Oliver v. Illinois Workers' Compensation Comm'n , 2015 IL App (1st) 143836WC ( 2016 )

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Appellate Court Date: 2016.02.19 10:25:14
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Oliver v. Illinois Workers’ Compensation Comm’n,
2015 IL App (1st) 143836WC
Appellate Court TOMMY OLIVER, Appellee, v. THE ILLINOIS WORKERS’
Caption COMPENSATION COMMISSION et al. (Rausch Construction,
Appellant).
District & No. First District, Workers’ Compensation Commission Division
Docket No. 1-14-3836WC
Filed December 18, 2015
Rehearing denied February 1, 2016
Decision Under Appeal from the Circuit Court of Cook County, No. 14-L-50328; the
Review Hon. James M. McGing, Judge, presiding.
Judgment Affirmed.
Counsel on George F. Klauke, Jr., of Klauke Law Group, LLC, of Schaumburg,
Appeal for appellant.
Mitchell W. Horwitz and Tyler D. Berberich, both of Horwitz,
Horwitz & Associates, Ltd., of Chicago, for appellee.
Panel JUSTICE STEWART delivered the judgment of the court, with
opinion.
Presiding Justice Holdridge and Justices Hoffman, Hudson, and
Harris concurred in the judgment and opinion.
OPINION
¶1 On July 28, 2011, the claimant, Tommy Oliver, filed an application for adjustment of
claim pursuant to the Workers’ Compensation Act (Act) (820 ILCS 305/1 et seq. (West
2010)), seeking benefits for injuries he allegedly sustained on July 19, 2011, while working
for the employer, Rausch Construction.
¶2 On October 3, 2011, the claimant filed a petition for penalties under sections 19(k) and
19(l) of the Act (820 ILCS 305/19(k), (l) (West 2010)) and attorney fees under section 16 of
the Act (820 ILCS 305/16 (West 2010)), claiming that the employer had not paid temporary
total disability (TTD) benefits or his medical bills. The employer filed a response, asserting
that it had subpoenaed the claimant’s medical records and informed the claimant’s attorney
of its need for additional records to determine compensability.
¶3 On February 21, 2013, the claim proceeded to an arbitration hearing. On March 9, 2012,
the arbitrator filed a decision, awarding the claimant TTD benefits of $1,087.20 per week for
12.429 weeks, from August 1 through October 25, 2011; $20,510.37 in medical expenses;
and permanent partial disability (PPD) benefits of $695.78 per week for 50.6 weeks,
representing a 20% loss of use of the right arm. The arbitrator also awarded the claimant
$4,230 in section 19(l) penalties, $17,011.50 in section 19(k) penalties, and $6,804.64 in
section 16 attorney fees, finding that the employer’s refusal to pay him TTD benefits and
medical expenses was unreasonable and vexatious. The arbitrator noted that the employer did
not dispute liability based on the claimant’s medical records; instead, the employer denied
benefits based on the fact that the claimant did not report the accident until six days after it
occurred.
¶4 The employer sought review of the arbitrator’s decision before the Illinois Workers’
Compensation Commission (Commission). On November 26, 2012, the Commission filed its
decision, finding that penalties and attorney fees should not be imposed against the employer
because the employer’s conduct in the defense of this claim was neither unreasonable nor
vexatious. The Commission reversed the arbitrator’s award of penalties and attorney fees,
corrected the arbitrator’s decision to reflect an award of TTD benefits for 122/7 weeks,
corrected several minor typographical errors, and otherwise affirmed and adopted the
arbitrator’s decision.
¶5 The claimant filed a timely petition for judicial review in the circuit court of Cook
County. The circuit court remanded the matter to the Commission for further findings of fact
regarding the Commission’s decision as to penalties and attorney fees. The employer
appealed the circuit court’s decision to the appellate court, but the appeal was dismissed for
lack of jurisdiction because the circuit court’s remand order was not a final order.
¶6 On March 18, 2014, the Commission issued its decision on remand. In its decision on
remand, the Commission restated its reasons for denying penalties and attorney fees in its
original decision.
¶7 The claimant filed a timely petition for judicial review in the circuit court. On December
2, 2014, the circuit court entered its opinion, finding that the Commission’s decision as to
penalties and attorney fees was against the manifest weight of the evidence. The circuit court,
therefore, reversed the Commission’s decision and reinstated the arbitrator’s decision with
respect to penalties and attorney fees.
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¶8 The employer filed a timely appeal. On appeal, the employer argues that the
Commission’s decision as to penalties and attorney fees was not against the manifest weight
of the evidence. For the reasons that follow, we affirm the judgment of the circuit court,
which reversed the Commission’s decision and reinstated the arbitrator’s decision with
respect to penalties and attorney fees.
¶9 BACKGROUND
¶ 10 On July 28, 2011, the claimant filed an application for adjustment of claim pursuant to
the Act, seeking benefits for injuries he allegedly sustained on July 19, 2011, while working
for the employer.
¶ 11 On October 3, 2011, the claimant filed a petition for penalties under sections 19(k) and
19(l) of the Act and attorney fees under section 16 of the Act, claiming that the employer had
not paid TTD benefits or his medical bills. The employer filed a response, asserting that it
had subpoenaed the claimant’s medical records and informed his attorney of its need for
additional records to determine compensability.
¶ 12 On February 21, 2012, the claim proceeded to an arbitration hearing. The pertinent
evidence presented at the arbitration hearing can be summarized as follows.
¶ 13 The claimant testified that, on July 19, 2011, he was working as a pile driver for the
employer on a project at Belmont Harbor, which is on the shore of Lake Michigan in
Chicago. The only other days he had worked for the employer were July 15 and 18, 2011. He
stated that, on the day of the accident, he was standing on a small barge using an acetylene
and oxygen torch to cut steel when some sparks or fire flew out and struck him in the chest.
He testified that, in response, he jerked his right arm back, striking his right elbow against a
steel wall. He stated that, when he hit his elbow, he “hollered out.” He testified that a
coworker, Tita Gosten, heard him holler out and asked if he was hurt.
¶ 14 The claimant testified that, after he hit his elbow, he worked the rest of the day and was
laid off at the end of the day. At that time, he noticed bruising and a little blood. He testified
that he did not report the accident that day because he thought it was just a regular injury that
comes with construction work. He explained that he did not report every bump and bruise he
received on the job. That evening, his elbow began swelling, and, over the next several days,
the swelling and discomfort worsened.
¶ 15 On July 25, 2011, the claimant saw Dr. Bryan Waxman, an orthopedic surgeon at the
Illinois Bone and Joint Institute, reporting that he had injured his right elbow at work
approximately a week earlier when he hit his elbow on a metal beam and that he had noticed
swelling and some discomfort that night. The doctor noted that, approximately 10 years
earlier, the claimant had a triceps avulsion, which had been surgically repaired, and that his
elbow had been fine since that time. Dr. Waxman suspected another triceps avulsion and
ordered a magnetic resonance imaging (MRI) scan, which showed a full-thickness tear
involving the triceps tendon.
¶ 16 After seeing Dr. Waxman on July 25, 2011, the claimant called the employer to report his
accident. His call was directed to Patrick Kutzer, the employer’s site superintendent. The
claimant testified that Kutzer told him that he should have reported the accident on the day it
occurred and that Kutzer would not allow him to fill out an accident report even though he
tried to explain that he was not aware of the extent of his injuries on the day of the accident.
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¶ 17 Dr. Waxman surgically repaired the claimant’s right triceps tendon on August 1, 2011.
The claimant followed up with Dr. Waxman after surgery and underwent physical therapy
from August 18 through October 24, 2011. Dr. Waxman released him to return to work with
a 15-pound lifting restriction on his right arm on October 25, 2011. He testified that he then
went to work for Aretha Construction, where he was a foreman most of the time. Dr.
Waxman released him from his care on December 14, 2011, noting that he was “pretty much
doing all of his normal activities.” The doctor advised him to slowly get back to heavy
lifting, noting that it could take him six to nine months to do so.
¶ 18 The claimant testified that he still did not have full use of his right arm and that he was
still experiencing pain when welding, especially when working overhead. He stated that he
could not keep his arm in the same spot for very long when it was elevated because it was
painful. He testified that he had pain in the joints of his arm. He stated that lifting was also
painful, especially lifting something into a truck. He testified that he understood that this was
just something he had to live with. He stated that he had not been back to Dr. Waxman and
that the doctor had given him pain pills, which he only used when he had to. He denied
injuring his right arm since the day of the accident.
¶ 19 The claimant testified that he had injured his right arm in a work-related accident in 1999.
As a result, he had undergone surgery to repair his triceps tendon and had received a
settlement of 20% loss of use of his right arm. He stated that he had stopped treating for that
injury about a year later and that he had returned to work. He testified that, from
approximately 2000 until his injury on July 19, 2011, he had received no treatment for his
right arm.
¶ 20 At the time of the arbitration hearing, the employer had not paid any workers’
compensation benefits or medical bills related to the claimant’s July 19, 2011, injury. The
claimant testified that the only reason the employer had given him for refusing to pay him
benefits was that he did not report the accident on the day it occurred.
¶ 21 Patrick Kutzer, the employer’s site superintendent at Belmont Harbor, testified on the
employer’s behalf. The claimant worked for him as a pile driver on July 15, 18, and 19, 2011.
He testified that, during those three days, he interacted with the claimant before work, at
break times, and at the end of the day. He stated that, when he saw the claimant periodically
throughout the day on July 19, 2011, he did not notice the claimant having any pain or
problems. He testified that he had spoken to the claimant after work that day because it was
the claimant’s last day.
¶ 22 Kutzer testified that on July 25, 2011, the claimant called to say that he wanted Kutzer to
fill out an accident report for the last day he was there because he had hurt himself on the job.
Kutzer stated that he told the claimant that he could not fill out an accident report a week
after the accident occurred. He testified that it was his experience as a superintendent or job
foreman that the accident report had to be filled out the day of the accident. He stated that he
“didn’t know you could even fill one out after the fact.”
¶ 23 Kutzer testified that he had burned sheet pile with a torch hundreds of times. He stated
that, when cutting with a torch, it was common for molten metal, sparks, or slag to blow back
in the direction of the person doing the cutting.
¶ 24 On cross-examination, Kutzer acknowledged that he knew of no factual or medical basis
to dispute that the claimant was injured at work on July 19, 2011. He testified that, as far as
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he knew, the only issue the employer had with this case was that the claimant reported his
accident six days after it occurred.
¶ 25 On March 9, 2012, the arbitrator issued a decision, awarding the claimant TTD benefits
of $1,087.20 per week for 12.429 weeks, from August 1 through October 25, 2011;
$20,510.37 in medical expenses; and PPD benefits of $695.78 per week for 50.6 weeks,
representing a 20% loss of use of his right arm. The arbitrator also awarded the claimant
$4,230 in section 19(l) penalties; $17,011.59 in section 19(k) penalties; and $6,804.64 in
section 16 attorney fees, finding that the employer’s refusal to pay him TTD benefits and
medical expenses was unreasonable and vexatious. The arbitrator explained her reasoning as
follows:
“[The claimant’s] Petition for Penalties and Attorneys’ Fees was filed Oct. 3,
2011. [Citation.] [The employer] filed a Response on Oct. 4, 2011, indicating it had
informed [the claimant’s] counsel additional medical records were needed to
determine compensability and that it had subpoenaed those records. The Arbitrator
takes [the employer] at its word and notes [the employer] did not rely on the medical
records as a basis for disputing liability at trial. The only reason for denying benefits
apparent from the record is that [the claimant] waited six days to report the accident.
[The employer’s] only witness testified that was the only basis for dispute as far as he
knew. Since the accident consisted of bumping the back of his right elbow against a
metal wall, [the claimant’s] hope that his injury would be just another of many bumps
and bruises not requiring medical care or an accident report, was *** entirely
reasonable. The denial of benefits for this reason in the face of the medical records
was not reasonable.”
¶ 26 The employer sought review of the arbitrator’s decision before the Commission, arguing
that the arbitrator erred in awarding penalties and attorney fees because the claimant’s failure
to report a work injury on the day it occurred was a reasonable basis for challenging liability.
The employer relied on Kutzer’s testimony that the claimant did not appear to be in pain, that
the claimant did not report an accident on that day, and that the claimant did not inform
Kutzer of his injury until six days later.
¶ 27 In response, the claimant argued that the employer’s failure to pay TTD benefits and
medical bills was unreasonable, vexatious, and solely for the purpose of delay as the medical
records fully supported his claim. He argued that the fact that he reported the accident six
days after it occurred does not create a reasonable basis for the employer’s failure to pay
benefits as he credibly testified that his right elbow condition worsened after he went home
on the day of the accident.
¶ 28 On November 26, 2012, the Commission filed its opinion, finding that penalties and
attorney fees “should not be imposed against [the employer] in the present case” because
“[the employer’s] conduct in the defense of this claim was neither unreasonable nor
vexatious as there were legitimate issues in dispute with respect to accident and causal
connection, such as [the claimant’s] failure to report a work accident on his last day of work,
[the claimant’s] request to fill out an accident report six days after the reported work injury
and Mr. Kutzer’s testimony.” The Commission reversed the arbitrator’s award of penalties
and attorney fees, corrected the arbitrator’s decision to reflect an award of TTD benefits for
122/7 weeks, corrected several minor typographical errors, and otherwise affirmed and
adopted the arbitrator’s decision.
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¶ 29 The claimant filed a timely petition for judicial review in the circuit court. The circuit
court remanded the matter to the Commission for further findings of fact regarding the
Commission’s decision as to penalties and attorney fees. The employer appealed the circuit
court’s decision to the appellate court, but the appeal was dismissed for lack of jurisdiction
because the circuit court’s remand order was not a final order.
¶ 30 On March 18, 2014, the Commission issued its decision on remand, which provides, in
pertinent part, as follows:
“In compliance with the circuit court’s order, the Commission expands on the
reasons why it found [the claimant] ineligible for penalties and attorney fees as stated
in its November 26, 2012, Decision and Opinion on Review. The Commission denies
[the claimant’s] request for penalties pursuant to sections 19(k) and 19(l) and attorney
fees pursuant to section 16 based on the following: (1) although [the claimant] alleged
he injured his right elbow on his last day of work, he failed to report he had sustained
a work accident that day; (2) [the claimant] sought medical treatment and requested to
complete an accident report six days after the reported work injury; and (3) Mr.
Kutzer, [the claimant’s] supervisor on the day of the accident, testified that [the
claimant] did not appear to be in pain and did not report an accident on the day he
claimed it occurred. These facts provide reasonable explanation for [the employer’s]
denial of [the claimant’s] claim and show that [the employer’s] refusal to pay benefits
was not frivolous, vexatious or solely for the purpose of delay.”
¶ 31 The claimant filed a timely petition for judicial review in the circuit court, arguing that
the Commission’s decision as to penalties and attorney fees was against the manifest weight
of the evidence. The circuit court agreed and, on December 2, 2014, entered an order,
reversing the Commission’s decision and reinstating the arbitrator’s decision with respect to
penalties and attorney fees. The circuit court explained its reasoning as follows:
“All three (3) of the Commission’s purported reasons to support its decision are,
in reality, the same reason. That [the claimant] did not report his accident on the day
it happened and waited six (6) days to file an accident report with the [e]mployer. The
Commission attempts to set a precedent that cannot be allowed; that an employee
must report an accident on the day it occurs in order to be eligible for benefits. Such
an idea is specifically prohibited by the Act, which provides that an accident must be
reported within 45 days of its occurrence. 820 ILCS 305/6(c).
Further, and more importantly, the [c]ourt notes that the [employer] refused to
allow [the claimant] to file an accident report six (6) days after the alleged accident.
The [employer] then attempts to argue that it reasonably believed that there was no
causal connection between the work accident and [the claimant’s] current condition
of ill-being. The [employer] never allowed [the claimant] to file a report and therefore
never conducted an investigation into the accident. An employer cannot be allowed to
willfully decide not to investigate a matter and then argue that, even though [it] did
not look into it, [it] reasonably believed [it] did not have to pay benefits.
Had the [employer] allowed [the claimant] to file an accident report, investigated
it, and then determined that there was no causal connection, then [its] delay in paying
benefits would be wholly reasonable and not vexatious. This point becomes even
more important as [the claimant] testified before the Arbitrator that a fellow employee
was present when he was injured, and noticed his reaction to the accident. That is
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something the [employer] would likely have found out had [it] investigated the
accident. The [employer] stuck its head in the sand and then argued that it could not
see or hear anything so it was reasonable for [it] to think nothing was there. That is a
dangerous precedent that cannot be allowed.” (Emphasis in original.)
¶ 32 ANALYSIS
¶ 33 On appeal, the employer argues that the Commission’s decision as to penalties and
attorney fees was not against the manifest weight of the evidence. The intent of sections
19(l), 19(k), and 16 of the Act “is to implement the Act’s purpose to expedite the
compensation of industrially injured workers and penalize an employer who unreasonably, or
in bad faith, delays or withholds compensation due an employee.” Avon Products, Inc. v.
Industrial Comm’n, 82 Ill. 2d 297, 301, 412 N.E.2d 468, 470 (1980). “Penalties for delayed
payment are not intended to inhibit contests of liability *** by employers who honestly
believe an employee not entitled to compensation; they are intended to promote the prompt
payment of compensation where due and to deter those occasional employers or insurance
carriers who might withhold payment from other than legitimate motives.” Id. at 301-02, 412
N.E.2d at 470.
¶ 34 The standard for awarding penalties under section 19(l) differs from the standard for
awarding penalties and attorney fees under sections 19(k) and 16. McMahan v. Industrial
Comm’n, 183 Ill. 2d 499, 514-15, 702 N.E.2d 545, 552-53 (1998).
¶ 35 We begin our analysis by considering the Commission’s denial of penalties under section
19(l) of the Act, which provides, in pertinent part, as follows:
“In case the employer or his or her insurance carrier shall without good and just
cause fail, neglect, refuse, or unreasonably delay the payment of benefits under
Section 8(a) or Section 8(b), the Arbitrator or the Commission shall allow to the
employee additional compensation in the sum of $30 per day for each day that the
benefits *** have been so withheld or refused, not to exceed $10,000. A delay in
payment of 14 days or more shall create a rebuttable presumption of unreasonable
delay.” (Emphases added.) 820 ILCS 305/19(l) (West 2010).
¶ 36 Penalties imposed under section 19(l) are “in the nature of a late fee.” McMahan, 183 Ill.
2d at 515, 702 N.E.2d at 552. Moreover, the award of section 19(l) penalties is mandatory
“[i]f the payment is late, for whatever reason, and the employer or its carrier cannot show an
adequate justification for the delay.” Id. “The standard for determining whether an employer
has good and just cause for a delay in payment is defined in terms of reasonableness.”
Jacobo v. Illinois Workers’ Compensation Comm’n, 2011 IL App (3d) 100807WC, ¶ 20, 959
N.E.2d 772. The employer bears the burden of justifying the delay, and its justification is
sufficient only if a reasonable person in the employer’s position would have believed the
delay was justified. Board of Education of the City of Chicago v. Industrial Comm’n, 93 Ill.
2d 1, 9-10, 442 N.E.2d 861, 865 (1982). The Commission’s determination of the
reasonableness of the delay is a question of fact, which will not be disturbed unless it is
against the manifest weight of the evidence. Jacobo, 2011 IL App (3d) 100807WC, ¶ 20, 959
N.E.2d 772. The Commission’s decision is against the manifest weight of the evidence only
if the opposite conclusion is clearly apparent. Beelman Trucking v. Illinois Workers’
Compensation Comm’n, 233 Ill. 2d 364, 370, 909 N.E.2d 818, 822 (2009).
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¶ 37 Here, the Commission found that the employer’s refusal to pay benefits was reasonable
because (1) although the claimant alleged he was injured on his last day of work, he did not
report the accident that day; (2) he sought medical treatment and asked to complete an
accident report six days later; and (3) his supervisor on the day of the accident testified that
he did not appear to be in pain and did not report an accident on the day it occurred.
¶ 38 As the circuit court noted in its order, “[a]ll three (3) of the Commission’s purported
reasons to support its decision are, in reality, the same reason.” All of the Commission’s
purported reasons center around the fact that the claimant did not report his accident on the
day it occurred. This is not a legitimate basis for denying workers’ compensation benefits.
¶ 39 According to the Act, notice of an accident must be reported to the employer within 45
days of the accident. 820 ILCS 305/6(c) (West 2010). Here, there is no dispute that the
claimant reported the accident to the employer six days after it occurred.
¶ 40 “The purpose of the notice requirement is to enable the employer to investigate the
alleged accident.” Seiber v. Industrial Comm’n, 82 Ill. 2d 87, 95, 411 N.E.2d 249, 252
(1980). “Compliance with the requirement is accomplished by placing the employer in
possession of the known facts related to the accident within the statutory period.” Id.
¶ 41 Here, the claimant’s notice after six days clearly fulfilled the purpose of the Act’s notice
requirement and was not a legitimate basis for withholding benefits. The circuit court astutely
described the employer’s unreasonable conduct in this case. After the claimant reported his
accident to Kutzer, he was denied the opportunity to fill out a formal accident report, and
there is no evidence that the employer investigated the claim in any manner. Instead, the
employer denied the claim off-hand, simply because it was not reported on the day of the
accident. Kutzer acknowledged that, as far as he knew, the employer had no factual or
medical basis to deny the claim, and the only basis he knew of for the denial of the claim was
that the claimant reported the accident six days after it occurred. The employer had ample
opportunity to investigate the facts and circumstances of this claim but chose not to do so.
¶ 42 In its brief to this court, the employer further argues that Kutzer’s testimony that he did
not notice the claimant’s pain on the day of the accident somehow creates a reasonable basis
for denial of benefits. However, whether Kutzer, a lay witness, noticed that the claimant was
experiencing symptoms after his accident is of no consequence in the face of clear and
undisputed medical records, which detail the claimant’s work accident and injury. Again,
Kutzer acknowledged that the only issue the employer had with the claim was that the
claimant reported his accident six days after it occurred.
¶ 43 Furthermore, when examined along with the medical records and the claimant’s
testimony, the six-day delay in reporting the accident was reasonable. The claimant’s injury
worsened over the several days after his accident and did not respond to rest at home. He,
therefore, sought medical treatment and reported his accident to the employer six days later.
The employer did not dispute the claim based on medical evidence or witness testimony.
Instead, it disputed the claim based solely on the fact that the claimant did not report his
accident on the day it occurred.
¶ 44 To reach its conclusions in this case, the Commission had to ignore the letter of the law in
finding that reporting an accident six days after it occurred is a reasonable basis for disputing
a workers’ compensation claim. As noted above, a claimant has 45 days to report an accident
to an employer under the Act. The Commission did not cite any legal authority to support its
position that not reporting an accident on the day it occurred is a reasonable basis for
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disputing a claim; nor did the employer cite such legal authority in its appellate brief.
Furthermore, the Commission did not even attempt to explain how the employer’s refusal to
pay the claimant benefits in this case was reasonable in the face of medical records and
testimony, which clearly demonstrate a work-related accident and injury.
¶ 45 As the circuit court noted in its decision in this case:
“The Commission attempts to set a precedent that cannot be allowed; that an
employee must report an accident on the day it occurs in order to be eligible for
benefits. Such an idea is specifically prohibited by the Act, which provides that an
accident must be reported within 45 days of its occurrence. 820 ILCS 305/6(c).”
¶ 46 The Commission seemingly found that an employer can deny benefits on any claim that
is not reported on the day of the accident. Kutzer testified that he did not know that he was
even allowed to fill out an accident report after the accident date, evidencing the employer’s
apparent one-day reporting policy. Such a position is in direct contrast to the clear language
of the Act, which allows 45 days to report an accident to an employer. Furthermore, such a
position is unreasonable based upon the fact that many workplace injuries do not manifest
themselves until days after the accident, and many claimants are not in a position to report
their accident on the day it occurred. The employer argues that the claimant should have
reported his accident on the day it occurred because he began feeling some symptoms that
day. Again, the employer’s position is unsupported by any authority and is not supported by
the record in this case. The record shows that the claimant tried to give his injury time to
improve, believing at first that it was a common workplace injury that did not require
medical treatment or an accident report; however, when the injury did not improve over the
next several days, he decided that he needed to seek medical treatment and reported the
accident to the employer. His course of action was reasonable and is not a legitimate basis for
the employer’s denial of benefits.
¶ 47 The burden of providing a reasonable basis for denial of benefits falls solely on the
employer. The record is clear that the employer denied this claim, without any investigation,
solely because the claimant did not report the accident on the day it occurred. As the
employer has provided no authority for such a denial, it has failed to provide a reasonable
basis for that denial. Therefore, we find that the Commission’s determination that the
employer’s refusal to pay benefits was reasonable is against the manifest weight of the
evidence. Under section 19(l), when the employer’s refusal to pay benefits is without good
and just cause, penalties are mandatory. Accordingly, we affirm the circuit court’s order
reversing the Commission’s decision and reinstating the arbitrator’s decision with respect to
penalties under section 19(l).
¶ 48 We turn now to the Commission’s denial of penalties and attorney fees under sections
19(k) and 16 of the Act. Section 19(k) provides, in pertinent part, that “where there has been
any unreasonable or vexatious delay of payment *** the Commission may award
compensation additional to that otherwise payable under this Act equal to 50% of the amount
payable at the time of such award.” (Emphases added.) 820 ILCS 305/19(k) (West 2010).
Section 16 provides for an award of attorney fees and costs when an award of additional
compensation under section 19(k) is appropriate. 820 ILCS 305/16 (West 2010). The amount
of attorney fees to be awarded is a matter within the discretion of the Commission. Jacobo,
2011 IL App (3d) 100807WC, ¶ 22, 959 N.E.2d 772.
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¶ 49 The standard for awarding penalties and attorney fees under sections 19(k) and 16 is
higher than the standard for awarding penalties under section 19(l) because sections 19(k)
and 16 require more than an “unreasonable delay” in payment of benefits. McMahan, 183 Ill.
2d at 514-15, 702 N.E.2d at 552. For the award of penalties and attorney fees under sections
19(k) and 16, it is not enough for the claimant to show that the employer simply failed,
neglected, or refused to make payment or unreasonably delayed payment without good and
just cause. Id. at 515, 702 N.E.2d at 552. Instead, penalties and attorney fees under sections
19(k) and 16 are “intended to address situations where there is not only a delay, but the delay
is deliberate or the result of bad faith or improper purpose.” Id. at 515, 702 N.E.2d at 553. In
addition, while section 19(l) penalties are mandatory, the imposition of penalties and attorney
fees under sections 19(k) and 16 is discretionary. Id.
¶ 50 Accordingly, our review of the Commission’s decision to deny section 19(k) penalties
and section 16 attorney fees differs from our analysis of the Commission’s decision to deny
section 19(l) penalties. A review of the Commission’s decision to deny section 19(k)
penalties and section 16 attorney fees involves a two-part analysis. Id. at 516, 702 N.E.2d at
553. First, we must determine whether the Commission’s finding that the facts do not justify
section 19(k) penalties and section 16 attorney fees is against the manifest weight of the
evidence. Id. Second, we must determine whether the Commission abused its discretion in
refusing to award such penalties and attorney fees under the facts in the present case. Id. An
abuse of discretion occurs when the Commission’s ruling is arbitrary, fanciful, or
unreasonable, or where no reasonable person would take the view adopted by the
Commission. Blum v. Koster, 235 Ill. 2d 21, 36, 919 N.E.2d 333, 342 (2009).
¶ 51 We agree with the circuit court’s conclusion that section 19(k) penalties and section 16
attorney fees should have been awarded in this case. The employer’s conduct was not the
result of simple inadvertence or neglect. More was involved than just a lack of good and just
cause. The employer made a deliberate decision not to honor its statutory obligations to the
claimant, and it did so simply because the claimant did not report the accident on the day it
occurred. Based on the testimony of the employer’s only witness in this case, the claimant’s
supervisor, the employer’s refusal to pay benefits in this case was apparently the product of
its established policy that if an accident is not reported on the day it occurs, it cannot be
reported at all, and no benefits will be paid. This policy contravenes section 6 of the Act,
which allows an employee 45 days to report an accident. See 820 ILCS 305/6(c) (West
2010). Under these circumstances, the Commission’s determination that the facts do not
support section 19(k) penalties and section 16 attorney fees is against the manifest weight of
the evidence. We further hold that, under the facts of this case, the Commission’s refusal to
award such penalties and attorney fees was an abuse of discretion.
¶ 52 CONCLUSION
¶ 53 For the foregoing reasons, we affirm the judgment of the circuit court of Cook County,
which reversed the Commission’s decision and reinstated the arbitrator’s decision with
respect to penalties and attorney fees.
¶ 54 Affirmed.
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