Court Opinion

ID: 4636576
Source: CourtListenerOpinion
Date Created: 2020-11-24 22:38:27.238079+00
Date Added: 2024-06-11T07:58:34.040099
License: Public Domain

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                                    Appellate Court                              Date: 2020.05.26
                                                                                 14:34:34 -05'00'

                   Iannoni v. City of Chicago, 2019 IL App (1st) 182526

Appellate Court         ALPHONSE IANNONI, Plaintiff-Appellee, v. THE CITY OF
Caption                 CHICAGO, Defendant-Appellant.

District & No.          First District, First Division
                        Nos. 1-18-2526, 1-19-0015 cons.

Filed                   September 30, 2019
Rehearing denied        October 30, 2019

Decision Under          Appeal from the Circuit Court of Cook County, No. 18-L-50369; the
Review                  Hon. James M. McGing, Judge, presiding.

Judgment                Reversed.

Counsel on              Jeffrey N. Powell, of Hennessy & Roach, P.C., of Chicago, for
Appeal                  appellant.

                        John W. Powers, of Cullen, Haskins, Nicholson & Menchetti, P.C., of
                        Chicago, for appellee.

Panel                   JUSTICE WALKER delivered the judgment of the court, with
                        opinion.
                        Presiding Justice Griffin and Justice Pierce concurred in the judgment
                        and opinion.
                                               OPINION

¶1       The circuit court held that the entire amount of an arbitrator’s award, stated as a weekly
     amount times a number of weeks, came due when the Illinois Workers’ Compensation
     Commission (Commission) adopted the arbitrator’s award. The employer, the City of Chicago
     (City), paid its injured employee only the weekly amount times the number of weeks that had
     elapsed by the time of payment. The injured employee filed a section 19(g) petition under the
     Workers’ Compensation Act (Act) (820 ILCS 305/19(g) (West 2016)) in the circuit court,
     alleging that all permanent partial disability benefits awarded to employees should be paid in a
     lump sum, whether they had accrued or not. The trial court entered a judgment awarding the
     employee the unpaid part of the award plus interest and attorney fees. The City argues on
     appeal that it paid all amounts due as they accrued and that it intended to pay the remainder of
     the award monthly, as it accrued. We hold that the City correctly paid its injured employee the
     amounts awarded as those amounts accrued over time. We reverse the circuit court’s judgment.

¶2                                         I. BACKGROUND
¶3       On March 31, 2014, Alphonse Iannoni suffered an injury in the course of his employment
     with the City. He filed a claim for workers’ compensation. The City began paying workers’
     compensation benefits to Iannoni as the parties proceeded to arbitration.
¶4       The arbitrator entered a final decision, dated March 21, 2018, awarding Iannoni both
     temporary total disability benefits and permanent partial disability benefits. The arbitrator set
     temporary total disability benefits at $902.67 per week for 1493/7 weeks, for a total of
     $134,884.68. The City had already paid $128,694.95, so it owed only $6189.73 for temporary
     total disability. The arbitrator added, “Petitioner is permanently partially disabled to the extent
     of 35% loss of use of the person as a whole under Section 8(d)2 of the Act [(820 ILCS
     305/8(d)(2) (West 2016))], equivalent to 175 weeks of benefits.” The arbitrator awarded
     “$721.66 per week.” Neither party challenged the award. The Commission adopted the
     arbitrator’s award as its final order.
¶5       On May 9, 2018, the City sent Iannoni a check for $62,890.49, covering the remaining
     temporary total disability benefits and more than 70 weeks of permanent partial disability
     benefits. The City sent Iannoni a second check in June 2018 for $3135.78, covering a little
     more than four times the weekly permanent partial disability benefits the arbitrator awarded.
¶6       On June 27, 2018, Iannoni filed a complaint against the City, seeking immediate payment
     of the remainder of the permanent partial disability award, plus interest and attorney fees. The
     City answered that it had already paid all of the amounts that had accrued as of the date of the
     complaint. The City chose to pay Iannoni monthly amounts to match the mandatory rate of
     $721.66 per week, until it paid the entire amount the arbitrator awarded. The City added, “the
     benefits are processed for the entire upcoming month, even though they have not yet accrued
     as of the date they are issued. Plaintiff is actually receiving the benefits early.” Iannoni replied,
     “The award can be calculated to the precise penny and Defendant is obligated to pay regardless
     of whether the Plaintiff is alive or dead. *** [T]he entire award was due and payable, i.e.
     accrued, the moment the Commission’s decision became final.”
¶7       In an order dated October 30, 2018, the circuit court said:

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                   “A permanent disability is immutable. It will not go away. The worker who suffers
               from a permanent disability is therefore entitled to a lump sum benefit in exchange for
               the loss of the complete use of their person. This is in sharp contrast to a temporary
               disability. It makes sense that temporary disability benefits would accrue on an
               installment basis during the pendency of the disability—the purpose of temporary
               disability benefits is to compensate the worker during their period of incapacity.”
¶8         The circuit court entered a judgment in favor of Iannoni for the amount of unpaid benefits
       plus attorney fees of $34,247.50. The court requested supplemental briefs on interest. The City
       filed a notice of appeal from the October 2018 order.
¶9         On December 4, 2018, the circuit court entered a supplemental order awarding Iannoni
       $3429.77 in interest. Again, the City appealed. We have consolidated the appeals.

¶ 10                                            II. ANALYSIS
¶ 11        On appeal, the City argues that paying in monthly installments that cover the mandated rate
       of $721.66 per week complies with the Commission’s order. The City also challenges the
       award of interest and fees. We review de novo the circuit court’s interpretation of the Act.
       Cassens Transport Co. v. Illinois Industrial Comm’n, 218 Ill. 2d 519, 524 (2006).
¶ 12        “The underlying purpose of workmen’s compensation legislation in this and other States is
       to provide financial protection in various forms, including the restoration of lost wages, for
       workers whose earning power is interrupted or terminated as a consequence of injuries arising
       out of and in the course of their employment.” Board of Education of the City of Chicago v.
       Industrial Comm’n, 53 Ill. 2d 167, 171 (1972). “Workers’ compensation provides income
       replacement similar to income continuation” (Scudella v. Illinois Farmers Insurance Co., 174
       Ill. App. 3d 245, 250 (1988)) by “provid[ing] a flow of benefits to compensate for lost wages”
       (Freeman United Coal Mining Co. v. Industrial Comm’n, 99 Ill. 2d 487, 497 (1984)). “[T]he
       purpose of workers’ compensation is to provide injured workers with periodic payments,
       which are a substitute for regular wages” (Bailey v. Colonial Freight System, Inc., 836 S.W.2d
       554, 557 (Tenn. 1992)), and therefore “the ordinary payment of compensation is in installment
       payments” (Swilling v. Pride Masonry of Gaffney, 736 S.E.2d 672, 678 (S.C. Ct. App. 2012)).
       See Lawrence v. Natural Gas Pipeline Co., 106 P.2d 685, 687-88 (Kan. 1940). Because the
       legislature intended workers’ compensation payments to substitute for the injured employee’s
       wages, “[l]ump-sum awards are the exception and not the rule.” Bagwell v. Industrial Comm’n,
       94 Ill. 2d 101, 106 (1983).
¶ 13        The legislature expressed its preference for periodic payments. Section 9 of the Act
       provides:
                “Any employer or employee or beneficiary who shall desire to have such
                compensation, or any unpaid part thereof, paid in a lump sum, may petition the
                Commission, asking that such compensation be so paid. If, upon proper notice to the
                interested parties and a proper showing made before such Commission or any member
                thereof, it appears to the best interest of the parties that such compensation be so paid,
                the Commission may order the commutation of the compensation to an equivalent
                lump sum, which commutation shall be an amount which will equal the total sum of the
                probable future payments capitalized at their present value ***.” 820 ILCS 305/9
                (West 2016).

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¶ 14       In Nunn v. Industrial Comm’n, 138 Ill. App. 3d 143, 146 (1985), the appellate court
       explained:
               “The rationale for limiting lump sum awards to exceptional circumstances is to
               safeguard the money and unless it clearly appears that the disabled worker’s means of
               support will increase, a petition for a lump sum settlement should be denied.”
       The party seeking a lump sum payment bears the burden of showing that such payments will
       serve the best interests of both parties. Salisbury v. Illinois Workers’ Compensation Comm’n,
       2017 IL App (3d) 160138WC, ¶¶ 16-21.
¶ 15       Iannoni did not ask the arbitrator or the Commission to award a lump sum. He filed no
       petition under section 9 of the Act. Instead, he claims that the arbitrator awarded a lump sum
       by awarding him $721.66 per week for 175 weeks. He relies primarily on Lester v. Industrial
       Comm’n, 256 Ill. App. 3d 520 (1993), but that case establishes that the City paid Iannoni
       correctly.
¶ 16       A work accident led to the amputation of Lester’s fingers in October 1988. His employer,
       Ford, paid him workers’ compensation for the amputations about 67 weeks later, in March
       1990. In 1991, an arbitrator found that Ford owed Lester compensation for 80 weeks due to the
       amputations, plus substantial penalties for Ford’s unreasonable and vexatious delay of 67
       weeks in making the payments. The appellate court affirmed the award of penalties for the
       delay. The court found:
               “[T]he legislature intended that individuals who receive amputations should be
               immediately compensated when no dispute exists as to whether the injury arose out of
               and in the course of employment. Such a result is consistent with the legislature’s intent
               because prompt payment alleviates the possibility that an employee will be faced with
               unnecessary financial burdens. Requiring immediate payment is not unfair to the
               employer because statutorily it would have to pay the amount owed at some point in
               time. It is consistent with the purpose of the Act to require the amount owed to be paid
               promptly. The employer can pay the amount owed immediately since section 8(e)
               clearly sets forth the compensation an employer is obligated to pay. As such, it is
               unreasonable that an employee should have to wait for a judgment to be entered before
               receiving the compensation clearly owed.” Lester, 256 Ill. App. 3d at 523.
¶ 17       In affirming the Commission’s calculation of penalties, the court stated:
               “The Commission found that Lester was only entitled to penalties on the amount of
               compensation that had already accrued at the time payment was tendered by Ford. ***
               Lester contends that once a penalty is imposed for failure to pay a benefit, the penalty is
               to be calculated on the entire amount of that type of benefit, not just the amount that had
               accrued prior to payment. *** Here the Commission properly calculated penalties and
               attorney fees based only on the amount accrued until payment was tendered.” Lester,
               256 Ill. App. 3d at 524.
¶ 18       In Lester, the parties could calculate the exact amount Ford would need to pay because of
       the amputations, yet Ford delayed payment only on the part of the total that had accrued at the
       time of the tender of payment, about 67 weeks after the injury. Thus, in Lester, payments for
       the amputation accrued over a period of 80 weeks, and the Act required Ford to pay Lester each
       week the amount set by the statute, as a substitute for his wages, beginning on the date of the
       amputation.

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¶ 19       In accord with Lester and the purpose of the Act, the City paid Iannoni temporary total
       disability benefits, starting well before the arbitrator entered the award. Following arbitration,
       the City paid the amounts the arbitrator awarded before those amounts came due. If Iannoni
       seeks to receive the remaining payments in a lump sum, he must file a petition under section 9
       of the Act, and he will need to present evidence showing that a lump sum payment will serve
       the best interests of the parties. Salisbury, 2017 IL App (3d) 160138WC, ¶¶ 16-21. We reverse
       the circuit court’s order for immediate payment of amounts that had not accrued as of the date
       of the order. Because the City made timely payments of all amounts due, we reverse the awards
       of interest and attorney fees. See Illinois State Toll Highway Authority v. Heritage Standard
       Bank & Trust Co., 157 Ill. 2d 282, 293-94 (1993).

¶ 20                                      III. CONCLUSION
¶ 21       The Act mandates periodic payment of amounts intended to replace an injured worker’s
       lost wages. The City appropriately paid Iannoni at the start of each month the amount of
       workers’ compensation coming due that month. Because Iannoni filed no petition for a lump
       sum payment, we reverse the order directing payment of benefits in a lump sum and the order
       directing payment of interest and attorney fees.

¶ 22      Reversed.

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