                                      2019 IL App (1st) 182526
                                 Nos. 1-18-2526 & 1-19-0015 (Cons.)
                                         September 30, 2019

                                                                                 FIRST DIVISION



                                               IN THE

                                 APPELLATE COURT OF ILLINOIS

                                         FIRST DISTRICT


     ALPHONSE IANNONI,                             )      Appeal from the Circuit Court
                                                   )      Of Cook County.
          Plaintiff-Appellee,                      )
                                                   )      No. 18 L 50369
          v.                                       )
                                                   )      The Honorable
     THE CITY OF CHICAGO,                          )      James M. McGing,
                                                   )      Judge Presiding.
          Defendant-Appellant.                     )



         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
     Nos. 1-18-2526 & 1-19-0015 (Cons.)


        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 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

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        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:

               “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.”




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¶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.

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          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).

¶ 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.”



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          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

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                 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.

¶ 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

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          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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                                     No. 1-18-2526


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


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



Attorneys                    Jeffrey N. Powell, of Hennessy & Roach, P.C., of Chicago, for
for                          appellant.
Appellant:


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




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