TESSA M. WASHEK, Employee/Appellant, v. NEW DIMENSIONS HOME HEALTHCARE and SFM MUT. INS. CO., Employer-Insurer.
WORKERS’ COMPENSATION COURT OF APPEALS
MARCH 27, 2012
PENALTIES. The compensation judge properly denied the employee’s request for penalties based on alleged late payment of fees pursuant to Minn. Stat. § 176.081, subdivision 7, where there had been no award of those fees.
Determined by: Wilson, J., Johnson, J., and Milun, C.J.
Compensation Judge: Bradley J. Behr
Attorneys: David R. Vail, Soderberg & Vail, Minneapolis, MN, for the Appellant. Andrew W. Lynn, Lynn, Scharfenberg & Assocs., Minneapolis, MN, for the Respondents.
DEBRA A. WILSON, Judge
The employee appeals from the judge’s denial of penalties for allegedly late payment of fees pursuant to Minn. Stat. § 176.081, subd. 7. We affirm.
The employee sustained a work-related injury on December 18, 2002, while employed by New Dimensions Home Healthcare [employer]. A hearing took place on December 9, 2011, on the employee’s claim for reinstatement of rehabilitation services. The compensation judge filed a findings and order on March 7, 2011, finding that the employee was likely to benefit from rehabilitation services. No appeal was taken.
On April 12, 2011, David Vail, the employee’s attorney, filed a statement of attorney fees seeking $13,292.50 as a Heaton-type attorney fee and partial reimbursement of attorney fees under Minn. Stat. § 176.081, subd. 7, in the amount of $3,912.75. The employer and insurer objected to the fee application but not Mr. Vail’s itemization of time or his hourly rate.
The attorney fee claim came on for hearing, and, in findings and order filed on August 18, 2011, Judge Bradley Behr found that Mr. Vail was entitled to Heaton fees. He ordered the employer and insurer to pay Mr. Vail $13,292.50, together with costs, within 14 days of the order. Mr. Vail’s claim for subdivision 7 reimbursement was not addressed. Again, no appeal was taken from the findings and order.
The employer and insurer made timely payment of the fees awarded by Judge Behr. On August 30, 2011, Mr. Vail wrote to Andrew Lynn, attorney for the employer and insurer, acknowledging receipt of the fees and inquiring as to the insurer’s intent to pay subdivision 7 fees. Mr. Lynn responded by voicemail, and the subdivision 7 fees were paid on September 7, 2011.
On October 13, 2011, the employee filed a claim petition seeking penalties based on the employer and insurer’s failure to pay subdivision 7 fees by September 1, 2011. The matter proceeded to hearing, and, in findings and order filed on December 21, 2011, Judge Behr found that penalties were not appropriate because subdivision 7 fee payment had not been delayed or untimely. The employee appeals.
The employee contends that, because the employer and insurer had denied liability for rehabilitation benefits, and those benefits were awarded, an award under subdivision 7 was required. In support of this contention, the employee cites Costello v. Clay County, slip op. (W.C.C.A. Nov. 22, 2002). In Costello, this court held that in such a situation, “an award under subdivision 7 is required by statute” (emphasis added). That does not equate, however, to a requirement that payment be made absent an award.
Secondly, the employee contends that subdivision 7 fees are analogous to interest and that, because this court has consistently held that interest is payable even though a compensation judge might fail to award it, subdivision 7 fees are similarly payable despite the lack of an award. We are not persuaded.
Minn. Stat. § 176.081, subd. 7, provides that “upon application, [the compensation judge] shall award to the employee” partial reimbursement of attorney fees under that subdivision. (Emphasis added.) While the employee made specific application for subdivision 7 fees in his application for attorney fees, the compensation judge failed to address that claim in his findings and order. The language of subdivision 7 clearly contemplates both a specific application for and an award of the fees. This differs from interest payment requirements.
Minn. Stat. § 176.221, subd. 8, specifies that payment of compensation “shall be made within 14 days of the filing of an appropriate order by the division or a compensation judge.” In this case, the compensation judge failed to order subdivision 7 fees in his August, 18, 2011, findings and order. Therefore, while the judge’s Heaton fee award may have triggered the employee’s entitlement to subdivision 7 fees, it did not constitute an award of those fees, and it did not trigger the running of the 14-day payment period.
An award of penalties under either Minn. Stat. § 176.225, subd. 1 or 5, requires a delay in payment. The compensation judge properly found that there was no delay in payment of subdivision 7 fees because those fees were not awarded as part of the August 18, 2011, findings and order. We also note that the employer and insurer paid those fees within 14 days of Mr. Vail’s letter requesting payment, despite the lack of an award. We affirm the judge’s denial of penalties.
 See Heaton v. J.E. Fryer & Co., 36 W.C.D. 316 (W.C.C.A. 1983).
 Citing Hanegmon v. National Steel Pellet, No. WC04-140 (W.C.C.A. Oct. 6, 2004).
 At the hearing on penalties, Judge Behr indicated on the record that it is his custom to award subdivision 7 fees as part of his findings and order, that he did not make an award in this case, and that he did not know why he failed to do so.