JERRED K. MOORE, Employee, v. CAL SPAS OF MINN. and SFM, Employer-Insurer/Appellants.
WORKERS= COMPENSATION COURT OF APPEALS
NOVEMBER 13, 2008
ATTORNEY FEES - RORAFF FEES. Where the only dispute during the hearing on the employee=s request for surgery was whether the employee had to quit smoking prior to undergoing the recommended procedure, where the employee prevailed on that issue and underwent the procedure, and where the employer and insurer voluntarily paid the employee temporary total disability benefits after surgery was performed, the compensation judge correctly determined that the employee=s attorney was entitled to Roraff fees, payable by the employer and insurer, calculated on a contingent basis based on the medical expenses incurred and paid, rather than from withholding from the temporary total disability benefits voluntarily paid following surgery.
Determined by: Wilson, J., Johnson, C.J., and Stofferahn, J.
Compensation Judge: Gary P. Mesna
Attorneys: Thomas A. Klint, Midwest Disability, Coon Rapids, MN, for the Respondent. M. Chapin Hall, Lynn, Scharfenberg & Assocs., Minneapolis, MN, for the Appellants.
DEBRA A. WILSON, Judge
The employer and insurer appeal from the judge=s award of Roraff attorney fees. We affirm.
The employee sustained work-related injuries to his low back on February 1, 2005, and October 14, 2005, while working for Cal Spas of Minnesota [the employer]. As a result of these work injuries, Dr. Joel Sagedahl, the employee=s treating physician, imposed various work restrictions. A discogram performed on July 31, 2006, showed abnormal discs at L5-S1 and L4-5, and orthopedist Dr. Paul Hartleben subsequently recommended an anterior posterior lumbar fusion at L4-5 and L5-S1, contingent on the employee quitting smoking.
The employee filed a medical request on October 11, 2006, requesting the recommended surgery. A few weeks later, on November 8, 2006, the employer and insurer filed a notice of intention to discontinue benefits [NOID], seeking to discontinue payment of temporary partial disability benefits based on an independent medical examination by Dr. John Sherman, who said that the employee was able to work full time. Following an administrative conference and decision, the employee filed an objection to discontinuance.
Prior to the hearing on the objection to discontinuance, the parties reached an agreement specifying that the employer and insurer would pay for the proposed surgery if the employee quit smoking. Dr. Sagedahl helped the employee in his smoking cessation efforts.
On June 11, 2007, the employee was seen by Dr. Richard Salib for a second opinion regarding his back. Dr. Salib examined the employee, reviewed his discography, and offered an additional option - - a total disc replacement or an anterior disc replacement at either one or both of the involved levels. Dr. Salib=s recommendation was contingent on a CT scan showing that there were no arthritic changes.
The employee was seen by Dr. Salib again on July 12, 2007, at which time the doctor indicated that he had reviewed a CT scan, which confirmed that there were no arthritic changes that would complicate disc replacement surgery. At that time, he recommended a one-level fusion and a one-level disc replacement. Dr. Salib=s recommendation was not contingent on the employee quitting smoking. On July 23, 2007, the employee filed a medical request, seeking approval for the surgery proposed by Dr. Salib.
The objection to discontinuance went to hearing on July 31, 2007. In findings and order filed on September 18, 2007, a compensation judge found the employee capable of working four hours per day, and the judge ordered payment of temporary partial disability benefits based on imputed earnings for a four-hour work day. He also ordered the insurer to withhold attorney fees from those payments.
On November 14, 2007, the July 2007 medical request came on for hearing. In findings and order filed on January 3, 2008, the compensation judge found that there was no dispute as to the necessity for surgery; the only dispute was whether the employee needed to quit smoking before undergoing surgery. The judge found that the surgery proposed by Dr. Salib was reasonable and necessary and that the employee need not quit smoking before undergoing the surgery. There was no appeal from that findings and order, and the employee underwent the surgery, at which time the employer and insurer began paying temporary total disability benefits.
On March 12, 2008, Thomas Klint, attorney for the employee, filed a statement of attorney fees, seeking Roraff fees in the amount of $24,000.00, for services rendered in pursuing the surgery claim. By the time of the hearing on the fee claim, medical bills relating to the surgery totaled $44,732.24. In a findings and order filed on June 23, 2008, the compensation judge found that Mr. Klint was entitled to attorney fees calculated using the statutory 25/20 formula, as applied to the medical expenses. The employer and insurer appeal.
STANDARD OF REVIEW
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 (2008). 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, 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 evidence or not reasonably supported by the evidence as a whole.@ Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).
In disputes involving only medical benefits, Minn. Stat.'176.081, subd. 1(a) and 1(a)(1), provide for contingent attorney fees of 25% of the first $4000, and 20% of the next $60,000 of the value of the medical benefits obtained. Pursuant to Minn. Stat. '176.081, subd. 1(c), AIn no case shall fees be calculated on the basis of any undisputed portion of compensation awards.@
In the present case, the employer and insurer contend that attorney fees should be withheld from the temporary total disability benefits that the employer and insurer began paying when the employee underwent the disputed surgery, arguing that implicit in a dispute over surgery is a dispute over the temporary total disability benefits payable as a result of that surgery. In the alternative, the employer and insurer contend that attorney fees are properly withheld from temporary total disability benefits because those benefits are merely an extension of the temporary partial disability benefits that they were ordered to pay in the prior proceeding. We are not persuaded.
The question of just what is genuinely disputed is usually determined at the time of an award. Kohn v. A & M Business Interiors, slip op. (W.C.C.A. Jan. 30, 2005). In the instant case, the employee was not claiming temporary total disability benefits at the time of hearing on the medical request. In his unappealed findings on the medical request, the compensation judge found that the only issue was whether it was necessary for the employee to quit smoking before surgery.
In Turan v. Park Constr., 61 W.C.D. 602 (W.C.C.A. 2001), the employer and insurer voluntarily paid the employee continuing temporary total disability benefits from the date of his work injury. The employer and insurer had served the employee with a notice of intention to discontinue benefits, effective August 28, 2000, based on an independent medical examiner=s finding of maximum medical improvement. The employee=s medical request for knee surgery was the subject of an administrative conference in June 2000, at which time the compensation judge concluded that the surgery was reasonable and necessary and causally related to the work injury. No appeal was taken from that decision. Temporary total disability benefit payments were continued, but the employer and insurer withheld attorney fees after August 28, 2000. The surgery was completed in late September or early October of 2000. The employee=s attorney notified the employer and insurer that he was not seeking attorney fees out of the temporary total disability benefits and filed a petition for attorney fees based on a percentage of the total cost of the surgery. After hearing on the attorney fee issue, a compensation judge found that the temporary total disability benefits paid after August 28, 2000, had not been disputed and that the employee=s attorney was entitled to apply the 25/20 statutory formula to the medical expenses to arrive at an attorney fee. On appeal, this court affirmed the judge=s finding, holding that the attorney=s representation of the employee at the administrative conference was limited to the issue of entitlement to surgery. In a similar case, Crowley v. Plehal Blacktopping, Inc., slip op. (W.C.C.A. Oct. 13, 2005), this court affirmed the compensation judge=s finding that attorney fees were not payable out of wage loss benefits paid subsequent to the hearing on surgery, as the only issues in dispute at the hearing were medical and rehabilitation benefits. At oral argument, counsel for the employer and insurer attempted to distinguish these cases, but we find them to be directly on point.
The employer and insurer also contend that this court=s holding in Dietrich v. U.S. Airways, Inc., slip op. (W.C.C.A. May 30, 2008), is applicable to the instant case. We are not persuaded. In Dietrich, we held that attorney fees in retraining cases are payable on a contingent basis from wage loss benefits payable during retraining. However, Dietrich is a retraining case, not a need for surgery case, and Minn. Stat. '176.102, subd. 11(b), expressly provides for payment of temporary total disability benefits to an employee who is not employed during a retraining program. As such, weekly benefits are part and parcel of a request for retraining. In contrast, there is no statute providing for automatic payment of weekly indemnity benefits after surgery, and defenses to temporary total disability claims exist, such as retirement and removal from the job market. Not all surgical procedures result in temporary total disability.
We are also unpersuaded by the employer and insurer=s argument that the temporary total disability benefits paid following the employee=s surgery are simply an extension of the previously disputed temporary partial disability benefit claim and award. The dispute over the temporary partial disability benefits involved the employee=s restrictions, specifically, how many hours he could work each day in his disabled condition. That dispute has nothing to do with the employer and insurer=s payment of temporary total disability benefits following the employee=s surgery. Temporary partial disability benefits were only payable while the employee was working, and there was no corresponding order for payment of temporary total disability benefits after the employee=s surgery. Substantial evidence supports the judge=s finding that those payments were voluntary.
Finally, the employer and insurer contend that there should be no attorney fee for the fusion surgery because the employee=s attorney did not try the request for surgery at the time of the hearing on temporary partial disability benefits. We note initially that, at the time of the hearing on the temporary partial disability claim, the parties had reached an agreement on the October 11, 2006, medical request. That agreement provided that the employee would be allowed to have fusion surgery once he quit smoking, as recommended by Dr. Hartleban. The new medical request for disc replacement and fusion by Dr. Salib was not filed until July 23, 2007, just five days before the hearing on temporary partial disability. Given the short period between the filing of the medical request and the hearing on temporary partial disability benefits, it was not unreasonable for the employee=s attorney to try the issues separately. Furthermore, the employer and insurer did not indicate any desire, at that time, for the issues to be consolidated.
The judge=s order for fees is affirmed.
 Roraff v. State, Dep=t of Transp., 288 N.W.2d 15, 32 W.C.D. 297 (Minn. 1980). Attorney fees for work performed in connection with medical claims are now governed by Minn. Stat. ' 176.081, subd. 1, but use of the term Roraff fees has survived the codification.