RYAN JANIKOWSKI, Employee/Cross-Appellant, v. RYAN JANIKOWSKI and VANLINER INS. CO., Employer-Insurer/Appellants.
WORKERS’ COMPENSATION COURT OF APPEALS
FEBRUARY 14, 2013
ATTORNEY FEES - IRWIN FEES. The compensation judge properly applied the factors in Irwin v. Surdyk’s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999) to the facts in this case, and the compensation judge’s award of attorneys fees for representation of the employee in recovering medical and rehabilitation benefits, in an amount less than that claimed by the employee’s attorney, but greater than the contingent fees awarded, was reasonable and therefore is affirmed.
Determined by: Milun, C.J., Wilson, J., and Hall, J.
Compensation Judge: Penny D. Johnson
Attorneys: Donald W. Kohler, Kohler Law Office, White Bear Lake, MN, for the Cross-Appellant. Thomas L. Cummings and Allison A. Walsh, Jardine, Logan & O’Brien, Lake Elmo, MN, for the Appellants.
PATRICIA J. MILUN, Judge
The employer and insurer appeal the compensation judge’s award of attorney fees pursuant to Irwin v. Surdyk’s Liquor, in addition to contingent attorney fees. The employee and his attorney cross-appeal the compensation judge’s denial of the employee’s claim for attorney fees totaling $21,285.00, including contingent fees. We affirm.
The employee worked as a self-employed truck driver providing household goods moving services. On March 6, 2007, the employee sustained a work-related injury to his low back. He received chiropractic treatment and was disabled from work for a period of time. He was paid temporary total disability benefits based on a weekly wage of $1,133.86. The employee received chiropractic treatment again for back problems in February 2008, but did not receive wage loss benefits at that time. The employee sustained another work-related low back injury on March 6, 2009, for which he obtained chiropractic treatment and was again intermittently disabled from work.
In April 2009, the employee retained attorney Donald W. Kohler to represent him. On August 5, 2009, the employee filed a medical request seeking approval of a lumbar MRI scan and payment of chiropractic bills that exceeded the twelve-week limit under the treatment parameters. The employer and insurer filed a medical response refusing to pay for or approve the treatment. An administrative conference was held on September 17, 2009. In a Decision and Order, served and filed October 1, 2009, an arbitrator/mediator at the Workers’ Compensation Division ordered the employer and insurer to pay the disputed chiropractic bills and approved the requested MRI scan.
On August 26, 2009, the employee alleged a work-related injury to his low back when he slipped and fell from the top rung of a six foot ladder while unloading a truck. On September 21, 2009, the employee filed a claim petition alleging injuries on March 6, 2007, February 6, 2008, March 6, 2009, and August 26, 2009, and seeking temporary total disability and permanent partial disability benefits and a rehabilitation consultation. The employer and insurer filed an answer on October 2, 2009, admitting an average weekly wage of $1,133.86 for the March 6, 2007, date of injury, asserting the March 6, 2007, and March 6, 2009, injuries were temporary and had resolved, and denying primary liability for any injury on February 6, 2008, and August 26, 2009. The employer and insurer further alleged the employee had been overpaid temporary total disability benefits. On October 23, 2009, the employer and insurer filed a request for formal hearing from the arbitrator/mediator’s decision of October 1, 2009.
The matters were consolidated for hearing and were heard by Compensation Judge Penny Johnson at the Office of Administrative Hearings on June 7, 2011. The issues before the compensation judge were: (1) whether the employee sustained a work-related injury on August 26, 2009; (2) if so, had the injury of August 26, 2009, resolved; (3) whether the employee sustained a permanent partial disability of 13% of the whole body related to the low back injury; (4) whether the employee was entitled to a rehabilitation consultation; (5) whether the medical treatment provided at Express Health/Twin Cities Occupational Health, Life Scan Upright MRI, Consulting Radiologists, Noran Neurological Clinic, and Dockter-Lutz Chiropractic was reasonably required as a result of an injury on August 26, 2009; and (6) the employee’s weekly wage at the time of his admitted or alleged work injuries on March 6, 2007, February 6, 2008, March 6, 2009, and August 26, 2009. In a Findings and Order served and filed on August 1, 2011, the compensation judge found the employee sustained a compensable injury to his low back on August 26, 2009; that the effects of that injury had not yet resolved; that all treatment at issue was reasonable and necessary and causally related to that injury; that the employee had sustained a permanent partial disability of 10% of the whole body related to that injury; that the employee was entitled to a rehabilitation consultation; and that a reasonable approximation of the employee’s lost earning capacity was $1,000.00 per week.
The employer and insurer appealed to this court. In a decision served and filed February 29, 2012, this court affirmed the compensation judge’s findings with respect to primary liability for the August 26, 2009, injury and the award of permanent partial disability benefits, medical expenses, and a rehabilitation consultation, and reversed and remanded the judge’s finding with respect to the employee’s weekly wage. As a result, the employee’s weekly wage was further significantly reduced for the dates at issue.
The employee’s attorney filed a statement of attorney fees and costs on April 18, 2012, seeking contingent fees based on recovery of permanent partial disability benefits, medical expenses, and a rehabilitation consultation, and $18,403.42 in fees pursuant to Irwin, for legal services provided to the employee between April 2, 2009, and June 7, 2011.
A hearing was held before Compensation Judge Penny Johnson on July 16, 2012. The judge found monetary benefits were awarded to the employee of $8,000.00 for a 10% permanent partial disability and $2,632.90 in medical expenses. She concluded the dollar value of the rehabilitation consultation was not reasonably ascertainable, and assigned a value of $500.00 pursuant to Minn. Stat. § 176.081, subd. 1(a)(2). The total amount of those benefits was $11,132.90. The judge calculated a contingent fee, pursuant to the statutory 25/20 formula of Minn. Stat. § 176.081, subd. 1(a), on the $11,132.90 in monetary benefits awarded, finding the employee’s attorney entitled to a contingent attorney fee of $2,426.58, of which only part had been paid. Applying the Irwin factors, the compensation judge concluded the contingent fee was inadequate to fairly compensate the attorney for his work on the case. The judge further found that, in light of the Irwin factors, a reasonable attorney fee was $10,000.00, awarding the employee’s attorney additional Irwin fees for his representation of the employee. The employer and insurer appeal the award of Irwin fees. The employee cross-appeals the denial of attorney fees in the full amount of his claim.
STANDARD OF REVIEW
The Workers’ Compensation Court of Appeals must determine whether the findings of fact and order are clearly erroneous and unsupported by substantial evidence in view of the entire record as submitted. Substantial evidence supports the findings if, in the context of the entire record, they are supported by evidence that a reasonable mind might accept as adequate. Fact findings are clearly erroneous if the reviewing court, looking at the entire evidence, is left with a definite and firm conviction that a mistake has been committed. Findings of fact should not be disturbed, even though the reviewing court might disagree with them, “unless they are clearly erroneous in the sense that they are manifestly contrary to the weight of the evidence or not reasonably supported by the evidence as a whole.”
Under Minn. Stat. § 176.081, subd. 1(a), a claimant’s attorney is entitled to a contingent fee of 25 percent of the first $4,000.00 and 20 percent of the next $60,000.00 of the compensation awarded to the employee. The contingent fee “is presumed to be adequate to cover recovery of medical and rehabilitation benefit or services concurrently in dispute.” If the employee’s attorney establishes the statutory contingent fee is inadequate to reasonably compensate the attorney for representing the employee in the medical or rehabilitation dispute, attorney fees may be assessed against the employer or insurer based on the 25/20 formula. In Irwin, the supreme court further held that where the contingent fee is inadequate to reasonably compensate the employee’s attorney in a medical or rehabilitation dispute, an additional hourly fee may be assessed. In determining both the adequacy or inadequacy of the contingent fee and the amount of a reasonable attorney fee, the compensation judge must consider the statutory guidelines on fees together with “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.”
The compensation judge found the employee’s attorney expended considerable time and effort in preparing the case, and concluded the 80.5 hours listed in the statement of fees generally represented the actual time spent on the case. The judge further found attorney Kohler’s fee of $275.00 an hour was reasonable for his experience level. The judge found the employee’s attorney successfully represented the employee in the administrative conference, and that discovery was extensive, including two depositions, medical records and opinions, and multiple contested motions. The judge also found the weekly wage issue required extensive and time-consuming discovery, as well as extensive proof, argument, and testimony at hearing. The judge concluded the results obtained for the employee were only somewhat satisfactory. The employee’s attorney was successful in establishing primary liability for the August 26, 2009, injury, and that the ongoing effects of the injury had not resolved; he successfully established a 10% permanency, although not the 13% claimed; he secured payment for all of the medical bills claimed; and he established entitlement to a rehabilitation consultation. Attorney Kohler was ultimately unsuccessful, however, in establishing a weekly wage sufficient to establish a basis for additional wage loss benefits.
The employer and insurer argue the statutory contingent fee of $2,426.58 is sufficient to compensate attorney Kohler, given the limited effort and time and the average difficulty required for recovery of the medical and rehabilitation benefits claimed, along with the relatively insignificant amount recovered for the employee. We are not persuaded.
The employer and insurer disputed the employee’s medical and rehabilitation claims primarily on the basis of a denial of primary liability for the August 26, 2009, injury, and their assertion that the injury had resolved. The issues of primary liability and the extent of the injury were vigorously defended by the employer and insurer, requiring expert medical opinion, medical records, and the testimony of the employee to establish liability. And, while the amount of benefits recovered is a factor to consider in an award of attorney fees, it is not the only factor or the determinative factor. The medical and rehabilitation issues were dependent on the employee’s success in establishing liability for the injury and a causal relationship to the injury. The effort and time to do so was properly considered by the compensation judge in finding that the contingent fee was inadequate to compensate the attorney for his efforts on behalf of the employee in this case. Substantial evidence supports this finding, and we affirm.
The employee’s attorney asserts the compensation judge found the actual time spent on the case was 80.5 hours, and contends the majority of that time was spent to establish primary liability and medical expenses, including intervention letters, drafting pleadings, responding to discovery demands, preparation for administrative and settlement conferences, two employee depositions, responding to contested motions, and preparation for hearing. The employee’s attorney asserts he would have spent the majority of the 80.5 hours without consideration of the weekly wage issue, and the judge’s reduction of his attorney fee claim was arbitrary.
“[A] determination of a claim for [Irwin] fees is not merely a matter of multiplying the attorney’s hourly rate times the amount of time spent on the case less the contingent fee awarded. The time reasonably necessary to present the case is but one of the Irwin factors. Rather, a reasonable fee must be determined based on all seven of the Irwin factors.” Further, the factors need not be weighed evenly. The issue is whether the compensation judge’s decision was reasonable based on the record as a whole considering and applying all of the Irwin factors.
In this case, as in most, the compensation judge who presided over the case had a unique vantage point from which to assess the complexity and amount of work necessary to resolve the medical and rehabilitation benefits in dispute. The judge concluded a significant amount of time and effort was expended on the weekly wage issue, on which the employee did not prevail, and reduced the Irwin fee awarded to an amount approximately half of the amount claimed.
Establishing the employee’s weekly wage was necessary to establish entitlement to wage loss benefits, if any. The amount of attorney fees for recovery of monetary benefits is generally limited to the statutory 25/20 contingent fee on compensation awarded to the employee. There is, generally, no basis for hourly fees payable by the employer and insurer for the recovery of monetary compensation. The amount of the employee’s weekly wage was unrelated to and not necessary to establish the employee’s entitlement to either medical or rehabilitation benefits.
The compensation judge who presided over the hearing, based on her experience and discretion, found a reasonable attorney fee to be $10,000.00, including Irwin fees and contingent fees. We have carefully reviewed the record and conclude the compensation judge’s award of attorney fees was reasonable. We, therefore, affirm.
 Irwin v. Surdyk’s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999).
 In a Findings and Order on Remand, served and filed April 18, 2012, the compensation judge found the employee’s weekly wage for March 6, 2007, was $230.12, for the February 6, 2008, injury was $352.63, and for the March 6, 2009, and August 26, 2009, injuries was $314.00.
 Minn. Stat. § 176.081, subd. 1(a)(2), provides that the statutory attorney fee for obtaining rehabilitation benefits for which a dollar value is not reasonably ascertainable is the amount charged in hourly fees for the representation or $500.00, whichever is less.
 Minn. Stat. § 176.421, subd. 1.
 Hengemuhle v. Long Prairie Jaycees, 358 N.W.2d 54, 59, 37 W.C.D. 235, 239 (Minn. 1984).
 Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).
 Minn. Stat. § 176.081, subd. 1(a)(1).
 The principle mechanism for payment of an injured employee’s attorney fees in workers’ compensation cases is a contingent fee computed on a percentage of the monetary compensation awarded to the employee as a result of the attorney’s representation. See, e.g., Coffing v. ISD No. 194, slip. op. (W.C.C.A. Feb. 5, 2007). Prior to 1995, an employee’s attorney could also recover a reasonable hourly fee payable by the employer and insurer for recovery of medical expenses and/or rehabilitation benefits pursuant to Roraff v. State, Dep’t of Transp., 288 N.W.2d 15, 32 W.C.D. 297 (Minn. 1980) and Heaton v. J.E. Fryer & Co., 36 W.C.D. 316 (W.C.C.A. 1983); see also Kopish v. Sivertson Fisheries, 39 W.C.D. 627 (W.C.C.A. 1987). Hourly attorney fees awarded under Irwin for the recovery of medical and/or rehabilitation benefits continue to be referred to as Roraff and Heaton fees.
 Irwin, 599 N.W.2d at 142, 59 W.C.D. at 336.
 See Dimon v. Metz Baking, 64 W.C.D. 143 (W.C.C.A. 2003), summarily aff’d (Minn. Jan. 29, 2004); Moen v. G.F. Business Equip., 42 W.C.D. 952, 957 (W.C.C.A. 1989).
 Borgan v. Bob Hegland, Inc., 62 W.C.D. 452, 462 (W.C.C.A. 2002).
 See Wilmes v. Wal-Mart Stores, Inc., 61 W.C.D. 548 (W.C.C.A. 2001), summarily aff’d (Minn. Sept. 12, 2001).
 Hubbard v. Northeast Metro ISD No. 916, slip op. (W.C.C.A. Nov. 24, 2003).