KATHY KLEIN, Employee, v. WAL-MART STORES, INC., and INSURANCE CO. OF THE STATE OF PENN./AIG, adm'd by CLAIMS MANAGEMENT, INC., Employer-Insurer/Appellants.
WORKERS= COMPENSATION COURT OF APPEALS
JULY 31, 2002
ATTORNEY FEES - RORAFF FEES; STATUTES CONSTRUED - MINN. STAT. § 176.081, subd. 1(c). Where the employer and insurer conceded that all of the time spent by the employee=s attorney was reasonable and necessary to establish the employer and insurer=s liability for the disputed medical expenses, where they further conceded that, if the time incurred by the attorney before certification had been incurred after certification, they would not be disputing the attorney=s claim, and where certification of the medical dispute was ultimately requested and issued, the court concluded that arbitrary denial of fees for that portion of the employee=s attorney=s work that was expended prior to certification, would be contrary to the supreme court=s holding in Irwin, and so affirmed the judge=s award of the Roraff fees at issue.
Affirmed as modified.
Determined by Pederson, J., Wilson, J., and Johnson, C.J.
Compensation Judge: Jennifer Patterson.
WILLIAM R. PEDERSON, Judge
The employer and insurer appeal from the compensation judge=s award of Roraff attorney fees for legal services provided prior to certification of a dispute under Minn. Stat. ' 176.081, subd. 1(c). We affirm.
On March 30, 1999, and October 12, 1999, Kathy Klein [the employee] sustained admitted work-related injuries while in the employ of Wal-Mart Stores, Inc. [the employer]. The employer and its insurer commenced payment of various workers= compensation benefits but at some point ceased paying the employee=s medical expenses.
On May 25, 2000, the employee consulted attorney David C. Wulff regarding her workers= compensation claims, and Mr. Wulff commenced an investigation to determine the issues in dispute. About ten months later, on April 3, 2001, Mr. Wulff filed a request for certification of a medical dispute, and on April 19, 2001, the Department of Labor and Industry [DOLI] issued a Certification of Dispute. On April 30, 2001, Mr. Wulff filed a Medical Request, and the matter was scheduled for an administrative conference on June 28, 2001. At the administrative conference, counsel for the employer and insurer agreed that all benefits would be paid, and this agreement was confirmed by a Medical Response filed July 2, 2001. The amount of the disputed medical bills was $4,745.79.
On July 5, 2001, Mr. Wulff filed a Statement of Attorney=s Fees, seeking Roraff attorney fees, fees pursuant to Minn. Stat. ' 176.081, subd. 7, and costs. Attorney Wulff requested $3,567.00 in Roraff fees, representing 14.6 hours of attorney time and 9.6 hours of paralegal time. On July 6, 2001, counsel for the employer and insurer filed an objection to Mr. Wulff=s application for fees, specifically objecting to attorney and paralegal time performed prior to the issuance of the Certification of Dispute by DOLI on April 19, 2001.
A hearing on the claim for attorney fees was held before a compensation judge on October 22, 2001. At the hearing, counsel for the employer and insurer stipulated that the fees claimed by Mr. Wulff were reasonable and necessary and based upon Agenuinely disputed claims.@ No objection was raised as to the time spent by Mr. Wulff=s office or as to the hourly rate billed for his services and for those of his paralegal. Nor was any objection raised to Mr. Wulff=s fees under the Irwin factors. The compensation judge identified the principal issue before her as whether an attorney may be awarded Roraff fees for time spent on a medical issue before filing a request with DOLI for medical dispute certification, as required by Minn. Stat. ' 176.081, subd. 1(c). In her Findings and Order issued December 14, 2001, the judge determined that the statute could not be interpreted to deny a claim for any of the fees at issue, whether the work was performed before or after the dispute was certified. Accordingly, the judge awarded the requested fees and costs. The employer and insurer appeal.
STANDARD OF REVIEW
A[A] decision which rests upon the application of a statute or rule to essentially undisputed facts generally involves a question of law which [the Workers= Compensation Court of Appeals] may consider de novo.@ Krovchuk v. Koch Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993).
The essential facts in this case are undisputed. The issue before this court is whether the compensation judge erred as a matter of law in awarding Roraff attorney fees to the employee=s attorney for services performed with respect to a medical issue before obtaining certification of the dispute from DOLI as required under Minn. Stat. ' 176.081, subd. 1(c) (1995). The relevant portion of that statute provides as follows:
Allowable fees under this chapter shall be based solely upon genuinely disputed claims or portions of claims, including disputes related to the payment of rehabilitation benefits or to other aspects of a rehabilitation plan. The existence of a dispute is dependent upon a disagreement after the employer or insurer has had adequate time and information to take a position on liability. Neither the holding of a hearing nor the filing of an application for a hearing alone may determine the existence of a dispute. Except where the employee is represented by an attorney in other litigation pending at the department or at the office of administrative hearings, a fee may not be charged after June 1, 1996, for services with respect to a medical or rehabilitation issue arising under section 176.102, 176.135, or 176.136 performed before the employee has consulted with the department and the department certifies that there is a dispute and that it has tried to resolve the dispute.
The employer and insurer assert that the words and phrases of a statute are to be construed according to their plain meaning, and they contend that in this case there is nothing ambiguous about the phrase Aa fee may not be charged . . . before.@ They contend that the plain meaning of these words leads to the conclusion that Ano obligation, no fee, no burden may arise before the condition precedent is met@--in this case, certification of a dispute. We do not agree.
In Jorgenson v. Novak-Fleck, Inc., 638 N.W.2d 760, 62 W.C.D. 89 (Minn. 2002), 62 W.C.D. 81 (W.C.C.A. 2001), the supreme court approved of this court=s observation that the apparent intent of the dispute certification procedure under Minn. Stat. ' 176.081, subd. 1(c), is to promote Athe prompt and economical resolution of medical and rehabilitation disputes without the need for attorney involvement.@ Jorgenson v. Novak-Fleck, Inc., 638 N.W.2d 760, 762-63, 62 W.C.D. 89, 91 (Minn. 2002), citing Jorgenson v. Novak-Fleck, Inc., 62 W.C.D. 81, 85 (W.C.C.A. 2001). While words and phrases are to be construed according to their plain meaning, pursuant to Minn. Stat. ' 645.08(1), we must also be guided by the presumption that the legislature does not intend an absurd or unreasonable result. Minn. Stat. ' 645.17(1).
In the present case, the employer and insurer concede that all of the time spent by the employee=s attorney was reasonable and necessary to establish the employer and insurer=s liability for the disputed medical expenses. They further concede that, if the time incurred by the attorney before certification had been incurred after certification, they would not be disputing the attorney=s claim. We fail to see how construction of the statute as requested by the employer and insurer promotes the apparent legislative intent. We believe that the statute was intended to promote the economical resolution of undisputed claims. The interpretation proposed by employer and insurer would arbitrarily deny an award of fees for services reasonably performed on Agenuinely disputed@ issues. Under this interpretation, an award of fees would depend on when the services were rendered, rather than on those services= relationship to a genuine dispute in light of the Irwin factors. Such an arbitrary denial of fees without consideration or review of their reasonableness is contrary to the supreme court=s holding in Irwin.
We have suggested before that the statutory limitation on fees that is here at issue is relevant to a request for payment of Roraff fees only where there is no prior certification at all by the Department. Cf. Freeman v. Tri County Hosp., slip op. (W.C.C.A. July 10, 2002). Because the Department in this case did certify a medical dispute, we affirm the compensation judge=s award of fees. Further, we modify the judge=s Order to include an additional award of fees payable to the employee under Minn. Stat. ' 176.081, subd. 7.
 See Roraff v. State of Minn., 288 N.W.2d 15, 32 W.C.D. 297 (Minn. 1980).
 See Irwin v. Surdyk=s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999). The factors are (1) the amount involved, (2) the time and expense necessary to prepare for trial, (3) the responsibility assumed by counsel, (4) the experience of counsel, (5) the difficulties of the issues, (6) the nature of the proof involved, and (7) the results obtained.
 The compensation judge neglected to address the employee=s application for an award of fees under Minn. Stat. ' 176.081, subd. 7. At oral argument, counsel for the employer and insurer agreed that an award of subdivision 7 fees was appropriate and that the compensation judge=s Findings and Order may be modified accordingly.