CYNTHIA J. STEWART, Employee/Appellant, v. 3M CO., and OLD REPUBLIC INS. CO./HELMSMAN MANAGEMENT SERVS., Employer-Insurer.
WORKERS= COMPENSATION COURT OF APPEALS
NOVEMBER 4, 2003
ATTORNEY FEES. The compensation judge properly determined that fees for the employee=s attorney should be paid from weekly benefits received by the employee as a result of a successful claim for approval of a retraining program.
Determined by Stofferahn, J., Wilson, J. and Pederson, J.
Compensation Judge: Paul V. Rieke
Attorneys: DeAnna M. McCashin, Schoep & McCashin, Alexandria, MN, for Appellant. Gina M. Stanaway, Brown & Carlson, Minneapolis, MN, for Respondents.
DAVID A. STOFFERAHN, Judge
The employee appeals from the determination of the compensation judge that attorney fees for representing the employee in a retraining claim should be paid from weekly benefits rather than as Heaton fees. We affirm.
Cynthia Stewart, the employee, sustained a work injury on May 15, 2000, which has been diagnosed as bilateral epicondylitis and forearm pain. Her employer, 3M Company, and its insurer accepted liability for the injury. Eventually, the employer was not able to accommodate the employee=s restrictions and she was terminated from her employment in March 2001. The employee then commenced a job search with the assistance of her QRC.
Subsequently, the employee requested approval of a retraining program in accounting. On January 7, 2003 the employee=s claims for approval of the retraining program and for a period of temporary total disability benefits before the program began were heard by a compensation judge. In his Findings and Order, served and filed January 24, 2003, the compensation judge denied the claim for temporary total disability benefits and approved the retraining program requested by the employee. In Finding 21 of his decision, the compensation judge determined that the employee=s attorney Ais entitled to a reasonable >Heaton- type= attorney fee for obtaining approval of a contested retraining course in accounting.@ There was no appeal of the compensation judge=s decision.
On February 18, 2003, the employee=s attorney filed a statement of attorney fees requesting $6,716.00 in Heaton fees. After correspondence from the attorney for the employer and insurer regarding some of the time which had been itemized, the statement of attorney fees was amended to request a fee of $6,318.00. The employer and insurer objected to an award of Heaton fees in that amount and the dispute over fees was considered in a telephone conference on May 27, 2003 by the same compensation judge who had considered the employee=s claims in January.
In his Findings and Order of May 30, 2003, the compensation judge found that the parties had agreed that a reasonable fee in this matter for the employee=s attorney was $6,318.00. The compensation judge ordered attorney fees to be paid from the employee=s weekly retraining benefits. If fees from those benefits were not sufficient to pay the entire fee, the balance would be paid by the employer and insurer as a Heaton fee. The employee appeals.
The employee argues on appeal that the compensation judge erred in awarding attorney fees out of the employee=s weekly retraining benefits and not as Heaton fees. The employee contends the compensation judge, in his decision of January 24, 2003, ordered that attorney fees were to be paid as Heaton fees. According to the employee, since that decision was not appealed, the award of Heaton fees is res judicata for the current issue.
The position of the employee is that the language used by the compensation judge in Finding 21 of his January 24, 2003 decision means that all fees would be paid as Heaton fees. The employer and insurer argue that the use of the word Areasonable@ indicates that the compensation judge contemplated that a contingency fee from benefits would be paid before a Heaton fee was paid.
Application of the doctrine of res judicata requires that the issues must have been litigated and decided in the earlier proceeding. Westendorf v. Campbells Soup Co., 243 N.W.2d 157, 28 W.C.D. 460 (Minn. 1976). In the present case, we have no record from the first hearing and we do not know what the parties may have litigated with regard to attorney fees or what the compensation judge contemplated in his finding on this issue. Even in the absence of those concerns we would not affirm an award of Heaton fees in this case on the basis of res judicata. Res judicata is a doctrine of equity and in its application, the focus is whether the result would be an injustice on the party against whom estopped is urged. R.F. v. T.F., 528 N.W.2d 869, 872, n.3 (Minn. 1995); Baker v. Deb Shops, 62 W.C.D. 237 (W.C.C.A. 2002).
The employee also argues that her weekly benefits were not created by the 2003 decision and therefore they are not benefits from which attorney fees should be paid. When an employee=s attorney is successful in obtaining approval for a retraining plan, the employee receives temporary total disability compensation during the period of retraining. Minn. Stat. ' 176.102, subd. 11(b). This compensation constitutes a stream of benefits from which attorney fees are to be paid. The temporary total disability compensation Ms. Stewart will receive while she is in school is the result of the claims which were determined by the compensation judge in his Findings and Order of January 24, 2003. The decision of the compensation judge to award attorney fees from those benefits is appropriate.
The employee, rather than disputing this basic proposition, contends that if attorney fees are deducted from her weekly workers= compensation benefits, she will receive a lesser amount than if she had not initiated a workers= compensation claim and had instead remained on long term disability benefits provided by the employer. We have no reason to disagree with the employee=s numbers but those numbers do not provide a basis for disregarding clear precedent in attorney fee awards in retraining cases. The question of whether or not a workers= compensation claim makes economic sense and should be brought is a question for the employee and her attorney and not this court.
Finally, the employee claims on appeal that the compensation judge erred in not ordering Edquist fees. Apparently when this case was heard on January 7, 2003 to consider the employee=s request for retraining, the employee was already in school and was receiving long term disability benefits from the employer. The record does not indicate when those benefits began or the amount of the benefits. The employee states that, with the award of weekly retraining benefits, the long term disability benefits would be repaid to the employer and that the compensation judge should have ordered Edquist fees to be deducted from the repayment.
The January 24, 2003 decision did not mention the employee=s receipt of long term disability benefits and the compensation judge did not order reimbursement of those benefits to the employer. There was no claim for or reference to Edquist fees in any of the documents filed in connection with the attorney fee dispute and the compensation judge did not discuss Edquist fees in his decision on attorney fees. We conclude that this is not an issue which was raised before the compensation judge. As a reviewing court we do not consider an issue not argued at the hearing and raised for the first time on appeal. Wetterlind v. A.P./Viking Automatic Sprinkler Systems, slip op. (W.C.C.A. June 25, 2002).
The decision of the compensation judge is affirmed.
 Heaton v. J.E Fryer & Co. and United Van Bus Delivery, 36 W.C.D. 316 (1983).
 We note that this matter was heard as a telephone pretrial. It appears no record was made and no transcript was prepared. Determination of an attorney fee dispute should be made with the same care as other disputed claims. Shamp v. Daybreak Foods, slip op. (W.C.C.A. Dec. 12, 2002).