BELOW THE RED LINE - Heyl Royster
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BELOW THE RED LINE
WORKERS’ COMPENSATION UPDATE
“WE’VE GOT YOU COVERED!”
A NEWSLET TER FOR EMPLOYERS & CLAIMS PROFESSIONALS J A N U A RY 2 0 2 2
virtually, but there are some case of Country Mutual Insurance
WORKERS’ motion hearings that require an in- Co. v. Under Construction and
COMPENSATION person appearance. But generally Remodeling, Inc., the Appellate
speaking, the Commission in Illinois Court grappled with what
PUBLICATION TEAM
is keeping as much as practical obligations are owed by each party
Toney J. Tomaso in an insurance contract before
virtual, except trials and certain
Practice Chair
motion hearings. a determination could be made
Amber D. Cameron regarding whether a breach of the
Editor & January Feature Author With enthusiasm, I want to share cooperation clause had occurred
the news of the return of Heyl to nullify the insurer’s duty to
Royster’s Workers’ Compensation defend or indemnify the employer
Practice Group’s Fall Claims in the workers’ compensation
A WORD FROM THE Handling Seminar in 2022. Dates claim. Amber talks about the
PRACTICE CHAIR and times are under consideration, “take-aways” or lessons our clients
but we will continue with a virtual can appreciate and learn from this
format. I can report our Team is fact pattern which does come up
If you enjoy cold weather, then now and again. It is always best to
eager to be back in action providing
January 2022 has been right up know the rules the Courts want us
you and your Team with cutting-
your alley. For the rest of us, grab to play by when figuring out who is
edge updates and content to help
another blanket or sweatshirt, turn upholding their end of the
you with your everyday claims
up your thermostat, and dream contract.
handling needs. For those clients
about spring. Under the “count
interested in an in-person visit,
your blessings” subject matter, I am
we can accommodate that as well.
pleased that my job is one where
Contact me and we can work on
I work indoors on days like today.
setting that up. More details will
My sincere thanks to those who
follow regarding the Fall Claims
brave the cold and work outside
Handling Seminar as the planning
during these winter months.
unfolds.
A quick COVID update regarding
In this month’s article my partner,
the Illinois Workers’ Compensation
Amber Cameron, outlines for
Commission: Docket calls and
us what happened in a case
pre-trial hearings are still virtual
where a workers’ compensation
(via Webex), and that will continue
carrier asserted its insured failed
into the foreseeable future. Our
to cooperate in investigation,
workers’ compensation trials, Toney J. Tomaso
thus nullifying the carrier’s duty
or arbitration hearings, are still Workers' Compensation
to defend or indemnify the
taking place in-person. Most Practice Chair
employer in the pending workers’
motion hearings are occurring
compensation matter. In the ttomaso@heylroyster.com
2019 while working for his in the insurance policy. Country
employer, Under Construction Mutual claimed Szymanski
and Remodeling, Inc. (“Under was not an employee of Under
FEATURE ARTICLE Construction”) and filed a timely Construction based on an audit
Application for Adjustment of that did not list Szymanski
Country Mutual vs. Claim with the Illinois Workers’ as an employee, therefore
Under Construction: Compensation Commission. the workers’ compensation
Insurer and Employer Under Construction had policy did not apply. Further,
a workers’ compensation Under Construction had failed
Contractual Duties insurance policy at the time to cooperate with Country
with Country Mutual Insurance Mutual’s investigation of the
By Amber Cameron Company (“Country Mutual”). claim by not responding to its
Country Mutual began efforts correspondence and therefore,
T
here are basic duties that to investigate Szymanski’s the insurer had no obligation
apply to relationships injury claim and as part of to defend or indemnify the
between insureds and that investigation, contacted employer in the workers’
insurers. The insurance policy Under Construction for more compensation claim filed by
between the insurer and the information. Country Mutual Szymanski.
insured is a contract and the claimed to have attempted to
language of that contract spells contact Under Construction Szymanski was personally
out the duties of each party. nine times within a four-month served with the civil complaint
In general, most policies state period, but the employer failed and entered an appearance,
that if a suit or claim is filed, to respond. but Under Construction was
the insured has a duty to the only served through leaving
insurer to give notice of the the complaint with a registered
filing, a duty to cooperate with agent on file with the Illinois
defense of the claim, and a duty Secretary of State. Under
of good faith and fair dealing. Construction failed to enter
The insurer has a duty to defend an appearance or answer in
and indemnify the insured in the the civil claim and the Court
claim. granted Country Mutual’s
Motion for Default Judgment
The Facts against Under Construction.
Country Mutual later filed a
In Country Mutual Insurance Country Mutual filed a Motion for Summary Judgment
Co. v. Under Construction complaint against Under with the sole argument that
and Remodeling, Inc., the Construction (and Szymanski Country Mutual had exercised a
Appellate Court of Illinois, First as a necessary part to the suit) reasonable degree of diligence
District, overturned a grant for a declaratory judgment in seeking Under Construction’s
of summary judgment to the in Cook County, claiming it cooperation in defense of
insurance carrier of an Illinois had no duty to defend or the underlying workers’
workers’ compensation policy. indemnify the employer, Under compensation claim without
2021 IL App (1st) 210600. Construction, in Szymanski’s success and Under Construction
Petitioner Kazimierz Szymanski workers’ compensation claim had breached the cooperation
(“Szymanski”) alleged an injury because the insured had clause of the insurance policy.
to his left shoulder on July 2, breached the cooperation clause In support, Country Mutual
2 / B elo w the R ed L i n e
stated that it made phone calls further that the employer’s The Appellate Court noted the
to Under Construction but was failure to respond to letters and insurer had attempted to reach
unable to leave messages, sent calls as alleged did not mean the policyholder employer
letters by US mail, and sent it was willfully noncooperative by phone, mail, email and
emails without a response. with the workers’ compensation through personal service but
Additionally, Country Mutual claim. Summary judgment was the evidence didn’t indicate
had sent a special investigator to granted on the basis of the any communications reached
the registered agent’s address. employer’s breach of contract the employer or if they did,
The evidence submitted to the under the cooperation clause of did not make clear to Under
Court however did not include the insurance policy. Construction that it was required
the phone numbers, physical to respond and participate in
addresses, email addresses or After summary judgment was the investigation. The insurer did
the time of day contact was entered in Country Mutual’s not hire a special investigator
attempted. Further, the letters favor, Szymanski filed an appeal until after the civil complaint
were not certified (but for the as a defendant in Country was filed, and the investigator’s
reservation of rights letter), Mutual’s declaratory judgment efforts did not prove any contact
and the record did not include complaint. The Appellate was reached with the insured.
whether any of the letters Court reversed the summary While Under Construction had
were returned undelivered or judgment and remanded recently renewed its policy
if anyone had signed for the the case back to the Circuit with the same insurance
one certified letter. The insurer Court. The basis for summary broker, Country Mutual did not
claimed the silence by Under judgment was the employer’s attempt contact through the
Construction was “willful refusal breach of the insurance policy’s broker or the address for Under
to cooperate” and this refusal cooperation clause with respect Construction listed on the new
“greatly prejudiced” Country to the insurer’s investigation policy. The Court opined that
Mutual’s ability to obtain of Szymanski’s workers’ the insurer did try to reach
facts necessary to defend the compensation claim. However, the insured but did not show
workers’ compensation claim. the burden of establishing reasonable diligence in its
breach of contract rests on effort and the lack of response
A default judgment was entered the insurer; in order for the by the insured in this case was
by the Cook County Circuit insurer to make a prima facie not enough to demonstrate a
Court against the employer, case of failure to cooperate, willful refusal to cooperate in
Under Construction, after it must prove both a breach the investigation of the workers’
which the insurer moved for of the cooperation clause in compensation claim. In short,
summary judgment. In response the contract and resulting the insurer did not do enough to
to the Motion for Summary substantial prejudice to the be relieved of its duty to defend
Judgment, injured employee insurer. and indemnify the employer.
Szymanski claimed Country The summary judgment was
Mutual had failed to establish The Appellate Court ruled that reversed and the claim was
how it was prejudiced by the record did not establish remanded.
Under Construction’s alleged that the insurer engaged in
failure to cooperate, argued “reasonable diligence” in Conclusion
that the insurer had not attempting to secure the
displayed a reasonable degree employer’s cooperation in The holding in Country Mutual
of due diligence in seeking the the workers’ compensation makes clear that in order for
employer’s cooperation, and investigation and defense. an insurer to be relieved of its
3 / B elo w the R ed L i n e
duty to defend and indemnify
an insured for breach of the
cooperation clause of an
insurance policy, there must be ABOUT THE AUTHOR
convincing evidence that the
insurer made a diligent effort to Amber Cameron
solicit the insured’s cooperation
in the defense of the claim in Heyl Royster Partner Amber Cameron
addition to persuasive evidence concentrates her practice in workers’
that the insured willfully refused compensation and toxic tort litigation.
to cooperate in the investigation. Her previous experience as a staff
What actions could the insurer attorney for the Illinois Workers’
have taken after its initial efforts Compensation Commission provides
to contact the insured failed her unique expertise when representing
to elicit a response? It would employers of all sizes at dockets in
likely have gone a long way Missouri and southern Illinois—having
with the court if the insurer had drafted hundreds of opinions on review and on remand, gaining
confirmed the insurer’s good advanced knowledge in workers’ compensation law. Additionally,
addresses and phone numbers she devotes a portion of her practice to the defense of asbestos
for its correspondence through personal injury suits, representing the firm’s clients at depositions,
a skip trace service, Szymanski hearings, and procedural matters.
himself, or policy broker. The
correspondence should have
Amber earned her law degree and a certificate in dispute
also directly outlined the action
resolution from the University of Missouri-Columbia School of
that the insured needed to take
Law. As a law student, she served as Vice-Justice of the Lawson
to assist in the defense of the
Chapter of Phi Alpha Delta Law Fraternity and excelled in legal
claim and the consequences of
inaction. Further, if the insurer writing, winning Best Brief in the Board of Advocates Moot Court
provided evidence of receipt Competition.
by the insured of certified mail
sent, used a special investigator
to attempt service before filing
the declaratory judgment, or
used other sources that were
likely to disclose and reach the
insured and then pursued the
leads that were generated, the
Court would have likely found
that the insured breached
the cooperation clause of the
policy if they failed to respond
and relieved the insurer of its
duty to defend and indemnify
the insured in the workers’
compensation claim.
4 / B elo w the R ed L i n eREGIONAL ZONE MAPS
Zone 5 Zone 5
Zone 5 Woodstock Waukegan
Rockford
Zone 6
Dockets Covered: Elgin
Zone 6
Cape Girardeau • Jefferson City Rockford Wheaton
Contact Attorney:
Joplin • Kansas City • Springfield
Missouri Zone
St. Joseph • St. Louis Chicago
Chicago Zone
Brad A. Antonacci Zone 6
Geneva Chicago
bantonacci@heylroyster.com Contact Attorneys: Zone
Kevin J. Luther Toney J. Tomaso Zone 3 Zone 4
kluther@heylroyster.com ttomaso@heylroyster.com Rock Island Zone 4 Joliet
Ottawa
312.971.9807 Amber D. Cameron
Peoria Zone 4
Dockets Covered: acameron@heylroyster.com Kankakee
Elgin • Geneva • Wheaton 314.241.2018
Zone 3
Zone 6
Contact Attorney: Peoria Zone 3
Kevin J. Luther Champaign
Zone 2 Bloomington
kluther@heylroyster.com Springfield
Zone 2
815.963.4454 Urbana
Zone 2
Dockets Covered: Quincy Springfield
Rockford • Waukegan • Woodstock St. Joseph Kansas City
Zone 5
Contact Attorneys:
Kevin J. Luther
Jefferson City
kluther@heylroyster.com
815.963.4454 St. Louis Edwardsville
St. Louis Zone 1
Dockets Covered:
Mt. Vernon
Kankakee • Joliet • Ottawa Zone 1
Zone 4
Contact Attorney: Collinsville
Kevin J. Luther Cape Girardeau
Springfield
kluther@heylroyster.com
815.963.4454
Dockets Covered: Joplin Zone 1
Herrin
Bloomington • Rock Island • Peoria
Zone 3
Contact Attorney:
Jessica M. Bell
jbell@heylroyster.com
309.676.0400
Workers’ Compensation State of Wisconsin
Dockets Covered:
Quincy • Springfield • Urbana Practice Chair Contact Attorney:
Contact Attorney:
Zone 2
Contact Attorney: Kevin Luther - kluther@heylroyster.com
Bruce L. Bonds Toney Tomaso - ttomaso@heylroyster.com 815-963-4454
bbonds@heylroyster.com 217-344-0060
217.344.0060
Dockets Covered: Workers’ Compensation Appellate
Collinsville • Herrin • Mt. Vernon Jones Act Claims
Contact Attorneys:
Zone 1
Contact Attorneys:
Toney Tomaso - ttomaso@heylroyster.com Contact Attorney:
Toney J. Tomaso
217-344-0060 Ann Barron - abarron@heylroyster.com
ttomaso@heylroyster.com
Christopher Drinkwine - cdrinkwine@heylroyster.com 618-656-4646
618.656.4646
815-963-4454
WORKERS’ COMPENSATION OFFICE LOCATIONS
Champaign Chicago Edwardsville Peoria Rockford Springfield St. Louis
301 N. Neil St. 33 N. Dearborn St. 105 W. Vandalia St. 300 Hamilton Blvd. 120 W. State St. 3731 Wabash Ave. 701 Market St.
Suite 505 Seventh Floor Mark Twain Plaza III Second Floor Second Floor Springfield, IL Peabody Plaza
Champaign, IL Chicago, IL Suite 100 Peoria, IL Rockford, IL 62711 Suite 1505
61820 60602 Edwardsville, IL 61602 61101 217.522.8822 St. Louis, MO
217.344.0060 312.853.8700 62025 309.676.0400 815.963.4454 63101
618.656.4646 314.241.2018
WWW.HEYLROYSTER.COM
5 / B elo w the R ed L i n eWORKERS’ COMPENSATION PRACTICE GROUP
Practice Group Chair
Toney Tomaso
ttomaso@heylroyster.com
Champaign Office Chicago Office Edwardsville Office
Contact Contact Contact
Attorney: Attorney: Attorney:
Bruce Bonds Brad Antonacci Toney Tomaso
bbonds@heylroyster.com bantonacci@heylroyster.com ttomaso@heylroyster.com
John Flodstrom Kevin Luther John Flodstrom
jflodstrom@heylroyster.com kluther@heylroyster.com jflodstrom@heylroyster.com
Joseph Guyette Joseph Rust Amber Cameron
jguyette@heylroyster.com jrust@heylroyster.com acameron@heylroyster.com
Toney Tomaso Britanny Jocius Springfield Office
ttomaso@heylroyster.com bjocius@heylroyster.com
Contact
Attorney:
Leah Nolan Dan Simmons
Samuel Brolley dsimmons@heylroyster.com
sbrolley@heylroyster.com lnolan@heylroyster.com
John Langfelder
Peoria Office Jessica Petrovski jlangfelder@heylroyster.com
jpetrovski@heylroyster.com
Contact
Attorney: Jessica Bell
Jessica Bell Emma Ray jbell@heylroyster.com
jbell@heylroyster.com eray@heylroyster.com
Bruce Bonds St. Louis Office
bbonds@heylroyster.com Rockford Office
Contact Attorneys:
Contact
Attorney: Toney Tomaso
Craig Young Kevin Luther ttomaso@heylroyster.com
cyoung@heylroyster.com kluther@heylroyster.com
Amber Cameron
James Manning Heidi Agustsson acameron@heylroyster.com
hagustsson@heylroyster.com
jmanning@heylroyster.com
Jordan Emmert Jenna Scott
Melinda Rowe-Sullivan jemmert@heylroyster.com
jscott@heylroyster.com
mrowesullivan@heylroyster.com
Joe Pishghadamian Appellate
jpishghadamian@heylroyster.com
Contact
Attorney:
Steve Getty Toney Tomaso
sgetty@heylroyster.com ttomaso@heylroyster.com
Christopher Drinkwine
cdrinkwine@heylroyster.com
6 / B elo w the R ed L i n eBelow is a sampling of our practice groups highlighting a partner who practices
in that area – For more information, please visit our website
www.heylroyster.com
Appellate Advocacy Healthcare
Ann Barron Katie H. Anderson
abarron@heylroyster.com kanderson@heylroyster.com
Business and Commercial Litigation Insurance Services
John Heil Patrick Cloud
jheil@heylroyster.com pcloud@heylroyster.com
Business Organizations & Transactions Long Term Care/Nursing Homes
Ken Davies Tyler Robinson
kdavies@heylroyster.com trobinson@heylroyster.com
Casualty/Tort Litigation Professional Liability
Nick Bertschy Renee Monfort
nbertschy@heylroyster.com rmonfort@heylroyster.com
Civil Rights/Section 1983 & Correctional Healthcare Toxic Torts & Asbestos
Keith Fruehling Jennifer Johnson
kfruehling@heylroyster.com jbjohnson@heylroyster.com
Construction Trucking/Motor Carrier Litigation
Mark McClenathan Matt Hefflefinger
mmcclenathan@heylroyster.com mhefflefinger@heylroyster.com
Employment & Labor Workers’ Compensation
Brian Smith Toney Tomaso
bsmith@heylroyster.com ttomaso@heylroyster.com
Governmental
Andy Keyt
akeyt@heylroyster.com
Scan this QR Code
for more information about
our practice groups and attorneys
Peoria Champaign Chicago Edwardsville Rockford Springfield St. Louis Jackson
300 Hamilton Blvd. 301 N. Neil St. 33 N. Dearborn St. 105 W. Vandalia St. 120 W. State St. 3731 Wabash Ave. 701 Market St. 200 W. Jackson St.
Second Floor Suite 505 Seventh Floor Mark Twain Plaza III Second Floor Springfield, IL Peabody Plaza Suite 200
Peoria, IL Champaign, IL Chicago, IL Suite 100 Rockford, IL 62711 Suite 1505 Ridgeland, MS
61602 61820 60602 Edwardsville, IL 61101 217.522.8822 St. Louis, MO 39157
309.676.0400 217.344.0060 312.853.8700 62025 815.963.4454 63101 800.642.7471
618.656.4646 314.241.2018
Under professional rules, this communication may be considered advertising material. Nothing herein is intended to constitute legal advice on any subject or to create an attorney-client relationship. The cases or statutes discussed are in summary form.
To be certain of their applicability and use for specific situations, we recommend that the entire opinion be read and that an attorney be consulted. Prior results do not guarantee a similar outcome.
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