Court Expands Attorney Fee Provision Under Workers’ Comp.

By John Flynn Rooney – Law Bulletin Staff Writer
Chicago Daily Law Bulletin | Volume 148, No. 32 | Thursday, February 14, 2002

An airline employee can seek penalties and attorney fees in her worker’s compensation case on the airline’s unreasonable and vexatious delay in paying more than $105,000 in medical expenses, a state appeals court ruled Thursday.
A panel of the Illinois Appellate Court Industrial Commission Division held that a lower court judge and the Industrial Commission erred. The judge and commission held that a 1998 Illinois Supreme Court decision should be applied retroactively in the case involving Anne Hennessy and American Airlines.

The high court had ruled that attorney fees should be awarded under sections 16 of the Workers’ Compensation Act where the unreasonable and vexatious delay related to the payment of medical expenses. McMahan v. Industrial Commission,183 III.2d 499, 702 N.E2d 545.

Under Thursday’s decision, the claimants in “any Industrial Commission cases that were pending before the decision in McMahan can petition the commission for penalties and attorney fees for the non-payment or delay in the payment of medical expenses,” said Robert J. Smoler, a Chicago attorney representing Hennessy.

Hennessy, a luggage handler, sought benefits for injuries sustained while working for American. She sustained one back injury in June 1991 and a second back injury in April 1996. An arbitrator entered decisions in both cases in May 1998, and awarded medical expenses and temporary total disability benefits, but declined to impose penalties under section 19(k) of the act or assess attorney fees.

Both parties appealed to the Industrial Commission, which consolidated the cases. The Supreme Court issued its decision in McMahan before the parties field their petitions for review before the commission.

The commission filed its decision in October 1999, which affirmed and adopted the arbitrator’s decision in the case stemming from Hennessy’s initial injury. In the latter case, the commission found that Hennessy was entitled to additional temporary benefits and medical expenses.

The commission further held that American’s conduct was “unreasonable and vexatious” and that Hennessy was entitled to penalties and fees. The commission found that Hennessy should receive total of $21,343 in penalties and fees stemming from the unpaid temporary benefits.

Hennessy had requested that penalties and fees be awarded both on the temporary benefits and medical expenses.
The commission, however, said that it decided not to apply McMahan retroactively and therefore didn’t include medical benefits in its calculation of penalties and fees.Hennessy then filed a petition for review in the Cook County Circuit Court asserting that the Commission erred in declining to apply McMahan retroactively. Circuit Judge Thomas P. Quinn confirmed the commission’s decision, holding that because McMahan expressly overruled Childress v. Industrial Commission, 93 III. 2d 144, 442 N.E. 2d 841 (1982), it represented a change in the law and should be given only prospective application.

Hennessy then pursued the matter before the appeals court. “Generally, when a court issues an opinion, the decision is presumed to apply both retroactively and prospectively,” Justice Philip J. Rarick wrote for the panel, noting that the presumption can be overcome in one of two ways. “First, the issuing court itself may expressly state that its decision will be applied prospectively only, “ the panel said. “Second, a later court may, under some circumstances, override the presumption by declining to give the previous opinion retroactive effect, at least with respect to the parties appearing before the later court.
The panel found that Quinn misapplied the test first promulgated by the U.S. Supreme Court in Chevron Oil V. Huson, 404 U.S. 97, 30 L.Ed. 296 (1971). In the Chevron case, the high court used a three-part analysis to determine whether only prospective relief in civil cases is appropriate. “Because our Supreme Court did not state in McMahan that it was to be given prospective application only and because the parties did not rely on Childress, the precedent overruled by McMahan, the presumption of retroactive application is not overcome,” the panel added.

The panel returned the matter to the commission for further proceedings. Smoler said he plans to ask the commission to award Hennessy up to $52,500 in penalties and $10,500 for attorney fees for the unpaid medical expenses Justices John T. McCullough, Thomas E. Hoffman, Jack O’Malley and William E. Holdridge joined in the seven-page opinion. The case is American Airlines v The Industrial Commission, et al. (Anne Hennessy, appellant), No.1-01-1545WC. Mark F. Slavin of Slavin and Slavin in Chicago could not be reached for comment Thursday.

Addendum
Further, I did eventually receive penalties and attorneys fees from the commission and actually was awarded more than I stated in the article. the Award from the Commission which I received on November 15, 2002 was for $52,580.34 in 19k penalties and $21,032.13 in Section 16 Attorneys Fees, totaling $73,612.47 in penalties and fees. 96 WC 44689. That case and its companion case were subsequently settled for a total of $410,093.56. The total recovery for both cases thereby amounted to $607,434.71

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