June 2017 Case Notes & Comments

"If you know the enemy and know yourself, you need not fear the result of a hundred battles. ~ Sun Tzu

MONTHLY QUIZ: Plaintiff-Surveyor is surveying at a construction site and sets several benchmarks. Subcontractor, who is also onsite, is hired to construct a temporary drywall corridor. Once the corridor is built and at the end of the work day, Subcontractor's employees stack drywall in the corridor. The next morning, Surveyor visits the site to check the benchmarks he had previously placed in the corridor. Believing one of his benchmarks to be behind the one of the stacks, Surveyor moves the drywall. The stack, however, continues to move and several sheets of drywall fall on Surveyor. Surveyor sues several constructors, including General Contractor (GC) and Subcontractor. The contracts show that each subcontractor is responsible for all labor, materials, tools, equipment, and supervision and to do all things necessary for the proper and complete performance of the work. While each subcontractor has control over the means and methods of their respective work performance, GC retains the general right to start, stop, and inspect the progress of the work. Surveyor claims that GC has retained sufficient control over the work, but GC moves for summary judgment. Is there sufficient evidence in the record as to control? Is GC entitled to summary judgment? You be the judge. (Answer below). 

EMPLOYER PROVIDES ADEQUATE JUSTIFICATION TO REVERSE SECTION 19(L) PENALTIES: Following a trial, Claimant was awarded benefits under the Workers' Compensation Act (Act) (820 ILCS 305/1 to 30 (West 2012), which award included TTD, PPD and "all medical expenses" as set forth in Claimant's trial exhibits. Neither Claimant nor her Employer filed a petition for review. Following trial, Employer's counsel reportedly requested Claimant's medical records from Claimant's counsel. Claimant subsequently filed a petition for penalties and fees pursuant to sections 19(l), 19(k), and 16 of the Act because more than 130 days had passed since the arbitration decision and Employer had yet to pay the award. Five days after the filing of Claimant's penalty/fee petition, Employer issued Claimant a check for the payment of the PPD portion of the award. Employer ultimately admitted that the PPD payment was late. Employer's counsel then made additional written demands to Claimant's counsel for Claimant's medical records. Shortly after receipt of the records, Employer paid Claimant's medical bills. Upon review of Claimant's penalty/fee petition, the Commission found that Claimant failed to prove that Employer acted in an unreasonable or vexatious manner and denied penalties or fees under Sections 19(k) and 16 of the Act. However, the Commission awarded Claimant section 19(l) penalties, in part, for Employer's failure to timely pay medical bills. Employer argued that it did not receive Claimant's medical records from opposing counsel until approximately 24 days after Claimant filed her penalty/fee petition. Claimant argued that her "written demand for payment of the medical expenses [as required by section 19(l) of the Act] was contained in the Request for Hearing form submitted by the parties at the beginning of the [a]rbitration hearing and that the medical expenses claimed at arbitration were admitted into evidence at trial." The trial and appellate courts rejected Claimant's argument that the request for hearing form constituted a sufficient written request for the payment of medical expenses under Section 19(l) of the Act. Furthermore, the trial and appellate courts found that counsel's failure to tender the bills to Employer constituted adequate justification for the late payment. Further, the appellate court expressly stated that Employer had no "duty to actively seek out a claimant's medical bills either through the use of a subpoena or some other method in order to comply with the requirements of section 19(l)." Accordingly, the Commission's award of section 19(l) penalties was against the manifest weight of the evidence. Reversal of Section 19(l) penalties affirmed. Theis v. Illinois Workers' Compensation Comm'n, 2017 IL App (1st) 161237WC  (Mar. 17, 2017)

LEF PRESENTS TO AMERICAN RENTAL ASSOCIATION OF CHICAGOLAND: David I. Walters recently conducted an educational seminar at the pre-convention Tabletop Show and Dinner hosted by the American Rental Association of Chicagoland, a nonprofit trade association for equipment rental businesses and manufacturers and suppliers of rental equipment.  The event was well attended by the owners and operators of equipment rental facilities throughout the Chicagoland area and Northern Illinois.  The seminar included an analysis of the recent amendments to the Illinois Theft Statute, which now make the theft of rental equipment and revenue a crime. Mr. Walters also provided a general overview and tutorial of the litigation process, with an emphasis on risk reduction and damage mitigation. 

PRIVILEGES: QUALITY ASSURANCE ACT / MEDICAL STUDIES ACT:  Nursing home Patient was injured during a fall. Witness statements were taken and a report was prepared as part of an internal investigation of the occurrence.  In Patient's negligence action against Nursing Home, Nursing Home withheld from discovery the statements and report, claiming they were privileged pursuant to the Quality Assurance Act and the Medical Studies Act. The trial court ordered the documents produced, and after Nursing Home refused, Nursing Home appealed the contempt order entered against it.  Noting that no Illinois appellate court opinion had yet interpreted the Quality Assurance Act (which applies to long-term-care facilities), the Appellate Court held that the Quality Assurance Act should be interpreted harmoniously with the Medical Studies Act (which applies to medical facilities such as hospitals). The Appellate Court affirmed the trial court, and ordered the statements and report to be produced.  In so holding, the Court noted that, although the report and statements were eventually reviewed by the quality assurance committee, because they were made prior to such peer-review committee meeting, the privilege did not apply. Lindsey v. Butterfield Health Care II, Inc., 2017 IL App (2d) 160042 (Feb.9, 2017). 

STATUTE OF FRAUDS: Parents owned various real estate in Chicago. Pursuant to a 2003 oral agreement with their Son, Son would manage the property. Son alleged that, pursuant to this 2003 oral agreement, in exchange for "the commitment of a lifetime of work", Parents agreed to make Son an equal partner in their real estate business.  In 2012, Parents brought suit against Son, alleging he breached his fiduciary duties to them. During the pendency of the action, Parents died, and their Daughter was substituted as a party in her capacity as executor of their Estate. Son then filed a counterclaim against Sister, alleging that she exerted undue influence over Parents and manipulated them to terminate the 2003 oral agreement. Son's counterclaim sought enforcement of the alleged 2003 oral agreement. The trial court dismissed Son's counterclaim on the basis that, because the contract was not one that could be performed within the space of one year, it was therefore unenforceable under the Statute of Frauds (740 ILCS 80/1).  Affirmed on appeal.  Church Yard Commons Limited Partnership v. Podmajersky, Inc., 2017 IL App (1st) 161152 (Mar. 28, 2017).

ANSWER TO QUIZ: General Contractor (GC) is entitled to summary judgment, Surveyor loses. Surveyor did not develop any evidence that GC directed the manner in which he surveyed, that GC was aware of Surveyor's presence on the morning of the accident, or that GC had any knowledge of the hazardous method Surveyor used to check for the benchmarks in the corridor. Surveyor also failed to establish that GC exerted sufficient control over Subcontractor's work because the evidence showed that Subcontractor was free to dictate the means and methods of its own work. Notably, summary judgment was also entered in favor of Subcontractor. Snow v. Power Construction Company, LLC,2017 IL App (1st) 151226 (May 4, 2017).