JAMIE E. BRYANT, Employee, v. UNIVERSITY OF MINN., SELF-INSURED/SEDGWICK CLAIMS MGMT. SERVS., Employer/Appellant.
WORKERS= COMPENSATION COURT OF APPEALS
DECEMBER 21, 2006
ATTORNEY FEES - IRWIN FEES. Where there was no evidence as to the benefit recovered for the employee, there was no basis for the compensation judge to conclude that a contingent fee was not adequate to reasonably compensate the employee=s attorney.
Determined by Stofferahn, J., Wilson, J., and Pederson, J.
Compensation Judge: Gary M. Hall
Attorneys: John Malone, Malone & Atchison, Edina, MN, for the Respondent. Roderick C. Cosgriff, Heacox, Hartman, Koshmrl, Cosgriff & Johnson, St. Paul, MN, for the Appellant.
DAVID A. STOFFERAHN, Judge
The self-insured employer appeals from the compensation judge=s award of add-on attorney fees pursuant to Irwin v. Surdyk=s Liquor. We vacate the award.
The employee, Jamie E. Bryant, was a police officer for the University of Minnesota on November 8, 2003, and December 10, 2003. The employee claimed to have sustained personal injuries on those dates which arose out of and in the course of her employment. The employer denied primary liability. The employee filed a claim petition in January 2004, which was heard by Compensation Judge Gary M. Hall on October 13, 2005.
At the hearing, the parties stipulated that the employee had returned to work without restrictions on March 14, 2004, and that the employee Ahas now fully recovered from the claimed injuries without any permanent partial disability.@ In his Findings and Order of December 12, 2005, the compensation judge found that the employee sustained work-related injuries on the claimed dates. The compensation judge also found the employee had been paid full wage continuation during the time she was off work due to her injuries. The compensation judge determined the employee was entitled to the claimed wage loss benefits subject to Aany appropriate offsets for full wage continuation@ as well as payment for Athe disputed medical treatments.@ There is nothing in the decision which indicates the nature and amount of the wage loss claim, the extent of any wage continuation payments, whether the medical expenses were outstanding or paid and the amount of those expenses. The compensation judge also found that the employee=s attorney represented the employee Apursuant to a lawful retainer agreement@ but there was no order concerning fees. There was no appeal from the findings and order.
On March 1, 2006, the employee=s attorney, Dennis Atchison, filed a Statement of Attorney Fees. The statement indicated that the attorney had spent 20.5 hours on the case and requested a fee of $4,600.00. He advised that in Aexcess of $11,000.00" had been recovered. With regard to the benefits in dispute the statement stated ABoth injury dates were denied on a primary basis. A hearing was conducted on October 13, 2005, and employee prevailed on all issues.@ The employer objected to the requested fee and a hearing on the issue was held on May 25, 2006, before Compensation Judge Hall.
At the hearing, the employee=s attorney filed a statement of his time detailing 32.2 hours. The fee requested at the hearing was $6,440.00. There were no other exhibits and no testimony at the hearing. The employee=s attorney and the employer=s attorney argued the question of fees to the compensation judge.
The compensation judge issued findings and order on the attorney fee dispute on May 25, 2006. The compensation judge reviewed the arguments of counsel and then applied the factors set forth in Irwin in determining the appropriate fee. The compensation judge found that $5,000.00 would reasonably compensate the employee=s attorney and ordered the employer to pay that amount to the employee=s attorney. The employer appeals.
Minn. Stat. ' 176.081, subd. 1, provides for attorney fees of 25% of the first $4,000.00 in compensation awarded to the employee and 20% of the next $60,000.00 in compensation awarded. This formula also applies to attorney fees in cases in which rehabilitation benefits or medical benefits are recovered. In Irwin, the Supreme Court held that attorney fees were not held to the statutory limit alone and that in cases in which a contingent fee is inadequate, a compensation judge might award an additional fee after considering a number of factors. Those factors which have come to be known as the Irwin factors, include a determination of the result obtained on behalf of the employee.
This court has had numerous occasions to consider the Irwin case and its application to claims for fees. We have stated that the contingent fee formula is Apresumed to be adequate.@ Minn. Stat. ' 176.081, subd. 1(a). An additional fee paid by the employer and insurer is assessed only if the employee=s attorney establishes the contingent fee is inadequate. Cahow v. Brookdale Motors, 61 W.C.D. 427 (W.C.C.A. 2001). The add-on fee may be awarded for the recovery of medical expenses or for the recovery of rehabilitation benefits. Dally v. Conagra/Peavey Co., slip op. (W.C.C.A. Oct. 18, 2000). An add-on fee may also be awarded in a case involving both indemnity benefits and medical expenses. Keller v. Quicksilver Express Courier, WC04-339 (W.C.C.A. June 30, 2005). This court has held, however, that Irwin does not apply when the only compensation awarded was temporary total disability. Hubbard v. Northeast Metro ISD #916, slip op. (W.C.C.A. Nov. 24, 2003).
The first question then, in any case in which there is a claim for add-on fees, is whether the contingency fee from benefits recovered is adequate to reasonably compensate the attorney. The compensation judge in this case was not able to answer this question, and this court is not able to do so either. There is simply no evidence as to what benefits were recovered for the employee. The compensation judge found the employee to be entitled to temporary total disability benefits for the time she was off work, but the compensation judge also made payment of those benefits conditional on the Aappropriate offset@ for the wages received by the employee. We do not know if any credit was appropriate or if any benefits were paid. While there was reference to disputed medical expense, we do not know the amount of those bills, whether they were already paid by the employer, or whether the employee had any out-of-pocket costs.
It is the obligation of the employee=s attorney to present evidence which would support his claim for fees and in this case, he has failed to do so. We recognize there is a certain inherent awkwardness in attorney fee disputes with the possibility of counsel having to testify and be cross-examined. We are not holding that testimony is necessary in every case, but there must be an evidentiary basis for a compensation judge=s determination, and there must be a record for this court to review. Determination of an attorney fee dispute should be made with the same care as other disputed claims. Stewart v. 3M Co., slip op. (W.C.C.A. Nov. 4, 2003).
We find no record which supports an award of Irwin fees in the present case. The compensation judge=s decision is vacated. The employee=s attorney may file another fee statement of attorney fees.
 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999).
 While not an issue on appeal, this court is concerned about the withdrawal of a potential award to the employee under Minn. Stat. ' 176.081, subd. 7. An award under subd. 7, is mandatory in cases involving contingency fees, Roraff fees, and Heaton fees. Any waiver of the employee=s claim to these fees should be scrutinized carefully by the compensation judge. When the sole dispute at hearing is attorney fees, it is difficult to see what rationale there might be in waiving the employee=s claim.