LEE ANN ZIEGLER, Employee/Appellant, v. AWARD STAFFING SERVS., INC., and EMPLOYERS INS. CO. OF WAUSAU, Employer-Insurer.
WORKERS’ COMPENSATION COURT OF APPEALS
NOVEMBER 18, 2009
ATTORNEY FEES - RORAFF FEES. Given the record as a whole and in light of the Irwin factors and the purpose of attorney fees awards, the judge’s award of Roraff fees was modified from $3,300.00 to $5,500.00.
Affirmed as modified.
Determined by: Wilson, J., Pederson, J., and Johnson, C.J.
Compensation Judge: James F. Cannon
Attorneys: Michael B. Healey, Koll, Morrison, Charpentier & Hagstrom, St. Paul, MN, for the Appellant. Thomas V. Maguire, Brown & Carlson, Minneapolis, MN, for the Respondent.
DEBRA A. WILSON, Judge
The employee appeals from the judge’s determination as to the amount of attorney fees payable for work performed by her attorney in connection with her medical expense claim. We affirm, as modified, and award fees in the amount of $5,500.00.
On January 3, 2008, the employee slipped and fell in the course and scope of her employment work with Award Staffing Services, Inc. [the employer]. The employer and insurer admitted that the employee had sustained a work-related injury and paid various benefits. At some point, a dispute arose concerning the nature and extent of the injuries resulting from the slip and fall, specifically, whether the employee had injured her neck, as opposed to just her low back and shoulder, in that incident.
In May of 2008, the employee retained Gary Hagstrom to represent her in her workers’ compensation claim. On August 8, 2008, Mr. Hagstrom filed a claim petition, seeking approval of a two-level cervical fusion procedure that had been offered by Dr. Cornelius Lam. In their answer, the employer and insurer denied that the requested procedure was reasonable, necessary, or causally related to the January 3, 2008, incident. The employer and insurer also asserted that the proposed surgery was not appropriate based on the employee’s failure to exhaust conservative treatment options, including treatment specified by the treatment parameters. According to reports by Dr. Charles Burton, the employer and insurer’s independent medical examiner, the employee’s cervical condition was not related to her fall at work. Dr. Burton also strongly recommended against fusion surgery, given what he viewed as the employee’s lack of objective neurologic findings, her long term use of tobacco, and the fact that she has cystic fibrosis.
Hearing on the employee’s claim petition was held on October 22, 2008. At that hearing, the employer and insurer admitted for the first time that the employee had injured her neck in the January 3, 2008, work incident. Issues included whether the treatment parameters were applicable, whether the proposed surgery was otherwise reasonable and necessary, and whether two intervenors, Mayo Clinic and PreferredOne, were entitled to payment of medical expenses in the amount of $1,847.14. Evidence included the employee’s medical records, the deposition testimony and reports of Dr. Lam, and the reports of Dr. Burton.
In a decision issued on December 9, 2008, the compensation judge concluded that the treatment parameters were not applicable to the claimed expenses, because the employer and insurer had denied liability for the employee’s cervical condition until the date of hearing. However, the judge also concluded that the requested surgery was not reasonable or necessary treatment at that time, given the employee’s failure to exhaust conservative treatment options and the surgical risks associated with the employee’s history of smoking and cystic fibrosis. The judge therefore denied the employee’s request for surgery but ordered the employer and insurer to pay the claims of the intervenors. No appeal was taken from this decision.
Mr. Hagstrom subsequently filed a statement of attorney fees, seeking Roraff fees in the amount of $13,600.00 for work performed in connection with the medical claim. In that fee statement, Mr. Hagstrom documented 45.90 hours of his time, billed at a rate of $275.00 per hour, with the remainder of the claimed fee for paralegal time. A few days later, the employer and insurer filed an objection to the requested fees, objecting to the claimed hourly billing rates and to claims for time spent on non-medical issues. The employer and insurer also asserted that the employee had not prevailed on the most significant portion of her claim.
The attorney fee dispute came on for hearing on March 23, 2009, before the same judge who had heard the medical claim. In a decision issued on May 22, 2009, as amended on June 3, 2009, the judge concluded that Mr. Hagstrom was entitled to $3,300.00 in Roraff fees, with a corresponding award to the employee pursuant to Minn. Stat. § 176.081, subd. 7. The employee appeals.
Pursuant to Minn. Stat. § 176.081, subd. 1,
Subdivision 1. Limitation of fees. (a) A fee for legal services of 25 percent of the first $4,000.00 of compensation awarded to the employee and 20 percent of the next $60,000.00 of compensation awarded to the employee is the maximum permissible fee and does not require approval by the commissioner, compensation judge, or any other party. All fees, including fees for obtaining medical or rehabilitation benefits, must be calculated according to the formula under this subdivision, except as otherwise provided in clause (1) or (2).
In Irwin v. Surdyk’s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999), the Minnesota Supreme Court determined that the statutory cap on attorney fees for work performed to obtain medical benefits - - Roraff fees - - was unconstitutional. Reasonable fees are, instead, to be determined based not only on the statutory guidelines but also on “the 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 employee has the burden of establishing entitlement to Roraff fees. Cantu v. Ameripride Linen & Apparel Serv., 65 W.C.D. 343 (W.C.C.A. 2005).
In the present case, Mr. Hagstrom claimed $13,600.00 for work performed in connection with the employee’s medical expense claim, the bulk of it related to more than 45 hours of his own work, at an hourly rate of $275.00. The employer and insurer responded by objecting to the claimed hourly rate and to various entries in Mr. Hagstrom’s fee statement that were purportedly unrelated to the medical expense issues. The employer and insurer also asserted that Mr. Hagstrom had not been successful on the primary claim, for approval of fusion surgery.
In his decision on attorney fees, the judge analyzed the underlying facts, in light of the Irwin factors, in considerable detail, concluding, in part, that Mr. Hagstrom had “thoroughly represented the employee” through the date of the medical expense hearing, performing most of the work himself, and that, as a very experienced workers’ compensation practitioner, Mr. Hagstrom’s hourly rate of $275.00 was reasonable, as were paralegal hourly rates of up to $100.00, as claimed. The judge further concluded, however, that the case was not complicated, that the necessary proof was not difficult to obtain or present, and that the employee had lost her primary claim, for fusion surgery, obtaining only a minimal amount, $1,847.14, in payment to the intervenors. As such, in the judge’s view, both the amount involved and the result obtained weighed against the claimed fee. Accordingly, the judge awarded Mr. Hagstrom $3,300.00 in Roraff fees, based on his conclusion that Mr. Hagstrom should be compensated for twelve hours of work at his claimed hourly rate.
On appeal, Mr. Hagstrom contends that the compensation judge erred in his analysis of the nature of the proof involved and the complexity of the issues, in that the judge failed to give enough weight to the fact that the employer and insurer had denied liability for the cervical injury until the date of hearing. That is, Mr. Hagstrom contends, the judge improperly failed to consider all of the work he was required to perform in anticipation of trial on the issue of primary liability/medical causation, including taking depositions and obtaining narrative reports. Mr. Hagstrom also contends that the judge improperly analyzed the issue of “results obtained,” in that he failed to give adequate consideration to the fact that Mr. Hagstrom’s work secured ongoing medical care for the employee’s cervical injury.
We agree with the judge’s analysis in many respects. The causation issue was not complex, consisting only of the rather straightforward question of whether or not the employee had injured her neck in the admittedly work-related fall. While Mr. Hagstrom deposed Dr. Lam, questioning was focused largely on the issue of the requested cervical fusion surgery, as opposed to causation. The remainder of the documentary evidence consisted primarily of the employee’s treatment records, and the employer and insurer’s expert, Dr. Burton, was not deposed. As for the question of the results obtained, the employee did not, in fact, prevail on her claim for approval of the two-level fusion, which appeared to be the primary focus of the litigation. Finally, the employer and insurer were correct in pointing out that a number of the entries on Mr. Hagstrom’s fee statement were not related to the medical expense dispute.
At the same time, however, it seems to us that the compensation judge underestimated the importance of the fact that, through Mr. Hagstrom’s efforts, liability for a cervical injury was established. See Ryan v. University of Minn., 63 W.C.D. 645 (W.C.C.A. 2003) (in analyzing the issue of results obtained in litigation, a compensation judge may consider whether liability for future benefits has been established). Also, in general, fee awards should be adequate to ensure that injured workers have access to competent representation. Cf. Kahn v. State, Univ. of Minn., 327 N.W.2d 21, 24, 35 W.C.D. 425, 429 (Minn. 1982); Vaughn v. Allina Health Sys., No. WC08-210 (W.C.C.A. Mar. 9, 2009). Looking at the record as a whole, the fee award here is not sufficient to serve that aim. Therefore, under these particular circumstances, we conclude that Mr. Hagstrom is entitled to $5,500.00 in Roraff fees for work performed in connection with the employee’s medical expense claim. The award to the employee pursuant to Minn. Stat. § 176.081, subd. 7, is also modified accordingly.
 See Roraff v. State, Dep’t of Transp., 288 N.W.2d 15, 32 W.C.D. 297 (Minn. 1980).
 We would also observe here, in passing, that Dr. Lam’s opinion as to the employee’s need for fusion surgery was somewhat equivocal.
 Specifically, time spent on rehabilitation issues, weekly wage, and the possible pursuit of a civil claim.