NO. 4-05-0900 Filed: 6/1/06 

 IN THE APPELLATE COURT 

 OF ILLINOIS 

 FOURTH DISTRICT 

NESTLE USA, INC., ) Appeal from 

Plaintiff-Appellant, ) Circuit Court of 

v. ) Morgan County 

DONALD DUNLAP and THE INDUSTRIAL ) No. 04CH72 

COMMISSION OF ILLINOIS, ) 

Defendants-Appellees, ) 

and ) Honorable 

FREDERIC NESSLER and MICHAEL McDONALD, ) Richard T. Mitchell, 

Defendants. ) Judge Presiding. _________________________________________________________________ 

JUSTICE COOK delivered the opinion of the court: 

Plaintiff, Nestle USA, Inc. (Nestle), brought an action 

seeking declaratory relief from a ruling by arbitrator Ruth White 

of the Illinois Workers' Compensation Commission (Commission) 

(formerly the Illinois Industrial Commission) regarding reinstatement of Donald Dunlap's workers' compensation claim. 

Plaintiff also sought to enjoin the Commission from further 

hearing Dunlap's claim. Plaintiff presented a motion for summary 

judgment on the undisputed facts. The Attorney General of the 

State of Illinois, acting as counsel for the Commission, presented a motion to dismiss the case. The trial court granted the 

Commission's motion to dismiss. Nestle appeals. We affirm. 

I. BACKGROUND 

On January 13, 2000, Donald Dunlap filed a workers' 

compensation claim with the Commission claiming he had a heart 

attack on September 4, 1999, while employed by Nestle. When he 

filed the claim, Dunlap's attorney was Frederic Nessler. According to the Commission's records, Nessler has been noted to be 
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Dunlap's counsel of record through 2004. 

On November 15, 2000, attorney Michael McDonald wrote 

to Nessler that Dunlap's wife asked him to pursue her husband's 

claim and that McDonald would protect Nessler's fee on any 

ultimate settlement or verdict. 

On July 23, 2001, McDonald sent Nessler a "Stipulation 

to Substitute Attorneys" form for Nessler to sign and return to 

McDonald. Three days later, Nessler returned the signed 

substitution-of-attorney form. 

On October 1, 2002, Nessler wrote to Eugene Keefe, 

Nestle's attorney, saying that he received a notice of a motion 

and order concerning Dunlap's case. Nessler stated he no longer 

represented Dunlap as of July 26, 2001, when a signed 

substitution-of-attorney form was sent to McDonald. Also, on 

October 1, 2002, Nessler sent the notice to McDonald and requested a file-stamped copy of the approved substitution-ofattorney form. 

On May 20, 2003, a paralegal with Nessler's firm, 

Lorrie Foor, sent McDonald a letter stating that in "December of 

2001, we had a hearing regarding the unsigned Substitution of 

Attorney" and requesting the signed and filed form. The letter 

concluded that if the Nessler firm did not hear from McDonald 

within 10 days, they would be setting the Dunlap case for hearing 

again on July 19, 2003. Also on May 20, 2003, Foor sent a letter 

to arbitrator Ruth White stating that Dunlap has retained McDonald as counsel and a hearing was conducted in December 2002, to 
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have the substitution entered. Foor asked that the matter be 

continued because Nessler is still the attorney of record on the 

docket but Nessler's firm is unaware of the status of the Dunlap 

case. 

On October 16, 2003, White issued an order dismissing 

Dunlap's case for want of prosecution because the petitioner 

failed to appear at a status call or trial date. Notices of 

dismissal dated November 7, 2003, which were addressed to Nessler 

and Keefe, stated that unless a petition to reinstate was filed 

with the Commission within 60 days of receipt of the dismissal, 

the case could not be reopened. 

On February 3, 2004, Keefe faxed Nessler a copy of his 

notice of dismissal dated November 7, 2003, and stated that 

Nestle has closed the file on the Dunlap case as the Commission's 

records indicate that the case was dismissed without reinstatement. 

On February 26, 2004, Nessler faxed the notice of 

dismissal to McDonald. 

On April 26, 2004, McDonald filed a petition to reinstate Dunlap's case. In the motion to reinstate, McDonald stated 

that he did not receive the October dismissal order until it was 

faxed to him on February 26, 2004, by Nessler after Nessler 

received the notice from Keefe on February 3, 2004. The motion 

stated that Nessler withdrew as counsel on March 13, 2001, and 

McDonald entered his appearance on that date. McDonald claims 

that he had appeared before White in the matter. In Nestle's 
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complaint for injunctive relief, Nestle acknowledged that "McDonald has occasionally attended Industrial Commission status 

hearings and otherwise claimed to represent *** Dunlap as counsel," but that Nestle had always objected and pointed out that 

McDonald failed to file an appearance of counsel or a substitution of counsel on Dunlap's behalf. 

On September 8, 2004, White allowed McDonald to appear 

as counsel for Dunlap and argue his motion to reinstate. White 

reinstated the case after accepting McDonald's assurances, as an 

officer of the court, that he, at some point in the past, filed a 

substitution-of-counsel form despite the fact that the Commission 

never showed him to be counsel of record. 

On December 8, 2004, Nestle filed a complaint for 

injunctive relief in the circuit court of Morgan County. In the 

complaint, Nestle alleged that Nessler is Dunlap's counsel of 

record, and he never filed a motion to reinstate within 60 

working days from the date Nestle's attorney faxed a copy of the 

dismissal to Nessler. In its first-amended complaint for declaratory judgment and permanent injunction, Nestle sought a declaratory judgment because the arbitrator and Commission "have innocently refused to follow Illinois law in the claim below and are 

now acting outside the powers granted to the Workers' Compensation Commission by our legislature to the irreparable detriment 

of Plaintiff Nestle." Nestle claimed that if it is forced to 

continue to defend a claim that was finally dismissed by rule of 

law, Nestle's due-process and equal-protection rights under 
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Illinois law would be violated. Nestle asked that the circuit 

court permanently enjoin the Commission and White from further 

adjudicating Dunlap's claim. 

The Commission filed a motion to dismiss under sections 

2-615 and 2-619(a)(1) and (a)(9) of the Code of Civil Procedure 

(Code) (735 ILCS 5/2-615, 2-619(a)(1), (a)(9) (West 2004)). The 

Commission alleged that the circuit court lacked jurisdiction 

because Nestle had not exhausted its administrative remedies and 

was improperly seeking judicial review of the arbitrator's 

nonfinal decision through its declaratory-relief action. Dunlap, 

through attorney Norbert Goetten, filed a motion to dismiss, 

arguing that the complaint was premature because the Commission 

had not entered a final order in the case. Nessler and McDonald 

were dismissed as defendants and are no longer parties to this 

matter. Nestle responded and filed a motion for summary judgment. 

On September 30, 2005, the circuit court granted the 

Commission's motions to dismiss, finding that the court's jurisdiction under section 19(f) of the Workers' Compensation Act 

(Act) (820 ILCS 305/19(f) (West 2004)) is limited to review of 

final decisions. 

This appeal followed. 

II. ANALYSIS 

First, Nestle filed a motion with this court to "Append 

Abstract of Record," seeking leave to supplement the record with 

the transcript of the September 8, 2004, hearing before White; 
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White's decision granting Dunlap's motion to reinstate the case; 

and a Commission "Stipulation to Substitute Attorney" form dated 

March 13, 2001, and signed by Dunlap, Nessler, and McDonald. The 

Commission responded that this court should not allow the motion 

because the documents were not certified by the Commission in 

accordance with section 14 of the Act (820 ILCS 305/14 (West 

2004)) and because the documents were not part of the record in 

the circuit court. Because the three documents' inclusion in the 

record will not affect the outcome of this case, we see no harm 

in granting the motion. 

As to the merits of the appeal, the circuit court 

dismissed Nestle's complaint after determining the court lacked 

jurisdiction. The court never addressed the merits of the case. 

 Thus, the only issue before this court is whether the circuit 

court correctly determined that it lacked jurisdiction. See 

Kemp-Golden v. Department of Children & Family Services, 281 Ill. 

App. 3d 869, 879, 667 N.E.2d 688, 695 (1996) (when the circuit 

court dismissed the complaint based on lack of standing, this 

court only reviewed the judgment granting the motion to dismiss 

and refused to review the merits of the plaintiff's claim). We 

review a circuit court's decision to grant motions to dismiss 

under sections 2-615 and 2-619 of the Code (735 ILCS 5/2-615, 2-

619 (West 2004)) under the de novo standard. Morris v. Williams, 

359 Ill. App. 3d 383, 386, 834 N.E.2d 622, 626 (2005). 

Nestle argues that the trial court had either original 

or concurrent jurisdiction to state the rights of the parties as 
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the issue involved undisputed facts and questions of law regarding the arbitrator's power to reinstate the claim. Nestle claims 

it should not be required to follow the normal procedures for 

appealing an arbitrator's decision in a workers' compensation 

claim to the five-member appellate panel of the Commission. 

According to Nestle, the arbitrator acted outside of her statutory authority and, therefore, without jurisdiction when she 

reinstated Dunlap's claim after more than 60 days had passed from 

the date Dunlap's attorney of record received notice of the 

dismissal. 

The Commission urges that the Commission has exclusive 

jurisdiction in this matter. According to the Commission, 

Dunlap's claim against Nestle involves a determination of benefits and "circuit courts have no original jurisdiction over 

workers' compensation proceedings, wherein benefits are determined, under the Act" (Hartlein v. Illinois Power Co., 151 Ill. 

2d 142, 158, 601 N.E.2d 720, 727 (1992)). Because the Commission 

has exclusive jurisdiction, the court must apply the "exhaustion 

of administrative remedies doctrine." Under the exhaustion 

doctrine, a party claiming to be wronged by an administrative 

action must first pursue all available administrative remedies 

before seeking review in the courts. Illinois Health Maintenance 

Organization Guaranty Ass'n v. Shapo, 357 Ill. App. 3d 122, 130, 

826 N.E.2d 1135, 1142-43 (2005). Alternatively, the Commission 

claims that even if the trial court had original or concurrent 

jurisdiction, the court correctly deferred jurisdiction under the 
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doctrine of primary jurisdiction as the Commission is better 

suited to resolve the dispute than the court. 

The Supreme Court of Illinois has determined that the 

courts have no original jurisdiction in cases involving determination of workers' compensation benefits. Hartlein, 151 Ill. 2d 

at 158, 601 N.E.2d at 727. In such compensation proceedings, the 

court's role is appellate only. Gunnels v. Industrial Comm'n, 30 

Ill. 2d 181, 185, 195 N.E.2d 609, 611 (1964). The supreme court 

has also held, though, that the Commission's jurisdiction is 

concurrent with the circuit court in some instances. See Segers 

v. Industrial Comm'n, 191 Ill. 2d 421, 426-27, 732 N.E.2d 488, 

492 (2000) (jurisdiction is concurrent when the issue involves a 

widow's application for death benefits after her husband had 

previously settled for a lump sum); Employers Mutual Cos. v. 

Skilling, 163 Ill. 2d 284, 286-87, 644 N.E.2d 1163, 1165 (1994) 

(jurisdiction is concurrent when the issue involves an insurancecoverage issue connected to a workers' compensation claim). 

We conclude that under these facts, the Commission had 

exclusive jurisdiction and Nestle was required to exhaust all 

administrative remedies before seeking judicial review. 

The only arbitrator's decision on appeal is White's 

decision to reinstate Dunlap's claim. As a result of White's 

reinstating his claim, Dunlap may be entitled to benefits. While 

the issue does not involve an arbitrator's traditional determination of benefits, exclusive jurisdiction should apply for two 

main reasons. First, the arbitrator's decision resolved a 
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factual dispute. Second, a jurisdictional determination should 

not be dependent upon the merits of a claim. 

First, Nestle urges that the Commission, as an administrative agency, only has the powers granted by the Illinois 

legislature and White's reinstatement of Dunlap's claim was not 

authorized by the legislature because the petition for reinstatement came after 60 days from notice to Dunlap's counsel of 

record. Nestle cites Business & Professional People for the 

Public Interest v. Illinois Commerce Comm'n, 136 Ill. 2d 192, 555 

N.E.2d 693 (1989), Segers, 191 Ill. 2d 421, 732 N.E.2d 488, and 

Daniels v. Industrial Comm'n, 201 Ill. 2d 160, 775 N.E.2d 936 

(2002), to support its contention that courts can render declarations on interpretations of Illinois's administrative agencies' 

procedures, powers, and rules based upon undisputed facts without 

first exhausting administrative remedies. Nestle's argument and 

the application of the three cases rest on the premise that the 

trial court was presented with only undisputed facts. Despite 

Nestle's assertion to the contrary, the arbitrator's decision 

resolved a factual dispute. 

Nestle claims that the facts are undisputed because 

Nessler, not McDonald, was Dunlap's attorney at all relevant 

times as he was listed as Dunlap's counsel of record at all 

relevant times. White concluded, though, that McDonald had been 

Dunlap's attorney since 2001 when he sent a substitution-ofattorney form to the Commission office in Chicago. Based on her 

belief that McDonald would not lie to her, White concluded that 
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the Commission must have made an error that kept McDonald from 

appearing as the attorney of record. While McDonald could not 

produce any documentation proving that he ever filed the form, 

Nestle produced documents that showed Nessler and others continually requested that McDonald file the appropriate forms. Nestle 

claims that White's conclusion did not rest on a determination of 

"disputed facts," but was a "hopeful and generous conclusion by a 

forgiving hearing officer without a shred of evidence to support 

it." 

However Nestle chooses to characterize White's determination, this matter clearly arose over a factual dispute. Nestle 

claims that McDonald never filed the substitution-of-attorney 

form and that McDonald lied to White. McDonald claims he filed 

the form and the Commission made an error. White chose to 

believe McDonald despite the documents Nestle produced. White 

made her decision based upon her familiarity with the specific 

facts of the case and her observation of the parties. The 

parties disagreed as to when the 60 days began to run based upon 

a dispute over who should have received the notice of dismissal. 

 White resolved the factual dispute and applied the time limit 

according to her determination. 

According to the Act, whenever a disputed question of 

law or fact exists, the Commission shall first designate an 

arbitrator who shall investigate claims and hear evidence. 820 

ILCS 305/19(a), (b) (West 2004). The arbitrator's decision may 

then be reviewed by the Commission. 820 ILCS 305/19(b) (West 
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2004). The Act provides for review of final Commission decisions 

in the trial court. See 820 ILCS 305/19(f)(1) (2004) (proceeding 

for review in trial court shall be commenced within 20 days of 

the receipt of notice of the decision of the Commission); see 

also Pace Bus Co. v. Industrial Comm'n, 337 Ill. App. 3d 1066, 

1069, 787 N.E.2d 234, 237 (2003) (jurisdiction to review final 

decision of the Commission is vested in the trial court). Nestle 

should follow the procedures outlined in the Act before the 

courts interfere. 

 Further, in concluding that the trial court had 

original or concurrent jurisdiction, Nestle assumed its claim was 

meritorious. In the trial court, Nestle essentially sought a 

determination that the arbitrator acted outside of her statutory 

power. Nestle then claimed that the court had jurisdiction 

because the arbitrator acted outside her statutory power. Under 

Nestle's theory, in order for the court to have jurisdiction, the 

court first had to determine Nestle would succeed on the merits. 

 If Nestle's claim is meritorious, the trial court has jurisdiction. Nestle agrees, though, that if its claim is not meritorious and White acted within her statutory powers, the court does 

not have jurisdiction. Further, had White ruled Dunlap's petition could not be reinstated, Dunlap's only recourse would have 

been an appeal to the Commission. In that situation, Dunlap 

could not have appealed to the courts because White's decision 

was authorized by statute. Nestle, though, could appeal to the 

court because White acted without statutory authority. 
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Jurisdiction should not be determined by a ruling on 

the merits. See Nelson v. Miller, 11 Ill. 2d 378, 391, 143 

N.E.2d 673, 680 (1957) (rejecting the assumption that the trial 

court lacks jurisdiction over a nonresident defendant who allegedly committed a tortious act within the state unless all of the 

elements that combine to spell ultimate liability in tort are 

present); C&K Distributors, Inc. v. Hynes, 122 Ill. App. 3d 525, 

529, 461 N.E.2d 560, 563 (1984) ("Jurisdiction is authority to 

hear and decide a cause. [Citation.] It does not depend upon the 

correctness of the decision made and is not lost because of an 

erroneous decision"). Based on Nestle's theory, any litigant 

could skip Commission review and seek judicial review by alleging 

that the arbitrator's decision was not authorized by statute. 

Trial courts would be forced to first determine if arbitrators' 

decisions were wrong in order to determine if they had jurisdiction. 

Nestle should be required to exhaust all administrative 

remedies before pursuing judicial review. The exhaustion doctrine applies when an administrative agency has exclusive jurisdiction to hear an action. Board of Education of Warren Township 

High School District 121 v. Warren Township High School Federation of Teachers, Local 504, 128 Ill. 2d 155, 163, 538 N.E.2d 

524, 528 (1989). Courts have recognized several exceptions to 

the exhaustion doctrine, and Nestle invokes three exceptions. 

First, Nestle claims that the case involves undisputed facts. 

See Castaneda v. Illinois Human Rights Comm'n, 132 Ill. 2d 304, 
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309, 547 N.E.2d 437, 439 (1989). Second, the issue involves 

statutory interpretation that falls within the expertise of the 

court because the arbitrator acted outside her statutory authority in seeking to continue to adjudicate a case that was finally 

dismissed. See Office of the Cook County State's Attorney v. 

Illinois Local Labor Relations Board, 166 Ill. 2d 296, 306, 652 

N.E.2d 301, 306 (1995). Third, Nestle will suffer irreparable 

harm from further administrative remedies. See Illinois Bell 

Telephone Co. v. Allphin, 60 Ill. 2d 350, 358, 326 N.E.2d 737, 

742 (1975). 

As stated above, the case involves disputed facts. 

Further, the issue does not involve statutory interpretation. 

The issue revolves around the arbitrator's factual determination. 

 Finally, Nestle claims it would suffer irreparable harm because 

it would be forced to maintain reserves, retain evidence, relocate witnesses, and defend a claim that was finally dismissed. 

Once again, this argument assumes the merits of Nestle's claim by 

assuming the case was finally dismissed. None of the exceptions 

excuse Nestle from exhausting administrative remedies. 

Nestle must first exhaust its administrative remedies 

by appealing to the Commission before seeking judicial review. 

This will give the Commission the chance to consider the arguments of the parties and make its own factual determinations and 

conclusions regarding the filing of the substitution of attorney 

form. The Commission may not agree with the arbitrator. If the 

Commission does agree with White, Nestle will have the opportu-
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nity to present its appeal of the Commission's final decision to 

the trial court. 

III. CONCLUSION 

For the reasons stated, we affirm the trial court's dismissal. 

Affirmed. 

STEIGMANN and McCULLOUGH, JJ., concur.