Court Opinion

ID: 9716057
Source: CourtListenerOpinion
Date Created: 2023-08-26 06:24:32.768251+00
Date Added: 2024-06-11T18:23:41.052105
License: Public Domain

JUSTICE FREEMAN, specially concurring: At issue is whether the Illinois Industrial Commission could award attorney fees to a claimant’s former attorneys several months after the Commission approved a settlement between the claimant and his employer. The majority holds that the Commission had jurisdiction to consider the former attorneys’ fee petition. In the majority’s view, the Commission properly ordered the claimant’s current attorney to pay the former attorneys a portion of the attorney fee award that the current attorney received pursuant to the settlement. I, too, believe that the Commission had jurisdiction to consider the fee petition at issue. Thus, I join in the result reached by the majority. I write separately, however, to distance myself from the majority’s analysis. In particular, under the majority’s analysis, the Commission’s jurisdiction hinges upon the source of payment of the attorneys’ fees rather than the type of action at issue. I believe that the majority’s solution to the question of jurisdiction is both incomplete and unworkable. ANALYSIS Goldstein filed an application for adjustment of claim on Alvarado’s behalf for injuries that Alvarado sustained while working for Central Die Casting. Subsequently, Alvarado retained new counsel, Ribbeck, who settled the claim for a lump-sum payment. As noted above, the majority holds that the Commission had jurisdiction to award Goldstein attorney fees several months after the Commission approved the lump-sum settlement between Alvarado and Central Die Casting. The majority reasons that the hearing on the fee petition was a collateral proceeding which did not require that the award to Alvarado be reopened. The majority emphasizes that the Commission ordered Ribbeck to pay the fees rather than Alvarado or Central Die Casting: “The settlement award at issue was between Alvarado and his employer, Central Die Casting, and included an award of $19,413.33 in attorney fees to Ribbeck. Once that award became final, the Commission was without jurisdiction to order Alvarado or Central Die Casting to pay attorney fees to Goldstein. In determining the fee dispute in this case, however, the Commission did not reopen or modify the final settlement to provide for an additional $1,350 in attorney fees. The Commission did not order Alvarado to pay Goldstein $1,350 in attorney fees, nor did the Commission order Central Die Casting to pay Goldstein $1,350 in attorney fees. Rather, pursuant to section 16a, the Commission ordered Ribbeck to pay Goldstein $1,350 from the $19,413.33 in attorney fees that Ribbeck had received pursuant to the settlement. This was a collateral matter that was distinct from the settlement between Alvarado and Central Die Casting. Under the circumstances, we hold that the Commission acted within its jurisdiction pursuant to sections 16 and 16a of the Act in ordering Ribbeck to pay Goldstein its fees.” (Emphases in original.) 216 Ill. 2d at 558-59. I reiterate my agreement with the result reached by the majority. Pursuant to section 16 of the Workers’ Compensation Act (820 ILCS 305/16 (West 2002)), the Commission may determine the reasonableness and fix the amount of any fee of compensation charged by any person, including attorneys, for any service performed in connection with the Act. Further, section 16a of the Act provides that “[a]ny and all disputes regarding attorneys’ fees, whether such disputes relate to which one or more attorneys represents the claimant or claimants or is entitled to the attorneys’ fees, or a division of attorneys’ fees where the claimant or claimants are or have been represented by more than one attorney, or any other disputes concerning attorneys’ fees or contracts for attorneys’ fees, shall be heard and determined by the Commission after reasonable notice to all interested parties and attorneys.” 820 ILCS 305/16a (West 2002). I believe that a hearing on an attorney’s fee petition is in the nature of a supplemental proceeding, authorized by the Act, which does not affect the validity of the underlying compensation award to the claimant. So long as the attorney’s fee petition is pending at the time that the Commission makes its decision on the compensation award to the claimant, the Commission retains jurisdiction to determine the reasonableness and fix the amount of the fee charged by the attorney for services performed in connection with the application for adjustment of claim. The jurisdiction of the Commission is determined by the type of action at issue, a supplemental hearing on a petition for attorney fees. In the present case, Goldstein filed its petition for fees on August 31, 1997. Thus, Goldstein’s petition was pending at the time the arbitrator approved the settlement agreement between Alvarado and Central Die Casting.3 Because Goldstein’s fee petition was not resolved at the hearing on the settlement agreement, I believe that the Commission retained jurisdiction to fix the amount of Goldstein’s fee at a later date and provide either for payment of the fee from the compensation award or from monies already paid to Ribbeck from the compensation award. These payment options would not reopen the final settlement to increase the total compensation paid by Central Die Casting. Rather, the total compensation would be reapportioned in order to provide for payment of Goldstein’s fees by Ribbeck, if payment had already been forwarded to him, or by Alvarado. While I agree with the majority that the Commission retained jurisdiction to consider Goldstein’s fee petition, for several reasons I believe that the majority’s analysis is problematic. First, the majority apparently makes subject matter jurisdiction in this case hinge upon the source of payment of the attorneys’ fees rather than the type of action at issue. According to the majority, the Commission had jurisdiction because the Commission was dealing only with Goldstein and Ribbeck, and the Commission ordered Ribbeck to pay Goldstein’s fees. I do not believe, however, that section 16a of the Act is limited to disputes between attorneys. See 820 ILCS 305/16a (West 2002). The section specifically refers to disputes relating to “which one or more attorneys represents the claimant or claimants or is entitled to the attorneys’ fees,” and disputes relating to “a division of attorneys’ fees where the claimant or claimants are or have been represented by more than one attorney.” But the section also refers to “any other disputes concerning attorneys’ fees or contracts for attorneys’ fees.” (Emphasis added.) It is not inconceivable that such other disputes might involve the claimant and an attorney. Limiting the Commission’s jurisdiction to disputes between attorneys is an incomplete and unworkable solution to the question of jurisdiction. Consider the scenario where a claimant discharges his attorney; the attorney files a fee petition; the claimant follows the same course of conduct as in the case at bar; and the arbitrator approves the lump-sum settlement without resolving the attorney’s fee petition. Is the Commission without jurisdiction thereafter to order the pro se claimant to pay the attorney’s fees from the settlement amount? Also, consider a scenario similar in all ways to the facts of the present case, with the exception that the settlement agreement provides for payment of all monies to the claimant.4 A side agreement between the claimant and his attorney provides for payment of the attorney’s fees. Does the Commission lack authority to order the claimant to pay a portion of the compensation received through the settlement to the attorney who initially represented the claimant? Lastly, in making the second attorney liable to the first attorney for payment of the first attorney’s fees, I believe the majority is ignoring a problem that may be caused by slow, or nonexistent, payments from either the employer or the claimant to the second attorney. The second attorney will certainly not want to pay the first attorney monies that the second attorney has not yet received. Even considering that the second attorney may have a cause of action for his fees, will the second attorney necessarily pursue that cause of action, thereby protecting the first attorney’s share of the fees? I believe that it is problematic to tie jurisdiction to the source of payment rather than the type of action involved, that is, an action for attorney fees. The position of the majority would also seem contrary to this court’s opinion in Collins v. Industrial Comm’n, 12 Ill. 2d 200 (1957). In Collins, U.S. Collins and George Traicoff, attorneys, represented the claimant before the Commission in proceedings arising out of the death of her husband. The arbitrator awarded the claimant compensation benefits on her own behalf and on behalf of her minor children, as well as medical and hospital expenses. No appeal being taken, the awards became final. On its own motion, on February 1, 1955, the Commission gave notice that a hearing would be set for the determination of attorney fees. Thereafter, on March 2, 1955, the claimant filed a petition for a lump-sum settlement in order to buy a house and to pay attorney fees. On March 4, 1955, the Commission sent separate notices for the hearing on the petition for lump-sum settlement and the hearing on attorney fees. The notice for the fee hearing designated the claimant as petitioner, and Collins and Traicoff as respondents. Following the hearing, on May 13, 1955, the Commission rejected the petition for lump-sum settlement. Two months later, on July 12, 1955, the Commission entered an order fixing the reasonable value of the services rendered by Collins and Traicoff at $300. Collins and Traicoff filed a writ of certiorari to review the Commission’s order. The circuit court quashed the writ upon the claimant’s motion. On appeal, the court reversed, finding proper jurisdiction. We noted that by statute the circuit court has the “ ‘power to review all questions of law and fact presented’ ” by the record before the Commission. Collins, 12 Ill. 2d at 202, quoting Ill. Rev. Stat. 1955, ch. 48, par. 138.19. The Commission is expressly authorized to fix the fees of attorneys for services performed in connection with the Act. The Act “thus contemplates that the matter of fees of attorneys is one of the questions of law or fact that may arise and be ‘presented by [the] record.’ ” Collins, 12 Ill. 2d at 202. We also rejected the claim that judicial review is limited to “parties” and that the attorneys are not parties. We characterized the hearing on attorney fees as a supplemental hearing before the Commission, and judged that Collins and Traicoff were parties to the supplemental hearing at which their fees were determined. Collins, 12 Ill. 2d at 202-03. The majority cites Collins for the proposition that the circuit court has jurisdiction under the Act to review an award of attorney fees but fails to grasp two matters of import in the opinion. First, the Collins court would not have determined that the circuit court had jurisdiction to review the Commission’s fee award unless the court was also of the opinion that the Commission had jurisdiction to consider and determine the fees of Collins and Traicoff for the services rendered to the claimant. Second, the Commission designated the claimant and her attorneys as parties to the hearing on attorney fees; the attorneys sought judicial review; and the claimant opposed the circuit court’s jurisdiction. The real significance of Collins, as it applies to the case at bar, is that after the arbitrator’s awards became final, the Commission retained jurisdiction to determine the attorneys’ fee issue in a proceeding which did not involve a dispute between attorneys but rather a dispute between the claimant and her attorneys. Second, the majority opinion is incomplete in that it does not address the lack of notice to Goldstein. There was a dispute as to the proper division of attorney fees since Alvarado was represented by two law firms, both of which were petitioning for fees. Where a fee dispute exists, section 16a(J) of the Act (820 ILCS 305/16a(J) (West 2002)) requires that notice be given to all interested parties and attorneys. Goldstein did not receive the required notice, and thus was unaware of the proceedings wherein the arbitrator approved the settlement agreement, awarding Ribbeck $19,413.33 in fees. An argument can be made that the Commission did not have the authority to approve the settlement agreement’s provision for attorney fees precisely because Goldstein was never notified of the proceedings. Third, in outlining the instances when the Commission may reopen or modify a final award, the majority opinion fails to distinguish between decisions involving lump-sum awards or settlement contracts approved by the Commission, and decisions involving awards or settlement contracts approved by the Commission where payments are to be made in installments. See 216 Ill. 2d at 555 (“section 19(h) provides that where an employee’s disability has recurred, increased, diminished or ended, an agreement or award under the Act may be reviewed by the Commission”). A more accurate statement of the law is that an agreement or award providing for compensation in installments may, at any time within 18 months after such agreement or award, be reviewed by the Commission on the ground that the disability of the employee has recurred, increased, diminished or ended. However, when compensation that is payable in accordance with an award or settlement contract approved by the Commission is ordered paid in a lump sum by the Commission, no review is available. See 820 ILCS 305/19(h) (West 2002). The appropriate distinction is particularly necessary to avoid confusion since the present case involves a lump-sum settlement. CONCLUSION I join in the result reached by the majority, but not in its analysis. I believe that the jurisdiction of the Commission must turn upon the type of action at issue. To base the Commission’s jurisdiction upon the source of payment of the attorneys’ fee is to needlessly limit the Commission’s jurisdiction to fee disputes between attorneys, leaving aside other fee disputes that may arise under the Act. I also believe that the majority analysis is incomplete without a discussion of the lack of notice. Lastly, the majority sows confusion by failing to recognize the distinction between lump-sum settlements and settlements based upon installment payments. For these reasons, I cannot join fully the majority opinion. JUSTICE McMORROW joins in this special concurrence.  I agree with the majority that the subterfuge of filing a new, but identical, claim in 1999 and dismissing the 1996 claim should not impact the 1997 fee petition in any way.   It should be noted that, by statute, all attorneys’ fees for representation of an employee shall only be recoverable from compensation actually paid to the employee. See 820 ILCS 305/ 16a(I) (West 2002).