dr. Martin Lanoff. As part of this assessment, Dr. Lanoff reviewed claimant's medical records, including those from D'Souza, and conducted a physical examination. In the report of his findings, Dr. Lanoff concluded that claimant did not sustain any lumbar abnormality as a result of the alleged work accident. Rather, Dr. Lanoff opined that, at most, claimant sustained a mild cervico-thoracic strain that should have improved within six to eight weeks after the alleged accident. Dr. Lanoff added that claimant's condition did not warrant any further chiropractic treatment, claimant had reached maximum medical improvement, and claimant could return to full, unrestricted duty.

         ¶ 8 At some point, the parties began settlement negotiations. To this end, respondent prepared a form agreement entitled "Settlement Contract Lump Sum Petition and Order" (settlement contract). The first page of the settlement contract provided in part that claimant's accident occurred when a "[b]ox fell on [his] neck." The settlement contract listed the body part affected as the "[n]eck" and the nature of the injury as a "[b]ulging disc without nerve involvement." The first page of the settlement contract also contained sections referencing "Temporary Total Disability Benefits" and "Medical Expenses." The section labeled "Temporary Total Disability Benefits" provided that claimant was temporarily totally disabled from October 8, 2006, through January 31, 2007, a period of 16 weeks, during which he received temporary total disability (TTD) benefits at a rate of $346.66 per week. The section labeled "Medical Expenses" had a line to indicate whether the employer had or had not paid all of the employee's medical bills. Respondent checked that it had paid all of claimant's medical bills. The "Medical Expenses" section also instructed the preparer to "[l]ist unpaid bills in the space below." Respondent left that space blank. On the second page of the settlement contract, a paragraph entitled "Terms of Settlement" provided in relevant part as follows:

"Respondent denies that the [claimant] sustained accidental injuries as alleged and further denies any causal connection between the alleged condition of ill-being and the alleged accidental injuries, but to avoid further litigation the Respondent offers and [claimant] accepts a lump sum of $7, 800.00 per petition below in full, final, and complete settlement of this claim. Respondent is hereby released, acquitted, and discharged from any and all liability under the *** Act *** in any way arising out of the accidental occurrence herein referred to including the known, unknown, fatal or non-fatal, past, present, or future effects, developments, or sequelae including medical and hospital expenses incurred or to be incurred, known or unknown. Review of this agreement under §8(a) and §19(h) are expressly waived. The lump sum represents 5% loss of use of the man as a whole and hereby settles all disputed issues. Respondent shall retain all rights under Section 5(b) of the *** Act and any other rights and recovery it may have relative to this claim."

         Respondent signed the proposed settlement contract on July 31, 2007, and submitted it to claimant. For reasons not entirely clear from the record, neither claimant nor his attorney signed the settlement contract until October 11, 2011, more than four years after respondent. On October 27, 2011, the Commission approved the settlement contract. The settlement amount, less certain fees, was subsequently tendered to and accepted by claimant.

         ¶ 9 No further proceedings were had in the matter until April 2, 2014, when claimant filed a "Motion to Enforce Contract and Penalties." In the one-page motion, claimant noted that although the settlement contract specifically stated that respondent had paid "all medical bills, " claimant has received medical bills that are still unpaid and respondent "has refused to honor the [settlement] contract and pay the outstanding medical bills." Claimant requested that respondent be ordered to pay "any and all medical bills that are pending." In addition, claimant requested penalties pursuant to sections 19(k) and 19(1) of the Act (820 ILCS 305/19(k), 19(1) (West 2012)) and attorney fees pursuant to section 16 of the Act (820 ILCS 305/16 (West 2012)).

         ¶ 10 In its response to claimant's motion, respondent argued that it did not owe payment for the medical bills in question, which were from D'Souza at St. Anthony's, because it denied payment for these bills before the settlement contract was approved and the settlement contract "contains no language declaring [that] the Respondent assumes any obligation to pay for any past, present, or future medical bills subsequently incurred, or previously denied by the Respondent at any time." Respondent also challenged its liability for the medical bills on the grounds that they are for: (1) treatment administered after respondent signed the settlement contract; (2) treatment administered to parts of claimant's body not injured in the alleged work accident; and (3) treatment that is not reasonable or medically ...


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