Illinois Appellate Court Rules That Employer May Not Offset Worker’s Compensation Award with Credit – Patel v. Home Depot USA

While a personal injury claim is subject to a jury’s decision, Illinois workers’ compensation claims are decided by the Illinois Workers’ Compensation Commission. Rather than undergoing a jury trial, workers’ compensation cases undergo an arbitration process in which both parties present their case to the arbitrator, who then determines an appropriate award. And because the Illinois workers’ compensation damages are clearly laid out in the Illinois Workers’ Compensation Act, there are generally few surprises when it comes to workers’ compensation cases.

However, disputes can arise when a company does not honor the terms set out in the arbitration agreement. The Illinois Appellate Court recently reviewed an Illinois workers’ compensation lawsuit involving a dispute over payment of attorney fees and costs. In Patel v. Home Depot USA, Inc., 2012 IL App. (1st) 103217, the plaintiff brought a claim against its employer after it stopped paying his workers’ compensation benefits. A Circuit Court judge had entered a decision in favor of the plaintiff and ordered the defendant company to pay the plaintiff’s attorney fees, costs, and interests.

On two separate occasions, the plaintiff Naresh Patel was injured while working at the Home Depot. As a result of these injuries, Home Depot was paying temporary total disability (TTD) to Patel. However, at least twice Home Depot suddenly stopped those payments to Patel without providing any written notice or warning. And while Patel was able to reinstate the TTD payments, doing so required him to hire an attorney and an arbitrator.

During the arbitration process, Patel was awarded benefits to be paid by Home Depot. However, Home Depot was also given a credit in excess of the amount of this award. Patel then filed a petition asking the circuit court to order Home Depot to pay the award and also to institute additional penalties against Home Depot, i.e. attorney fees, costs, and interest. Patel’s claim was brought under section 19(g) of the Illinois Workers’ Compensation Act, which states:

In a case where the employer refuses to pay compensation according to such final award or such final decision upon which such judgment is entered the court shall in entering judgment thereon, tax as costs against him the reasonable costs and attorney fees in the arbitration proceedings. (820 ILCS 305/19(g)).

Home Depot argued that it was not required to pay these additional fees because it had already paid more workers’ compensation than it was obligated to pay and had an excess credit. However, the Illinois appellate court disagreed on the basis that the credit only applied to a payment of benefits. Because the award granted under 19(g) did not directly apply to benefits, the credit could not be used to offset it.

In its review, the appellate court relied on Illinois Graphics Co. v. Nickum, 159 IL 2d. 469 (1994), where a company sought to recover past benefit payments under 19(g). In Illinois Graphics, the injured worker had received TTD payments while her workers’ compensation claim was being considered. When her workers’ compensation claim was denied, Illinois Graphics received a credit for the TTD benefits it had paid out. It sought to recover those payments from its employee by filing a 19(g) claim. However, the court denied Illinois Graphic’s ability to use 19(g) to recover credit on the basis that 19(g) was for the payment of benefits, not the awarding of credit. And because the credit and benefits cannot be combined under 19(g), in Patel, Home Depot cannot pay off the 19(g) award by applying any unused credits issued by the Industrial Commission.

Kreisman Law Offices has been handling Illinois worker injury cases for more than 36 years for individuals and families in and around Chicago, Cook County, and surrounding areas, including Tinley Park, Chicago’s Logan Square, Cicero Lincolnshire, Vernon Hills, Hillside, Elmhurst, and Winfield.

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