Heyl Royster

 


Heyl Royster

 

Is the Respondent Required to Pay PPD Awards in a Lump Sum?

11/26/19

By: Brad Antonacci, Chicago Office

When an Arbitrator or the Commission issues an award for PPD, the gut reaction is to pay the PPD award in a lump sum. However, according to the recent case of Iannoni v. City of Chicago, 2019 IL App (1st) 182526, respondent does not necessarily need to pay the award in a lump sum, but rather can pay any non-accrued benefits on a weekly basis.

In Iannoni, petitioner suffered an injury in the course of his employment with respondent, the City of Chicago. He filed a Workers’ Compensation claim and respondent began paying Workers’ Compensation benefits as the parties proceeded to arbitration. Following arbitration, the Arbitrator entered a final decision awarding petitioner both temporary total disability benefits and permanent partial disability benefits. The TTD benefits awarded totaled $134,884.68, and respondent had already paid $128,694.95, leaving a balance of $6,189.73 for TTD. The Arbitrator further awarded petitioner permanent partial disability benefits to the extent of 35% loss of use of person-as-a-whole under Section 8(d)(2) of the Act, equaling 175 weeks of benefits. The PPD benefits were awarded at the rate of $721.66 per week. Neither party challenged the award.

Following the award, respondent sent a check to petitioner for $62,890.49. The check covered the balance of the temporary total disability benefits due and more than 70 weeks of permanent partial disability benefits that had accrued. Respondent then sent petitioner a second check for $3,135.78, covering a little more than four weeks of PPD benefits. They did not pay the entire PPD award in a lump sum.

Petitioner then filed a complaint against respondent in circuit court, seeking immediate payment of the remainder of the PPD award, plus interest and attorney’s fees. Respondent argued that it chose to pay petitioner monthly amounts to match the mandatory rate of $721.66 per week until it paid the entire PPD amount the Arbitrator awarded. Respondent argued that, since petitioner was being paid PPD for the entire upcoming month, even though those weekly benefits had not yet accrued as of the date they were issued, petitioner was actually receiving the weekly PPD benefits early.

The circuit court held that petitioner was entitled to a lump sum PPD payment in exchange for the loss of the complete use of his person. The circuit court entered a judgment in favor of petitioner for the amount of the unpaid PPD benefits plus attorney’s fees in the amount of $34,247.50. In a supplemental order, the circuit court additionally awarded petitioner $3,429.77 in interest. Respondent appealed.

On appeal, the appellate court reversed the circuit court’s order requiring immediate payment of the PPD amount that had not accrued as of the date of the order. Also, because respondent had made timely payments of all amounts due, the appellate court reversed the award of interest and attorney’s fees as well.

According to the appellate court, the underlying purpose of the Workers’ Compensation Act is to provide financial protection in various forms, including the restoration of lost wages for workers whose earning power is interrupted or terminated as a consequence of injuries arising out of and in the course of employment. The purpose of Workers’ Compensation is to provide injured workers with periodic payments, which are a substitute for regular wages, and therefore the ordinary payment of compensation is in installment payments. Because the legislature intended Workers’ Compensation payments to substitute for the injured employee’s wages, lump sum awards are the exception and not the rule.

The appellate court also cited to Section 9 of the Act and noted that if an employee or employer desires to have compensation paid in a lump sum, they may petition the Commission, asking that such compensation be so paid.

Petitioner did not petition the Commission to award a lump sum. He filed no petition under Section 9. The appellate court found that the respondent paid petitioner the TTD benefits that had accrued as well as the PPD benefits that had accrued. If petitioner was seeking to receive the remaining payments in a lump sum, he needed to file a petition under Section 9 of the Act and would need to present evidence showing that a lump sum payment would serve the best interests of the parties.

While the appellate court noted lump sum awards are the exception and not the rule, in practice, PPD awards are almost always paid in a lump sum once a Commission award becomes final. Frankly, we would expect that most if not all respondents would prefer to pay the award in a lump sum in order to close the file sooner rather than later. However, it is not necessary to pay the non-accrued benefits in a lump sum. It may be difficult to find reasons why respondent would not want to pay a PPD award in a lump sum. But for some, there may be financial incentive to pay the award weekly. According to Iannoni, the respondent can do just that.

If you have any questions about payment of awards, feel free to reach out to us.