As a young attorney, I remember (amidst the morning buzz at the Commission) overhearing another attorney proclaim something along the lines of, “If we’re not settled here and now, then we’re going to trial today… and I’m putting everything in dispute except jurisdiction and employment.” At the time, I thought that the strategy was a bold one, and perhaps a savvy approach to sandbag an injured worker’s attorney who wasn’t prepared for a stipulation sheet ambush. It occurred to me that even a very skilled attorney could be blindsided with such a strategy, assuming on the doorsteps of trial that there was much less to prove. CAUTION: A recent Appellate Court case gives pause for those considering such a haughty tactic.
In McDonald’s v. (Bedoy) Illinois Workers’ Compensation Comm’n, 2022 IL App (1st) 210928WC, the Petitioner, Evangelina Bedoy, was a 21-year kitchen worker for McDonald’s who alleged lower back and shoulder injuries retrieving a box of meat from a refrigerator, stored above-head level.
Petitioner hurt her shoulder and back trying to stop the falling box with her right hand and verbally notified two supervisors. She kept working until the store manager arrived and told her to stop working and even called an ambulance. One of Petitioner’s supervisors testified that he completed a Form 45 (First Report of Injury) the date of the injury, confirmed by a facsimile date/time notation. Evidence supported the fact that the main franchise office received this form.
Five days after the accident (October 8, 2012), McDonald’s insurer sent a letter to Petitioner acknowledging notice of the “work related injury,” identifying her employer as McDonald’s. On October 23, 2012, Petitioner filed an Application with the Commission. Petitioner underwent an extended course of non-operative treatment for an aggravation of her pre-existing (but asymptomatic) degeneration. This resulted in a medical restriction of reduced hours from 38 per week to 10, which McDonald’s accommodated. Medical disputes existed based upon the opinions of Respondent’s IME physician.
Following trial, the Arbitrator found Petitioner sustained an accident as alleged and that her injuries were related to the accident. The Arbitrator awarded medical benefits, permanent partial disability and penalties and attorney’s fees. On review, the Commission unanimously affirmed and adopted the Arbitration Decision (with a couple minor adjustments), and the Circuit Court confirmed the Commission’s Decision.
At trial, the franchise owner acknowledged that Petitioner sustained a work accident on October 3, 2012, and that he had not been contacted by an insurer since reporting it. Notwithstanding, McDonald’s placed the issues of notice and accident in dispute. As a consequence, the Arbitrator awarded penalties because those issues “presented no controversy and were merely frivolous.”
Concerning the issue of accident, the Appellate Court noted that Respondent presented no evidence whatsoever to rebut Petitioner’s testimony about having a work accident, and all of the other evidence indicated that McDonald’s was aware. An opposite conclusion on the issue of causation was not clearly apparent, and thus was left undisturbed.
In concluding that penalties and attorney’s fees were proper, the Appellate Court first noted that the basis of the levying of penalties was not a delay or a refusal to pay, but instead Respondent’s unreasonableness when disputing the issues of accident and notice. Moreover, the Commission’s finding that contesting those issues “presented no real controversy and was merely vexatious,” was not an abuse of discretion. Simply put, had the employer possessed facts that justified its position, penalties and fees would not usually be appropriate. However, where the employer possessed facts that supported a single finding, and where the employer takes a contrary position, penalties and fees are warranted.
The case is a cautionary lesson for practitioners and employers to carefully consider what issues are being placed in dispute, and to ensure that there is justification for the defense positions taken. If not, a very real exposure exists for penalties and attorney’s fees.
An interesting side note was contained in the Appellate Court’s analysis of “behavior” in the context of penalty imposition. Specifically, the Court referenced Residential Carpentry v. Illinois Workers’ Compensation Comm’n, 389 Ill. App. 3d 975, 984 (2009) where penalties were awarded when the employer approved a rotator cuff repair but denied a clavicle shortening when both issues could be addressed with the same surgery. This serves as a gentle reminder of potential dangers presented when only a portion – but not an entire operation – is approved/authorized.
If you have any questions about whether you could face penalties by disputing certain aspects of a claim, feel free to reach out to our attorneys here.