GARY P. DUDA, Employee, v. PIZZA HUT, INC., and CNA COMMERCIAL INS. CO., Employer-Insurer/Appellants.
WORKERS= COMPENSATION COURT OF APPEALS
JULY 12, 2002
ATTORNEY FEES - RORAFF FEES. Considering the record in light of the factors specified in Irwin v. Surdyk=s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999), the compensation judge abused his discretion in awarding the employee Roraff fees for all time spent on the case, and the judge=s decision is therefore modified to reflect a Roraff fee award of $1,000.00.
Determined by Wilson, J., Johnson, C.J., and Pederson, J.
Compensation Judge: Danny P. Kelly.
DEBRA A. WILSON, Judge
The employer and insurer appeal from the compensation judge=s award of $2,852.50 in Roraff fees. We reverse and substitute an award of $1,000.00.
On February 7, 1997, the employee was involved in a work-related automobile accident while employed as a delivery person by Pizza Hut, Inc. [the employer]. He subsequently received treatment for neck, low back, and bilateral knee pain from several medical providers, including Dr. Stephen Spaniol, D.C. The employer and its insurer apparently admitted liability for low back, neck, and knee injuries but eventually took the position that the injuries were merely temporary.
The matter came on for hearing before Judge Danny Kelly on February 18, 2000. According to the compensation judge=s decision, issued on April 14, 2000, the following issues were submitted for determination: the nature of the February 7, 1997, work injury; whether the employee was entitled to benefits for a 3.5% whole body impairment related to his low back condition, a 3.5% whole body impairment related to his neck condition, and a 1% whole body impairment related to his right knee condition; and whether chiropractic care rendered by Dr. Spaniol from March 5, 1997, through May 1, 1998, was compensable.
With regard to the issue of the nature of the injury, the judge determined that, while the employee=s work injuries might prove in the end to be temporary, the effects of the injuries had not resolved as of the hearing date. The judge further concluded that the employee had a 0% permanent partial disability with regard to both his neck and low back condition but that a permanency rating with regard to his right knee condition was premature in light of recommended treatment. Finally, the judge concluded that the employer and insurer were liable for payment for only a portion of chiropractic expenses, $145.00 out of approximately $625.00 that had been claimed; the remaining expenses were denied for lack of documentation. The employee appealed from the judge=s decision on permanent partial disability benefits and chiropractic expenses; however, a panel of this court affirmed the judge=s decision in its entirety. Duda v. Pizza Hut, Inc., slip op. (W.C.C.A. Nov. 8, 2000).
The employee=s attorney subsequently filed a petition for attorney fees, seeking payment by the employer and insurer, under Roraff, for all time spent by him on the employee=s case. A hearing on the fee petition was held before Judge Kelly on November 26, 2001. No formal testimony or other evidence was submitted, but both parties explained their positions with regard to the Roraff fee claim. In his decision issued on January 24, 2002, the judge concluded that the employee=s attorney was entitled to $2,852.50, payable as Roraff fees, as claimed. The employer and insurer appeal.
Minn. Stat. ' 176.081, subd. 1, provides in part as follows:
(1) The contingent attorney fee for recovery of monetary benefits according to the formula in this section is presumed to be adequate to cover recovery of medical and rehabilitation benefit or services concurrently in dispute. Attorney fees for recovery of medical or rehabilitation benefits or services shall be assessed against the employer or insurer only if 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 cases where the contingent fee is inadequate the employer or insurer is liable for attorney fees based on the formula in this subdivision or in clause (2).
For purposes of applying the formula where the employer or insurer is liable for attorney fees, the amount of compensation awarded for obtaining disputed medical and rehabilitation benefits under sections 176.102, 176.135, and 176.136 shall be the dollar value of the medical or rehabilitation benefit awarded, where ascertainable.
In Irwin v. Surdyk=s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999), the Minnesota Supreme Court determined that the statutory cap on fees for recovery of medical expenses, traditionally referred to as Roraff fees, was unconstitutional, and that a reasonable fee in cases such as this one should be determined by considering not only the statutory guidelines but also Athe 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. at 142, 59 W.C.D. at 336.
In the present case, the employee=s attorney claimed entitlement to Roraff fees for all time spent on the case, 16.30 hours at $175.00 an hour, for a total fee of $2,852.50. The compensation judge awarded the entire fee, as claimed. In making his decision, the judge made findings relative to most, but not all, of the Irwin factors. The employer and insurer appeal, contending that the fee award is unreasonable under the circumstances. After close review of the scant record in light of Irwin, we are compelled to conclude that the judge=s award constitutes an abuse of discretion.
We emphasize initially that we cannot fault the judge=s assessment of counsel=s substantial workers= compensation experience or the reasonableness of his hourly rate. However, the amount involved, with regard to medical expenses, was minimal, and the record does not support the judge=s suggestion that the case was Acomplicated.@ Rather, the claims appear to have been relatively straight-forward; at least nothing in the record suggests otherwise. Similarly, we see nothing in the record to support the judge=s finding that Agreat responsibility@ was assumed by counsel, and the judge gave no explanation for his conclusion to that effect. With regard to the nature of the proof involved, we would note that the fee statement indicates that no depositions were taken. Finally, as to the question of Aresults obtained,@ the compensation judge himself indicated that the employee had prevailed on less than one-quarter of the claimed chiropractic expenses. Moreover, while the judge did not accept the employer and insurer=s argument that the employee=s injuries were only temporary, the judge also did not find the injuries permanent, ruling instead that it was in effect premature to make that determination. As previously indicated, all permanent partial disability claims, which might have yielded contingent fees, were denied. The result in this case can only be characterized as fair, at best.
In Borgan v. Bob Hegland, Inc., slip op. (W.C.C.A. June 12, 2002), this court cautioned that Aa determination of a claim for [Roraff] fees is not merely a matter of multiplying the attorney=s hourly rate times the amount of time spent on the case less the contingent fee award.@ Rather, the issue is what fee is reasonable considering the Irwin factors. Each case is dependent on its particular facts. In the matter now before us, the judge abused his discretion in awarding $2,852.50 in Roraff fees, representing payment for all time spent by counsel at his usual hourly rate, under the circumstances. At the same time, counsel is entitled to a reasonable fee for his work in securing some chiropractic expenses. We therefore reverse the judge=s decision and substitute an award of $1,000.00.
 See Roraff v. State of Minn., 288 N.W.2d 15, 32 W.C.D. 297 (Minn. 1980).
 In this regard we would note again that no actual evidence was submitted at the fee hearing. Fee hearings should generally be conducted in a manner that allows for adequate appellate review, which would ordinarily entail the submission of evidence, including testimony, if necessary.