Last week, the First District Appellate Court granted our Motion to Publish and issued its decision in Loyola University Medical Center v. The Illinois Workers’ Compensation Commission, 2015 IL (1st) 130984WC, as an opinion.  The significance of this decision, and the rationale behind our effort to get it published, is that it established that a necessary component of the Commission’s authority to assess penalties and attorney fees against a party who fails to comply with an approved settlement contract is that the Commission has jurisdiction to interpret the terms of the settlement contract.

While Flynn v. Industrial Commission, 94 Ill.App.3d 844 (1981), long ago established that the Commission has the authority to assess penalties and attorney fees against a party who fails to comply with the terms of an approved settlement contract, the particular circumstances of our case had yet to be addressed by a higher court: rather than a specific dollar amount being at issue, the contract terms in Loyola referenced “any claim for reimbursement by any entity, which provided long term or short term disability payments….”  The Loyola decision expands Flynn by explaining that it would be impossible for the Commission to determine if a party’s refusal to pay warranted the imposition of penalties and fees without first interpreting the contract’s terms: “Stated differently, to assess whether claimant was entitled to penalties and attorney fees, the Commission had to necessarily determine whether there had been a breach of the settlement contract.” Loyola University of Chicago, 2015 IL (1st) 130984WC-U, ¶20.  With this opinion, we now have appellate precedent establishing that the Commission is empowered to “interpret the settlement contract as originally drawn to ascertain the parties’ intent.” Loyola University of Chicago, 2015 IL (1st) 130984WC-U, ¶22.

The Loyola decision is also significant in that the Court felt “compelled” to address the Commission’s finding that it lacked jurisdiction to consider penalties and attorney fees “because the settlement contract contained language explicitly waiving claimant’s right to them.” Loyola University of Chicago, 2015 IL (1st) 130984WC-U, ¶26. The Court emphatically rejected the Commission’s determination as contrary to law and inconsistent with the intent of the Act.

Attorney Fees, First District Appellate Court