RENEE STARK, Employee, v. HERITAGE COMMUNICATIONS and CNA/CONTINENTAL CASUALTY, Employer-Insurer/Appellants.
WORKERS= COMPENSATION COURT OF APPEALS
MAY 10, 2000
ATTORNEY FEES - RORAFF FEES. Particularly absent any flow of monetary benefits from which a contingent fee may be paid, the issues on which an employee=s attorney did not prevail have little if any bearing on the attorney=s entitlement to a reasonable fee for the work on which he prevailed. Where it was not unreasonable in light of Minn. Stat. § 176.081 and factors articulated in Irwin v. Surdyk=s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999), the compensation judge=s award of Roraff attorney fees in the amount of $2100.00 for work in securing an award of $523.89 in medical benefits was not clearly erroneous and unsupported by substantial evidence.
Determined by Pederson, J., Wilson, J. and Rykken, J.
Compensation Judge: Jeanne E. Knight
WILLIAM R. PEDERSON, Judge
The employer and insurer appeal from the compensation judge's award of Roraff attorney fees. We affirm.
On March 27, 1997, Renee Stark sustained an injury to her low back in the course of her employment with Heritage Communications. Heritage Communications [the employer] and its insurer admitted liability for the injury and evidently paid benefits. On January 16, 1998, Ms. Stark [the employee] filed a Claim Petition, alleging entitlement to temporary total or temporary partial disability benefits for the period September 2, 1997, thorough September 9, 1997, and for a second period continuing from September 27, 1997, based on her March 1997 work injury. The employer contested payment, and the matter came on for hearing on October 6, 1998. Issues at hearing included the employee=s temporary disability during the periods alleged, the existence of injury-related restrictions, the reasonableness and diligence of the employee=s job search during the periods at issue, the employee=s entitlement to rehabilitation services, and the reasonableness and necessity of certain medical treatment. By Findings and Order filed December 7, 1998, the compensation judge denied all of the employee=s claims except for her claims for payment of about $758.98 in unpaid medical expenses owed to an intervening provider and for payment of about $53.14 paid by and reimbursable to another intervenor.
On February 25, 1999, the employee=s attorney filed a Petition for Taxation of Actual and Necessary Disbursements in the total amount of $354.24, and eventually, on April 6, 1999, an order was issued for the employer and insurer=s payment of that amount. On May 20, 1999, the employee=s attorney filed a Statement of Attorney=s Fees on which he itemized fourteen hours of work, normally billed at $150.00 an hour, for his assistance in recovering $847.49 in medical expenses, for which he claimed Roraff fees in the amount of $211.87, pursuant to the 25/20 formula prescribed in Minn. Stat. ' 176.081, subd. 1(a) (1998). On June 2, 1999, the employer and insurer filed a response to the employee=s Statement of Attorney=s Fees, acknowledging that the employee=s attorney was entitled to some Roraff fees but disputing the amount of those fees. They contended that, based on recent case law, including this court=s decision in Friedges v. Independent Sch. Dist. #719, slip op. (W.C.C.A. May 17, 1999), Roraff fees are to be calculated as a percentage of the dollar value of medical expenses Aas limited by the fee schedule@ and that, A[i]n light of the fact the amount of bills paid equal $523.89, . . . the appropriate Roraff fee claim would be $130.90.@ The employee=s attorney requested a hearing on the matter, and on September 24, 1999, he filed an Amended Statement of Attorney=s Fees, now seeking $2,100.00 in hourly fees for the fourteen hours of work he had itemized in his original Statement of Attorney Fees.
The matter came on for hearing on September 27, 1999. At hearing, the employee=s attorney contended that he did not file his initial, May 20, 1999, Statement of Attorney Fees for over five months after the judge=s December 7, 1998, Findings and Order because Ait took me about six months to get my costs paid. I had to chase them around on my costs@ until finally Athey were ordered April 6 and they were paid May 26.@ The employee=s attorney indicated also at hearing, without controversion, that the employer and insurer had agreed verbally at the October 6, 1998, hearing that certain prescription medication would be paid for and need not be litigated, but that this payment was not forthcoming and that he was compelled to continue even after hearing to work in the employee=s behalf to obtain those benefits. He contended that he would have accepted the $211.87 that he had requested in his original Statement of Attorney=s Fees had it been paid him prior to issuance of the supreme court=s decision in Irwin v. Surdyk=s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999), which he understood as new authorization to claim fees in addition to those available under the previously apparent 25/20 statutory cap. In her Findings and Order on Attorney Fees filed November 16, 1999, the compensation judge noted and apparently accepted the attorney=s estimate that he spent fourteen hours of work on the medical issues on which he prevailed. Concluding that A[p]ayment based on 25/20% of the benefits awarded will not adequately compensate [the attorney] for his efforts in this regard,@ the judge awarded the employee=s attorney the $2100.00 in fees that he had claimed. In her Memorandum, the judge explained that,
[w]hile it would have been a better practice for [the employee=s attorney] to submit with his fee petition records detailing all hours spent on the file, followed by the reduction to what he thought best represented the effort and hours limited to the issues on which he did prevail, the compensation Judge finds that 14 hours of work fairly and accurately represents the time spent on those issues.
The employer and insurer appeal.
STANDARD OF REVIEW
In reviewing cases on appeal, the Workers= Compensation Court of Appeals must determine whether Athe findings of fact and order [are] clearly erroneous and unsupported by substantial evidence in view of the entire record as submitted.@ Minn. Stat. ' 176.421, subd. 1 (1992). Substantial evidence supports the findings if, in the context of the entire record, Athey are supported by evidence that a reasonable mind might accept as adequate.@ Hengemuhle v. Long Prairie Jaycees, 358 N.W.2d 54, 59, 37 W.C.D. 235, 239 (Minn. 1984). Where evidence conflicts or more than one inference may reasonably be drawn from the evidence, the findings are to be affirmed. Id. at 60, 37 W.C.D. at 240. Similarly, A[f]actfindings are clearly erroneous only if the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed.@ Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975). Findings of fact should not be disturbed, even though the reviewing court might disagree with them, Aunless they are clearly erroneous in the sense that they are manifestly contrary to the weight of the evidence or not reasonably supported by the evidence as a whole.@ Id.
Minn. Stat. ' 176.081, subd. 1(a) (1998), provided in pertinent part that A[a] fee for legal services of 25 percent of the first $4,000 of compensation awarded to the employee and 20 percent of the next $60,000 of compensation awarded to the employee is the maximum permissible fee@ and that A[a]ll fees, including fees for obtaining medical or rehabilitation benefits, must be calculated according to the formula under this subdivision, except as otherwise provided in clause (1) or (2).@ Clause (1) of the subdivision provided in part that fees for recovery of medical or rehabilitation benefits shall be assessed against the employer or insurer Aif the attorney establishes that the contingent fee is inadequate to reasonably compensate the attorney for representing the employee in the medical or rehabilitation dispute.@ In such cases, clause (1) provided, A[f]or the purposes of applying the formula, . . . the amount of compensation awarded for obtaining disputed medical and rehabilitation benefits . . . shall be the dollar value of the medical or rehabilitation benefit awarded.@ Clause (2) of the subdivision does not here pertain.
In Irwin v. Surdyk=s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999), the supreme court construed Athe dollar value of the medical or rehabilitation benefit awarded,@ in subdivision 1(a)(1), to mean the amount payable pursuant to the fee schedule of Minn. Stat. ' 176.136, rather than the dollar amount of the actual charges of the health care provider. Id., 599 N.W.2d at 143, 59 W.C.D. at 336. Also in Irwin, the court, while expressly Anot tak[ing] issue with the actual percentage of dollar limitations adopted by the legislature in Minn. Stat. ' 176.081 (1998),@ concluded that the statute was unconstitutional Ato the extent it impinges on our inherent power to oversee attorneys and attorney fees and deprives us of a final, independent review of attorney fees.@ Id., 599 N.W.2d at 142, 59 W.C.D. at 334. Concluding that A[t]hose portions of section 176.081 that do not violate the doctrine of separation of powers remain valid,@ the Irwin court remanded the fees issue in that case to this court Ato review the compensation judge=s determination of reasonable attorney fees.@ Id., 599 N.W.2d at 142, 59 W.C.D. at 335-36. They indicated that, A[i]n its review, the WCCA should not only consider the statutory guidelines, but also the amount involved, the time and expense necessary to prepare for trial, the responsibility assumed by counsel, the experience of counsel, the difficulties of the issues, the nature of the proof involved, and the results obtained.@ Id., 599 N.W.2d at 142, 59 W.C.D. at 336.
The employer and insurer contend that, in awarding the attorney fees here at issue, the compensation judge Adid not perform the analysis required under Irwin.@ They contend that the judge Asimply accepted the claimed number of hours worked without any documentation of the total number of hours worked on the file and multiplied it by the Employee=s attorney=s uncontested hourly rate,@ whereas A[t]he Irwin decision requires a more detailed analysis.@ The employer and insurer argue that the judge neglected to consider specifically those factors related to the statutory guidelines, the amount involved, the difficulties of the issues, the nature of the proof involved, and the results obtained. Had the judge done so, they argue, she would have found $130.90 to be a reasonable Roraff fee - - 25% of the $523.89 in medical expenses awarded. In the alternative, they contend that the employee=s attorney should be awarded at most no more than 5% of the $13,000.00 statutory maximum fee, or $650.00, in keeping with the fact that he prevailed on only 5% of the employee=s total claim. As a second alternative, they argue that the matter should be remanded to the compensation judge for additional findings to support her conclusion, including a finding as to the total number of hours that the employee=s attorney spent on the file as a whole. We are not persuaded.
The employer and insurer argue first that A[t]he Employee=s attorney=s position in his Statement of Attorney=s Fees, was that the attorney fee should be based on what was billed rather than what was paid after fee reduction@ pursuant to Minn. Stat. ' 176.136. Their suggestion appears to be that the compensation judge was also of this position. We see no evidence that this was the case. It is true that the employee=s attorney=s original Statement of Attorney=s Fees, filed prior to the supreme court=s September 2, 1999, issuance of its decision in Irwin, did list the full billed amount of $847.49 as the amount of medical benefits obtained through the attorney=s assistance. However, Finding 2 of the compensation judge=s eventual Findings and Order on Attorney Fees, issued November 16, 1999, listed $523.89 as the amount of Aultimately@Aawarded medical expenses.@ Apparently this was the amount actually paid by the employer and insurer after reduction of the billed amount by proper application of Minn. Stat. ' 176.136, pursuant to the court=s decision in Irwin. At any rate, 25% of either figure would be only minimally different from the other and just about equally warranting of upward adjustment for being a less than reasonable fee for fourteen hours of work.
Amount Involved and Results Obtained
The employer and insurer=s arguments as to the Aamount involved@ and Aresults obtained@ appear to focus primarily on the disparity between the total amount of all of the employee=s claims, including her unsuccessful claims for indemnity and rehabilitation benefits, and the total amount of her successful medical expense claim alone. However, assuming that the attorney has itemized on his statement of fees only time that was essential to his recovery of medical benefits found due to the employee, and assuming that there is no available flow of benefits from which may be paid a contingent fee by the employee, we find no basis in case law or elsewhere for concluding that an employee=s attorney=s entitlement to a reasonable Roraff fee for successful and necessary work recovering medical benefits due his client, payable by the employer and insurer, should be in any way conditioned on the proportionate relationship between those owed benefits and other benefits found to be not owed. In the present case, the value of the benefits obtained for the employee was substantial, even as reduced by section 176.136, and, assuming that his claim is otherwise reasonable, the employee=s attorney deserves a reasonable fee for the time he necessarily expended in successfully obtaining those benefits, regardless of the relative size of his unsuccessful effort.
Difficulty of the Issues and Nature of the Proof Involved
The employer and insurer also contend that the issues in this case and the nature of the proof involved were not difficult and so did not warrant a fee beyond the $130.90 that would be due the employee=s attorney by mere application of the statutory formula to the $523.89 in medical benefits that he obtained. They argue that A[t]his was a straight forward case,@ for a limited amount of benefits, based on an admitted injury and weekly wage, requiring no depositions or legal briefs and presenting no novel legal issues. Whatever truth there may be in those assertions, the employee=s attorney=s normal fee for just one hour=s work remains more than the $130.90 that the employer and insurer recommend that he be paid for all of the work that he claims took him fourteen hours to perform. The compensation judge in this case, who was far more familiar than we are with the work done by the employee=s attorney in this matter, credited the attorney=s itemization of time that he needed to spend on this case in order to secure payment for the medical care to which the employee was ultimately entitled. Moreover, the compensation judge devoted most of her Memorandum to addressing the very credibility issue raised by the employer and insurer, lamenting that the employee=s attorney had not submitted records detailing all hours spent on the file but citing an obvious illustration that the stated fees included Aonly those pro-rated hours which [the attorney] felt represented the time spent on the issues on which he prevailed.@ The judge also stated expressly Athat 14 hours of work fairly and accurately represents the time spent on those issues@ on which the employee did prevail and that the attorney=s Ahourly rate of $150.00, considering his expertise and years in the field, is appropriate.@ This explanation by the judge is clearly contrary to the employer and insurer=s assertion on appeal that the compensation judge Asimply accepted the claimed number of hours worked without any documentation of the total number of hours worked on the file and multiplied it by the attorney=s uncontested hourly rate@ (emphasis added). We conclude that it was not unreasonable for the compensation judge to conclude that the issues and the nature of the proof involved in this case were sufficiently complex to warrant payment of more than the $130.90 that would result from the simple application of the statutory formula.
Cap-based and Remand Alternatives
As an alternative to their recommended fee of $130.90, the employer and insurer argue that the employee should be paid no more than $650.00, which would represent 5% of the $13,000.00 maximum attorney fee payable under the statute, in keeping with the fact that the attorney prevailed on only 5% of the issues in litigation before the judge. Such a rationale, however, again presumes that an employee=s attorney=s entitlement to Roraff fees automatically depends on the relationship between those issues on which he prevailed and those issues on which he did not prevail. Particularly absent any flow of monetary benefits from which a contingent fee may be paid, the issues on which an employee=s attorney did not prevail have little if any bearing on the attorney=s entitlement to a reasonable fee for medical expense work on which he did prevail.
As a second alternative to the fee awarded by the judge, the employer and insurer suggest that the case might be remanded to the compensation judge for additional findings, including a finding as to the total number of hours that the employee=s attorney spent on the file as a whole. We conclude, however, that such a remand is in this case unnecessary. As we have already indicated, the judge was clearly in a unique position to assess the complexity of the work accomplished by the employee=s attorney in successfully obtaining payment of the medical bills at issue. Acknowledging and deferring to that unique position, we have affirmed as not unreasonable the judge=s conclusion that the employee=s itemization of the work he did in obtaining those benefits was not unreasonable. Nor, based on the record before us, do we find the judge=s decision unreasonable even aside from that normal deference on credibility-based issues.
Because it was not unreasonable in light Minn. Stat. ' 176.081 and factors articulated in Irwin v. Surdyk=s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999), we affirm the compensation judge=s award of $2100.00 in Roraff fees to the employee=s attorney. See Hengemuhle, 358 N.W.2d at 59, 37 W.C.D. at 239.
 See Roraff v. State, Dep't of Transp., 288 N.W.2d 15, 32 W.C.D. 297 (Minn. 1980).
 In her December 7, 1998, order, the compensation judge indicated that the bills from the first intervenor were Adifficult to determine@ and that it was not clear as to whether the total bill had been reduced pursuant to the Minnesota Medical Fee Schedule. In her eventual Findings and Order on Attorney Fees filed November 16, 1999, the judge indicated that the medical expenses awarded ultimately amounted to $523.89.
 This figure is the sum of the $758.98 and $53.14 awarded pursuant to the judge=s December 7, 1998, decision, plus $35.37 in prescription costs which the employee=s attorney claimed had been conceded at hearing but had required further work for recovery.
 This was subsequently a holding also in the supreme court=s decision in Irwin v. Surdyk=s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999), issued September 2, 1999.
 Aside from the statutory guidelines factor, the factors referenced by the Irwin court for arriving at a reasonable fee are not new to the decision in Irwin. See, e.g., Saari v. McFarland, 319 N.W.2d 706, 34 W.C.D. 677 (Minn. 1982); Minn. Stat. ' 176.081, subd. 5(d) (1982). These factors were removed from the actual language of the statute with the repeal of Minn. Stat. ' 176.081, subd. 5, in 1995.