APPELLATE COURT REVERSES COMMISSION AWARD OF PENALTIES
By Robert Jennetten
Penalties and attorney’s fees under Sections 19(l), 19(k) and 16 should not be awarded when the employer denies benefits relying on a reasonable medical opinion or where there are conflicting medical opinions. The test is whether the employer’s reliance on such a medical opinion or conflicting medical opinions is objectively reasonable. Where no reasonable person could conclude that an employer was not entitled to rely on the medical opinions of three separate physicians, it is an abuse of discretion for the Commission to award penalties.
In Reynolds v. Industrial Commission filed in the Third District Appellate Court on November 9, 2009, the worker’s compensation panel of the appellate court held that the Commission abused its discretion in awarding penalties. A construction laborer claimed that he injured his neck while erecting scaffolding. He reached for the end of a heavy plank with his neck snug to the metal scaffold and while pulling on the plank he felt a tingling vibration and spasm down his neck. He continued to work for a few days and then sought treatment from a chiropractor for neck pain and arm weakness. Shortly thereafter, a primary care physician ordered an MRI which showed significant multilevel changes. The primary care physician questioned relationship between the work accident and these conditions. Dr. Delheimer, serving as a treater, opined that Petitioner had multilevel degenerative changes. Petitioner followed with Dr. Robert Eilers and Dr. DePhillips who opined that his neck problem was work related. After additional testing, Dr. DePhillips performed a three level fusion. Dr. Gunner Andersson examined Petitioner for the employer and opined that the conditions in Petitioner’s cervical spine were not caused by the work accident. The Arbitrator awarded TTD, medical expenses and penalties. The Commission affirmed. The trial court affirmed except as to penalties. The appellate court affirmed the trial court upholding reversal of the Commission’s penalties award. The appellate court concluded that the employer could objectively rely on the opinions of the three doctors who questioned causation. The court held that since no reasonable person could agree with the conclusion reached by the Commission that the employer engaged in vexatious and unreasonable conduct, the Commission abused its discretion.
It is unusual for the appellate court to reverse a Commission award of penalties and attorney’s fees which makes this a very significant decision. This is a slip opinion and it is possible that the employee will seek leave to appeal to the Illinois Supreme Court. There was no dissent and so it is unlikely that the court will take the case.
The important lesson is that penalties should not be awarded against an employer where the decision to deny benefits was objectively reasonable because it was based on a reasonable medical opinion. If Dr. Andersson’s opinion had not been supported by the primary care physician and Dr. Delheimer, the result may have been different. Even so, reliance on a well reasoned opinion from a competent examining physician should be sufficient to avoid penalties. This decision may have a chilling effect on the Commission’s propensity to award penalties and attorneys fees.