DIANE DUFT v. THE STATE OF ILLINOIS (2001)

OPINION

Claimant filed her Amended Complaint on April 1, 1999, to enforce a workmen's compensation award and for other relief. Claimant was injured while in the course of her employment with the Illinois Department of Corrections. Claimant contends that respondent has failed to pay or make timely appeal of awards to Claimant by the Illinois Industrial Commission, or to pay or reimburse Claimant for out-of-pocket expenses awarded to her. Claimant also seeks attorney's fees and penalties.

This Court has jurisdiction to enforce payment of a proper final award of Workmen's Compensation benefits against the State of Illinois as well as out-of-pocket expenses awarded by the Industrial Commission. This Court has previously held in this case by our Order filed December 15, 1999, that claims for penalties and attorneys fees are within the province of the Industrial Commission and not with this Court. Claimant's counsel asserts a claim for attorney's fees under the common fund doctrine upon which we have reserved ruling pending this final decision.

The Public Service Administrator for the Department of Corrections with responsibility as claims manager for the Department of Corrections in matters of workmen's compensation claims testified as an adverse witness that when a workmen's compensation award is made in favor of an IDOC employee, it was his Department's responsibility to make appropriate payments. He testified that Claimant's awards were paid in part in advance of the Industrial Commission awards. Invoice vouchers admitted in evidence demonstrate payments to the Claimant of two checks, one in the amount of $20,670.24 and another in the amount of $35,246.85 for a total of $55,917.09. An additional check was sent to Claimant in the amount of $497.81 toward medical bills that were awarded.

The Medical Benefits Coordinator for IDOC testified as an adverse witness that other than the foregoing payments identified as having been made to the Claimant, no additional payments were paid after the Industrial Commission award on Claimant's medical bills to either providers, insurance companies, or other State agencies.

In cases before the Industrial Commission, it is required under Rule 7030.40 that the Request for Hearing define the issues in dispute prior to hearing. A copy of the Request for Hearing form in force at the time Claimant's cases were tried was admitted in evidence without objection.

A supervisor for the State Retirement System was called as an adverse witness and testified that his agency pays disability benefits to State employees for time lost by the employees due to disability that is denied by the Illinois Industrial Commission as qualifying for worker's compensation benefits. If the injured State employee is later found to be entitled to worker's compensation benefits, then a reimbursement may be made to the State Retirement System. In the case of this Claimant, the Retirement System received a partial reimbursement of disability benefits paid totaling $7,270.22 as a result of the Claimant's successful proceedings before the Illinois Industrial Commission.

Recalled by Respondent, IDOC's Public Service Administrator testified that IDOC opted not to appeal Claimant's awards from the Illinois Industrial Commission and that respondent had paid all amounts due to Claimant under the awards. The reimbursement to the State Retirement System of $7,270.22 was calculated as the amount of the temporary total disability benefits that Claimant was found to be entitled to by the Illinois Industrial Commission which had been earlier denied by IDOC. The Retirement System had paid Claimant a benefit which was subject to recovery if it became a part of an award made or a settlement agreed upon before the Illinois Industrial Commission pursuant to 40 ILCS 5-123.1. During the period in question, the Retirement System had paid Claimant a benefit equal to 50% of her salary as compared to the Industrial Commission award of temporary total disability benefits for the same period of time. The State Retirement System notified IDOC of the overpayment as a result of the award of temporary total disability benefits to the Claimant by the Industrial Commission. IDOC reimbursed the State Retirement System by deducting the overpayment from Claimant's award with the net result being that Claimant received all of the temporary total disability benefits during the period of time in question to which the Industrial Commission found her entitled through a combination of overpayments by the State Retirement System and IDOC.

IDOC's Administrator testified that the Illinois Worker's Compensation Act and the Illinois Pension code specifically provide that excess benefits paid to or on behalf of a State employee by the State Employees Retirement System under Article 14 of the Illinois Pension Code as a result of a disputed disability claim shall be credited against any payments made or to be made by the State of Illinois to or on behalf of the employee under the Worker's Compensation Act, except for payments for medical expenses already incurred at the time of the Industrial Commission award. The Worker's Compensation Act specifically provides for reimbursement to the State Employee Retirement System. (See 40 ILCS 5-123.1 and 820 ILCS 305/1.)

Additional payments were made to Graham Correctional Center Personal Services Payroll as a result of the salary reversal which took place upon Claimant being awarded temporary total disability benefits for the period of November 15, 1988, through January 17, 1989. Claimant had received and was paid full salary during that period of time on the basis of Claimant's election to utilize accumulated benefit time as provided by IDOC Personnel Rules and the Union contract between Claimant's Union and IDOC. The salary reversal changed payments from taxable salary payments to non-taxable temporary disability payments for the periods of time in question. For the stated time period, IDOC reimbursed Graham Correctional Center the sum of $3,073.10.

Salary reversals allow crediting Claimant with reinstatement and recovery of accumulated benefit time, thereby crediting the Claimant's account with leave time equivalents. In this case, Claimant's facility was directed to restore 39 days, 1 hour of accumulated benefit time to Claimant's account, being the equivalent of $6,552.92 as reflected on respondent's Invoice Voucher #19214843 which was admitted into evidence.

IDOC determined by contacting medical providers that the medical bills submitted by Claimant, and upon which Claimant contends she is entitled to an award of $24,365.90, had been paid prior to the award. In fact, no payments had been made by IDOC to providers after the Arbitrator's award.

A number of bills on Claimant's list were determined by IDOC to be bills for medical services rendered to other members of her family. This was determined by direct contact with the providers. Bills listed on Claimant's Exhibit #2 that were on account of services for Claimant's family member Timothy Duft included: Dr. Wayne Burroughs $452.00; Metropolitan Medical Center $1,914.54 and Osteopathic Associates of St. Louis $118.00. All of these bills were refused for reimbursement by IDOC under Claimant's award.

IDOC's Benefits Coordinator testified that the process of checking bills submitted for payment pursuant to an arbitration award goes on both before and after the arbitration hearing. Arbitration awards creating liability on the part of IDOC for medical expenses are treated as advisory and require additional investigation by IDOC Benefit Coordinators to see if the bills are properly included as having been incurred for work-related injuries of the Claimant rather than being for members of the Claimant's family. IDOC Benefit Coordinators feel free to examine medical bills allowed by the Arbitrator in an arbitration award after trial. They are taken as a suggestion which may or may not be approved by IDOC after they subject the bills in question to further inquiry, investigation and examination.

On direct examination, respondent's representative from the State Retirement System testified that all amounts incorrectly paid by the State Retirement System in denial of the Claimant's original claim for occupational disability benefits had been restored in keeping with the determination of the Illinois Industrial Commission that Claimant's disability was occupational in nature. Since the State Retirement System had declined Claimant's claim for occupational disability benefits and paid only non-occupational benefits which tended to reduce Claimant's credits with the State Retirement System, Claimant's credits had been restored and appropriate adjustments had been made between what was paid by the State Retirement System to the Claimant for her disability and what should have been paid as temporary disability benefits from an entirely different fund which does not reduce the Claimant's retirement benefits. The result of this adjustment is that the Claimant lost no time as a result of funds paid to her by the State Retirement System which she would have lost had the Industrial Commission determined that her claimed disability was not work related.

On cross-examination, respondent's Retirement System Supervisor acknowledged that he had declined to pay a claim for attorney's fees under the common fund doctrine on reimbursement of $7,270.22 from IDOC to the State Retirement System, and explained on re-direct examination that the State Retirement System had had a change of policy in respect to recognizing claims for attorney's fees under the Common Fund Doctrine since January, 1995, long after receiving the request from Claimant's counsel in the case at bar.

Claimant argues that respondent's right to claim advance payment credits against the arbitration award was lost when respondent's attorneys at the arbitration hearing failed to advise the Arbitrator of advance payments to Claimant or payments of medical bills incurred by Claimant, and cites Chicago Board of Education v. Chicago Teachers Union, (1981), 56 Ill.Dec. 654, 86 Ill.2d 469, 427 N.E.2d 1199. In the Chicago Board case, the Board of Education agreed under a union contract with the claimant to pay her regular salary after she sustained serious disabling injuries when viciously beaten by an unknown assailant in the course of her employment. The union contract provided that teacher absences resulting from school-related assault would result in full salary payment and medical expenses for the teachers with no deduction being made for sick leave. The teacher also made a claim with the Illinois Industrial Commission for worker's compensation benefits and was awarded a substantial sum for disability and medical expenses. The Board of Education had made no claim before the Arbitrator to credits for benefits which the Board paid under the terms of the union contract, and sought to set the arbitration award aside on the ground that it represented a double recovery. The Board's attempt was rejected by the Illinois Supreme Court primarily on the basis that the parties had a right to contract for what amounted to double benefits in their union contract, but in any event, the Board had waived the right to make the argument by not raising the issue before the Illinois Industrial Commission. The Chicago Board of Education case is distinguishable from the case at bar. Claimant does not contend that she holds a legal entitlement to benefits which are greater than the benefits to which she is entitled, pursuant to the Illinois Worker's Compensation Act arising from her injuries under a union contract or any other legal mechanism. Claimant argues, in effect, that a lapse of form in checking a box on the Request for Hearing before the Arbitrator should open the door to a claim for double recovery greatly exceeding compensation benefits correctly determined under the Worker's Compensation Act.

Claimant offered no evidence to support her contention that bills for which Respondent was found liable by the Industrial Commission had not been paid in full. Claimant offered no testimony that she had not been paid or received credit for all sums awarded to her by the Illinois Industrial Commission both before and after the award. No past due medical bills were offered or proven. We agree with respondent that Claimant was in a much better position to provide information to this Court as to which bills had been paid and which, if any, had not. In contract actions in the Court of Claims, the claimant has the burden of proof. Black v. State of Illinois, (1996), 49 Ill.Ct.Cl. 143; Thiems Construction Co. v. State of Illinois, (1993), 45 Ill.Ct.Cl. 267. Claimants also have the obligation to prove their damages by a preponderance of the evidence. Joint Venture v. State of Illinois, (1996), 50 Ill.Ct.Cl. 50. Furthermore, we believe respondent is correct in asserting that it is not always possible at the time of an arbitration hearing to know what bills have been paid and which are outstanding.

Claimant suggests that credits against the award from salary reversals made subsequent to the award and disability benefits received by Claimant before the award which were reimbursed by IDOC out of the award do not and should not act to satisfy Respondent's obligation under the award of the Industrial Commission. In effect, Claimant is asking this Court to abandon the statutory scheme which is included in the Pension Code and the Worker's Compensation Act. This the Court will not do. We find that the mechanisms employed in this case were in accordance with the statutory mandates and accomplish the obvious intent of the legislature in making provision for such adjustments in satisfaction of the rights of an injured State employee under the Worker's Compensation Act. Claimant does not argue or even assert that the calculations of IDOC and the State Retirement System were incorrect. Instead, Claimant contends that the whole series of mechanisms whereby Claimant's retirement time was restored, her benefit days restored, and the tax status of her pre-arbitration award disability benefits were altered to Claimant's benefit, should all be ignored by this Court and hold that respondent is not entitled to any credit against the Industrial Commission award.

Respondent has accepted and discharged the burden of evidencing compliance with the Industrial Commission award, inasmuch as Claimant has received, both before and after the award, the full amount to which Claimant was entitled under the applicable provisions of the Worker's Compensation Act.

As to medical bills, Claimant argues in reply that the burden falls on the Respondent to prove payment and to demonstrate the extent and nature of unpaid medical expenses, if any, incorporated within the list of expenses relied upon by the Arbitrator in fashioning his award. We disagree and hold that the burden of demonstrating non-payment of bills for which Respondent was found liable under the award was upon Claimant. None of these bills were shown to be unpaid.

It is not disputed that Claimant received checks from IDOC totaling $55,916.85. Funds paid to Claimant out of her retirement on the basis of non-occupational disability were restored to Claimant's credit under the Retirement System in the sum of $7,270.22. The sums paid to Claimant at full salary rates under Claimant's accumulated benefit days entitlement, in excess of Claimant's rights under the Worker's Compensation Act, were repaid to Graham Correctional Center in the sum of $3,073.10, thereby restoring all of Claimant's accumulated employee benefit days. These payments to the benefit of Claimant in restoration of employee and retirement benefits are of a total value in excess of the cash amount awarded to Claimant pursuant to the arbitration award. More importantly, they are in accord with the Worker's Compensation Act and the Pension Code. Accordingly, we conclude that Claimant has received the full measure of the benefits to which she was entitled pursuant to the award of the Illinois Industrial Commission.

Finally, the refusal of the State Retirement System to honor the claim by Claimant's counsel for an award of attorney's fees under the Common Fund Doctrine, though subsequently apparently reversed by the State Retirement System as a result of Appellate Court decisions in 1995, was in accord with the policy of the State Retirement System at the time the claim was made. Salary reversals and adjustment payments instead of benefitting third party providers, as in the usual case where the Common Fund Doctrine is applied, directly benefitted Claimant by restoring retirement and employee benefits exhausted or impaired as a result of respondent's original denial of worker's compensation benefits. Application of the Common Fund Doctrine in this cause would effectively deprive Claimant of benefits awarded to her by the Industrial Commission, unlike the ordinary case where recovery works to the benefit of a third party required by the doctrine to share the costs incurred by the claimant and prevent a windfall benefit. Claimant's counsel should look to his Representation Agreement with Claimant for the recovery of attorney's fees. Application of the doctrine in this case would merely result in indirectly increasing the interest of Claimant's counsel in the total award and decreasing the benefit of the award received by Claimant.

For the foregoing reasons, it is the Order of the Court that Claimant's claim be and hereby is denied in its entirety.

FREDERICK J.