PAUL J. FREDERICK, Employee/Appellant, v. SCOTT DEAN WINTER and FARM BUREAU MUTUAL GROUP, Employer-Insurer.
WORKERS’ COMPENSATION COURT OF APPEALS
JUNE 29, 2012
ATTORNEY FEES - RORAFF FEES. Where the employee’s medical request was determined in a separate hearing from the employee’s temporary partial disability claim, the medical request was not concurrently in dispute with that claim, and the contingent fees from the temporary partial disability benefits awarded in the earlier hearing cannot be considered in determining the employee’s claim for Roraff fees for the medical request.
Reversed and remanded.
Determined by: Milun, C.J., Stofferahn, J., and Hall, J.
Compensation Judge: Jane Gordon Ertl
Attorneys: DeAnna McCashin, Schoep & McCashin, Alexandria, MN, for the Appellant. Matthew P. Bandt, Jardine, Logan, & O’Brien, Lake Elmo, MN, for the Respondents.
PATRICIA J. MILUN, Judge
The employee appeals the compensation judge’s denial of his claim for attorney fees for medical expenses awarded on the basis that contingent fees were being paid for temporary partial disability benefits awarded at an earlier hearing. We reverse and remand.
On August 13, 2007, Paul J. Frederick, the employee, sustained a work-related crush injury to his right little finger while working as an over-the-road truck driver for Scott Winter, the employer, which was insured for workers’ compensation liability by Farm Bureau Mutual Group, the insurer. The employer and insurer paid various workers’ compensation benefits, including temporary total disability benefits and medical expenses.
The employee hired attorney DeAnna McCashin to represent him for workers’ compensation issues in January 2008. Initially, there were disputes over a weekly wage issue and medical requests that were settled by the parties. In December 2009, the employer and insurer filed a notice of intention to discontinue benefits on the basis that 104 weeks of temporary total disability benefits had been paid and also claiming that these benefits had been paid under a mistake of fact based on their assertion that the employee had been terminated from employment in January 2008 for misconduct. The employer and insurer agreed to pay the minimal ascertainable permanent partial disability but requested to withhold 20 percent of these payments for the alleged overpayment of temporary total disability. After an administrative conference in January 2010, the employer and insurer’s request to withhold 20 percent for an overpayment was denied.
The employer and insurer filed a petition to recover overpayment of temporary total disability benefits on February 1, 2010. Later that month, the employer and insurer petitioned to consolidate a pending medical request for approval of a trial nerve stimulator with the overpayment petition. The employee objected to consolidation, arguing that he was entitled to an expedited hearing on the medical request. The trial nerve stimulator medical request was then settled by the parties, with the employer and insurer agreeing to pay for the trial nerve stimulator and $1,200.00 in attorney fees. An award on settlement was issued on June 29, 2010.
During this time, the employee began receiving medical treatment from Dr. Steven Radjenovich at the Midway Medical Clinic in March 2010. Dr. Radjenovich referred the employee to Michelle Beeman, a licensed psychologist at Crossroads Counseling Services, for treatment of his symptoms of anxiety and depression. The employee began receiving psychological counseling services in July 2010. He also began working for a different employer at a wage loss on May 18, 2010, and filed a claim petition for temporary partial disability benefits and penalties on June 14, 2010. At the parties’ request, the compensation judge consolidated the employee’s claim petition with the employer’s overpayment petition on September 7, 2010, and a consolidated hearing was scheduled for December 15, 2010. In November 2010, the employee’s attorney sent a letter to the employer and insurer’s attorney requesting to amend the claim petition to include “the issue of the need for psychological counseling in the upcoming hearing[.]” The employer and insurer would not agree to amend the claim petition to consolidate a psychological claim, since “[t]hat would require obtaining an independent psychiatric evaluation, which we [would] be unable to do prior to the hearing.” Based on the employer and insurer’s objection, the employee’s request to consolidate the employee’s claim for psychological treatment expenses with the pending petitions was not granted.
After the December 15, 2010, hearing, the compensation judge found that the employee had not been terminated for misconduct and denied the overpayment claim and the claim for penalties, but awarded temporary partial disability benefits in a decision served and filed February 25, 2011. Contingent fees were ordered to be withheld and paid to the employee’s attorney, along with taxable costs and partial attorney fee reimbursement under Minn. Stat. § 176.081, subd. 7. Neither party appealed this decision.
The employee filed a request for a certificate of medical dispute on January 5, 2011, for payment of psychological treatment expenses for a consequential injury of depression and anxiety disorder from chronic regional pain. The employer and insurer objected and the medical dispute was certified on January 7, 2011. On January 26, 2011, the employee filed a medical request for payment of psychological treatment expenses. A medical conference was held on March 21, 2011, and the claimed expenses were awarded on March 22, 2011. On April 18, 2011, the employer and insurer filed a request for formal hearing, claiming that the employee was not entitled to medical benefits related to his mental health treatment because his work injury was not a substantial contributing cause of his mental health issues. A hearing was held on June 8, 2011. The compensation judge found that the employee’s 2007 work injury was a substantial contributing cause of the employee’s mental health condition and that the employee sustained a consequential injury in the nature of major depression disorder/anxiety from chronic regional pain as a result of his right hand injury. The judge awarded the claimed psychological treatment expenses. Neither party appealed this decision.
On September 16, 2011, the employee filed a statement of attorney fees related to the June 8, 2011, hearing on the psychological treatment expenses, including taxable costs. The employer and insurer objected. A hearing on this issue was held on November 7, 2011. The employer and insurer asserted that the attorney fee claim was premature since contingent fees were being withheld from the employee’s ongoing temporary partial disability benefits, or alternatively, that a pending claim petition for permanent total disability benefits could create an additional stream of benefits in the future. The compensation judge found the claim for attorney fees was premature since the employee was receiving a stream of benefits from which contingent fees were available, and denied the claim. The employee appeals this decision.
STANDARD OF REVIEW
“The Workers’ Compensation Court of Appeals shall have the authority to raise the issue of the attorney fees at any time upon its own motion and shall have continuing jurisdiction over attorney fees.” 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.
This case presents two issues on appeal. First, whether the compensation judge committed an error of law in finding the Roraff fee petition was premature where attorney fees were being paid from an earlier litigation regarding wage loss benefits, and second, whether the judge erred in her findings by implying that the employee’s attorney is presently receiving ongoing wage loss attorney fees where the fees were withheld by the employer and insurer but not paid to the employee’s attorney.
As a general rule, attorney fees are paid from the stream of benefits paid to an employee who prevailed in a disputed claim for workers’ compensation benefits, as decided by the Minnesota Supreme Court in Roraff v. State, Department of Transportation. A separate claim for medical benefits, however, provides no income stream of payment to the employee and therefore the law permits reasonable attorney fees to be paid for such claims by the employer and insurer. In a proceeding to recover medical benefits, a successful claimant may be awarded reasonable attorney fees to be paid by the employer and insurer. As a practical matter, separate claims that have common issues of law or fact are generally consolidated for hearing to provide efficiency and conserve resources. In those cases, at the conclusion of the hearing, the employee’s attorney will petition for fees and costs and the opposing party will file their objections, if any, and the compensation judge will issue a decision.
In cases after Roraff where separate claims were consolidated for trial and an ongoing stream of benefits were litigated in the same proceeding, this court broadened the Roraff holding to permit the payment of Roraff fees when medical expenses were of measurable significance and it was clear that the contingent fees alone would not reasonably compensate the attorney for time expended. The Minnesota Supreme Court, in Smith v. City of Sauk Centre, clarified the question of combined claims and distinguished the fee in a proceeding brought solely to recover medical benefits from a proceeding where a medical benefits dispute is resolved simultaneously with a dispute over monetary benefits.
In proceedings where a medical benefits dispute is resolved simultaneously with a dispute over monetary benefits, Roraff fees are not allowable unless the disallowance would result in inadequate compensation to the attorney.
In this case, the medical dispute was not resolved simultaneously with the wage loss claim; they were separate claims that were not consolidated as a result of the employer and insurer’s objections.
Minn. Stat. § 176.081, subd. 1(a)(1) specifically states, “[t]he contingent attorney fee for recovery of monetary benefits according to the formula in this section is presumed to be adequate to cover recovery of medical and rehabilitation benefit[s] or services concurrently in dispute.” In the present case, there were no wage loss benefits concurrently in dispute at the time of the hearing on the medical request. The employer and insurer raised an objection to the employee’s request to consolidate the employee’s psychological counseling expenses with the claim petition, and the employee’s request was therefore denied. Thereafter, in a separate claim initiated by the employee’s attorney, the employee’s attorney sought certification of a medical dispute from the Department of Labor and Industry, filed a medical request, participated in a medical conference, and prevailed at hearing. The attorney time expended to succeed on the medical benefit claim involved a separate subject matter that required new timelines to complete discovery and to proceed with the litigation. The issue of what is genuinely in dispute in an employee’s claim is generally determined at the time of the award of benefits. In this case, the only issue in dispute at the June 8, 2011, hearing was the employee’s entitlement to psychological treatment expenses for his mental health condition.
The employer and insurer contend that the question for this court is not whether the indemnity benefits and medical benefits are concurrently in dispute, but whether the employee’s attorney is concurrently entitled to Roraff fees while simultaneously being entitled to contingent fees from wage loss benefits. The employer and insurer maintain that the employee’s ongoing wage loss benefits are currently producing contingent fees, and therefore it is premature to determine whether contingent fees will be adequate to compensate the employee’s attorney. In support of their argument, the employer and insurer cite prior cases from this court where ongoing wage loss benefits were currently producing contingent fees and the court held that it was premature to determine whether contingent fees will be adequate to compensate the employee’s attorney. The compensation judge also relied on these cases in denying the employee’s claim for Roraff fees. While we recognize the holdings in these cases, we also recognize a common thread of significance among the cases cited that distinguish these cases from the facts unique to this case. In those cases, the employee’s indemnity claims were raised as part of the same pleadings or consolidated with the medical/rehabilitation claims and scheduled for one hearing. In the present case, at the request of the employer and insurer, the employee’s medical request remained separate from the initial pleadings through the hearing.
Minn. Stat. § 176.081, subd. 1(a)(1) as written is clear in language and in structure. We believe the ordinary meaning of “concurrently in dispute” requires concurrent proceedings, not separate proceedings litigated and decided before the adjudication of the medical dispute. While the statute also requires the employee’s attorney to concurrently file all outstanding disputed issues, in this case, the employer and insurer refused to consolidate the medical request with the other benefits, namely temporary partial disability benefits and the alleged overpayment of temporary total disability benefits, at issue in the earlier hearing. We cannot ignore the ordinary meaning of benefits “concurrently in dispute” under Minn. Stat. § 176.081, subd. 1(a)(1) and thus cannot affirm the judge’s finding that the employee’s claim for Roraff fees was premature on a separate medical request that provided no income stream of payment to the employee.
The determination of a reasonable attorney fee is within the sound discretion of the compensation judge. We therefore reverse the order denying the employee’s claim for Roraff fees and remand the matter to the compensation judge for specific findings on attorney fees under Minn. Stat. § 176.081, subd. 1(a)(1).
The employee also appealed the compensation judge’s findings regarding payable contingent fees, claiming that the attorney fees being withheld by the employer and insurer had not been paid to the employee’s attorney. Given our remand of this decision, we need not address this issue. The compensation judge may consider the employee’s argument regarding payment of these fees on remand.
 Respondent’s Ex. 3.
 Respondent’s Ex. 4.
 Minn. Stat. § 176.081, subd. 3.
 Krovchuk v. Koch Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993), summarily aff’d (Minn. June 3, 1993).
 Roraff v. State, Dep’t of Transp., 288 N.W.2d 15, 32 W.C.D. 297 (Minn. 1980), as codified in Minn. Stat. § 176.081, subd. 1.
 Roraff, 288 N.W.2d at 16, 32 W.C.D. at 298.
 See Gau v. Coast to Coast Stores, 44 W.C.D. 280, 286 (W.C.C.A. 1990); Kopish v. Sivertson Fisheries, 39 W.C.D. 627 (W.C.C.A. 1987).
 Smith v. City of Sauk Centre, 578 N.W.2d 755, 756, 58 W.C.D. 209, 211 (Minn. 1998) (citing Kopish v. Sivertson Fisheries, 39 W.C.D. 627 (W.C.C.A. 1987); Minn. Stat. § 176.081, subd. 1 (1994)); see also Keller v. Quicksilver Express Courier, No. WC04-339 (W.C.C.A. June 30, 2005).
 Minn. Stat. § 176.081, subd. 1(a)(1) (emphasis added).
 Crowley v. Plehal Blacktopping, Inc., 66 W.C.D. 11, 17 (W.C.C.A. 2005).
 See Plumb v. Dodge of Burnsville, Inc., 64 W.C.D. 151 (W.C.C.A. 2004); Moran v. United Parcel Serv., 63 W.C.D. 430 (W.C.C.A. 2003); Borgan v. Bob Hegland, Inc., 62 W.C.D. 452 (W.C.C.A. 2002); Parales-Rodriguez v. ERMC, No. WC10-5181 (W.C.C.A. Apr. 1, 2011); Doberstein v. Supervalu, Inc., No. WC08-140 (W.C.C.A. July 17, 2008).
 Minn. Stat. § 176.081, subd. 1(a)(3).
 Jeffrey v. Banana Republic, 67 W.C.D. 246 (W.C.C.A. 2007), summarily aff’d (Minn. Aug. 21, 2007).