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Case Name: May 2015 – APCom Power v. Jerry Shultz and IWCC
Venue: Circuit Court of Cook County, IL
Plaintiff’s Attorney: Andrew M. Fernandez

Plaintiff’s Attorney: Henry Schmidt and Arthur R. Kingery
Case No.: 2012 L 051426
Date of Accident:09/25/12
Trial Date: 04/30/2014
Demand: $27,000 in medical bills, $10,000.0c0 in Setion 19(1)
Penalties and an undisclosed amount in Section 19(k) Penalties and Section 16 Fees

Decision Date: 04/30/2014

Benefits Awarded: $0
CASE SUMMARY BACKGROUND:

Petitioner worked for the Respondent in 2004. On May 25, 2004, Petitioner claimed that he suffered a workplace accident involving the elbow and the shoulder.

After the matter was taken to arbitration, the Arbitrator found that that Petitioner’s alleged workplace accident involved only the elbow and not the shoulder. On the same day, the parties executed a settlement agreement, approved by the Arbitrator. The settlement agreement provided a lump sum amount, with additional compensation for Petitioner’s out-of-pocket medical expenses and any other expenses related to the elbow injury. The settlement agreement also stated that expenses from any unrelated accidental injuries (i.e. shoulder treatment) were disputed and denied. The parties, believing that the Petitioner’s Group Health insurer would cover the disputed and unrelated medical bills for the shoulder, drafted the contract with language that the Respondent would hold Petitioner harmless for the medical bills.

After the agreed upon settlement amounts were paid in full by the Respondent, the Petitioner refused to cooperate with the Respondent in submitting the unrelated and disputed medical bills to the Group Provider. Instead, the Petitioner demanded that the Respondent pay the outstanding $27,820.15 in unrelated medical bills, or for the Respondent to defend the Petitioner in the collection litigation brought by the hospital. The Petitioner filed a Motion at the Commission, seeking full payment of the disputed bills, plus asking for the award of penalties and fees.

The Commission found the Respondent’s reason for nonpayment unreasonable, and additionally found the Respondent’s delay or refusal to pay the unrelated medical bills amount to be without “just cause” as required under section 19(1) of the Act. Respondent filed a timely appeal of the Commission’s decision to the Circuit Court.

TRIAL STRATEGY:

We believed it was unfair and unreasonable that the Petitioner sought payment for medical bills unrelated to the workplace accident while simultaneously blocking the Respondent from resolving the matter with the Group Insurer. We argued that the Commission lacked jurisdiction to award non-related bills, as any such bills fall outside of the Illinois Workers’ Compensation Act. Similarly, we argued that the award of penalties was without legal basis, and outside of the Commission’s jurisdiction.

Petitioner, instead, argued that all medical bills were the liability of the Respondent (whether the Respondent paid them or fought to defend against the collection action) because of the hold harmless provision in the Contract.

Knowing that Petitioner’s interpretation of the terms of the agreement ran contrary to the agreement’s purpose and the Arbitrator’s decision, we decided to protect our client’s interest and take the issue to the Circuit Court.

The Petitioner put up a fight every step of the way, even nitpicking the Respondent’s one-day-late filing of a motion in the Circuit Court. This dispute, alone, gave rise to a full briefing and hearing on the timeliness of the filing. (The day in question, national Election Day, although ultimately ruled in our favor to be a “state holiday” as defined by law, thus tolling any legal deadlines, was not listed as such in the Court Calendar.)

However, once it was before the Circuit Court on its merits, we vigorously defended our position that the Respondent should have no liability for any unrelated medical – or penalties for nonpayment of them. In order to aid the Circuit Court’s understanding of the settlement, we provided a copy of the previous Arbitrator’s Decision, records of our good faith efforts and communications attempting to resolve the dispute, and evidence of the Petitioner’s failure to show that the outstanding medical bills were causally related to the elbow injury and attempts to block resolution with the Group Provider. Next, we argued that our interpretation of the terms to include only elbow related injuries was reasonable, with just case, and followed the Arbitrator’s decision upon approving the settlement. Finally, we disputed Petitioner’s interpretation of the terms of the settlement agreement as well as the Commission’s finding that our non-payment was without good cause.

Ultimately, the Circuit Court agreed that our interpretation was reasonable and with just cause, holding that if the parties did not intend for the settlement contract to be the full, final and complete settlement, this language would not have been included in the contract. Furthermore, the Court found that the Petitioner’s interpretation would negate the “full, final and complete” nature of the settlement, and as such, reversed the Commission’s decision to award Section 19(1) penalties to the Petitioner. Implied in this decision is that the “hold harmless”, if applicable to the instant matter, could only be for related medical bills.

SIGNIFICANCE:

In defending against the Petitioner’s post-Arbitration Petition, we saved the client $27,000.00 in medical bills, plus we eliminated any award of penalties and fees.

This matter drives home the importance of drafting very meticulous settlement contracts, and staying especially wary of any requests by an opponent to add to the terms (i.e. hold harmless provisions), where we do not know whether a provider will or will not accept disputed bills, or where we cannot be certain that opposing counsel will remain good on his word to help resolve them. This case shows that claimants can and will try to unjustly profit from misinterpreting the terms of a settlement agreement, after they are paid out.

Our strategy to focus on the language of the settlement contract, the causality between the injuries occurred and the medical bills sustained, and our steadfast belief that our interpretation was reasonable and with just cause, sealed any shadows of doubt that lurked in the Court’s mind. While the Petitioner attempted to receive compensation for injuries that the Arbitrator clearly distinguished, our relentless effort to continue fighting the unrelated bills helped solidify our argument and win our case.

If you should have any additional questions or thoughts about this decision, please do not hesitate to contact the undersigned or the handling attorney, Andrew M. Fernandez.

 

Very truly yours,

KNELL O’CONNOR DANIELEWICZ