2015 IL App (1st) 143836WC

                            2015 IL App (1st) 143836WC

                                 NO. 1-14-3836WC

                      Opinion filed: December 18, 2015
________________________________________________________________________

                                       IN THE

                        APPELLATE COURT OF ILLINOIS

                                  FIRST DISTRICT

            WORKERS' COMPENSATION COMMISSION DIVISION
________________________________________________________________________

TOMMY OLIVER,                          )    Appeal from the
                                       )    Circuit Court of
      Appellee,                        )    Cook County.
                                       )
v.                                     )    No. 14-L-50328
                                       )
THE ILLINOIS WORKERS'                  )    Honorable
COMPENSATION COMMISSION, et al.        )    James M. McGing,
(Rausch Construction, Appellant).      )    Judge, presiding.
________________________________________________________________________

        JUSTICE STEWART delivered the judgment of the court, with opinion.
        Presiding Justice Holdridge and Justices Hoffman, Hudson, and Harris concurred
in the judgment and opinion.

                                     OPINION

¶1    On July 28, 2011, the claimant, Tommy Oliver, filed an application for adjustment

of claim pursuant to the Workers' Compensation Act (Act) (820 ILCS 305/1 et seq. (West

2010)), seeking benefits for injuries he allegedly sustained on July 19, 2011, while

working for the employer, Rausch Construction.




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¶2     On October 3, 2011, the claimant filed a petition for penalties under sections 19(k)

and 19(l) of the Act (820 ILCS 305/19(k), (l) (West 2010)) and attorney fees under

section 16 of the Act (820 ILCS 305/16 (West 2010)), claiming that the employer had not

paid temporary total disability (TTD) benefits or his medical bills. The employer filed a

response, asserting that it had subpoenaed the claimant's medical records and informed

the claimant's attorney of its need for additional records to determine compensability.

¶3     On February 21, 2013, the claim proceeded to an arbitration hearing. On March 9,

2012, the arbitrator filed a decision, awarding the claimant TTD benefits of $1,087.20 per

week for 12.429 weeks, from August 1 through October 25, 2011; $20,510.37 in medical

expenses; and permanent partial disability (PPD) benefits of $695.78 per week for 50.6

weeks, representing a 20% loss of use of the right arm. The arbitrator also awarded the

claimant $4,230 in section 19(l) penalties, $17,011.50 in section 19(k) penalties, and

$6,804.64 in section 16 attorney fees, finding that the employer's refusal to pay him TTD

benefits and medical expenses was unreasonable and vexatious. The arbitrator noted that

the employer did not dispute liability based on the claimant's medical records; instead,

the employer denied benefits based on the fact that the claimant did not report the

accident until six days after it occurred.

¶4     The employer sought review of the arbitrator's decision before the Illinois

Workers' Compensation Commission (Commission).             On November 26, 2012, the

Commission filed its decision, finding that penalties and attorney fees should not be

imposed against the employer because the employer's conduct in the defense of this claim

was neither unreasonable nor vexatious. The Commission reversed the arbitrator's award
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of penalties and attorney fees, corrected the arbitrator's decision to reflect an award of

TTD benefits for 12 2/7 weeks, corrected several minor typographical errors, and

otherwise affirmed and adopted the arbitrator's decision.

¶5     The claimant filed a timely petition for judicial review in the circuit court of Cook

County. The circuit court remanded the matter to the Commission for further findings of

fact regarding the Commission's decision as to penalties and attorney fees. The employer

appealed the circuit court's decision to the appellate court, but the appeal was dismissed

for lack of jurisdiction because the circuit court's remand order was not a final order.

¶6     On March 18, 2014, the Commission issued its decision on remand.                In its

decision on remand, the Commission restated its reasons for denying penalties and

attorney fees in its original decision.

¶7     The claimant filed a timely petition for judicial review in the circuit court. On

December 2, 2014, the circuit court entered its opinion, finding that the Commission's

decision as to penalties and attorney fees was against the manifest weight of the evidence.

The circuit court, therefore, reversed the Commission's decision and reinstated the

arbitrator's decision with respect to penalties and attorney fees.

¶8     The employer filed a timely appeal. On appeal, the employer argues that the

Commission's decision as to penalties and attorney fees was not against the manifest

weight of the evidence. For the reasons that follow, we affirm the judgment of the circuit

court, which reversed the Commission's decision and reinstated the arbitrator's decision

with respect to penalties and attorney fees.

¶9                                    BACKGROUND
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¶ 10   On July 28, 2011, the claimant filed an application for adjustment of claim

pursuant to the Act, seeking benefits for injuries he allegedly sustained on July 19, 2011,

while working for the employer.

¶ 11   On October 3, 2011, the claimant filed a petition for penalties under sections 19(k)

and 19(l) of the Act and attorney fees under section 16 of the Act, claiming that the

employer had not paid TTD benefits or his medical bills. The employer filed a response,

asserting that it had subpoenaed the claimant's medical records and informed his attorney

of its need for additional records to determine compensability.

¶ 12   On February 21, 2012, the claim proceeded to an arbitration hearing.             The

pertinent evidence presented at the arbitration hearing can be summarized as follows.

¶ 13   The claimant testified that, on July 19, 2011, he was working as a pile driver for

the employer on a project at Belmont Harbor, which is on the shore of Lake Michigan in

Chicago. The only other days he had worked for the employer were July 15 and 18,

2011. He stated that, on the day of the accident, he was standing on a small barge using

an acetylene and oxygen torch to cut steel when some sparks or fire flew out and struck

him in the chest. He testified that, in response, he jerked his right arm back, striking his

right elbow against a steel wall. He stated that, when he hit his elbow, he "hollered out."

He testified that a co-worker, Tita Gosten, heard him holler out and asked if he was hurt.

¶ 14   The claimant testified that, after he hit his elbow, he worked the rest of the day and

was laid off at the end of the day. At that time, he noticed bruising and a little blood. He

testified that he did not report the accident that day because he thought it was just a

regular injury that comes with construction work. He explained that he did not report
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every bump and bruise he received on the job. That evening, his elbow began swelling,

and, over the next several days, the swelling and discomfort worsened.

¶ 15   On July 25, 2011, the claimant saw Dr. Bryan Waxman, an orthopedic surgeon at

the Illinois Bone and Joint Institute, reporting that he had injured his right elbow at work

approximately a week earlier when he hit his elbow on a metal beam and that he had

noticed swelling and some discomfort that night. The doctor noted that, approximately

10 years earlier, the claimant had a triceps avulsion, which had been surgically repaired,

and that his elbow had been fine since that time. Dr. Waxman suspected another triceps

avulsion and ordered a magnetic resonance imaging (MRI) scan, which showed a full-

thickness tear involving the triceps tendon.

¶ 16   After seeing Dr. Waxman on July 25, 2011, the claimant called the employer to

report his accident.    His call was directed to Patrick Kutzer, the employer's site

superintendent. The claimant testified that Kutzer told him that he should have reported

the accident on the day it occurred and that Kutzer would not allow him to fill out an

accident report even though he tried to explain that he was not aware of the extent of his

injuries on the day of the accident.

¶ 17   Dr. Waxman surgically repaired the claimant's right triceps tendon on August 1,

2011. The claimant followed up with Dr. Waxman after surgery and underwent physical

therapy from August 18 through October 24, 2011. Dr. Waxman released him to return

to work with a 15 pound lifting restriction on his right arm on October 25, 2011. He

testified that he then went to work for Aretha Construction, where he was a foreman most

of the time. Dr. Waxman released him from his care on December 14, 2011, noting that
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he was "pretty much doing all of his normal activities." The doctor advised him to

slowly get back to heavy lifting, noting that it could take him six to nine months to do so.

¶ 18   The claimant testified that he still did not have full use of his right arm and that he

was still experiencing pain when welding, especially when working overhead. He stated

that he could not keep his arm in the same spot for very long when it was elevated

because it was painful. He testified that he had pain in the joints of his arm. He stated

that lifting was also painful, especially lifting something into a truck. He testified that he

understood that this was just something he had to live with. He stated that he had not

been back to Dr. Waxman and that the doctor had given him pain pills, which he only

used when he had to. He denied injuring his right arm since the day of the accident.

¶ 19   The claimant testified that he had injured his right arm in a work-related accident

in 1999. As a result, he had undergone surgery to repair his triceps tendon and had

received a settlement of 20% loss of use of his right arm. He stated that he had stopped

treating for that injury about a year later and that he had returned to work. He testified

that, from approximately 2000 until his injury on July 19, 2011, he had received no

treatment for his right arm.

¶ 20   At the time of the arbitration hearing, the employer had not paid any workers'

compensation benefits or medical bills related to the claimant's July 19, 2011, injury.

The claimant testified that the only reason the employer had given him for refusing to pay

him benefits was that he did not report the accident on the day it occurred.

¶ 21   Patrick Kutzer, the employer's site superintendent at Belmont Harbor, testified on

the employer's behalf. The claimant worked for him as a pile driver on July 15, 18, and
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19, 2011. He testified that, during those three days, he interacted with the claimant

before work, at break times, and at the end of the day. He stated that, when he saw the

claimant periodically throughout the day on July 19, 2011, he did not notice the claimant

having any pain or problems. He testified that he had spoken to the claimant after work

that day because it was the claimant's last day.

¶ 22   Kutzer testified that on July 25, 2011, the claimant called to say that he wanted

Kutzer to fill out an accident report for the last day he was there because he had hurt

himself on the job. Kutzer stated that he told the claimant that he could not fill out an

accident report a week after the accident occurred. He testified that it was his experience

as a superintendent or job foreman that the accident report had to be filled out the day of

the accident. He stated that he "didn't know you could even fill one out after the fact."

¶ 23   Kutzer testified that he had burned sheet pile with a torch hundreds of times. He

stated that, when cutting with a torch, it was common for molten metal, sparks, or slag to

blow back in the direction of the person doing the cutting.

¶ 24   On cross-examination, Kutzer acknowledged that he knew of no factual or medical

basis to dispute that the claimant was injured at work on July 19, 2011. He testified that,

as far as he knew, the only issue the employer had with this case was that the claimant

reported his accident six days after it occurred.

¶ 25   On March 9, 2012, the arbitrator issued a decision, awarding the claimant TTD

benefits of $1,087.20 per week for 12.429 weeks, from August 1 through October 25,

2011; $20,510.37 in medical expenses; and PPD benefits of $695.78 per week for 50.6

weeks, representing a 20% loss of use of his right arm. The arbitrator also awarded the
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claimant $4,230 in section 19(l) penalties; $17,011.59 in section 19(k) penalties; and

$6,804.64 in section 16 attorney fees, finding that the employer's refusal to pay him TTD

benefits and medical expenses was unreasonable and vexatious. The arbitrator explained

her reasoning as follows:

             "[The claimant's] Petition for Penalties and Attorneys' Fees was filed Oct. 3,

       2011. [Citation.] [The employer] filed a Response on Oct. 4, 2011, indicating it

       had informed [the claimant's] counsel additional medical records were needed to

       determine compensability and that it had subpoenaed those records.               The

       Arbitrator takes [the employer] at its word and notes [the employer] did not rely

       on the medical records as a basis for disputing liability at trial. The only reason

       for denying benefits apparent from the record is that [the claimant] waited six days

       to report the accident. [The employer's] only witness testified that was the only

       basis for dispute as far as he knew. Since the accident consisted of bumping the

       back of his right elbow against a metal wall, [the claimant's] hope that his injury

       would be just another of many bumps and bruises not requiring medical care or an

       accident report, was *** entirely reasonable. The denial of benefits for this reason

       in the face of the medical records was not reasonable."

¶ 26   The employer sought review of the arbitrator's decision before the Commission,

arguing that the arbitrator erred in awarding penalties and attorney fees because the

claimant's failure to report a work injury on the day it occurred was a reasonable basis for

challenging liability. The employer relied on Kutzer's testimony that the claimant did not


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appear to be in pain, that the claimant did not report an accident on that day, and that the

claimant did not inform Kutzer of his injury until six days later.

¶ 27   In response, the claimant argued that the employer's failure to pay TTD benefits

and medical bills was unreasonable, vexatious, and solely for the purpose of delay as the

medical records fully supported his claim. He argued that the fact that he reported the

accident six days after it occurred does not create a reasonable basis for the employer's

failure to pay benefits as he credibly testified that his right elbow condition worsened

after he went home on the day of the accident.

¶ 28   On November 26, 2012, the Commission filed its opinion, finding that penalties

and attorney fees "should not be imposed against [the employer] in the present case"

because "[the employer's] conduct in the defense of this claim was neither unreasonable

nor vexatious as there were legitimate issues in dispute with respect to accident and

causal connection, such as [the claimant's] failure to report a work accident on his last

day of work, [the claimant's] request to fill out an accident report six days after the

reported work injury and Mr. Kutzer's testimony."          The Commission reversed the

arbitrator's award of penalties and attorney fees, corrected the arbitrator's decision to

reflect an award of TTD benefits for 12 2/7 weeks, corrected several minor typographical

errors, and otherwise affirmed and adopted the arbitrator's decision.

¶ 29   The claimant filed a timely petition for judicial review in the circuit court. The

circuit court remanded the matter to the Commission for further findings of fact regarding

the Commission's decision as to penalties and attorneys fees. The employer appealed the


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circuit court's decision to the appellate court, but the appeal was dismissed for lack of

jurisdiction because the circuit court's remand order was not a final order.

¶ 30   On March 18, 2014, the Commission issued its decision on remand, which

provides, in pertinent part, as follows:

             "In compliance with the circuit court's order, the Commission expands on

       the reasons why it found [the claimant] ineligible for penalties and attorney fees as

       stated in its November 26, 2012, Decision and Opinion on Review.                 The

       Commission denies [the claimant's] request for penalties pursuant to sections 19(k)

       and 19(l) and attorney fees pursuant to section 16 based on the following: (1)

       although [the claimant] alleged he injured his right elbow on his last day of work,

       he failed to report he had sustained a work accident that day; (2) [the claimant]

       sought medical treatment and requested to complete an accident report six days

       after the reported work injury; and (3) Mr. Kutzer, [the claimant's] supervisor on

       the day of the accident, testified that [the claimant] did not appear to be in pain

       and did not report an accident on the day he claimed it occurred. These facts

       provide reasonable explanation for [the employer's] denial of [the claimant's]

       claim and show that [the employer's] refusal to pay benefits was not frivolous,

       vexatious or solely for the purpose of delay."

¶ 31   The claimant filed a timely petition for judicial review in the circuit court, arguing

that the Commission's decision as to penalties and attorney fees was against the manifest

weight of the evidence. The circuit court agreed and, on December 2, 2014, entered an

order, reversing the Commission's decision and reinstating the arbitrator's decision with
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respect to penalties and attorney fees.     The circuit court explained its reasoning as

follows:

            "All three (3) of the Commission's purported reasons to support its decision

      are, in reality, the same reason. That [the claimant] did not report his accident on

      the day it happened and waited six (6) days to file an accident report with the

      [e]mployer. The Commission attempts to set a precedent that cannot be allowed;

      that an employee must report an accident on the day it occurs in order to be

      eligible for benefits. Such an idea is specifically prohibited by the Act, which

      provides that an accident must be reported within 45 days of its occurrence. 820

      ILCS 305/6(c).

            Further, and more importantly, the [c]ourt notes that the [employer] refused

      to allow [the claimant] to file an accident report six (6) days after the alleged

      accident. The [employer] then attempts to argue that it reasonably believed that

      there was no causal connection between the work accident and [the claimant's]

      current condition of ill-being. The [employer] never allowed [the claimant] to file

      a report and therefore never conducted an investigation into the accident. An

      employer cannot be allowed to willfully decide not to investigate a matter and then

      argue that, even though [it] did not look into it, [it] reasonably believed [it] did not

      have to pay benefits.

            Had the [employer] allowed [the claimant] to file an accident report,

      investigated it, and then determined that there was no causal connection, then [its]

      delay in paying benefits would be wholly reasonable and not vexatious. This point
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       becomes even more important as [the claimant] testified before the Arbitrator that

       a fellow employee was present when he was injured, and noticed his reaction to

       the accident. That is something the [employer] would likely have found out had

       [it] investigated the accident. The [employer] stuck its head in the sand and then

       argued that it could not see or hear anything so it was reasonable for [it] to think

       nothing was there.       That is a dangerous precedent that cannot be allowed."

       (Emphasis in original)

¶ 32                                     ANALYSIS

¶ 33   On appeal, the employer argues that the Commission's decision as to penalties and

attorney fees was not against the manifest weight of the evidence. The intent of sections

19(l), 19(k), and 16 of the Act "is to implement the Act's purpose to expedite the

compensation of industrially injured workers and penalize an employer who

unreasonably, or in bad faith, delays or withholds compensation due an employee." Avon

Products, Inc. v. Industrial Comm'n, 82 Ill. 2d 297, 301, 412 N.E.2d 468, 470 (1980).

"Penalties for delayed payment are not intended to inhibit contests of liability *** by

employers who honestly believe an employee not entitled to compensation; they are

intended to promote the prompt payment of compensation where due and to deter those

occasional employers or insurance carriers who might withhold payment from other than

legitimate motives." Id. at 301-02, 412 N.E.2d at 470.

¶ 34   The standard for awarding penalties under section 19(l) differs from the standard

for awarding penalties and attorney fees under sections 19(k) and 16. McMahan v.

Industrial Comm'n, 183 Ill. 2d 499, 514-15, 702 N.E.2d 545, 552-53 (1998).
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¶ 35   We begin our analysis by considering the Commission's denial of penalties under

section 19(l) of the Act, which provides, in pertinent part, as follows:

             "In case the employer or his or her insurance carrier shall without good and

       just cause fail, neglect, refuse, or unreasonably delay the payment of benefits

       under Section 8(a) or Section 8(b), the Arbitrator or the Commission shall allow to

       the employee additional compensation in the sum of $30 per day for each day that

       the benefits *** have been so withheld or refused, not to exceed $10,000. A delay

       in payment of 14 days or more shall create a rebuttable presumption of

       unreasonable delay." (Emphasis added). 820 ILCS 305/19(l) (West 2010).

¶ 36   Penalties imposed under section 19(l) are "in the nature of a late fee." McMahan,

183 Ill. 2d at 515, 702 N.E.2d at 552. Moreover, the award of section 19(l) penalties is

mandatory "[i]f the payment is late, for whatever reason, and the employer or its carrier

cannot show an adequate justification for the delay." Id. "The standard for determining

whether an employer has good and just cause for a delay in payment is defined in terms

of reasonableness." Jacobo v. Illinois Workers' Compensation Comm'n, 2011 IL App

(3d) 100807WC, ¶ 20, 959 N.E.2d 772. The employer bears the burden of justifying the

delay, and its justification is sufficient only if a reasonable person in the employer's

position would have believed the delay was justified. Board of Education of the City of

Chicago v. Industrial Comm'n, 93 Ill. 2d 1, 9-10, 442 N.E.2d 861, 865 (1982). The

Commission's determination of the reasonableness of the delay is a question of fact,

which will not be disturbed unless it is against the manifest weight of the evidence.

Jacobo, 2011 IL App (3d) 100807WC, ¶ 20, 959 N.E.2d 772.                   The Commission's
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decision is against the manifest weight of the evidence only if the opposite conclusion is

clearly apparent. Beelman Trucking v. Illinois Workers' Compensation Comm'n, 233 Ill.

2d 364, 370, 909 N.E.2d 818, 822 (2009).

¶ 37   Here, the Commission found that the employer's refusal to pay benefits was

reasonable because (1) although the claimant alleged he was injured on his last day of

work, he did not report the accident that day; (2) he sought medical treatment and asked

to complete an accident report six days later; and (3) his supervisor on the day of the

accident testified that he did not appear to be in pain and did not report an accident on the

day it occurred.

¶ 38   As the circuit court noted in its order, "[a]ll three (3) of the Commission's

purported reasons to support its decision are, in reality, the same reason." All of the

Commission's purported reasons center around the fact that the claimant did not report his

accident on the day it occurred. This is not a legitimate basis for denying workers'

compensation benefits.

¶ 39   According to the Act, notice of an accident must be reported to the employer

within 45 days of the accident. 820 ILCS 305/6(c) (West 2010). Here, there is no

dispute that the claimant reported the accident to the employer six days after it occurred.

¶ 40   "The purpose of the notice requirement is to enable the employer to investigate the

alleged accident." Seiber v. Industrial Comm'n, 82 Ill. 2d 87, 95, 411 N.E.2d 249, 252

(1980). "Compliance with the requirement is accomplished by placing the employer in

possession of the known facts related to the accident within the statutory period." Id.


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¶ 41   Here, the claimant's notice after six days clearly fulfilled the purpose of the Act's

notice requirement and was not a legitimate basis for withholding benefits. The circuit

court astutely described the employer's unreasonable conduct in this case. After the

claimant reported his accident to Kutzer, he was denied the opportunity to fill out a

formal accident report, and there is no evidence that the employer investigated the claim

in any manner. Instead, the employer denied the claim off-hand, simply because it was

not reported on the day of the accident. Kutzer acknowledged that, as far as he knew, the

employer had no factual or medical basis to deny the claim, and the only basis he knew of

for the denial of the claim was that the claimant reported the accident six days after it

occurred. The employer had ample opportunity to investigate the facts and circumstances

of this claim but chose not to do so.

¶ 42   In its brief to this court, the employer further argues that Kutzer's testimony that he

did not notice the claimant's pain on the day of the accident somehow creates a

reasonable basis for denial of benefits. However, whether Kutzer, a lay witness, noticed

that the claimant was experiencing symptoms after his accident is of no consequence in

the face of clear and undisputed medical records, which detail the claimant's work

accident and injury. Again, Kutzer acknowledged that the only issue the employer had

with the claim was that the claimant reported his accident six days after it occurred.

¶ 43   Furthermore, when examined along with the medical records and the claimant's

testimony, the six-day delay in reporting the accident was reasonable. The claimant's

injury worsened over the several days after his accident and did not respond to rest at

home. He, therefore, sought medical treatment and reported his accident to the employer
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six days later. The employer did not dispute the claim based on medical evidence or

witness testimony.    Instead, it disputed the claim based solely on the fact that the

claimant did not report his accident on the day it occurred.

¶ 44   To reach its conclusions in this case, the Commission had to ignore the letter of

the law in finding that reporting an accident six days after it occurred is a reasonable

basis for disputing a workers' compensation claim. As noted above, a claimant has 45

days to report an accident to an employer under the Act. The Commission did not cite

any legal authority to support its position that not reporting an accident on the day it

occurred is a reasonable basis for disputing a claim; nor did the employer cite such legal

authority in its appellate brief. Furthermore, the Commission did not even attempt to

explain how the employer's refusal to pay the claimant benefits in this case was

reasonable in the face of medical records and testimony, which clearly demonstrate a

work-related accident and injury.

¶ 45   As the circuit court noted in its decision in this case:

             "The Commission attempts to set a precedent that cannot be allowed; that an

       employee must report an accident on the day it occurs in order to be eligible for

       benefits. Such an idea is specifically prohibited by the Act, which provides that an

       accident must be reported within 45 days of its occurrence. 820 ILCS 305/6(c)."

¶ 46   The Commission seemingly found that an employer can deny benefits on any

claim that is not reported on the day of the accident. Kutzer testified that he did not know

that he was even allowed to fill out an accident report after the accident date, evidencing

the employer's apparent one day reporting policy. Such a position is in direct contrast to
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the clear language of the Act, which allows 45 days to report an accident to an employer.

Furthermore, such a position is unreasonable based upon the fact that many workplace

injuries do not manifest themselves until days after the accident, and many claimants are

not in a position to report their accident on the day it occurred. The employer argues that

the claimant should have reported his accident on the day it occurred because he began

feeling some symptoms that day. Again, the employer's position is unsupported by any

authority and is not supported by the record in this case. The record shows that the

claimant tried to give his injury time to improve, believing at first that it was a common

workplace injury that did not require medical treatment or an accident report; however,

when the injury did not improve over the next several days, he decided that he needed to

seek medical treatment and reported the accident to the employer. His course of action

was reasonable and is not a legitimate basis for the employer's denial of benefits.

¶ 47   The burden of providing a reasonable basis for denial of benefits falls solely on the

employer.    The record is clear that the employer denied this claim, without any

investigation, solely because the claimant did not report the accident on the day it

occurred. As the employer has provided no authority for such a denial, it has failed to

provide a reasonable basis for that denial. Therefore, we find that the Commission's

determination that the employer's refusal to pay benefits was reasonable is against the

manifest weight of the evidence. Under section 19(l), when the employer's refusal to pay

benefits is without good and just cause, penalties are mandatory. Accordingly, we affirm

the circuit court's order reversing the Commission's decision and reinstating the

arbitrator's decision with respect to penalties under section 19(l).
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¶ 48   We turn now to the Commission's denial of penalties and attorney fees under

sections 19(k) and 16 of the Act. Section 19(k) provides, in pertinent part, that "where

there has been any unreasonable or vexatious delay of payment *** the Commission may

award compensation additional to that otherwise payable under this Act equal to 50% of

the amount payable at the time of such award." (Emphasis added). 820 ILCS 305/19(k)

(West 2010). Section 16 provides for an award of attorney fees and costs when an award

of additional compensation under section 19(k) is appropriate. 820 ILCS 305/16 (West

2010). The amount of attorney fees to be awarded is a matter within the discretion of the

Commission. Jacobo, 2011 IL App (3d) 100807WC ¶ 22, 959 N.E.2d 772.

¶ 49   The standard for awarding penalties and attorney fees under sections 19(k) and 16

is higher than the standard for awarding penalties under section 19(l) because sections

19(k) and (16) require more than an "unreasonable delay" in payment of benefits.

McMahan, 183 Ill. 2d at 514-15, 702 N.E.2d at 552. For the award of penalties and

attorney fees under sections 19(k) and 16, it is not enough for the claimant to show that

the employer simply failed, neglected, or refused to make payment or unreasonably

delayed payment without good and just cause. Id. at 515, 702 N.E.2d at 552. Instead,

penalties and attorney fees under sections 19(k) and 16 are "intended to address situations

where there is not only delay, but the delay is deliberate or the result of bad faith or

improper purpose." Id., 702 N.E.2d at 553. In addition, while section 19(l) penalties are

mandatory, the imposition of penalties and attorney fees under sections 19(k) and 16 is

discretionary. Id.


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¶ 50   Accordingly, our review of the Commission's decision to deny section 19(k)

penalties and section 16 attorney fees differs from our analysis of the Commission's

decision to deny section 19(l) penalties. A review of the Commission's decision to deny

section 19(k) penalties and section 16 attorney fees involves a two-part analysis. Id. at

516, 702 N.E.2d at 553. First, we must determine whether the Commission's finding that

the facts do not justify section 19(k) penalties and section 16 attorney fees is against the

manifest weight of the evidence.        Id.     Second, we must determine whether the

Commission abused its discretion in refusing to award such penalties and attorney fees

under the facts in the present case.      Id.   An abuse of discretion occurs when the

Commission's ruling is arbitrary, fanciful, or unreasonable, or where no reasonable

person would take the view adopted by the Commission. Blum v. Koster, 235 Ill. 2d 21,

36, 919 N.E.2d 333, 342 (2009).

¶ 51   We agree with the circuit court's conclusion that section 19(k) penalties and

section 16 attorney fees should have been awarded in this case. The employer's conduct

was not the result of simple inadvertence or neglect. More was involved than just a lack

of good and just cause. The employer made a deliberate decision not to honor its

statutory obligations to the claimant, and it did so simply because the claimant did not

report the accident on the day it occurred. Based on the testimony of the employer's only

witness in this case, the claimant's supervisor, the employer's refusal to pay benefits in

this case was apparently the product of its established policy that if an accident is not

reported on the day it occurs, it cannot be reported at all, and no benefits will be paid.

This policy contravenes section 6 of the Act, which allows an employee 45 days to report
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an accident. See 820 ILCS 305/6(c) (West 2010). Under these circumstances, the

Commission's determination that the facts do not support section 19(k) penalties and

section 16 attorney fees is against the manifest weight of the evidence. We further hold

that, under the facts of this case, the Commission's refusal to award such penalties and

attorney fees was an abuse of discretion.

¶ 52                               CONCLUSION

¶ 53   For the foregoing reasons, we affirm the judgment of the circuit court of Cook

County, which reversed the Commission's decision and reinstated the arbitrator's decision

with respect to penalties and attorney fees.

¶ 54   Affirmed.




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