Prate Roofing and Installations, LLC v. Liberty Mutual Insurance Corp.
2022 IL 127140 (IL. 2022)Words & Phrases
Worker's CompensationAppellate Judge
BurkeHolding
Illinois Department of Insurance has authority under section 462 of the Illinois Insurance Code to resolve a dispute regarding the payment of additional premiums for worker's compensation coverage.Fact Summary
In 2013, Prate sought workers' compensation coverage through the Illinois Assigned Risk Plan, which provides workers' compensation insurance coverage through a risk pool administered by the National Council on Compensation Insurance (NCCI). Liberty was assigned as Prate's carrier. Liberty audited Prate's records and determined that one of Prate's subcontractors, ARW Roofing, LLC (ARW), did not have workers' compensation insurance. Liberty determined that the omission had exposed it to more liability than it had bargained for and assessed Prate an additional premium of $127,305.
Prate filed an appeal with the Illinois Workers' Compensation Appeals Board (Board), which provides dispute resolution services for the NCCI. The Board later informed the parties by letter that it did not have sufficient information to resolve the dispute. Specifically, the Board explained it could not determine whether ARW was "an LLC or an Inc." when work was performed and whether that had a bearing on the dispute.
Prate then appealed to the DOI under section 462 of the Insurance Code. The DOI's hearing officer issued his findings of fact and conclusions of law, agreeing with Liberty on all of the issues. On administrative review, the Cook County circuit court affirmed the DOI's decision. The court explained in open court that it found that the factual finding that ARW did not have employees was not against the manifest weight of the evidence. Prate then appealed to the First District Appellate Court.
While the case was pending in the Appellate Court, that same district of the appellate court issued its ruling in CAT Express, 2019 IL App (1st) 181851. The CAT Express decision held "'the types of grievances that are under the jurisdiction of the NCCI' are limited to the interpretation or application of its experience rating plans, its classification system, or its manual rules. Section 462 limits the Department's review to the final decision of the NCCI involving only these three areas, and the NCCI expressly stated that it lacked jurisdiction because it does not decide employment status disputes, which do not implicate an 'interpretation or application' of its rules."
The appellate court determined that CAT Express was "dispositive of the merits of this appeal." However, the Supreme Court reversed and held that the Illinois DOI had authority to resolve the dispute.