HECTOR BERGELEEN, Respondent, v. HENNEPIN COUNTY MED. CTR., SELF-INSURED, Appellant.
WORKERS= COMPENSATION COURT OF APPEALS
MAY 17, 2004
ATTORNEY FEES - HEATON FEES. While the record minimally supported the conclusion that a dispute existed over the employee=s entitlement to some computer classes, the judge=s fee award of more than $7,000.00 was clearly excessive where the fee statement did not document the claimed hours of work, some time spent was clearly unrelated to any rehabilitation dispute, there had been no trial or conference in the matter, primary liability had been admitted, no depositions were taken or scheduled, no independent experts were consulted, and the issue was uncomplicated and could not have required much preparation.
Affirmed as modified.
Determined by Wilson, J., Pederson, J., and Rykken, J.
Compensation Judge: William R. Johnson
Attorneys: Mary L. Egan, Office of the Hennepin County Attorney, Minneapolis, MN, for the Appellant. Thomas J. Germscheid, Germscheid Law Firm, Oakdale, MN, for the Respondent.
DEBRA A. WILSON, Judge
The self-insured employer appeals from the compensation judge=s award of $7,043.75 in Heaton fees, contending that there was no real dispute over rehabilitation services and that the amount awarded by the judge was excessive. We affirm the judge=s decision that fees are payable but reduce the award to $2,000.00.
On May 31, 2002, the employee sustained an injury to his low back while working as a nursing assistant for Hennepin County Medical Center [the employer]. The self-insured employer admitted liability for the injury and provided rehabilitation assistance. On August 19, 2002, the employee retained attorney Thomas J. Germscheid to represent him. Mr. Germscheid, on behalf of the employee, apparently requested a change of QRC, and QRC Roxanne Tarrant began providing rehabilitation services shortly thereafter. Nothing in the file suggests that the employer opposed the change of QRC.
A rehabilitation report from late August of 2002 indicates that the employee was working for the employer in a light-duty capacity and that the QRC had reviewed the job and recommended modifications. Subsequently, when a functional capacities evaluation indicated that the employee would be unable to return to his pre-injury job as a nursing assistant, vocational evaluators at Minnesota Resource Center [MRC] recommended that the employee receive training in basic computer skills, communication, business writing, and grammar. In a February 14, 2003, report, the QRC concurred with that recommendation and indicated that she would follow up with the employer to determine whether the employer would authorize training at MRC. Rehabilitation assistance at that time was directed at finding the employee a suitable job with the employer. The employee apparently attended a short introductory computer class at MRC in April of 2003.
In early June of 2003, the employee=s job duties were changed, and the employee became concerned about his ability to perform certain aspects of the job safely. Specifically, he was uncomfortable recording patient medication information. On June 13, 2003, Mr. Germscheid filed a request for certification of a rehabilitation dispute, describing the issue as follows:
To immediately, or at least promptly, provide to Employee: (1) training so that he does not feel overwhelmed from making mistakes which may cause damage to patients, including writing down types of medication, interviewing clients concerning medication use, and calling the pharmacy, or any other jobs typically done by registered nurses; (2) set forth a plan for substance, procedure, and timing of training; (3) set forth a plan to give a suitable and permanent job to Employee.
On June 30, 2003, Mr. Germscheid filed a second request for certification of a dispute, indicating, in part, that he had not received a response to his first request for certification and referring to an attached letter from the QRC to the employer=s claims administrator about skills training. In that letter, the QRC wrote, in part,
I am sending you an updated R-3 Rehabilitation Plan Amendment regarding Mr. Bergeleen. I have put together an R-3 Rehabilitation Plan Amendment to reflect the services I believe Hector will need in moving towards the goal of a permanent, suitable job. Hector has been released with permanent restrictions for the past six months, however, I feel that we are not much farther along in attempting to identify a permanent job for Hector than we were in the beginning of his release. I feel that is due to a number of factors. There is such a lengthy lag in time in responding to the recommendation for some skill training specifically computer skills. A two hour one-on-one session was approved at MRC which was very basic. Hector will now undergo a one day training class at Hennepin County with Introduction to Windows which was finally authorized. This took six months and I am not sure why that happened. I had talked with Susan Kramer, supervisor at HCMC-CCU and she did authorize a $300.00 budget for Hector to receive computer skill training. I am not sure how Hector will [fare] in the classroom setting with an instructor and nine other participants, however, he is willing to try.
Mr. Germscheid=s June 30, 2003, request for certification also indicated that, A[s]ince the recommendation for skill training has not been agreed to after six months, it is obvious that insurer will not agree to exploration of retraining. Therefore, immediate certification is requested.@
On July 2, 2003, the employer=s claims administrator wrote to Mr. Germscheid concerning the pending request for certification of a rehabilitation dispute, explaining,
In response to your June 30, 2003 letter. On June 16, 2003, I received your June 13, 2003, letter directed to the Department of Labor and Industry, request for certification of dispute (rehab). On June 19, 2003 the DOLI contacted me regarding the request, and on June 24th after an exchange of messages, I was able to discuss this with Linda Wicher at DOLI. At that time I advised that I had talked to human resources at HCMC and confirmed that the employee is working and they continue to provide work within the employee=s restrictions. The employee=s concerns about taking down information on patients medication had been eliminated from his job duties, and is being supervised/trained in the other tasks that had been outlined that he may not be familiar with. In addition I was advised that the employee is registered for computer classes through Hennepin County. We continue to review job openings within the county that are within the employee restrictions that would provide a permanent placement. After this conversation it was my understanding that a conference would not be scheduled. I advised Ms. Wicher that I would be contacting Roxanne Tarrant, QRC to inform her of this information and Ms. Wicher suggested that if the QRC needed to further discuss this she was to contact Linda Wicher (651-284-5268) with the DOLI. I have left calls for the QRC on June 25, 2003, and July 1, 2003, to provide this information and discuss further rehabilitation plans and have not had a response.
A copy of this letter was faxed to the Department of Labor and Industry. Nevertheless, on July 14, 2003, the Department issued a certification of dispute, describing the nature of the dispute as A[w]hether the rehabilitation plan should be amended to include computer skills training or an exploration of retraining.@ About a week later, on July 22, 2003, Mr. Germscheid filed a rehabilitation request, indicating that the A[r]elief requested includes computer skills training and exploration of retraining including testing for skills and interests and aptitude.@
On August 12, 2003, the Department served a notice scheduling an administrative conference on the rehabilitation request for September 26, 2003. Shortly after service of the notice, by letter dated August 19, 2003, the employer=s claims administrator wrote to the employee=s QRC concerning that status of the case, indicating in part as follows:
On July 16, 2003, you had left a phone message for me regarding Hector=s rehabilitation, outlining recommendations in attempting to find a permanent job for him. After discussing these recommendations with his Supervisor I called to discuss them with you leaving a message on July 23, July 29, reaching you on July 30 at that time you advised me you that you were on your way to Albert Lea and would call me on July 31st. On July 31, 2003, we discussed that the department agreed that they could accommodate Hector=s hours so that he could participate in job search. They agreed that on Tuesday=s he could leave at 1:30 p.m. and on Friday=s start work at 10:00 a.m. to starting the job search process. I advised that we could revisit these hours once we had a chance to review the job search progress and if hours needed to be adjusted further. You have informed me that you would be supervising the job search and I advised that it is important for Hector to document his time away from work during his involvement in job search.
I have agreed for you to look into the computer classes at MRC, due to the changes in the classes at Hennepin County. You were to advise what the cost and hours would be for these classes. Since then I have learned that Hector has participated in an August 9th computer class at Hennepin County.
Your final recommendation was for me to agree to development and exploring training for him as another possibility. I suggested that we wait on this last item to see how we progressed with the first two item[s], computer training and outside job search. You agree[d] with that, advising that you would advise Mr. Germscheid, Hectors attorney of this agreement and see if the rehabilitation request was need[ed].
The following day, by letter dated August 20, 2003, the claims administrator notified the QRC that the employee had been authorized Ato participate in 6 hours of computer training@ at MRC. In that letter, the QRC was asked to call the claims administrator, in part to discuss the need for the pending administrative conference. About a week later, by letter dated August 28, 2003, Mr. Germscheid notified the Department that he was withdrawing his request for an administrative conference.
Mr. Germscheid subsequently filed a claim for $7,043.75 in Heaton fees for services rendered on rehabilitation issues. In his statement of fees, Mr. Germscheid indicated that he had spent 40.25 hours on the case and that his hourly rate was $175.00. The employer objected to the claimed fee, and the matter came for hearing before a compensation judge on December 29, 2003.
At hearing, the employer contended that there had been no dispute over rehabilitation and that Mr. Germscheid was not in any event entitled to be compensated for all the time spent on the employee=s file but only for time spent resolving the arguable dispute. In a decision issued on January 5, 2004, the compensation judge awarded Mr. Germscheid $7,043.75, as claimed. The employer appeals.
Heaton fee claims are subject to analysis under the factors set forth in Irwin v. Surdyk=s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999). Those factors include 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. The ultimate question is reasonableness, Lanhart v. Bureau of Engraving, slip op. (W.C.C.A. May 7, 2001), and a judge=s decision on that question will generally not be reversed absent an abuse of discretion, John v. Suburban Air Conditioning, 62 W.C.D. 285 (W.C.C.A. 2002). However, pursuant to Minn. Stat. ' 176.081, subd. 1(3)(c),
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.
In the present case, the employer argues initially that the record does not establish the existence of an actual dispute over rehabilitation. Rather, they contend, Athere was only a slight delay in scheduling the computer classes but there was never any genuine dispute about whether or not [the employee] was entitled to receive such rehabilitation benefits.@ This argument is not entirely without merit. Letters from the employer=s claims administrator might support the conclusion that the delay in scheduling computer training may have been attributable at least in part to the QRC=s own delay in responding to questions and communications from the employer. Moreover, the compensation judge did not precisely identify the nature of the rehabilitation dispute when discussing the issue, other than noting that Ait does not appear that this matter moved along effortlessly@ and citing the QRC=s reference to Aa lengthy time lag in responding to requests and the nature of the jobs the employee has been moved into as causing problems from a vocational standpoint.@ More explanation as to the judge=s rationale would have been helpful. The fact remains, however, that the issue of computer training had been raised as early as February of 2003 and was not finally resolved to the employee=s satisfaction until Mr. Germscheid requested and received certification of a dispute in July of 2003. We therefore conclude that the record is minimally adequate to support the conclusion that a dispute existed for purposes of establishing grounds for a Heaton fee award. We also conclude, however, that the compensation judge=s $7043.75 award is clearly excessive.
When analyzing Mr. Germscheid=s Heaton fee request, the compensation judge essentially gave only three reasons for awarding the entire $7043.75 claim: the fact that, while the recovery was not great monetarily, Athe employee testified that Mr. Germscheid=s services were valuable to him@; the fact that Mr. Germscheid is a skilled practitioner with 23 years experience and could easily have claimed more than the $175.00 hourly rate that he was claiming in this case; and the fact that employees will be unable to secure representation if attorneys do not receive adequate compensation. As such, the compensation judge failed to address most of the Irwin factors when evaluating the fee claim, and, under other circumstances, we might well have remanded the matter for reconsideration. See, e.g., Lanhart v. Bureau of Engraving, slip op. (W.C.C.A. May 7, 2001). However, in this particular case, the employer has specifically asked this court to make a decision on the amount of the fee, without remand. Given these circumstances, and because the matter is uncomplicated and does not involve any lengthy history of proceedings before the compensation judge, we will do so.
We have several reasons for concluding that the claimed fee is excessive. Initially, we would note that, while Mr. Germscheid=s attorney fee statement purports to document a total of 40.25 hours spent on the employee=s file, the individual time entries on the fee statement do not add up to 40.25 hours but rather to only 20.45 hours. We can find no explanation for this discrepancy. Furthermore, several of the entries relate to work obviously not properly chargeable to the employer: specifically, time spent on telephone calls with the employee prior to the retainer; time spent in a telephone call with the employee over a Adiscrimination case@; and time spent to Areceive and review correspondence from attorney for friend.@ In addition, while Mr. Germscheid seeks payment for all the time spent on the employee=s file since the date of the retainer in August of 2002, there is simply nothing in the record to support the conclusion that any dispute over rehabilitation existed before early 2003, at the earliest. The fact that Mr. Germscheid may have reviewed ongoing QRC correspondence and reports prior to any controversy in the case does not mean that he is entitled to compensation for all of his time.
There was no trial in the matter, and the scheduled administrative conference was cancelled. Primary liability was admitted, no depositions were scheduled or taken, no independent experts were consulted. The primary issue - - the employee=s entitlement to some computer training - - was not difficult and could hardly have involved the need for much preparation.
We do not intend to suggest that Mr. Germscheid=s assistance was not valuable to the employee in terms of securing the recommended computer training. However, this was clearly an uncomplicated claim. Under the circumstances, we conclude that a $2,000.00 fee is more than adequate to compensate Mr. Germscheid for his work, and we reduce the judge=s fee award accordingly.
 See Heaton v. J.E. Fryer & Co., 36 W.C.D. 316 (W.C.C.A. 1983); Minn. Stat. ' 176.081, subd. 1.
 The background facts in this matter have been gleaned primarily from imaged documents, including rehabilitation records and the pleadings. While a hearing was held on the attorney fee dispute that is the subject of this appeal, no evidence was submitted beyond the employee=s testimony. The parties and the compensation judge are reminded that Acontested fee hearings merit the same procedures, and procedural safeguards, as other disputed claims,@ Shamp v. Daybreak Foods, 63 W.C.D. 153, 157 (W.C.C.A. 2002). As such, the submission of exhibits is typically necessary to create a record for review purposes in the event of an appeal. In the present case, the record is minimally adequate to avoid remanding the matter for further proceedings.
 At the close of his testimony, the employee responded Ayes@ when asked by the compensation judge whether he thought Mr. Germscheid=s services had been valuable to him. When asked by the compensation judge to explain why, the employee replied,
Well, I feel that I=m able to go to - - I=m able to either call him or call Roxanne Tarrant and it=s good to have the support there, I don=t feel alone so it has been great. I don=t really keep in contact with Tom Germscheid, only if I really need to or if I have things that I=m not understanding but most of all he=s been great and I=ve been getting his letters and stuff and I was notified about the court thing so it=s been good.
 In his brief, Mr. Germscheid contends that this entry related to a Asimilarly situated employee who was faced with similar tactics by the employer.@
 However, we agree with Mr. Germscheid that an attorney may be entitled to compensation for work performed prior to certification of a dispute. Klein v. Wal-Mart Stores, Inc., 62 W.C.D. 628 (W.C.C.A. 2002).