Illinois State Treasurer v. The Illinois Workers' Compensation Commission

2013 IL App (1st) 120549WC, 2 N.E.3d 351

• Court: Appellate Court of Illinois
• Decided: November 18, 2013
• Docket: 1-12-0549WC
• Status: Unpublished

Opinion

2013 IL App (1st) 120549WC

Opinion filed: November 18, 2013

IN THE

APPELLATE COURT OF ILLINOIS

FIRST DISTRICT

WORKERS' COMPENSATION COMMISSION DIVISION

ILLINOIS STATE TREASURER, as ex ) Appeal from the Circuit Court officio Custodian of the Injured Workers' ) of Cook County, Illinois Benefit Fund, ) ) Appellant, ) ) v. ) Appeal No. 1-12-0549WC ) Circuit No. 10-L-51111 ) THE ILLINOIS WORKERS' COMPENSATION ) Honorable COMMISSION et al. (Joseph Meuse, Marilyn ) Margaret Brennan, Arnoux, Ken Schechtel d/b/a/ A New Millennium ) Judge, Presiding. Homecare, and Janina Anna Zakarzecka, ) Appellees). )

PRESIDING JUSTICE HOLDRIDGE delivered the judgment of the court, with opinion. Justices Hoffman, Hudson, Turner, and Stewart concurred in the judgment and opinion. ______________________________________________________________________________

OPINION

¶1 The claimant, Janina Zakarzecka, filed an application for adjustment of claim under the

Workers' Compensation Act (the Act) (820 ILCS 305/1 et seq. (West 2006)) seeking benefits for

injuries to her wrists which she allegedly sustained while working as a caregiver and companion

in a private home. Because her employer was uninsured for workers' compensation, the claimant 2013 IL App (1st) 120549WC

sought compensation from the Injured Workers' Benefit Fund (Fund). After conducting a

hearing, an arbitrator found that the claimant's injuries were caused by an accident that arose out

of and in the course of her employment and awarded the claimant temporary total disability

(TTD) benefits, permanent partial disability (PPD) benefits, and medical expenses.

¶2 The Illinois State Treasurer (Treasurer), as ex officio custodian of the Fund, appealed the

arbitrator's decision to the Illinois Workers' Compensation Commission (the Commission). The

Commission unanimously affirmed and adopted the arbitrator's decision.

¶3 The Treasurer sought judicial review of the Commission's decision in the circuit court of

Cook County, which confirmed the Commission's decision. This appeal followed. On January

7, 2013, we issued an unpublished order reversing the Commission's award of benefits. The

claimant filed a timely petition for rehearing arguing, for the first time, that we lack jurisdiction

to decide this appeal. We ordered the parties to brief the jurisdictional issues raised by the

claimant.

¶4 We hold that, because the Treasurer did not file an appeal bond as required by section

19(f)(2) of the Act (820 ILCS 305/19(f)(2) (West 2012)), we lack jurisdiction to decide the

Treasurer's appeal. We therefore withdraw our prior order and dismiss the appeal for lack of

jurisdiction.

¶5 FACTS

¶6 The claimant worked as a home healthcare provider, caregiver, and companion to Joseph

Meuse, an elderly man who was legally blind. One of her job responsibilities was to pick up

Meuse's mail. In order to retrieve the mail, the claimant had to walk down a flight of stairs to the

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front door. On May 10, 2007, the doorbell rang, and the claimant was preparing to go downstairs

to pick up a delivery. While attempting to change her shoes at the top of the stairs, the claimant

fell and was injured.

¶7 The claimant filed an Application for Adjustment of Claim seeking benefits for her

injuries and naming Meuse as the employer/respondent. Meuse died while her claim was

pending. The claimant subsequently amended her claim to add Meuse's estate and Ken Schechtel

as respondents.1 She also added the Fund as a respondent because Meuse did not have workers'

compensation insurance at the time of the claimant's injury.2

¶8 The arbitrator found that the claimant's accident arose out of and in the course of her

employment with Meuse and awarded the claimant TTD benefits, medical expenses, and

compensation for the permanent and partial loss of both of her hands. The Treasurer, acting as ex

officio custodian of the Fund, appealed the arbitrator’s decision to the Commission, which

1 Ken Schechtel owned and operated the employment agency that placed the claimant

with Meuse. 2 The Fund was established to provide workers' compensation benefits to injured workers

whose employers have failed to provide coverage under the Act. See 820 ILCS 305/4(d) (West

2010). When the Commission collects penalties and fines from uninsured employers, it deposits

those moneys into the Fund. Id. If the Fund has insufficient moneys to pay all claims at the end

of each fiscal year, the Commission distributes a pro rata share to each eligible claimant. Id. The

Commission may obtain reimbursement from the employer for compensation obligations paid by

the Fund. Id.

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unanimously affirmed and adopted the arbitrator's decision. The Treasurer then sought judicial

review of the Commission's decision in the circuit court of Cook County, which confirmed the

Commission's ruling.

¶9 The Treasurer appealed the Commission's decision in this Court. On January 7, 2013, we

issued an order reversing the Commission's award of benefits because we found that the claimant

had failed to present evidence supporting a reasonable inference that her injuries arose out of a

risk associated with her employment.

¶ 10 Thereafter, the claimant filed a timely petition for rehearing in which she argued, for the

first time, that we lack jurisdiction to decide the Treasurer's appeal. She maintained that we have

no jurisdiction for two alternative reasons. First, the claimant argued that the appeal involves a

claim against the State of Illinois, and is therefore barred from judicial review under section

19(f)(1) of the Act. See 820 ILCS 305/19(f)(1) (West 2012). In the alternative, the claimant

argued that judicial review was barred by section 19(f)(2) of the Act because the claimant failed

to file an appeal bond, a prerequisite for the circuit court's jurisdiction under that section. See

820 ILCS 305/19(f)(2) (West 2012). Both of these arguments raised issues of first impression.

Accordingly, we ordered the State to respond to the claimant's petition and allowed the claimant

to file a reply.

¶ 11 ANALYSIS

¶ 12 As noted, the claimant argues that we lack jurisdiction to review the Commission's order

because: (1) Section 19(f)(1) of the Act bars judicial review of claims against the State; and (2)

section 19(f)(2) of the Act bars judicial review because the Treasurer failed to file an appeal bond

4 2013 IL App (1st) 120549WC

with the clerk of the circuit court. We hold that the instant appeal is not an "appeal against the

State," and, therefore, is not barred by section 19(f)(1)). However, we agree with the claimant

that the Treasurer's failure to file an appeal bond deprives us of jurisdiction under section

19(f)(2). We address these issues in turn.

¶ 13 1. Section 19(f)(1)

¶ 14 The claimant argues that Section 19(f)(1) of the Act strips us of jurisdiction to decide the

Treasurer's appeal. We disagree. Section 19(f)(1) provides that "claims against the State of

Illinois" are "not subject to judicial review." 820 ILCS 305/19(f)(1) (West 2012). This provision

"embodie[s] the doctrine of sovereign immunity" (Yonikus v. Industrial Comm'n, 228 Ill. App. 3d

333, 336-37 (1992)), which prevents the State from being made a defendant in any court. We

have found no cases addressing whether a claim against the Illinois State Treasurer in his official

capacity as ex officio custodian of the Injured Workers' Benefit Fund is a claim "against the

State" for purposes of Section 19(f)(1) of the Act. However, our supreme court and our appellate

court have repeatedly reviewed Commission decisions involving claims brought against the

Treasurer as ex officio custodian of the Second Injury Fund, a special fund similar to the Fund at

issue in this case. See, e.g., Daugherty v. Industrial Comm'n, 99 Ill. 2d 1 (1983); State Treasurer

of Illinois v. Industrial Comm'n, 75 Ill. 2d 240 (1979); Arview v. Industrial Comm'n, 415 Ill. 522

(1953); Treasurer of State of Illinois v. Industrial Comm'n, 136 Ill. App. 3d 809 (1985). None of

these cases suggested that the exclusionary language in section 19(f)(1) stood as a barrier to the

circuit or appellate court's jurisdiction.3

3 This is significant, because a reviewing court has an independent obligation to

5 2013 IL App (1st) 120549WC

¶ 15 Moreover, "the determination of whether a suit is brought against the State and thus

barred by the doctrine of sovereign immunity does not depend on the identity of the formal

parties, but rather on the issue raised and the relief sought." Senn Park Nursing Center v. Miller,

104 Ill. 2d 169, 186 (1984) (internal quotation marks omitted). The dispositive question is

whether a judgment rendered in the case could operate to control the actions of the State or

subject it to liability. Village of Riverwoods v. BG Limited Partnership, 276 Ill. App. 3d 720,

725 (1995). In this case, the judgment entered against the Fund could neither control the

discretionary actions of the State nor subject the State to liability. The judgment merely requires

the disbursement of money from a Fund that is dedicated entirely to paying claims of eligible

claimants whose employers failed to provide workers' compensation insurance. See 820 ILCS

305/4(d) (West 2012). Moreover, nothing in section 4(d) of the Act suggests that the State will

be held liable for any judgment entered against the Fund. In fact, it suggests just the opposite by

noting that: (1) all judgments against the Fund shall be paid by disbursements out of the Fund;

(2) the Fund is comprised entirely of penalties and fines imposed against employers who fail to

carry workers' compensation insurance; and (3) "if there are insufficient moneys in the Fund to

determine its own jurisdiction, and questions of jurisdiction cannot be waived or forfeited by the

parties. See People ex rel. Madigan v. Illinois Commerce Commission, 231 Ill. 2d 370, 387

(2008). Thus, even though the parties apparently did not raise the issue of the courts' jurisdiction

in Daugherty, State Treasurer of Illinois, Arview, or Treasurer of State of Illinois, those cases

arguably stand for the proposition that section 19(f)(1) does not bar courts from reviewing

Commission decisions in cases like the one at issue here.

6 2013 IL App (1st) 120549WC

pay all claims, each eligible claimant shall receive a pro-rata share" of the available moneys in

the Fund for that year. Id. Thus, the State is not liable to pay any portion of any judgment

against the Fund, even when there are insufficient monies in the Fund to satisfy the judgments

entered against it.4

¶ 16 The claimant also argues that section 19(f)(1) bars judicial review in this case because

one of the purposes of the doctrine of sovereign immunity is "to preserve and protect State funds"

(citing People ex rel Manning v. Nickerson, 184 Ill. 2d 245, 248 (1998)), and the moneys in the

Fund are "state funds." In support of this argument, the claimant notes that section 4(d) of the

Act provides that the Fund "shall be deposited the same as are State funds," "is subject to audit

the same as are State funds and accounts," and "is protected by the general bond given by the

4 That makes perfect sense, because claims brought against the Treasurer as ex officio

custodian the Fund are maintained against an employer, and only derivatively against the Fund.

The employer is the party who is ultimately liable to pay the judgment. See 820 ILCS 305/4(d)

(West 2010) (providing that: (1) "[m]oneys in the Injured Workers' Benefit Fund shall be used

only for payment of workers' compensation benefits for injured employees when the employer

has failed to provide coverage *** and has failed to pay the benefits due to the injured

employee"; (2) "[t]he Commission shall have the right to obtain reimbursement from the

employer for compensation obligations paid by the Injured Workers' Benefit Fund"; and (3)

"[a]ny such amounts obtained shall be deposited by the Commission into the Injured Workers'

Benefit Fund."). The Treasurer merely safeguards the moneys in the Fund and is added as a

respondent so that he may represent the interests of the Fund before the Commission.

7 2013 IL App (1st) 120549WC

State Treasurer." 820 ILCS 305/4(d) (West 2010). In addition, the claimant argues that the

legislature has converted the moneys contained in the Fund to "state funds" by diverting portions

of the Fund to the FY09 Budget Relief Fund and the general revenue fund.5 See 30 ILCS

105/8.46 (West 2008); 30 ILCS 105/8.49 (West 2010).

¶ 17 We disagree. The plain language in section 4(d) quoted by the claimant does not

support the conclusion that the legislature considers the moneys in the Fund to be "state funds."

In fact, it supports the opposite conclusion. In section 4(d), the legislature notes that the Fund

should be treated "the same as" State funds, not "the same as other State funds" or "the same as

all State funds." In other words, the legislature provided that the monies in the Fund are to be

treated like State funds are treated. This does not suggest that those monies are State funds. To

the contrary, it suggests that the moneys in the Fund are not, in fact, state funds (at least not

according to the legislature). If the legislature considered the monies in the Fund to be State

funds, it would have said simply said so; it would not have said that those monies should be

treated "the same as" State funds.

¶ 18 Moreover, although the monies in the Fund are treated like "state funds" in certain

respects, that fact does not support the claimant's argument. The claimant noted that one of the

purposes of the doctrine of sovereign immunity is "to preserve and protect State funds."

5 In 2008, the legislature authorized the transfer of $500,000 from the Fund to the FY09

Budget Relief Fund "[n]otwithstanding any other State law to the contrary." 30 ILCS 105/8.46

(West 2008). In 2009, the legislature authorized a transfer of $3,290,560 from the Fund to the

general revenue fund. 30 ILCS 105/8.49 (West 2010).

8 2013 IL App (1st) 120549WC

However, that purpose would not be served by barring judicial review of claims like the one at

issue in this case. As noted above, the Fund exits solely to pay compensation claims to injured

employees whose employers fail to carry workers' compensation insurance. The Fund is

comprised entirely of penalties and fines imposed against employers who fail to carry workers'

compensation insurance. It does not consist of any public revenues. Moreover, as noted above, a

judgment against the Fund in this case would not impact any discretionary funding decisions by

the State or subject to the State to any potential liability. Thus, the policies animating the

doctrine of sovereign immunity are not implicated here.

¶ 19 Moreover, the fact that the legislature has diverted moneys from the Fund to other public

funds does not alter the analysis. As noted, the dispositive question is whether the judgment in

this case could subject the State to liability. It cannot. This is not a case wherein the claimant

has sued the State of Illinois for improper diversion of State funds. That would be a claim

against the State that could subject the State to liability for damages. However, as noted above,

the claim at issue here is brought only derivatively against the Fund and does not subject the

State to any potential liability.

¶ 20 For all these reasons, the exclusionary language in section 19(f)(1) does not bar us from

deciding this appeal because the claim at issue is not a "claim against the State."

¶ 21 2. Section 19(f)(2)

¶ 22 The claimant also argues that section 19(f)(2) of the Act bars judicial review in this case

because the Treasurer did not file an appeal bond. We agree.

9 2013 IL App (1st) 120549WC

¶ 23 Section 19(f)(2) provides that no summons authorizing a circuit court to review a

decision issued by the Commission shall issue "unless the one against whom the Commission

shall have rendered an award for the payment of money shall upon the filing of his written

request for such summons file with the clerk of the court a bond conditioned that if he shall not

successfully prosecute the review, he will pay the award and the costs of the proceedings in the

courts." 820 ILCS 305/19(f)(2) (West 2012). This requirement is jurisdictional. Berryman

Equipment v. Industrial Comm'n, 276 Ill. App. 3d 76, 78-79 (1995) (noting that because the bond

requirement is statutory, strict compliance is required to vest subject-matter jurisdiction in the

circuit court); see also Residential Carpentry, Inc. v. Kennedy, 377 Ill. App. 3d 499, 502-03

(2007). Section 19(f)(2) expressly exempts certain local government entities from the appeal

bond requirement. Specifically, it provides that "[e]very county, city, town, township,

incorporated village, school district, body politic or municipal corporation against whom the

Commission shall have rendered an award for the payment of money shall not be required to file

a bond[.]" Id. However, it does not exempt the Treasurer acting as ex officio custodian of the

Fund.

¶ 24 In this case, the Treasurer was joined with the employer as a party respondent in the

arbitration proceedings and represented the Fund's interests before the Commission. The

Commission entered an "an award for the payment of money" against the Fund.6 As noted, the

6 The arbitrator entered an award against the Fund "to the extent permitted and allowed

under § 4(d) of the Act, in the event of the failure of Respondent-Employer to pay the benefits

due and owing the [claimant]. Respondent-Employer shall reimburse the [Fund] for any

10 2013 IL App (1st) 120549WC

Treasurer is not expressly exempt from the appeal bond requirement. See 820 ILCS 305/19(f)(2)

(West 2012). Accordingly, in order to issue a summons and initiate judicial review of the

Commission's order, the Treasurer was required to file an appeal bond with the circuit court. Id.

Because the Treasurer did not file such a bond, the circuit court lacked jurisdiction over the

claimant's appeal, and so do we. See Berryman Equipment, 276 Ill. App. 3d at 78-79; see also

Kennedy, 377 Ill. App. 3d at 502-03.

¶ 25 The Treasurer argues that, when section 19(f)(2) is read in its proper context, it is clear

that the legislature intended the bond requirement to apply to employers who have had judgments

awarded against them, not to the Treasurer acting as ex officio custodian of the Fund. However,

this argument finds little support in the plain language of section 19(f)(2). That section requires

an appeal bond to be filed by "the one against whom the Commission shall have rendered an

award for the payment of money," not by "the employer." "The best indicator of the legislature's

intent is the plain language of the statute itself, which must be given its plain and ordinary

meaning." Will County Forest Preserve District v. Illinois Workers' Compensation Comm'n,

2012 IL App (3d) 110077WC, ¶ 18. If the legislature had intended to limit the application of the

appeal bond requirement to "employers," it could easily have done so. Instead, it deliberately

chose to impose the bond requirement upon "the one against whom the Commission shall have

rendered an award for the payment of money," a broader phrase which covers a larger class of

respondents. As noted, in this case, the Commission entered an "award for the payment of

compensation obligations of Respondent-Employer that are paid to the [claimant] from the

[Fund]." The Commission affirmed and adopted the arbitrator's decision and award.

11 2013 IL App (1st) 120549WC

money" against the Fund. Accordingly, by the plain terms of section 19(b), the bond requirement

applies to the Fund (and thereby to the Treasurer, who acts on behalf of the Fund and represents

its interests in the Commission proceedings and during any judicial review of those

proceedings).7

¶ 26 The Treasurer notes that, in other statutes, the legislature has not required State officers

to file an appeal bond. See, e.g., Ill. S. Ct. R. 305i (eff. July 1, 2004) (regarding appeals by

public agencies); 735 ILCS 5/4-107 (2010) (regarding orders of attachment); 735 ILCS 5/11-103

(2010) (regarding restraining orders or preliminary injunctions). From this fact, the Treasurer

argues that the rule that no appeal bond is required of State officers "is applied with such

7 The Treasurer cites Celeste v. Industrial Comm'n, 205 Ill. App. 3d 423, 427 (1990), in

which we ruled that "[t]he [section 19(b)] bond requirements clearly apply only to those

employers against whom liability for payment of a compensation judgment may attach."

However, in Celeste, we addressed the question whether the bond requirement applied to

claimants (i.e., employees) seeking review of a Commission decision. We answered that

question in the negative because "an employee is not one against whom an award of money has

been rendered." Id. at 426. It was in that context that we stated that the bond requirement

applies only to "employers" against whom liability for payment of a judgment may attach. In

Celeste, we did not address the question presented here, i.e., whether the custodian of a Fund

against which an award for the payment of money has been made should be required to file a

bond under section 19(b). Accordingly, Celeste is inapposite.

12 2013 IL App (1st) 120549WC

regularity as to make it extremely unlikely that the general Assembly would provide for a

departure sub silentio."

¶ 27 We do not find this argument persuasive. First, as a general matter, "a statute must be

enforced as written, and a court may not depart from the statute's plain language by reading into

it exceptions, limitations, or conditions not expressed by the legislature." State Bank of Cherry v.

CGB Enterprises, Inc., 2012 IL App (3d) 100495, ¶ 28. Moreover, because section 19(f)(2)'s

bond requirement is jurisdictional, we should be particularly wary of reading exemptions into the

statute based upon on the legislature's practice in other contexts. A circuit court's jurisdiction to

review a decision of the Commission is a "special statutory power" (Forest Preserve District of

Cook County v. Industrial Comm'n, 305 Ill. App. 3d 657, 660 (1999)) that must be exercised

within the limits prescribed by the relevant statute (see In re Rami M., 285 Ill. App. 3d 267, 272

(1996) ("In cases where the court is conferred power to adjudicate by virtue of a statute, the

court's jurisdiction is strictly limited by the statute.")). While Illinois courts are courts of general

jurisdiction and are presumed to have subject-matter jurisdiction, this presumption does not

apply to workers' compensation proceedings. Kavonius v. Industrial Comm'n, 314 Ill. App. 3d

166, 169 (2000). Rather, on appeal from a decision of the Commission, the circuit court obtains

subject matter jurisdiction "only if the appellant complies with the statutorily-prescribed

conditions set forth in the Act." Kennedy, 377 Ill. App. 3d at 502. Thus, in order to vest subject

matter jurisdiction in the circuit court, an appellant must "strictly comply with the bond

requirements of section 19(f)(2)." Id. at 503; see also Berryman Equipment, 276 Ill. App. 3d at

13 2013 IL App (1st) 120549WC

78-79. Accordingly, it would be inappropriate to read exemptions into the bond requirement that

are not clearly expressed in the statute.

¶ 28 Moreover, it would be particularly inappropriate to read an unexpressed exemption into

section 19(f)(2)'s bond requirement because the statute already contains several express

exemptions. As noted, the statute explicitly exempts "[e]very county, city, township,

incorporated village, school district, body politic, or municipal corporation against whom the

Commission shall have entered an award for the payment of money" from the bond requirement.

820 ILCS 305/19(f)(2) (West 2012). The Treasurer was not included in this list of exempted

entities. Under the principle of expressio unius est exclusio alterius, "the enumeration of

exceptions in a statute is construed as an exclusion of all other exceptions." People ex rel.

Sherman v. Cryns, 203 Ill. 2d 264, 286 (2003); see also Hocraffer v. Trotter General

Contracting, Inc., 2013 IL App (3d) 120539, ¶ 12. Further, nothing in section 19(f)(2) states or

implies that a State officer acting as the custodian of a special fund is not required to file an

appeal bond. Thus, even if we found section 19(f)(2) to be ambiguous as to the issue presented

in this case (which we do not), principles of statutory construction would require us to find that

the Treasurer is not exempt from the bond requirement.

¶ 29 If the legislature wishes to exempt the Treasurer from section 19(b)'s bond requirement

in cases in which the Treasurer seeks review of a Commission decision as custodian of the Fund,

it may achieve that result by amending the statute. Until that occurs, it would be improper for us

to try to divine such an intention in an unambiguous statute that does not bear that construction.

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We will not read unexpressed exceptions into a jurisdictional requirement that already contains

express exemptions for other entities.

¶ 30 Moreover, requiring the Treasurer to file a bond in cases like this is sound public policy.

As the claimant noted in her petition for rehearing, the State has recently diverted portions of the

Fund to the FY09 Budget Relief Fund and the general revenue fund on at least two occasions.

See 30 ILCS 105/8.46 (West 2008); 30 ILCS 105/8.49 (West 2010). The State has done this

despite the fact that section 4(d) of the Act explicitly provides that "[m]oneys in the [Fund] shall

be used only for payment of workers' compensation benefits for injured employees" and "shall be

paid out and disbursed as herein provided and shall not at any time be appropriated or diverted

to any other use or purpose." (Emphasis added.) 820 ILCS 305/4(d) (West 2010). If the State

continues to divert monies from the Fund to other purposes, the Fund might be depleted below

the amount necessary to pay all eligible claims, forcing injured claimants to settle for a pro rata

share of the remaining proceeds in partial payment on their claims.8 Requiring the Treasurer to

file an appeal bond will help to ensure that each claimant collects the entire amount to which he

or she is entitled under the Commission's award. Given the recent diversions of funds by the

legislature, claimants are in need of this protection now more than ever.

8 See 820 ILCS 305/4(d) (West 2012) ("At the time of disbursement, if there are

insufficient moneys in the Fund to pay all claims, each eligible claimant shall receive a pro-rata

share, as determined by the Commission, of the available moneys in the Fund for that year.

Payment from the [Fund] to an eligible claimant pursuant to this provision shall discharge the

obligations of the [Fund] regarding the award entered by the Commission.")

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¶ 31 CONCLUSION

¶ 32 Because the Treasurer did not file a bond under section 19(f)(2) of the Act, the circuit

court did not have jurisdiction to review the Commission's decision. We therefore vacate the

circuit court's decision. Pursuant to Rule 19(f) of the Act, the Commission's decision is final.

We withdraw our prior order and dismiss this appeal for lack of jurisdiction.

¶ 33 Appeal dismissed.