Illinois Official Reports

Appellate Court

American Kitchen Delights, Inc. v. Illinois Workers’ Compensation Comm’n,

2020 IL App (1st) 191593WC

Appellate Court 

Caption

AMERICAN KITCHEN DELIGHTS, INC., Appellant, v. THE 

ILLINOIS WORKERS’ COMPENSATION COMMISSION et al.

(Jonathan Galindo, Appellee).

District & No. First District, Workers’ Compensation Commission Division

No. 1-19-1593WC

Filed June 12, 2020

Decision Under 

Review

Appeal from the Circuit Court of Cook County, No. 18-L-50818; the 

Hon. James M. McGing, Judge, presiding.

Judgment Reversed.

Counsel on

Appeal

Dennis Both, of Harvey, for appellant.

Eric A. Witter, of Witter Law Offices, LLC, of Chicago, for appellee.

Panel JUSTICE HUDSON delivered the judgment of the court, with 

opinion.

Presiding Justice Holdridge and Justices Hoffman, Cavanagh, and 

Barberis concurred in the judgment and opinion.
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OPINION

¶ 1 Respondent, American Kitchen Delights, Inc., appeals from an order of the circuit court of 

Cook County that confirmed a decision of the Illinois Workers’ Compensation Commission 

(Commission) finding that respondent knowingly failed to provide workers’ compensation 

coverage as required by the Workers’ Compensation Act (Act) (820 ILCS 305/1 et seq. (West 

2018)). We reverse.

¶ 2 I. BACKGROUND

¶ 3 On February 26, 2018, claimant, Jonathan Galindo, filed an application for adjustment of 

claim pursuant to the Act seeking benefits for injuries he allegedly sustained on February 2, 

2018, while working for respondent. At some point, claimant’s attorney learned that 

respondent did not have workers’ compensation coverage on the date of the alleged accident. 

Section 4(d) of the Act (820 ILCS 305/4(d) (West 2018)) states that an employer who 

knowingly fails to provide adequate insurance is not entitled to the benefits and protections of 

the Act and may be sued in the circuit court. See Keating v. 68th & Paxton, L.L.C., 401 Ill. 

App. 3d 456, 466 (2010). However, as a prerequisite to filing a civil action, a claim of an 

employer’s failure to provide workers’ compensation insurance must be presented to the 

Commission for a hearing. 820 ILCS 305/4(d) (West 2018); Keating, 401 Ill. App. 3d at 466. 

To this end, on April 19, 2018, claimant filed a motion for a preliminary hearing pursuant to 

section 4(d) of the Act (820 ILCS 305/4(d) (West 2018)), alleging that respondent knowingly 

failed to have workers’ compensation insurance on the date of the alleged accident. In its 

response to claimant’s motion, respondent acknowledged that it did not have workers’ 

compensation coverage on the date of the alleged accident but asserted that claimant failed to 

present sufficient proof that it knowingly failed to comply with the Act’s insurance mandate.

¶ 4 The matter proceeded to a hearing on June 1, 2018, before Commissioner Michael 

Brennan. The only witness to testify at the section 4(d) hearing was Shahnawaz Hasan, 

respondent’s founder and president. Hasan testified that respondent is a food manufacturing 

company located in Harvey. Hasan received claimant’s application for adjustment of claim 

sometime in March 2018. Around the same time, claimant’s attorney spoke to Hasan about the 

claim and respondent’s lack of workers’ compensation insurance. Hasan confirmed that 

claimant worked for respondent, although he could not state with certainty that claimant had 

been employed on February 2, 2018. Claimant’s attorney offered into evidence a copy of one 

of claimant’s paychecks from respondent. Hasan confirmed that the paycheck covered the pay 

period between January 21, 2018, and February 3, 2018.

¶ 5 Hasan acknowledged that under Illinois law respondent is required to have workers’ 

compensation insurance. Hasan testified that respondent has been in business for 32 years and, 

during that time, it has complied with all applicable federal and state insurance requirements. 

For the past three or four years, respondent’s workers’ compensation carrier has been FCCI 

Insurance Company (FCCI). The FCCI policy was purchased through an insurance broker. 

Hasan identified claimant’s exhibit No. 5 as a “Notice of Cancellation, Nonrenewal, or 

Declination” (Nonrenewal Notice) pertaining to policy No. WC00002490-4, respondent’s 

workers’ compensation insurance policy with FCCI. The Nonrenewal Notice stated that 

respondent’s workers’ compensation policy expired on December 31, 2017, and would not be 

renewed because of respondent’s “loss history.” Hasan confirmed that the address listed on the 
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Nonrenewal Notice is respondent’s business address in Harvey. The Nonrenewal Notice states 

that it was mailed on October 30, 2017, but Hasan could not recall receiving it. Hasan noted 

that, although he is the president of the company, he does not handle all aspects of the 

business’s daily operations, such as receiving the mail.

¶ 6 Hasan testified that the process for insurance renewals is long and detailed. Respondent’s 

insurance broker typically contacts the company in September to initiate the renewal process. 

At that time, respondent provides the broker with information regarding its loss history, sales 

projections, and labor costs. Using this information, the broker shops for quotes from various 

insurance companies, including the existing one. Hasan usually writes a check for the renewal 

premiums in March. Hasan could not recall respondent’s insurance broker telling him in 

September 2017 that the workers’ compensation policy would not be renewed. To the contrary, 

Hasan testified that, as late as April or May 2018, he “assumed” that respondent had workers’ 

compensation coverage because several of respondent’s other insurance policies had been 

cancelled and reinstated. In this regard, Hasan testified that respondent received an invoice 

from FCCI dated May 17, 2018. Respondent paid the invoice. Thereafter, respondent received 

rescission notices informing it that notices of cancellation previously issued with respect to 

respondent’s “commercial package,” “commercial auto,” and “umbrella” insurance policies 

had been rescinded effective May 23, 2018. Upon receiving the rescission notices, Hasan 

contacted respondent’s insurance broker, who confirmed that the workers’ compensation 

policy had not been renewed. It was then that Hasan became aware that respondent did not 

have workers’ compensation insurance. At that point, Hasan instructed the insurance broker to 

start looking for a new workers’ compensation insurance carrier. Hasan confirmed that as of 

June 1, 2018, the date of the section 4(d) hearing, respondent did not have workers’ 

compensation insurance.

¶ 7 Claimant offered into evidence an e-mail dated April 12, 2018, which his lawyer had 

received from respondent’s attorney. In the e-mail, respondent’s attorney stated that she had 

been informed that respondent did not have workers’ compensation coverage on the date of 

claimant’s alleged accident. Hasan acknowledged the e-mail, stating:

“Yeah, that’s what we had assumed from what was going on, but I needed 

confirmation of the fact that why would the insurance agent issue three policies and not 

the fourth one. So we needed in writing from the insurance company that in fact that is 

happening, and that was not some kind of a mistake or misunderstanding on our part.”

Hasan testified that he did not receive “[d]efinitive confirmation” in writing that respondent 

did not have workers’ compensation coverage until May 21, 2018.

¶ 8 On November 9, 2018, a three-member panel of the Commission entered an order finding 

that an employment relationship existed between claimant and respondent, that respondent was 

required to provide workers’ compensation insurance to its employees, and that respondent 

knowingly failed to provide workers’ compensation coverage on the date of claimant’s alleged 

accident. Regarding the latter finding, the Commission rejected any implication that the lapse 

of insurance was inadvertent and unknown. The Commission explained as follows:

“The evidence demonstrates that as early as October 30, 2017, notice was sent to 

Respondent regarding the non-renewal of the workers’ compensation policy, effective 

December 31, 2017. Respondent, by its own admission, had also received notice of 

[claimant’s] pending workers’ compensation claim, which had been filed with the 

Illinois Workers’ Compensation Commission on February 26, 2018. Also, by 
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Respondent’s own admission, that by April 2018, Respondent’s assumption was that it 

no longer had a workers’ compensation policy of insurance, but wanted written 

confirmation of the cancellation, which was received in May 2018. Nonetheless, as of 

the June 1, 2018 hearing, Respondent remained without workers’ compensation 

coverage.

None of Respondent’s explanations offer any justification for its failure to secure a 

workers’ compensation policy in full force and effect on the alleged accident date of 

February 2, 2018, as required under the Act. Respondent’s lack of memory in terms of 

receiving notice, ignorance in the matter at hand, or internal procedures, does not 

relieve it of its legal obligation to provide workers’ compensation insurance.”

¶ 9 Respondent sought judicial review of the Commission’s decision in the circuit court of 

Cook County. In an order dated August 1, 2019, the circuit court confirmed the decision of the 

Commission. This appeal by respondent ensued.

¶ 10 II. ANALYSIS

¶ 11 On appeal, respondent raises three issues. First, respondent argues that the Commission 

improperly determined that it knowingly failed to provide workers’ compensation insurance 

for purposes of section 4(d) of the Act (820 ILCS 305/4(d) (West 2018)). Second, respondent 

claims that the Commission improperly considered “incompetent, after the fact evidence” in 

finding that it knowingly failed to provide workers’ compensation insurance. Finally, 

respondent maintains that a heightened standard of proof should be applied to a finding under 

section 4(d) of the Act (820 ILCS 305/4(d) (West 2018)) that an employer knowingly failed to 

provide workers’ compensation insurance. We find respondent’s first contention dispositive 

and reverse on that basis.

¶ 12 Section 4 of the Act contains regulations to ensure that employers maintain adequate 

workers’ compensation insurance and pay compensation claims to their employees. 820 ILCS 

305/4 (West 2018); Keating, 401 Ill. App. 3d at 464. In turn, section 4(d) empowers the 

Commission to enforce those regulations. 820 ILCS 305/4(d) (West 2018); Keating, 401 Ill. 

App. 3d at 464. Specifically, section 4(d) authorizes the Commission, after conducting a 

hearing in accordance with due process principles, to determine whether an employer failed to 

provide the requisite insurance. 820 ILCS 305/4(d) (West 2018); Keating, 401 Ill. App. 3d at 

465. If the employer is deemed noncompliant, the Commission must determine whether that 

noncompliance was knowing or negligent. 820 ILCS 305/4(d) (West 2018).

¶ 13 An employer who is found to have negligently failed to provide adequate workers’ 

compensation insurance is subject to prosecution by the state’s attorney or the attorney general 

for a Class A misdemeanor. 820 ILCS 305/4(d) (West 2018); Keating, 401 Ill. App. 3d at 466. 

However, a finding that an employer’s failure to provide workers’ compensation insurance was 

knowing carries far more serious consequences. A knowing failure to provide adequate 

insurance is deemed “an immediate serious danger to public health, safety, and welfare 

sufficient to justify service by the Commission of a work-stop order on such employer, 

requiring the cessation of all business operations.” 820 ILCS 305/4(d) (West 2018). In 

addition, an employer who is found to have knowingly failed to provide workers’ 

compensation insurance is subject to prosecution by the state’s attorney or attorney general for 

a Class 4 felony. 820 ILCS 305/4(d) (West 2018); Keating, 401 Ill. App. 3d at 466. Moreover, 

as noted previously, an employer who knowingly fails to provide adequate insurance is not 
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entitled to the benefits and protections of the Act and may be sued in civil court. 820 ILCS 

305/4(d) (West 2018); Keating, 401 Ill. App. 3d at 466. In such an action, proof of injury 

creates a rebuttable presumption of the employer’s liability. 820 ILCS 305/4(d) (West 2018). 

An employer may attempt to disprove liability but may not rely on the defenses of assumption 

of the risk or negligence or on a claim that the injury was caused by a fellow employee. 820 

ILCS 305/4(d) (West 2018); Keating, 401 Ill. App. 3d at 466. Section 4(d) also authorizes the 

Commission to impose civil penalties against an employer who knowingly and willfully fails 

or refuses to comply with the Act’s insurance mandate. 820 ILCS 305/4(d) (West 2018).

¶ 14 Here, the Commission determined that respondent knowingly failed to provide workers’ 

compensation insurance. In so finding, the Commission stated that “as early as October 30, 

2017, notice was sent to Respondent regarding the non-renewal of the workers’ compensation 

policy, effective December 31, 2017.” The Commission did not elaborate upon the basis for 

this conclusion. Its statement appears to be a reference to the Nonrenewal Notice introduced 

by claimant, which indicates that it was mailed to respondent on October 30, 2017. Notice of 

an insurer’s intention not to renew a workers’ compensation policy is governed by section 

143.17a of the Illinois Insurance Code (215 ILCS 5/143.17a (West 2016)). See West Bend 

Mutual Insurance Co. v. Procaccio Painting & Drywall Co., 794 F.3d 666, 670 (7th Cir. 2015) 

(discussing section 143.17a of the Insurance Code in the context of workers’ compensation 

insurance). On the date FCCI purportedly mailed the Nonrenewal Notice to respondent, section 

143.17a stated in relevant part as follows:

“(a) A company intending to nonrenew any policy of insurance to which Section 

143.11 applies, except for those defined in subsections (a), (b), (c), and (h) of Section 

143.13, must mail written notice to the named insured at least 60 days prior to the 

expiration date of the current policy. In all notices of intention not to renew any policy 

of insurance, as defined in Section 143.11, the company shall provide a specific 

explanation of the reasons for nonrenewal. ***

* * *

(d) Under subsection (a), the company shall maintain proof of mailing of the notice 

of intention not to renew to the named insured on one of the following forms: a 

recognized U.S. Post Office form or a form acceptable to the U.S. Post Office or other 

commercial mail delivery service. *** For all notice requirements under this Section, 

an exact and unaltered copy of the notice to the named insured shall also be sent to the 

named insured’s producer, if known, or the producer of record.” (Emphasis added.) 215 

ILCS 5/143.17a (West 2016).

Thus, under section 143.17a of the Insurance Code, the only method for establishing 

compliance with the notice requirement is proof of mailing by the insurer. See Ragan v. 

Columbia Mutual Insurance Co., 183 Ill. 2d 342, 351 (1998) (noting that, where the legislature 

has provided a method for establishing compliance with a notice requirement, allowing other 

methods would circumvent the language and purpose of the statute).

¶ 15 Turning to the case at bar, although claimant obtained and introduced into evidence the 

Nonrenewal Notice itself, claimant did not produce proof of mailing of the Nonrenewal Notice 

by FCCI on “a recognized U.S. Post Office form or a form acceptable to the U.S. Post Office 

or other commercial mail delivery service.” 215 ILCS 5/143.17a(d) (West 2016). Absent 

evidence of proof of mailing of the Nonrenewal Notice in accordance with section 143.17a, 

we hold that the record was insufficient, as a matter of law, to support the Commission’s 
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finding that the Nonrenewal Notice was sent to respondent “as early as October 30, 2017.” See 

Ragan, 183 Ill. 2d at 351-52 (holding that envelope, which allegedly contained a cancellation 

notice and was metered and imprinted with a mailing date, was insufficient to meet statutory 

proof-of-mailing requirements under section 143.14(a) of the Insurance Code (215 ILCS 

5/143.14(a) (West 1994))); Guillen v. Potomac Insurance Co. of Illinois, 323 Ill. App. 3d 121, 

130-31 (2001), aff’d as modified & remanded, 203 Ill. 2d 141 (2003) (holding that unsigned 

letter purportedly sent to the insured regarding addition of lead exclusion to policy was 

insufficient to meet statutory proof-of-mailing requirements under section 143.17a of the 

Insurance Code). Thus, the Nonrenewal Notice itself, without proof of mailing in accordance 

with section 143.17a, was insufficient to establish that respondent knowingly failed to provide 

workers’ compensation insurance on the date of claimant’s alleged accident.

¶ 16 The Commission cited three additional justifications in support of its conclusion that 

respondent knowingly failed to provide workers’ compensation coverage on the date of 

claimant’s alleged accident. First, the Commission observed that respondent, by its own 

admission, had received notice of claimant’s pending workers’ compensation claim, which was 

filed on February 26, 2018. Second, the Commission noted that, by April 2018, “[r]espondent’s 

assumption was that it no longer had a workers’ compensation policy of insurance, but wanted 

written confirmation of the cancellation [sic], which was received in May 2018.” Third, the 

Commission pointed out that, as of the June 1, 2018, hearing, respondent remained without 

workers’ compensation coverage. While we are not prepared to say that there are no 

circumstances under which an event that postdates the alleged accident would be sufficient to 

establish that an employer knowingly failed to provide workers’ compensation insurance, we 

are unable to discern how the postaccident events cited by the Commission in this case do so. 

Neither the fact that respondent was aware of claimant’s workers’ compensation claim after 

February 26, 2018, nor the fact that by April 2018 respondent was under the assumption that 

it did not have workers’ compensation coverage sheds any light on what respondent knew or 

did not know regarding its workers’ compensation coverage as of the date of claimant’s alleged 

accident on February 2, 2018. Likewise, while we do not condone the lack of urgency exhibited 

by respondent in obtaining workers’ compensation coverage after it learned that its policy had 

lapsed, the fact that it still did not have coverage as of June 1, 2018, provides no indication as 

to what respondent knew about the status of its workers’ compensation coverage on February 

2, 2018. The Commission therefore erred in relying on these events in support of its finding 

that respondent’s failure to provide workers’ compensation insurance on the date of claimant’s 

accident was knowing.

¶ 17 III. CONCLUSION

¶ 18 In short, we conclude that the Commission erred in finding that respondent knowingly 

failed to comply with the Act’s insurance mandate. The evidence presented by claimant was 

insufficient to support the Commission’s finding that the Nonrenewal Notice was sent to 

respondent as early as October 30, 2017. Moreover, the remaining justifications proffered by 

the Commission were insufficient to establish what respondent knew about the status of its 

workers’ compensation insurance on the date of claimant’s alleged accident. Accordingly, we 

reverse the judgment of the circuit court of Cook County, which confirmed the decision of the 

Commission.
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¶ 19 Reversed.