PETER M. PAAPE, Employee/Appellant, v. CITY OF SOUTH ST. PAUL, SELF-INSURED/BERKLEY RISK ADM’RS, Employer-Insurer.
WORKERS’ COMPENSATION COURT OF APPEALS
APRIL 21, 2011
ATTORNEY FEES - RORAFF FEES; RULES CONSTRUED - MINN. R. 5221.6050, SUBP. 9.C.(6). The compensation judge erred in concluding that the employer had notified the employee of its approval of surgery within the 45-day period contemplated by the medical treatment parameters governing requests for nonemergency surgery. The 45-day period is calculated by calendar days, not working days. Because there was a genuine dispute over the employee’s entitlement to surgery, the employee’s attorney is entitled to Roraff fees for work performed in connection with that surgery.
Determined by: Wilson, J., Rykken, J., and Stofferahn, J.
Compensation Judge: Gary P. Mesna
Attorneys: Robert T. Brabbit, Brabbit & Salita, Minneapolis, MN, for the Appellant. Elyssa J. Weber, League of Minnesota Cities, St. Paul, MN, for the Respondent.
DEBRA A. WILSON, Judge
The employee’s attorney appeals from the compensation judge’s denial of Roraff fees for work performed in connection with the employee’s request for approval of surgery. We reverse.
The employee sustained a work-related back injury on November 1, 2005, and the self-insured employer admitted liability and paid various benefits. The employee eventually filed a claim petition on October 26, 2009, alleging entitlement to benefits for a 17.5% permanent partial disability.
The employee’s symptoms had been worsening over time, and he had another MRI scan on October 30, 2009. On December 9, 2009, Dr. Alejandro Mendez, the employee’s surgeon, determined that additional surgery would be necessary, but he indicated that he wanted to review the MRI before making a final recommendation. The employee’s qualified rehabilitation consultant [QRC] conveyed this information to the employer via a status report, also dated December 9, 2009. Less than two weeks later, during an appointment with the employee on December 21, 2009, Dr. Mendez recommended that the employee undergo a complicated fusion procedure.
Corvel Corporation handled the medical management of workers’ compensation cases for the self-insured employer. On December 30, 2009, Betty Vosberg, a medical manager for Corvel, received Dr. Mendez’s recommendation for surgery. Subsequently, on either January 5 or January 8, 2010, the employer notified the employee that it wanted what it described as a second opinion regarding the procedure proposed by Dr. Mendez. On January 5, 2010, Betty Torres, the claims adjuster on the file, conveyed the same information to the employee’s QRC.
Over the next two weeks, Ms. Torres and Ms. Vosberg sought to identify an appropriate physician to render an opinion as to the reasonableness and necessity of the recommended surgery. Then, on January 19, 2010, Ms. Vosberg gave Ms. Torres two names, one of which was Dr. Mahmoud Nagib. Shortly thereafter, the employee filed a medical request, dated January 21, 2010, indicating that the employee was requesting a “second opinion regarding surgery,” explaining as follows:
The employee’s treating physician has recommended surgery. However, the employee is seeking a second opinion prior to scheduling the surgery. A second opinion is reasonable and necessary to determine whether the employee needs the necessary surgery.
Not long after, by letter dated February 1, 2010, the employee’s attorney advised that the employee wished to amend his October 2009 claim petition “to include a claim for surgery as recommended by his treating physician.
Rehabilitation records indicate that the employee’s medical request for a second opinion caused some confusion on the part of Ms. Torres and Ms. Vosberg. In a progress report dated February 19, 2010, the QRC wrote as follows:
Please also be advised that prior to Ms. Torres forwarding Mr. Paape’s medical records to Dr. Nagib, I was able to clarify with Mr. Paape that he was not requesting an additional second opinion as was indicated in a Medical Request submitted by Mr. Paape and his attorney. Earlier in the month, I had received a call from the insurer inquiring about a Medical Request filed by Mr. Paape requesting a second opinion. She wanted to clarify that Mr. Paape wanted to proceed with the surgery and that it was she who wanted the second opinion. I was able to clarify with Mr. Paape and his attorney that Mr. Paape is not requesting an additional second opinion, as he would like to move forward with the surgery, and in fact the surgery has already been scheduled for 3/16/10. He is aware the insurer has not yet approved the surgery, and he is hopeful that after Dr. Nagib’s review of his medical records, he will also concur that it is most appropriate for him to proceed with the surgery.
After clarification of this misunderstanding, it is my understanding the Medical Request has been withdrawn. We are currently waiting to hear from Dr. Nagib’s office relative to his review of Mr. Paape’s medical records.
In this same report, the QRC noted that Ms. Torres had informed her on February 1, 2010, that Ms. Torres intended to forward the employee’s medical records to Dr. Nagib, who would then decide whether he needed to examine the employee prior to rendering an opinion.
In a letter dated February 19, 2010, Dr. Nagib concurred with Dr. Mendez’s recommendation for surgery. Ms. Torres apparently received this letter on February 26, 2010. Also on February 26, 2010, counsel for the self-insured employer filed an answer to the employee’s amended claim petition, indicating that the employer was still awaiting the opinion from Dr. Nagib.
On March 3, 2010, Ms. Torres notified Ms. Vosberg of Dr. Nagib’s opinion. Two days later, by letter dated March 5, 2010, the employer’s attorney informed the employee’s attorney that approval for the recommended surgery had been granted. By letter dated March 8, 2010, Ms. Vosberg informed Dr. Mendez of that approval. The employee underwent the surgery on March 16, 2010. The cost of the surgery was $136,433.80.
By letter dated April 2, 2010, the employee’s attorney notified the compensation judge that the employer had agreed to pay for the requested surgery and that, since surgery had been performed, it was premature to determine the employee’s claim for permanent partial disability. The attorney therefore asked the judge to strike the employee’s October 2009 claim petition from the active trial calendar.
The employee’s attorney claimed entitlement to Roraff fees for work performed in connection with the employee’s March 16, 2010, surgery, and that matter came on for hearing on October 25, 2010. The evidence included certain records of the QRC, Dr. Mendez, and Corvel personnel, as well as certain pleadings. No witnesses were called to testify. The employer took the position that no Roraff fees were payable because the employer had approved the requested surgery within a reasonable period, meaning that there had been no genuine dispute. More specifically, the employer contended that the rules governing procedures for requests for nonemergency surgery had been satisfied because the employer had approved the surgery within 45 days of the date the employer found a physician to perform an independent medical examination. The employer also contended, in the alternative, that the petition for Roraff fees was premature, because a claim for permanent partial disability benefits remained pending.
In a decision issued on November 16, 2010, the compensation judge determined that there had been no genuine dispute over the proposed surgery because the employer had substantially complied with the applicable rules and had approved the surgery within the time contemplated by rule, which the judge interpreted to be 45 working days. The employee’s claim for Roraff fees was denied on that basis. The employee appeals.
STANDARD OF REVIEW
“[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.” Krovchuk v. Koch Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993).
Pursuant to Minn. Stat. § 176.081, subd. 1c,
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 the 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. Neither the holding of a hearing nor the filing of an application for a hearing alone may determine the existence of a dispute.
(Emphasis added). In Alden v. Mills Fleet Farm, No. WC10-5081 (W.C.C.A. July 29, 2010), this court construed the “genuine dispute” language of the above-quoted fee provision in conjunction with the medical treatment parameters provisions governing requests for nonemergency surgery. After discussing the initial responsibilities of the healthcare provider and the workers’ compensation insurer once a provider requests surgery, we noted that the rules taken together appeared to reflect a judgment, by the department, that 45 days is an adequate period in which to allow an insurer to obtain an independent medical opinion and to make a decision to approve or deny authorization for the proposed surgery. See Minn. R. 5221.6050, subp. 9.C.(6). Concluding that the rules were very pertinent to the question of whether a genuine dispute existed for purposes of an attorney fee claim, we noted that we found “little justification for imposing liability for fees on an insurer that handles and ultimately approves a request for surgery in precisely the manner envisioned by the rules governing compensable treatment.” Alden, slip op. at 9.
In the present case, the compensation judge concluded that 45 days, as contained in the rule, meant 45 working days. However, as both parties agree, the judge’s decision on this point is clearly erroneous. Other time periods set by rule specify “working days.” The rule describing the 45-day period for obtaining an independent medical examination and approving or denying the requested surgery does not use the term 45 “working days” but instead simply 45 “days.” We must assume that the difference in terminology was intentional and meaningful. See also Stordahl v. Northern Hydraulics, slip op. (W.C.C.A. Oct. 27, 1993) (Minnesota Rules of Civil Procedure 6.01 governs computation of time for service and filing, and where the period of time described is less than 7 days, intermediate Saturdays, Sundays, and legal holidays are excluded).
The parties stipulated that the employer notified the employee that it wanted a second opinion on either January 5 or January 8, 2010. As such, the relevant 45-day period began to run no later than January 8, 2010, and therefore ended no later than February 22, 2010. The employee’s attorney was notified of the employer’s approval by letter dated March 5, 2010, and Dr. Mendez was notified by letter dated March 8, 2010. The employer therefore failed to approve the surgery request within the time frame contemplated by rule. In the interim, by letter dated February 1, 2010, the employee’s attorney filed an amendment to the employee’s claim petition, requesting approval of surgery.
The employer contends that strict compliance with the 45-day rule should be excused in this case, because the employee filed a medical request dated January 21, 2010, apparently seeking a second opinion “prior to scheduling the surgery.” It is evident that the medical request caused some confusion. However, the filing of that request did nothing to prevent the employer from timely obtaining an opinion from its chosen expert. Compare LaFountain v. M.A. Gedney Co., No. WC10-5079 (W.C.C.A. Aug. 16, 2010) (it was reasonably inferable from the record that a good part of the insurer’s delay in approving surgery was due to factors beyond the insurer’s control, that is, the refusal of the employee’s attorney to comply with the insurer’s request for an examination by their expert). In fact, while records indicate that Ms. Torres, the claims adjuster, asked the QRC to clarify the purpose of the medical request, there is no evidence suggesting that Corvel personnel substantially delayed transmission of the employee’s medical records to Dr. Nagib for that reason. We would also note that Ms. Torres evidently received Dr. Nagib’s opinion no later than February 26, 2010, but that it took another week or more before the employee’s attorney was notified of the employer’s approval.
The compensation judge erred in concluding that the employer substantially complied with the requirements of Minn. R. 5221.6050, subp. 9.C.(6), and that approval for surgery was given within the 45-day period contemplated by the rule. The employee’s attorney filed an amendment to the employee’s claim petition on about February 1, 2010, because approval had not been given. The record as a whole therefore compels the conclusion that a genuine dispute existed for purposes of the Roraff fee claim at issue here.
The employer argues, in the alternative, that, even if a genuine dispute existed, a Roraff fee award is premature, because the employee’s claim for permanent partial disability benefits remains pending. As such, the employer argues, the eventual permanent partial disability payment will generate a stream of benefits from which contingent fees may be withheld and paid. We are not persuaded. As the employee notes, there may be no disagreement over the employee’s permanent partial disability rating following his surgery. That claim has not been made; the issue has not been tried, and it may never be. Under these circumstances, Roraff fees are presently payable. The judge’s decision is reversed.
 See Roraff v. State, Dep’t of Transp., 288 N.W.2d 15, 32 W.C.D. 297 (Minn. 1980). See also Irwin v. Surdyk’s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999) and Minn. Stat. § 176.081, subds. 1(1) and 1(2).
 The parties stipulated to the date of this and several other events relevant to the fee claim on appeal.
 The medical request was filed on January 25, 2010.
 We note, however, that Dr. Nagib did not find it necessary to examine the employee, and he issued his report, agreeing with the recommended surgery, based solely on a review of the employee’s medical records.
 Pursuant to Minn. R. 5221.6050, subp. 9.A.(3), the healthcare provider is required to notify the insurer of the proposed surgery at least 7 working days prior to performing the procedure. The insurer then has 7 working days to respond to the provider’s request by either approving the request, denying authorization, or requesting an exam by the insurer’s physician. Id. at subp. 9.C.
 Minn. R. 5221.6050, subp. 9.C.(6), provides:
(6) In any case where prior notification of proposed surgery is required, the insurer may elect to obtain an examination of the employee by the employer’s physician under Minnesota Statutes, section 176.155, sometimes referred to as an “independent medical examination.” If the insurer notifies the employee and health care provider of the examination within seven working days of the provider’s notification, the proposed nonemergency surgery may not be provided pending the examination. However, after 45 days following the insurer’s request for an examination, the health care provider may elect to proceed with the surgery, subject to a determination of compensability by the commissioner or compensation judge under subpart 7.
 See, e.g., Minn R. 5221.6050, subp. 9.C. (an insurer has seven working days to respond to a request for surgery).
 As in Alden, what the employer was actually seeking here was an independent medical examination, not a second opinion, and we caution again that confusion of the terminology should be avoided.