Freedom Graphic Systems, Inc. v. Industrial Comm'n

Case Date: 12/31/2003
Court: Industrial Commission
Docket No: 1-03-0194WC Rel

               NOTICE
Decision filed 12/31/03.  The text of this decision may be changed or corrected prior to the filing of a Petition for Rehearing or the disposition of the same.


 
NO. 1-03-0194WC
 

IN THE APPELLATE COURT
 

OF ILLINOIS
 

FIRST DISTRICT

 

FREEDOM GRAPHIC SYSTEMS, INC.,
                            Plaintiff-Appellant,
                            v.
INDUSTRIAL COMMISSION OF ILLINOIS and
RICHARD KEEFE,
                            Defendants-Appellees.

 
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Appeal from
Circuit Court of
Cook County
No. 02L50994

Honorable
Alexander P. White,
Judge Presiding.




PRESIDING JUSTICE McCULLOUGH delivered the opinion ofthe court:

Claimant, Richard Keefe, filed an application seekingbenefits for injuries from employer, Freedom Graphic Systems, Inc.,pursuant to the Workers' Compensation Act (Act) (820 ILCS 305/1 etseq. (West 2000)). On December 3, 2001, the arbitrator concludedthat claimant suffered compensable injuries on June 4, 2001, andawarded claimant $140,040.60 for outstanding medical bills andprospective medical care. On July 23, 2002, the Commissionaffirmed and adopted the arbitrator's decision. On November 6,2002, the circuit court dismissed employer's action seekingadministrative review of the Commission's decision.

On appeal, employer argues that the trial court erred indismissing employer's action for administrative review where (1)employer's timely filed bond, while lacking the signature of theprincipal, was otherwise valid and complied with section 19(f) ofthe Act; (2) the circuit court clerk accepted the bond, notwithstanding the lack of signature of a principal; and (3) it shouldhave ordered the unsigned bond to be signed or ordered a signedbond substituted nunc pro tunc. In his brief, claimant requestssanctions against employer, asserting that employer's appeal isunsupported by Illinois law and was filed solely for purposes ofdelay. We affirm and deny claimant's request for sanctions.

Employer sought administrative review of the July 23,2002, Commission decision in favor of claimant. On August 9, 2002,employer filed a cause of action with the circuit clerk of CookCounty, and a bond pursuant to section 19(f) of the Act. However,on the face of the bond, the signature line for the surety wasstamped, not signed, and the signature line for the principal wasblank. The circuit clerk's office applied its seal to indicate thedocument was filed.

On September 16, 2002, employer filed a motion for leaveto file a fully signed bond. On September 17, claimant filed amotion to dismiss. On November 6, 2002, the circuit court grantedclaimant's motion to dismiss, concluding the clerk's office did nothave the authority to accept a bond not signed by the principal.

The circuit court denied employer's motion to reconsider,concluding that the Act strictly requires a principal to sign thebond. Because no principal signed the bond in this case, the courtdetermined it lacked subject-matter jurisdiction. The courtdeclined to rule nunc pro tunc to allow amendment of the bond formto allow the principal to execute the bond outside the statutoryperiod. This appeal followed.

Employer first argues that its bond, while lacking thesignature of the principal, either wholly or substantially compliedwith section 19(f)(2) of the Act. We disagree.

Section 19(f)(2) of the Act provides, in pertinent part:

"No such summons shall issue unless theone against whom the Commission shall haverendered an award for the payment of moneyshall upon the filing of his written requestfor such summons file with the clerk of thecourt a bond conditioned that if he shall notsuccessfully prosecute the review, he will paythe award and the costs of the proceedings inthe courts. The amount of the bond shall befixed by any member of the Commission and thesurety or sureties of the bond shall be approved by the clerk of the court. The acceptance of the bond by the clerk of the courtshall constitute evidence of his approval ofthe bond." 820 ILCS 305/19(f)(2) (West 2002).

While Illinois circuit courts are courts of generaljurisdiction and are presumed to have subject-matter jurisdiction,to vest the circuit court with subject-matter jurisdiction inworkers' compensation cases, the party bringing the action muststrictly comply with the bond requirements of section 19(f)(2). See Kavonius v. Industrial Comm'n, 314 Ill. App. 3d 166, 169, 731N.E.2d 1287, 1290 (2000). The filing of a bond is jurisdictionalin nature. Firestone Tire & Rubber Co. v. Industrial Comm'n, 74Ill. 2d 269, 272, 384 N.E.2d 1329, 1331. A bond not signed by theparty against whom the award has been entered is insufficient toconfer jurisdiction upon the circuit court. Coultas v. IndustrialComm'n, 31 Ill. 2d 527, 528, 202 N.E.2d 485, 486 (1964).

Similar to Coultas, the bond filed in this case was notexecuted by any principal. However, in Coultas, respondentemployer signed the bond as surety while her corporation signed asthe principal. Coultas, 31 Ill. 2d at 528, 202 N.E.2d at 486. Thesupreme court concluded that the circuit court was withoutjurisdiction where the bond was not signed by the party againstwhom the award was made. Coultas, 31 Ill. 2d at 528, 202 N.E.2d at486. It concluded that the case was treated as if the principal"did not file her bond." Coultas, 31 Ill. 2d at 528, 202 N.E.2d at486.

In this case, employer has an even less compelling casethan the employer in Coultas. Here, the bond form contained nosignature of the principal anywhere on the form. The circuit courtproperly treated the bond as not having been filed at all. SeeCoultas, 31 Ill. 2d at 528, 202 N.E.2d at 486; Firestone Tire &Rubber, 74 Ill. 2d at 272-73, 384 N.E.2d at 1331 (respondent hasthe responsibility to file a bond and failure to do so deprives thecircuit court of jurisdiction); cf. Lee v. Industrial Comm'n, 82Ill. 2d 496, 499, 413 N.E.2d 425, 427-28 (1980) (party seekingreview allowed to cure where at least one principal signs in suchcapacity).

The purpose of requiring a bond is to bind the principal.A bond without a principal's signature does not further thatpurpose. See First Chicago v. Industrial Comm'n, 294 Ill. App. 3d685, 689-91, 691 N.E.2d 134, 137-38 (1998) (the "signing individual's identity ultimately controls the outcome of the motion todismiss the appeal"). A bond is insufficient where the signatureis one other than that of the principal because such a signaturewould not bind the corporation to payment of the bond. Deichmueller Construction Co. v. Industrial Comm'n, 151 Ill. 2d413, 414-16, 603 N.E.2d 516, 517 (1992).

Employer asserts that the "signature of the obligor isnot required for validity" of bonds filed under section 19(f)(2). Illinois case law suggests otherwise. See Deichmueller, 151 Ill.2d at 414-15, 603 N.E.2d at 517 (because no representative ofemployer signed bond as principal, attorney could not obligateemployer to pay bond); Coultas, 31 Ill. 2d at 527-28, 202 N.E.2d at486 (person against whom judgment was entered must execute bond);Berryman, 276 Ill. App. 3d at 79, 657 N.E.2d at 1041 (filing ofbond signed by attorney rather than person authorized to bind partyis not sufficient to grant subject-matter jurisdiction undersection 19(f)(2)). Further, in Illinois Armored Car Corp. v.Industrial Comm'n, 205 Ill. App. 3d 993, 996, 563 N.E.2d 951, 954(1990), the court specifically held that section 19(f) requiresexecution of a bond by the employer against whom the award is made. To "execute" a document is to "make (a legal document) valid bysigning." Black's Law Dictionary 589 (7th ed. 1999).

To accept a bond without a signature by the principal anddeeming the circuit clerk's acceptance of the bond as conclusivewould release the principal from its obligation to pay the bond. Employer admits in his brief that "the fact that an obligor has notsigned a bond may constitute a defense which the obligor can raiseto his obligation thereon." If the signature of one other than theprincipal does not bind employer, neither would an absentsignature. Because it is not evident that employer is "'obligatedby the bond during the 20-day filing period, the purpose of thebond, that a claimant has a method of collecting on an awardagainst the respondent, is defeated, and strict compliance with thestatute has not been met.'" Deichmueller, 151 Ill. 2d at 415, 603N.E.2d at 517, quoting Deichmueller Construction Co. v. IndustrialComm'n, 215 Ill. App. 3d 272, 276, 574 N.E.2d 1208, 1211 (1991). Because section 19(f) strictly requires a principal's signature onthe bond form, the circuit court properly dismissed the action forlack of subject-matter jurisdiction.

Employer next contends that the circuit court wasrequired to deny claimant's motion to dismiss for lack of subject-matter jurisdiction where the circuit clerk's office accepted thebond, albeit without the signature of a principal. In support ofhis argument, he cites Chadwick v. Industrial Comm'n, 154 Ill. App.3d 859, 507 N.E.2d 878 (1987), and Republic Steel Corp. v.Industrial Comm'n, 30 Ill. 2d 311, 196 N.E.2d 654 (1964).

In Chadwick, the claimant sought administrative review ofa Commission decision pursuant to section 19(f)(1). Chadwick, 154Ill. App. 3d at 860, 507 N.E.2d at 879. The employer filed amotion to quash, alleging that the claimant failed to strictlycomply with section 19(f)(1) because, although he named theemployer as a party in interest and listed the name and address ofthe employer's attorney, the claimant failed to list the employer'saddress, as required under section 19(f)(1). Chadwick, 154 Ill.App. 3d at 860, 507 N.E.2d at 879. On appeal, the issue waswhether the motion to quash was improperly granted where claimant'swritten request for summons substantially complied with therequirements of section 19(f)(1). Chadwick, 154 Ill. App. 3d at860-61, 507 N.E.2d at 880. The appellate court concluded thatalthough claimant did not strictly comply with section 19(f)(1),she gave sufficient information for the clerk to properly notifythe respondent and its attorney of the pending appeal. Chadwick,154 Ill. App. 3d at 862, 507 N.E.2d at 881.

Chadwick does not support employer's argument here. Caselaw indicates that different parts of the Act, including differentprovisions of section 19(f), are treated differently regardingstrict- and substantial-compliance requirements. Chadwick does notaddress the lack of a principal's signature on a bond.

In Republic Steel, the employer sought administrativereview of a Commission decision in favor of the claimant. RepublicSteel, 30 Ill. 2d at 311, 196 N.E.2d at 655. The employer appliedfor a writ of certiorari and presented a surety bond of $20,000 tothe clerk of the court. The clerk orally approved the surety andidentification of the attorney who executed the bond for theemployer. The clerk marked the application and the bond as "filed"and registered the bond. Claimant filed a motion to quash thewrit, which the circuit court granted. Republic Steel, 30 Ill. 2dat 312, 196 N.E.2d at 655.

On appeal, the issue was whether section 19(f) requiredwritten approval by the clerk of the bond. Republic Steel, 30 Ill.2d at 312-13, 196 N.E.2d at 655-56. The Supreme Court of Illinoisconcluded that the statute did not require written approval. Republic Steel, 30 Ill. 2d at 313, 196 N.E.2d at 655-56.

Neither Chadwick nor Republic Steel addresses theconclusiveness of clerk approval. The plain language of section19(f)(2) indicates that the circuit clerk's acceptance of the bondis not dispositive for purposes of subject-matter jurisdiction. This interpretation is consistent with recent cases dealing with anattorney's signature as principal. See, e.g., Deichmueller, 151Ill. 2d 413, 603 N.E.2d 516; Berryman Equipment v. IndustrialComm'n, 276 Ill. App. 3d 76, 657 N.E.2d 1039 (1995).

Moreover, the language of the statute indicates thatcircuit clerk approval relates only to the surety, not theprincipal. Section 19(f)(2) discusses the fact that sureties mustbe approved by the clerk of the court. 820 ILCS 305/19(f)(2) (West2002). In context, the scope of "approval" of the circuit clerkrefers only to approval of surety, not the principal. While issuesrelated to the sufficiency of surety have been analyzed under thedoctrine of substantial compliance (see Lee, 82 Ill. 2d at 500, 413N.E.2d at 427), cases involving the sufficiency of the signature ofprincipal have been scrutinized under a strict-compliance standard(see Deichmueller, 151 Ill. 2d at 415, 603 N.E.2d at 517; Coultas,31 Ill. 2d at 527-28, 202 N.E.2d at 486). In the strict-compliancecases, the bond was filed with the clerk's office, but the factthat the office filed the bond did not control.

Employer cites no case that indicates clerk approval isdispositive of the sufficiency of the bond for jurisdictionalpurposes. If this proposition held true, the bonds filed in therecent cases involving an attorney signing as principal would havebeen valid merely because someone in the clerk's office made aclerical error. Such an error does not automatically confersubject-matter jurisdiction on the circuit court. Clerk approvalof a bond is not dispositive for purposes of subject-matterjurisdiction. The trial court properly dismissed employer's causeof action.

Employer last argues that, assuming that a bond signed bythe principal is required, the trial court should have ordered theunsigned bond to be signed or a signed bond substituted nunc protunc to satisfy the 20-day filing period.

In Berryman Equipment, 276 Ill. App. 3d at 78, 657 N.E.2dat 1040, the appellate court, citing Deichmueller, stated that anattempt to cure a defective bond as to the principal signature wasinsufficient when filed beyond the 20-day statutory period. Inthat case, nothing was on file with the circuit court within the20-day period that attempted to cure a bond submitted with only theattorney's signature on the principal line. Berryman, 276 Ill.App. 3d at 78, 657 N.E.2d at 1040. Because employer did notattempt to either sign the bond or submit a signed bond in place ofthe unsigned one within the 20-day period, the circuit court had nosubject-matter jurisdiction. Berryman, 276 Ill. App. 3d at 79, 657N.E.2d at 1041. The court would have had no authority to allow theemployer in that case to file a new bond after the statutoryperiod, nunc pro tunc or otherwise.

Here, similar circumstances exist. Employer filed a bondwithout the signature of a principal and did not attempt to curethe error until the 20-day statutory period had expired. Becausestrict compliance was required and the circuit court was withoutsubject-matter jurisdiction, the court could not allow employer tocure by either signing the bond or filing another bond nunc protunc. To the extent the circuit court lacked jurisdiction, thiscourt would also lack the jurisdiction to enter such an order.

In his brief, claimant requests sanctions because hebelieves employer's appeal is unsupported by Illinois law and wasfiled for the sole purpose of delay. However, claimant cites to nocase law and, in fact, no authority at all except for a vaguereference to "applicable Illinois Supreme Court Rule" in making hisrequest. Nor does he cite to any part of the record when referringto "meritless" arguments made before the trial court, or in showing the appeal was taken for purposes of delay. Regardless, a reviewof the record on appeal and employer's arguments in its briefreveals no violation of Illinois Supreme Court Rule 375(b). 155Ill. 2d R. 375(b). We deny claimant's request for sanctions.

For the reasons stated, we affirm the circuit court'sjudgment and deny claimant's request for sanctions.

Affirmed.

McCULLOUGH, J., with GREIMAN, CALLUM, HOLDRIDGE, andGOLDENHERSH, JJ., concurring.