SUSAN E. REINERS, Employee/Appellant, and DAVID M. BIALKE, Attorney, v. HOSPICE OF THE TWIN CITIES and STATE FUND MUT. INS. CO., Employer-Insurer.
WORKERS= COMPENSATION COURT OF APPEALS
SEPTEMBER 9, 2008
ATTORNEY FEES - CONTINGENT FEES. Where there was a dispute involving the nature of medical authorizations to which the insurer was entitled, but the permanent partial disability rating was never disputed, the employee=s attorney was not entitled to a contingent attorney fee on the permanent partial disability benefits paid.
Determined by: Johnson, C.J., Wilson, J., and Stofferahn, J.
Compensation Judge: Nancy Olson
Attorneys: Susan E. Reiners, pro se Appellant. David M. Bialke, Law Office of David M. Bialke, Fridley, MN, for the Respondent Attorney. Mark S. Lorentzen, Lynn, Scharfenberg & Associates, Bloomington, MN, for the Respondent Employer-Insurer.
THOMAS L. JOHNSON, Judge
The employee appeals the compensation judge=s award of contingent attorney fees under Minn. Stat. ' 176.081, subd. 1. We reverse.
Susan E. Reiners, the employee, sustained a personal injury on May 25, 2005, arising out of and in the course of her employment with Hospice of the Twin Cities, the employer, then insured by State Fund Mutual Insurance Company. The employer and insurer admitted liability for the employee=s injury.
By letter dated November 28, 2005, Martha Crump, a claim representative for the insurer wrote the employee enclosing a copy of a Report of Work Ability form completed by Dr. Mann who rated a 7% permanent partial disability secondary to the employee=s personal injury. In the letter, Ms. Crump stated, APlease note that the 7% PPD rating will not be issued until we have obtained your prior treatment records related to your low back to determine apportionment for any pre-existing conditions.@ (Resp. Ex. 1.) Apparently, Ms. Crump=s November 28, 2005, letter included medical authorization forms for signature by the employee.
On December 5, 2005, the employee retained David M. Bialke to represent her. The employee testified the reason she retained an attorney was because she did not want to sign the medical authorizations sent to her by Ms. Crump. The employee felt the medical release forms requested by the insurer were overly broad because they permitted the release of all of her medical records, not just those related to treatment for her personal injury. By letter dated December 12, 2005, directed to Ms. Crump, Mr. Bialke advised the insurer he was representing the employee. Mr. Bialke further stated, AIt appears as though unlimited medical authorizations were sent to Ms. Reiners. Pursuant to discovery Rule 1415.2200, the insurer is entitled to have access to prior medical records related to the low back body part only. We will not voluntarily provide unlimited medical authorizations.@ (Resp. Ex. 2.) Ms. Crump replied by letter dated December 28, 2005 stating, AOur standard authorizations were sent to your client on two separate occasions without being returned. If you object to these authorizations, please provide signed authorizations that you approve of, along with a complete list of prior medical providers that have provided treatment to the low back.@ (Resp. Ex. 3.)
On April 20, 2006, Mr. Bialke sent Ms. Reiners limited medical authorization forms for her signature which she signed and returned. These authorizations were limited to ARelease of Records Pertaining to the Following Conditions: Back Treatment.@ (Resp. Ex. 5.) On April 24, 2006, Mr. Bialke sent to the insurer these limited medical authorization forms. On April 26, 2006, Ms. Crump sent the medical authorization forms signed by Ms. Reiners to various medical providers. Accompanying the signed medical authorizations was a letter asking the provider to APlease forward copies of records for ANY and ALL treatment provided your facility by your facility to this patient.@ (Resp. Ex. 6.) There is no evidence whether the insurer received all of the employee=s medical records or only those pertaining to treatment for her back.
A Notice of Benefit Payment was served on the employee and her attorney on June 28, 2006, reflecting weekly payments of 7% permanent partial disability benefits. A second Notice of Benefit Payment was served on September 13, 2006, reflecting a final weekly payment of the permanency benefits and stating $1,341.31 was withheld for Minn. Stat. ' 176.086, subd. 1, attorney fees. By letter dated April 26, 2007, Mr. Bialke was advised by Ms. Crump that the insurer had withheld $1,341.34 in attorney fees from the payment of permanent partial disability benefits to the employee. (Resp. Ex. 6.) On July 11, 2007, Mr. Bialke filed a Statement of Attorney Fees and Costs requesting contingent attorney fees of $1,320.00 plus $321.00 in subdivision 7 fees and costs. The employee objected to the claimed fee and the matter was heard before a compensation judge at the Office of Administrative Hearings. In a Findings and Order, the compensation judge found that after obtaining the medical records using the medical authorizations provided by Mr. Bialke, the insurer paid the 7% permanent partial disability. The judge found Mr. Bialke=s actions resulted in payment of workers= compensation benefits and awarded Mr. Bialke the claimed contingent fee. The employee appeals.
Minn. Stat. ' 176.081, subd. 1(c), provides, in part:
In no case shall fees be calculated on the basis of any undisputed portion of compensation awards. Allowable fees under this chapter shall be based solely upon genuinely disputed claims or portions of claims, including disputes related to 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.
In this case, Dr. Mann rated a 7% permanent partial disability and that rating was never in dispute. What was in dispute was the nature of the medical authorizations to which the insurer was entitled. While Mr. Bialke may be eligible for an award of attorney fees for resolving a medical dispute, he is not entitled to a contingent fee on the permanent partial disability benefits. The award of attorney=s fees is reversed, and the insurer is ordered to pay to the employee all attorney fees withheld from the payment for the 7% permanent partial disability.
By Notice of Benefit Payment dated March 18, 2008, the insurer paid Mr. Bialke $1,320.00 in contingent attorney fee, plus fees of $321.00, pursuant to Minn. Stat. ' 176.081, subd. 7. Mr. Bialke is ordered to reimburse the insurer $1,641.00.
 We take no position on whether the employee=s attorney is entitled to an award of attorney fees under Roraff v. State, Dep=t of Transp., 288 N.W.2d 15, 32 W.C.D. 297 (Minn. 1980).
 It is not clear from the record the amount of the attorney fees withheld. The September 13, 2006, Notice of Benefit Payment and Ms. Crump=s April 26, 2007, letter state $1,341.34 was withheld but Mr. Bialke was awarded $1,320.00.