JEAN LUDESCHER, Employee, v. UNIVERSITY OF MINN., SELF-INSURED/SEDGWICK CMS, Employer.
WORKERS= COMPENSATION COURT OF APPEALS
MAY 24, 2007
ATTORNEY FEES - RORAFF FEES. Remand for hearing and new findings was necessary where no evidentiary hearing was held and where the judge erred in evaluating whether there existed a genuine dispute over payment of medical expenses, erred by assuming that the employer did not object to the hours claimed by the employee=s attorney, and erred by failing to rule on the effect of the employee=s failure to request certification of a dispute by the Department of Labor and Industry.
Vacated and remanded.
Determined by: Wilson, J., Rykken, J. and Stofferahn, J.
Compensation Judge: Jeanne E. Knight
Attorneys: Carter J. Bergen, Woodbury, MN, for the Respondent. Roderick C. Cosgriff, Heacox, Hartman, Koshmrl, Cosgriff & Johnson, St. Paul, MN, for the Appellant.
DEBRA A. WILSON, Judge
The self-insured employer appeals from the compensation judge=s award of fees for work performed by the employee=s attorney in connection with medical expenses related to the employee=s carpal tunnel syndrome. We vacate and remand the matter to the compensation judge for further proceedings consistent with this opinion.
The employee is employed by the University of Minnesota [the employer], which is self-insured for workers= compensation purposes. Sometime in late 2005, the employee began receiving treatment for hand and wrist symptoms, but she apparently did not miss any time from her job.
On January 17, 2006, notice was filed indicating that the employee had engaged Carter Bergen to represent her in connection with a workers= compensation claim against the employer. The file contains correspondence between Mr. Bergen and the employer=s claims administrator concerning payment of medical expenses. On February 17, 2006, the employee filed a claim petition, alleging entitlement to medical expenses incurred as a result of a claimed November 29, 2005, bilateral carpal tunnel injury. About two months later, by letter dated April 12, 2006, the employee withdrew her claim petition, indicating that the employer had agreed to pay the outstanding medical expenses at issue.
On April 14, 2006, Mr. Bergen filed a petition for Roraff fees, alleging entitlement to payment of fees for 7.25 hours of attorney time, at $225 an hour, and 4.75 hours of legal assistant time, at $110 an hour, for a total fee of $2,153,75. The employer responded by alleging that the claimed fees were excessive, unreasonable, and not related to any genuine dispute between the parties. The employer also requested a hearing on fees.
In June of 2006, the employer filed a notice of primary liability determination, accepting liability for the claimed injury.
Hearing on the employee=s petition for attorney fees was held before a compensation judge on July 24, 2006. At that time, counsel for the employer reiterated that the time spent by Mr. Bergen was excessive and that there had not been any genuine dispute concerning payment of the bills. Counsel also contended that no fees were owing because the dispute had not been certified by the Department of Labor and Industry, as required by statute. Counsel for both parties presented their views as to the history of the matter, and counsel for the employer gave the compensation judge a packet of correspondence between the claims adjuster and Mr. Bergen, but no evidence was formally submitted, and no sworn testimony was taken.
In a decision issued on November 17, 2006, the compensation judge concluded that Mr. Bergen was entitled to $2,153.75 in fees, as claimed, with partial reimbursement of fees, in the amount of $571.13, pursuant to Minn. Stat. ' 176.081, subd. 7. The employer appeals.
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.@ Krovchuck v. Koch Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993).
The compensation judge concluded that there had been a genuine dispute between the parties concerning liability for medical expenses related to the employee=s carpal tunnel syndrome, and, in her memorandum, she indicated that the employer had not objected to Mr. Bergen=s Ahours or rate.@ The judge therefore awarded the total fee claimed by Mr. Bergen, along with reimbursement pursuant to Minn. Stat. ' 176.081, subd. 7. The employer appeals, citing numerous alleged errors in the compensation judge=s findings and rationale. We agree that the judge erred.
There are several reasons for our decision. First, it appears from her memorandum that the judge based her conclusion about the existence of a genuine dispute largely on the fact that the employer did not file a notice of primary liability determination [NOPLD] until June 2006. According to the compensation judge, Minn. Stat. ' 176.221, subd. 1, requires employers to pay or deny claims with 14 days of notice of a compensable injury, and the employer in the present case did not file the NOPLD Ain a timely manner.@ However, Minn. Stat. ' 176.221, subd. 1, requires employers to pay or deny claims within 14 days only with respect to injuries that must be reported to the commissioner pursuant to Minn. Stat. ' 176.231, subd. 1, that is, Adeath or serious injury . . . or any other injury . . . which wholly or partly incapacitates the employee from performing labor or services for more than three calendar days.@ Minn. Stat. ' 176.231, subd. 1; see also Minn. R. 5220.2570, subd. 7 (a denial [of liability] must be filed within 14 days of notice or knowledge by the employer of an injury which is required to be reported to the commissioner under Minnesota Statutes, section 176.231, subdivision 1"). In the present case, the claim was for medical expenses only, and there is no evidence that the employee had been Awholly or partly@ incapacitated from working for more than three days. Moreover, Minn. Stat. ' 176.135, subd. 6, allows employers up to thirty days to pay medical expenses, and the compensation judge herself found that Athe date each provider submitted their bill to the employer and insurer is unknown.@
Second, the compensation judge did not rule on the employer=s argument regarding the employee=s failure to comply with the requirements of Minn. Stat. ' 176.081, subd. 1(c), concerning certification of a dispute by the department. In Jorgenson v. Novak-Fleck, Inc., 638 N.W.2d 760, 62 W.C.D. 89 (Minn. 2002), the supreme court indicated that certification is not a prerequisite to a fee award if an employer and insurer have denied primary liability. However, there was no formal denial of primary liability in the present case, and the compensation judge did not address the certification issue in any way.
Third, the compensation judge erred in concluding that the employer did not object to Mr. Bergen=s claimed hours or rate. During the hearing before the judge, counsel for the employer clearly alleged that the time spent by Mr. Bergen was excessive and unreasonable, even assuming the existence of a genuine dispute.
Fourth, there is no formal record for review here. The parties= accounts of just what happened, and when, are arguably inconsistent, and certain relevant facts - - such as when the medical bills were submitted to the employer - - are unknown. Even the employee, on appeal, concedes that the employer is entitled to an evidentiary hearing, pursuant to Irwin v. Surdyk=s Liquors, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999). See also Duda v. Pizza Hut, Inc., slip op. (W.C.C.A. July 12, 2002) (AFee hearings should generally be conducted in a manner that allows for adequate appellate review, which would normally entail the submission of evidence, including testimony, if necessary@).
For all the reasons stated above, we find it necessary to vacate the judge=s decision and remand the matter for a full evidentiary hearing and new findings. Initially, the judge should determine whether a genuine dispute existed, keeping in mind that A[t]he 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.@ Minn. Stat. ' 176.081, subd. 1(c). In connection with this issue, the judge should consider the effect of the employee=s apparent failure to ask the department to certify a dispute. Assuming these prerequisites for an award of fees are satisfied, the judge should calculate the contingent fee on the claimed medical expenses. If she concludes that the contingent fee is not adequate to compensate Mr. Bergen for his services, the judge should go on to determine whether additional fees are payable, considering the factors enunciated in Irwin. The employee has the burden of proof to establish entitlement to fees, see Cantu v. Amerpride Linen & Apparel Serv., 65 W.C.D. 343 (W.C.C.A. 2005), and determinations on attorney fees should be made with the same care as other disputed claims, Bryant v. University of Minn., No. WC06-197 (W.C.C.A. Dec. 21, 2006); Stewart v. 3M Co., slip op. (W.C.C.A. Nov. 4, 2003).
 See Roraff v. State, Dep=t of Transp., 288 N.W.2d 15, 32 W.C.D. 297 (Minn. 1980).
 ADeath or serious injury@ must be reported within 48 hours; an injury which Awholly or partly incapacitates the employee@ from working for more than three calendar days must be reported no later than 14 days after occurrence. Minn. Stat. ' 176.231, subd. 1.
 Minn. Stat. ' 176.081, subd. 1(c), provides that,
[e]xcept where the employee is represented by an attorney in other litigation pending, . . . a fee may not be charged . . . for services with respect to a medical or rehabilitation issue . . . 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.
 Pursuant to Irwin, a reasonable fee is to be determined considering not only the statutory guidelines but also 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, 599 N.W.2d at 142, 59 W.C.D. at 336.
 In its brief on appeal, the employer contends that its claims administrator paid the disputed fees, in error, after the compensation judge issued her decision. The employer=s claim for a refund or credit should be considered by the compensation judge during the proceedings on remand.