NEWSLETTER - April 2006

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April 2006

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• Firm Happenings
• Illinois Workers' Compensation Commission Update
• Circuit Court Update
• Case Law Update
  1. Supreme Court Complicates Recovery of Medical Bill Damages
  2. IME Doctor Not Agent Of Employer / 5-day Week To Calculate Wage
  3. Commission Requires Explanation For Fall

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Firm Happenings

Success! Success!

Our civil litigation department has enjoyed a successful month, as we have scored victories and recoveries on direct defense and subrogation matters. Our newest attorney, Chris Henson, a 10-year veteran, obtained a $40,000.00 settlement of a subrogation suit he brought based on a worker's compensation lien. The recoverable lien was approximately $50,000, and there were major issues with damages (all soft tissue injuries) as well as liability issues. We settled it before the depositions of the parties occurred, which saved our client a fair amount of expenses. Chris also obtained a recovery of virtually our entire lien of $4,500.00 following another claimant's pre-suit settlement of an automobile accident claim.

On March 22, Jack Shanahan obtained a “not guilty” finding for our client in a mandatory arbitration hearing of an auto accident claim. Plaintiff attempted to exit the Kennedy expressway at Austin Avenue ahead of our client's truck driver, then abruptly stopped and tried to get back in the traffic lane, leading to a rear-end collision with our insured's truck. Plaintiff's story changed during cross-examination, and we produced photographs of the damage to his van, demonstrating that his account of the accident did not make sense. The panel agreed with us. Jack also recently settled a property damage subrogation claim, recovering $4000.00 on a $6200.00 claim against a roofing company whose work failed to prevent water damage to our client's building following a heavy rain storm.

We also had success at the Illinois Worker's Compensation Commission, as the Commission upheld a trial victory secured by Terry Donohue in a slip and fall case. The details of this case are contained in our Case Law Update below.

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Illinois Workers' Compensation Commission Update

The Commission said goodbye to two veteran Arbitrators recently, as both Joseph Reichart and Valerie Peiler announced their retirements. Mr. Reichart's was effective in February, and his cases have been re-distributed among the remaining Chicago Arbitrators. Ms. Peiler's March call was taken over by Arbitrator Gomora, who is assigned to handle pro se settlements in Chicago. The Commission has now started the process of the permanent re-assignment of Ms. Peiler's cases to the other Chicago Arbitrators.

Circuit Court Update

There were few developments at the Circuit Court of Cook County, no doubt due in part to the recent Election Day on March 21. We will see if the results of the retention ballot lead to any changes or re-shuffling of judicial assignments in the Circuit Court and sub-circuits.

Case Law Update

Our summary includes a significant change in the proof of medical bill damages in civil claims, an explanation of several Worker's Compensation Act issues by the Appellate Court all in one handy case, and the Commission's recent pronouncement on the burden of proof in slip and fall cases.

Supreme Court Complicates Recovery of Medical Bill Damages in Civil Case

Late last year, the Supreme Court took on the important, and conflicted, issue of how much a Plaintiff can recover for her medical bill damages from a jury. Traditionally, the collateral source rule prevented a Defendant from attempting to limit a Plaintiff's recovery for medical bills incurred by arguing that insurance had paid the bills, and thus the Plaintiff had no “loss” to recover from. The longstanding rationale for allowing a Plaintiff to introduce the full amount of paid bills into evidence, even where the bills were paid by insurance, was that a tortfeasor should not benefit from contractual arrangements, i.e. insurance policies, between the claimant and outside parties.

As insurance providers have increasingly contracted with medical providers to pay reduced rates for standard medical services, however, a conflict arose as to what was proper evidence of the “reasonableness” of the medical charges. A medical bill that is “paid in full” is prima facie evidence that the charges incurred were reasonable. More and more, however, a doctor will accept as “payment in full” a substantially reduced amount of the charges incurred for the treatment. Consequently, Defendants, including our office in an auto liability case set for trial last summer, have argued that a Plaintiff can ask for no more from the jury than the amount that was received by the provider as payment in full. Any amount above that did not constitute “reasonable” charges for the service performed.

In Arthur v. Catour, Plaintiff incurred billed charges of $19,314.07 for treatment for a leg fracture caused in a slip and fall on the insured's property. Pursuant to contracts Plaintiff's insurer had with the medical providers, only $13,577.97 was paid to the providers as payment in full. Defendants sought to limit Plaintiff from asking the jury for more than $13,577.97 in medical damages based on the amount accepted by her treaters as full payment for her treatment. The Circuit Court granted this relief, but certified the question for appeal. The Appellate Court reversed, relying on the collateral source rule, and finding that Plaintiff could recover the charges incurred as long as the charges were shown to be reasonable. The Court certified the question for Supreme Court review, which was granted.

Taking the Appellate Court's holding that the incurred charges were recoverable so long as they were shown to be reasonable, the Supreme Court affirmed. Taking the logical next step from this holding, however, the Court noted that a Plaintiff could no longer establish the reasonableness of the charges through her testimony that the bills had been paid, as claimants previously had done, since the Plaintiff could not honestly testify that the amount charged was in fact the amount “paid in full.” Instead, Plaintiff must establish the reasonableness of the charges incurred “by other means,” while Defendants were free to challenge Plaintiff's evidence of reasonableness through cross-examination and other affirmative means.

Justice McMorrow dissented from this holding, noting that the Court had simply succeeded in making trial of claims more difficult on this issue. In the absence of a medical expert's testimony establishing the reasonableness of the charges incurred, a Plaintiff cannot lay a proper foundation to get his bills into evidence. In larger cases, this is less of a problem since doctors' depositions are more likely, but smaller cases will now require greater expense to prove up medical bill damages, or Plaintiffs may have to concede them. Likewise, once a treating physician's testimony is taken on the issue of the charges, Defendants will have to obtain affirmative evidence to dispute the charges incurred as being reasonable, yet will likely be barred from showing that the provider accepted less than the charges incurred since this would introduce the issue of Plaintiff's insurance coverage.

Justice McMorrow did not say how the issue should be resolved, but only that the Court's decision complicated the issue rather than helped to resolve it. How litigants will resolve the conundrum created by this decision remains to be seen. Had the Court adopted strict adherence to the collateral source rule, it would have likely allowed the charged amount of the bills as the only evidence to go before the jury, so tort defendants may have caught a break in theory, but in practice the issue pf proving or disputing the reasonableness of medical charges has become more involved and, likely, expensive to both sides of the litigation.

IME Doctor Not Agent Of Employer / Five Day Work Week Used To Calculate Wage

In William Greaney vs. Industrial Commission (No. 1-04-2796WC, 1ST Dist., June 29, 2005) the Appellate Court addressed a potpourri of issues. The claimant filed an Application for injuries incurred on June 15, 1998. During the trial he alleged he was carrying two buckets of mortar when his right hip gave way, causing additional injury to his back. The arbitrator ultimately found the case compensable with respect to the low back, but denied causal connection to the hip. The average weekly wage was held to be $899.04 and an award for TTD benefits, maintenance benefits, as well as a wage differential and penalties was also made.

On Review the Commission then modified the Decision to also find causal connection with the hip condition. Next, the Circuit Court affirmed the Commission's Decision, but reversed the award regarding the calculation of the average weekly wage and wage differential benefits.

Agency of IME Doctor

On appeal, the Appellate Court first held that it was error for the arbitrator to have admitted the Respondent's own IME report of Dr. Brackett over the hearsay objection of the Respondent on the basis that it was an admission by a party. The Court held that an IME physician is not the agent of the employer and therefore his report would not constitute an admission by the employer.

Admissibility of Uncertified Records

On another evidentiary issue, the Court agreed that the Commission erred in admitting uncertified medical reports of some of the treating physicians over the foundation and authenticity objections of the employer, even though they had been issued in response to a subpoena. The Court held that since there was no certification by the treating doctors that the documents were true, accurate and complete, there was an inadequate foundation to admit them into evidence. Disappointingly, after going to great length to recognize these evidentiary flaws, the Court then held that even disregarding the inadmissible records and IME report, that there was still sufficient other medical evidence to support the findings of causation.

Average Weekly Wage Calculation

Another issue addressed was that of average weekly wage. The wage evidence showed that there were 17 weekly pay periods of employment. The petitioner testified that he was a full-time employee scheduled to work five days per week, although the number of hours he would work depended on the weather. The claimant only worked five full days in 6 of the 17 weekly pay periods. He worked less than five days in 10 of those periods, and did not work at all in one period. The arbitrator and Commission had taken the total number of hours worked by the claimant and divided it by 40 to arrive at 10.5125 weeks worked. They then divided the gross earnings of $9,451.18 by 10.5125 weeks to arrive at a wage of $899.04.

The Circuit Court found a lower wage of $570.70, by counting all of the weeks. The Appellate Court held that neither was correct, and that the proper method to use here is to take the number of days the claimant worked prior to his injury and divide by the number of days in a full work week to get the “weeks and parts thereof”. In this instance the petitioner worked 59 days in the 17 weekly pay periods prior to the injury. The Court took 59 days and divided by five to arrive at 11.8 weeks of work. The gross wages were then divided by 11.8 to arrive at an average weekly wage of $800.95.

Commission Requires Explanation For Fall

In a case successfully defended by Terry Donohue of this office, the Commission ruled it is not enough for a claimant to simply state she does not know why she fell, she must at least provide reasonable inferences as to why she may have fallen.

The Illinois Workers Compensation Commission has affirmed the denial of benefits in a fall which was deemed unexplained. In Holtz v. J.C. Penny Co., 13 ILWCLB 169. The petitioner was working as a sales associate for the respondent when she fell down, suffering significant injuries to her right arm. It was brought out in her testimony that she did not know why she fell, and that she observed nothing unusual about the area where she fell. She testified that she was walking from a carpeted surface to parquet flooring, when she “just went down”. Petitioner never indicated that she might have slipped on water, that she might have tripped going from one surface to another, or even that she may have been tired from being on her feet all day.

In response, we presented testimony from the store manager. He testified that he inspected the area to see if there was anything which might have caused her to fall, and he specifically did not observe any water on the floor, any debris, nor any tear in the carpet. He presented colored photographs of the area, clearly showing the two surfaces. He testified that the area where the carpet meets the tile floor is flush, with no change in the level of the surfaces. He explained that the flooring is actually wood parquet, which is not slippery, and is not waxed because wax will not adhere to the surface. The manager further testified that in seven years he was not aware of anyone else, either customers or employees, ever falling in the area. He described it as an area open to the public, and not a common path for employees to take.

We were further able to point to evidence of prior leg surgery, obtained through subpoenaed medical records, as a possible non-work, idiopathic explanation for her fall. The importance of this somewhat dated treatment was likely magnified in view of the fact that the petitioner offered no other possible explanation for the fall.

The Commission agreed with the arbitrator and with the respondent's reliance on the Builders Square v. Industrial Commission, which held, “A claimant's burden of proof requires more than merely showing inability to explain why a fall occurred. In addition to such inability, a claimant must present evidence supporting a reasonable inference that the fall stemmed from an employment-related risk.” Builders Square, Inc. v. Industrial Commission, 339 Ill.App.3d 1006 (3rd District, 2003). The petitioner did not appeal this decision and our case is now closed.

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