SHARON BECKWITH, Employee/Appellant, v. SUN COUNTRY AIRLINES and KEMPER INS. COS., Employer-Insurer.
WORKERS= COMPENSATION COURT OF APPEALS
JULY 3, 2003
ATTORNEY FEES; PRACTICE & PROCEDURE. Attorneys in contested attorney fee cases may not expect a compensation judge to consider any documentation or other evidence that is not submitted to the judge in paper form.
ATTORNEY FEES - RORAFF FEES. Under the circumstances of this case, the compensation judge did not err in concluding that the employee=s attorney was adequately compensated for his work by the contingent fee.
Determined by Wilson, J., Johnson, C.J., and Pederson, J.
Compensation Judge: Jeanne E. Knight.
DEBRA A. WILSON, Judge
The employee=s attorney appeals from the judge=s decision on remand denying his claim for Roraff fees. We affirm.
The employee retained attorney Harold Sadoff in July of 2000 to represent her in connection with shoulder injuries allegedly sustained in the course and scope of her employment as a flight attendant for Sun Country Airlines [the employer]. In answer to the employee=s claim petition, the employer and insurer denied primary liability for the injuries and also denied that the employee=s treatment expenses were reasonable and necessary to cure or relieve the employee from the effects of her alleged injuries. Blue Cross/Blue Shield intervened in the matter to obtain reimbursement of treatment expenses and was separately represented in the ensuing proceedings. Subsequently, several medical providers were notified of their right to intervene, petitioned to intervene, and were granted intervenor status.
The employee underwent an independent medical examination by Dr. Peter Daly in early February 2001. In his report, transcribed on March 1, 2001, Dr. Daly concluded that the employee=s work activities had substantially contributed to her right shoulder condition, that treatment had been reasonable and necessary, and that the employee had a 2% whole body impairment due to her shoulder condition. At a settlement conference held a few weeks later, on March 26, 2001, the employer and insurer apparently agreed to pay indemnity benefits based on their weekly wage calculation, which was disputed by the employee, and also agreed to pay benefits for a 2% whole body impairment, Blue Cross/Blue Shield=s intervention interests, and any Spaeth claims. Mr. Sadoff contends, however, that no agreement was reached concerning medical mileage or prescription drugs and other out-of-pocket expenses incurred by the employee.
It is undisputed that the parties were unable to agree as to the employee=s weekly wage, and claims for wage loss benefit underpayment and penalties were certified to be set for hearing. The employer and insurer paid the employee indemnity benefits, based on their weekly wage calculation, on April 5, 2001. In late September 2001, just prior to the scheduled hearing, the parties agreed to settle the outstanding issues, and a stipulation for settlement was executed in November 2001, providing for payment of $7,200 to the employee in full satisfaction of all claims through September 25, 2001, payment to Blue Cross/Blue Shield of $4,928.93, and payment of Spaeth claims to several providers. However, the employer and insurer had already paid most if not all of these medical expenses, in late September 2001, after having received itemized and properly coded billing statements.
Under the terms of the settlement, Mr. Sadoff received $3,006.47 in contingent fees, and his right to seek Roraff fees was left open. When Mr. Sadoff subsequently claimed Roraff fees, the employer and insurer objected, and the matter came on for hearing before a compensation judge. At hearing, Mr. Sadoff claimed that he was entitled to total attorney fees in the amount of $14,080.00, based on 70.4 hours of work at $200.00 an hour.
In a decision issued on June 11, 2002, the compensation judge concluded that Mr. Sadoff had documented sixty hours of time Aappropriately spent on this matter,@ that the contingent fee did not adequately compensate him for his efforts, and that he was entitled to a total fee of $12,000.00, with a resulting Roraff fee of $8,993.53. The employer and insurer appealed from the judge=s Roraff fee award, and a panel of this court reversed and remanded the matter for reconsideration, explaining that the judge had not made adequate factual findings and had erroneously based her award almost exclusively on time spent by counsel. Beckwith v. Sun Country Airlines, slip op. (W.C.C.A. Nov. 18, 2002).
On remand, the judge concluded that Mr. Sadoff had not rebutted the statutory presumption that the contingent fee adequately compensated him for his work. See Minn. Stat. ' 176.081, subd. 1(a)(1). Accordingly, she denied Mr. Sadoff=s claim for Roraff fees. Mr. Sadoff appeals.
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.
Pursuant to Minn. Stat. ' 176.081, subd. 1(a)(1),
(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).
In determining whether the contingent fee is adequate, a compensation judge must evaluate 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.@ Irwin v. Surdyk=s Liquor, 599 N.W.2d 132, 142, 59 W.C.D. 319, 336 (Minn. 1999); see Borgan v. Bob Hegland, Inc., 62 W.C.D. 452 (W.C.C.A. 2002).
In the present case, Mr. Sadoff contends that the compensation judge made certain factual errors in evaluating his Roraff fee claim, indicating, for example, in her memorandum, that only one intervenor was party to the litigation, when there were in fact several, and in finding that the claim involved about $18,000.00 in indemnity benefits and about $5,000.00 in medical expenses, when in fact the indemnity claim was less and the medical claim more than stated by the judge. Mr. Sadoff also suggests that the judge was unaware of all the relevant circumstances, as evidenced by her error as to the number of intervenors, and he asks this court to clarify just what constitutes the record in a contested Roraff fee case. Finally, Mr. Sadoff argues that, properly analyzed using the Irwin factors, his efforts on the case merit an $8,993.53 Roraff fee award -- the amount awarded by the judge in her initial decision.
We note initially that the optical document imaging procedures now in place in the workers= compensation system have complicated the question of just what constitutes Athe record@ in any given proceeding, including attorney fee cases. Rules describing the scope of the record were promulgated prior to the change from paper files to imaged files and consequently do not reflect the reality of how documents are currently handled by the various agencies involved. For example, the record, under the rules, includes the judgment roll, see Minn. R. 1415.2900, subp. 7B(1), which formerly consisted largely of pleadings, orders, and notices. However, the Department of Labor and Industry no longer assembles any judgment roll in imaged files. We also note that, while the imaging system may be efficient in certain respects, searching for pertinent documents is cumbersome and time consuming, and we do not think it reasonable to expect a compensation judge to wade through multiple imaged documents to find the parts of Athe record@ relevant to the issues before him or her. As importantly, we, as a reviewing court, have no accurate way to determine just what imaged documents a judge has, or has not, considered in reaching a decision. While we recognize that our concerns as to imaging are applicable, at least arguably, to all proceedings at the trial level, the problems seem to be particularly pronounced in fee cases, which tend to be handled more informally than other workers= compensation disputes. We therefore hold that, in contested attorney fee cases, the parties may not expect a compensation judge to consider any documentation or other evidence that is not submitted to the judge at hearing in paper form. See also Shamp v. Daybreak Foods, 63 W.C.D. 153, 157. (W.C.C.A. 2002) (Acontested fee hearings merit the same procedures, and procedural safeguards, as other disputed claims@).
In the present case, Mr. Sadoff has not pointed to any imaged documentation, not submitted or referenced at hearing, that would likely have changed the compensation judge=s analysis or ultimate result. We are also unconvinced that any of the alleged factual errors were material to the judge=s decision. For example, while the judge may have been mistaken as to the precise amount of indemnity benefits paid as a result of Mr. Sadoff=s efforts, she was clearly aware that Mr. Sadoff had received $3,006.47 in contingent fees from those benefits.
Finally, we are not persuaded that the judge failed to adequately analyze the fee claim pursuant to the Irwin factors or that the judge erred in denying that claim. Mr. Sadoff=s contentions notwithstanding, the judge could reasonably conclude that the issues were not complicated. No medical depositions were taken, and no narrative reports were solicited from the employee=s treating physicians. The case rose and fell on primary liability for a rotator cuff tear, which was firmly established by the employer and insurer=s own independent examiner in March of 2001. Wage loss benefits were paid shortly thereafter, and, as noted by the compensation judge, the employer and insurer=s attorney assumed the responsibility for dealing with the intervenors and medical providers. Blue Cross/Blue Shield, which had paid the majority of the treatment costs, had separate representation. The only significant issues clearly left for trial, after the March 2001 settlement conference, were weekly wage and penalties. The fact that Mr. Sadoff may have Aappropriately spent@ sixty hours on the case, as found by the compensation judge in her prior decision, is but one factor for consideration in determining whether the contingent fee adequately compensated him for his efforts. Determining the propriety of a Roraff fee award Ais 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.@ Borgan, 62 W.C.D. 452, 462.
Mr. Sadoff is a highly experienced workers= compensation attorney and his work clearly contributed to the eventual payment of medical expense claims. Nevertheless, under all the circumstances in this case, we cannot conclude that the compensation judge erred in denying Mr. Sadoff=s claim for Roraff fees. We therefore affirm the judge=s decision in its entirety.
 See Roraff v. State, Dep=t of Transp., 288 N.W.2d 15, 32 W.C.D. 297 (Minn. 1980).
 A second retainer agreement was executed in September of 2000.
 However, for whatever reason, the names of the intervenors were not added to the case caption.
 There is no record of the conference, but Mr. Sadoff acknowledges the substance of the agreement by the employer and insurer.
 See Spaeth v. Cold Spring Granite Co., 56 W.C.D. 136, 161 (Minn. 1996) (order opinion).
 As we understand it, most if not all workers= compensation injury documents filed with the Department of Labor and Industry are optically scanned, after which they are indexed and may be accessed through a special computer system. The paper originals of the documents are then destroyed.
 For whatever reason, many documents seem to be imaged multiple times, and it is often impossible to determine the nature of a listed document, with any assurance of accuracy, without actually opening the document to read through it.
 During the fee hearing, Mr. Sadoff drew the compensation judge=s attention to several pleadings that were not expressly offered as evidence. The judge indicated that these pleadings would be considered.
 The judge may have been mistaken as to the number of formal intervenors. However, she was clearly aware that bills of several medical providers were involved in that she referred to both Blue Cross/Blue Shield and of defense counsel=s work to contact each provider to Aascertain the amount of Spaeth balance.@
 Mr. Sadoff contends that out-of-pocket expenses remained unpaid until the final settlement in November of 2001, but, as we indicated in our prior decision, nothing in the record definitely substantiates this assertion.