WCLA MCLE Smalley Steel Ring What Happens When

WCLA MCLE • Smalley Steel Ring: What Happens When the Petitioner Is Not Who He Says He Is • Mark P. Matranga, Wiedner & Mc. Auliffe • Wednesday August 5, 2009 • 12: 00 noon to 1: 00 pm • James R. Thompson Center Auditorium, Chicago, IL • 1 hour general MCLE credit

Issue • Does the Arbitrator have the authority to recall his decision, reopen proofs and issue a second decision when it is subsequently discovered that Petitioner used a false identity to obtain benefits in the Arbitrator’s first decision?

Workers’ Compensation Act • Section 19(b): “Unless a petition for review is filed by either party within 30 days after the receipt by such party of the copy of the decision…then the decision shall become the decision of the Commission and in the absence of fraud shall be conclusive. ” 820 ILCS 305/19(b) • Section 19(f): “The decision of the Commission acting within its powers, according to the provisions of paragraph (e) of this Section shall, in the absence of fraud, be conclusive unless reviewed as in this paragraph hereinafter provided. However, the Arbitrator or the Commission may on his or its own motion, or on the motion of either party, correct any clerical error or errors in computation within 15 days after the date of receipt of any award by such Arbitrator or any decision on review of the Commission and shall have the power to recall the original award on arbitration or decision on review, and issue in lieu thereof such corrected award or decision. Where such correction is made the time for review herein specified shall begin to run from the date of receipt of the corrected award or decision. ” 820 ILCS 305/19(f)

Previous Interpretations • Michelson v. IC, 375 Ill. 462 (1941): The Commission does not have the authority to set aside its decisions on the basis of fraud; without express authority, the Commission does not have jurisdiction to act and the parties are relegated to a Court of equity for relief under a charge of fraud. • Wilson-Raymond v. IC, 79 Ill. 2 d 45 (1980): There is no provision for recall or reconsideration of a decision other than that provided in Section 19(f). • Ming Auto Body v. IC, 387 Ill. App. 3 d 244 (2008): The clear and unambiguous language of Section 19(f) does not authorize an Arbitrator or the Commission to reopen and set aside a prior final decision, even where it is asserted that the award is based on fraud.

Harry Diaz v. Smalley Steel Ring 04 WC 041924 • 7 -09 -2004: DA • 8 -31 -04: Harry Diaz files Application alleging injury to his left arm • 4 -07 -05: Arbitrator Erbacci awards Petitioner Harry Diaz medical and TTD on 19(b) • 5 -10 -05: Respondent files “Emergency Motion to Recall Decision & Reopen Proofs” • 5 -13 -05: Arbitrator conduct hearing on Motion and reopens proofs • 8 -23 -05: Arbitrator conducts hearing and hears additional evidence about Petitioner’s use of false ID • 9 -1 -05 : Commission considers and denies Petition for Penalties for failure to pay award (05 IWCC 0979) • 11 -15 -05: Arbitrator issues second decision denying benefits

Diaz v. Smalley Steel Ring 06 IWCC 0947 • Petitioner files Review • Commissioners Sherman & Dauphin, 10 -30 -06 • “The Commission agrees with the Petitioner’s position that the Arbitrator did not have the statutory authority (i. e. jurisdiction) to recall his final decision, to reopen proofs, and to issue a second decision; ” relying on Sections 19(b) and 19(f) • Cites Michelson • Different from a Motion to Reopen before a decision is issued by the Arbitrator; Roberts v. Bridgestone, 02 IIC 663; and Radulescu v. LSG, 03 IIC 884

Smalley Steel Ring v. IWCC 386 Ill. App. 3 d 993, 900 N. E. 2 d 1161, 326 Ill. Dec. 914 (2008) • Confirmed by Circuit Court of Lake County, 06 MR 1535, Honorable Mary S. Schostok • Unanimous Appellate Court decision (Mc. Cullough, Gordon, Grometer, Holdridge & Donovan, 12 -12 -08) affirms Commission • “The Act expressly provides for recall of an Arbitrator’s decision in only one instance, i. e. , to correct clerical or computational errors. The Arbitrator did not have the statutory authority to act and, therefore, was without jurisdiction to recall his decision, reopen proofs and issue a second decision. The Commission was correct in its assessments and its decision should not be overturned on review. ” • “Employer may seek recourse for claimant’s fraudulent conduct. The appropriate forum for its allegations is in the circuit court. More specifically, we note Section 25 of the Act expressly provides for criminal penalties and civil liability in the event of fraudulent workers’ compensation claims. ” • “Such deficiencies in the Act should be addressed by the legislature. ”

Questions • What does “in the absence of fraud” mean? • What does “conclusive” mean? • Can parties waive, release or settle Section 25. 5 fraud provisions? • When is a case final? • What should the legislature do to address the “deficiencies” pointed out by the Appellate Court?