MICHELLE MILNER, Employee/Appellant, v. SCHWAN'S SALES ENTERS. and LIBERTY MUT. INS. CO., Employer-Insurer.
WORKERS= COMPENSATION COURT OF APPEALS
AUGUST 2, 2000
HEADNOTES
ATTORNEY FEES - RORAFF FEES; JURISDICTION - SUBJECT MATTER. Neither the compensation judge nor this court has jurisdiction to award attorney fees for legal services related to litigation in the district court and the Minnesota Court of Appeals. The compensation judge properly found she lacked jurisdiction to award fees related to legal work before the Workers= Compensation Court of Appeals. The compensation judge=s award of $405.00 for 2.7 hours expended on the employee=s successful claim petition is affirmed.
Affirmed as modified.
Determined by: Johnson, J., Pederson, J., and Wheeler, C.J.
Compensation Judge: Peggy A. Brenden
OPINION
THOMAS L. JOHNSON, Judge
The employee appeals from the compensation judge=s award of $405.00 in Roraff [1] attorney fees, and the judge=s denial of the employee=s claim for costs. We affirm.
BACKGROUND
The employee, Michelle Milner, sustained an admitted work-related injury in the nature of left upper extremity tendinitis in July 1991, while working for the employer, Schwan=s Sales Enterprises. The employer and its insurer, Liberty Mutual Insurance Company, accepted liability and paid wage loss and medical benefits through November 11, 1991. The employee subsequently alleged the work injury also caused thoracic outlet syndrome, left shoulder tendinitis, and carpal tunnel syndrome. She claimed entitlement to further wage loss, rehabilitation benefits and medical expenses, including the costs of surgery for thoracic outlet syndrome at McKennan Hospital in Sioux Falls, South Dakota. The employer and insurer denied liability for any injury except the admitted left upper extremity tendinitis, and maintained that the employee had received all benefits to which she was entitled.
The case was heard by Compensation Judge Bernard Dinner at the Office of Administrative Hearings in April 1993. The case was stricken from the calendar due to counsel=s failure to notify all potential intervenors of their right to intervene in the action. Service was subsequently accomplished on all potential intervenors, and three intervened. No response was received from the others, including McKennan Hospital. Compensation Judge Dinner found this failure to respond materially prejudiced the rights and interests of the parties, and on September 8, 1993, issued an order precluding these providers, including McKennan Hospital, from intervening in the action and/or claiming reimbursement from the employee, the employer or the insurer.
The parties, including the three intervenors, thereafter entered into a Stipulation for Settlement in which the employee accepted $6,500 in settlement of Aany and all claims@ for workers= compensation benefits Ato date and for five years in the future, through July 27, 1998.@ The employee=s claims for benefits arising after that time were left open. The employee specifically settled her claims for medical expenses incurred to date. The settlement referenced the compensation judge=s September 8, 1993 order and recited that the claims of the non-intervening medical providers were barred. Awards on Stipulation were served and filed on January 6, 1994 and April 5, 1994.
McKennan Hospital=s bill for services provided to the employee remained unpaid, and McKennan assigned its interest in the account to Accounts Management, Inc. (AMI) for collection. On January 10, 1994, AMI served a South Dakota Summons and Complaint on the employee. AMI obtained a default judgment against the employee in South Dakota in late February 1994, entitling it to recover more than $8,600 from the employee. (Ex. D.) In an effort to preclude AMI from docketing the South Dakota default judgment in Minnesota and enforcing the judgment against the employee, the parties sought to convert Compensation Judge Dinner=s Order Precluding Intervention into a judgment in Hennepin County. The Hennepin County District Court determined that it did not have authority to enter judgment on the workers= compensation court=s order, and the Minnesota Court of Appeals affirmed. See Milner v. McKennan Hospital, 529 N.W.2d 498 (Minn. Ct. App. 1995).
AMI subsequently obtained a notice of filing and docketing of the South Dakota default judgment in the District Court in Lyon County, Minnesota. The employee then filed a claim petition seeking payment of the medical expenses for her treatment at McKennan Hospital. A settlement judge at the Department of Labor and Industry granted the employer and insurer=s motion to dismiss the claim petition. The judge concluded the employee had no legal basis to pursue the claim as Compensation Judge Dinner=s order precluding McKennan from intervening or seeking reimbursement was not appealed. The employee filed a Petition to Vacate the Award on Stipulation on April 9, 1997. The employer and insurer filed an objection to the petition on April 14, 1997. By decision filed August 19, 1997, this court denied the employee=s petition to vacate. The court concluded the petition to vacate was premature since it was not determined whether the employee might obtain a stay of execution. Milner v. Schwan=s Sales Enterprises, slip op. (W.C.C.A. August 19, 1997).
The employee then filed a motion in the District Court, Lyon County, Minnesota, seeking to vacate AMI=s judgment against the employee or, in the alternative, seeking to stay enforcement of the judgment. By Order filed December 21, 1998, Judge George Marshall denied the employee=s motion. In his memorandum, Judge Marshall concluded the employee=s liability to AMI stemmed from a contract with McKennan Hospital in which the employee agreed to be personally responsible for any amounts not paid by the workers= compensation carrier. The judge further concluded that McKennan Hospital, a South Dakota corporation, was not subject to the workers= compensation laws of Minnesota, was not required to intervene and was not bound by the effects of noncompliance set forth at Minn. Stat. ' 176.361, subd. 7. Accordingly, the judge concluded AMI=s judgment was valid and entitled to full faith and credit in Minnesota. This order was not appealed. On January 11, 1999, the employee filed a second petition with the Workers= Compensation Court of Appeals again seeking to vacate the 1994 award on stipulation. By decision filed June 9, 1999, a panel of this court vacated the January 6, 1994 Award on Stipulation.
In July 1999, the employee filed a claim petition seeking payment of the medical expenses of McKennan Hospital assigned to AMI. In their answer, the employer and insurer denied liability for the medical expenses. In December 1999, the employer and insurer and McKennan Hospital/AMI entered into a stipulation for settlement resolving all claims of McKennan Hospital/ AMI for treatment provided the employee. A partial award on stipulation was served and filed January 18, 2000.
The employee=s attorney, David R. Vail, filed a Statement of Attorney=s Fees seeking Roraff fees in the amount of $4,505.00 and costs of $1,100.68. Mr. Vail claimed 24.5 hours of legal time at $100.00 per hour and 13.7 hours at $150.00 per hour. The costs included a payment of $1,043.08 to the law firm of Runchey, Louwagie & Wellman in Marshall, Minnesota, for legal services related to the civil litigation in Lyon County, Minnesota. (Pet. Ex. A.) The employer and insurer filed an objection to the claimed fees and costs. (Resp. Ex. 1.) The case was heard by a compensation judge at the Office of Administrative Hearings on March 6, 2000. In a Findings and Order on Attorney Fees filed March 7, 2000, the compensation judge found the legal services rendered from February 4, 1994 through mid-October 1996 were related to litigation in the district court and the Minnesota Court of Appeals; the time from mid-October 1996 through August 21, 1997 was related to litigation in the workers= compensation system, but the employee did not prevail in that litigation; the time from October 13, 1997 through January 6, 1999, was related to the district court litigation; the time from January 8, 1999 through July 23, 1999 was related to a petition to vacate; and the time from July 29, 1999 through January 12, 2000 related to the claim petition filed July 29, 1999. The compensation judge found Mr. Vail spent 2.7 hours related to the successful resolution of the employee=s 1999 claim petition. The compensation judge awarded Roraff fees of $405.00 and denied the employee=s claim for reimbursement of costs. The employee appeals.
STANDARD OF REVIEW
On appeal, 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." Minn. Stat. ' 176.421, subd. 1 (1992). 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." Hengemuhle v. Long Prairie Jaycees, 358 N.W.2d 54, 59, 37 W.C.D. 235, 239 (Minn. 1984). Similarly, 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.@ Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).
DECISION
Roraff Fees
The employee contends her attorney is entitled to Roraff fees for all of the legal efforts directed toward obtaining payment of the McKennan Hospital bills. The fact that most of the legal work was in the district court and appellate courts is not, the employee contends, a basis to deny the claim. The employee argues that what is significant is not the forum but the purpose for the legal work. Since all of the legal efforts were directed toward obtaining payment of medical expenses, the employee contends she is entitled to an award of Roraff fees. We cannot agree.
The Workers= Compensation Court of Appeals is a court of limited jurisdiction, restricted by law to questions of law and fact arising under the workers= compensation laws of the State of Minnesota. Neither the compensation judge nor this court has any jurisdiction in a case that does not arise under the workers= compensation laws. Minn. Stat. ' 175.A.01, subd. 5. Under Minn. Stat. ' 176.081 (1991), the compensation judge or this court has authority to award contingent attorney fees from benefits awarded to the employee, hourly fees for representation at discontinuance conferences, or hourly fees for representation on rehabilitation or medical issues under ' 176.102, 176.135 or 176.136. Attorney fees may also be recovered by an employee=s attorney for successful prosecution of a proceeding for medical expenses under Minn. Stat. ' 176.135 (1991). Roraff, at 15, 32 W.C.D. at 297.
There is no dispute that a significant portion of Mr. Vail=s time was related to litigation in the district courts of Hennepin County and Lyon County and an appeal to the Minnesota Court of Appeals. Thus, the legal time was incurred outside the workers= compensation system. Further, the purpose of the litigation was not to obtain payment of medical expenses. Rather, the primary aim of the litigation was to prevent or bar AMI from enforcing its judgment against the employee. The compensation judge properly held she was without authority to award Roraff fees for that litigation.
Another significant portion of Mr. Vail=s time was devoted to proceedings before the Workers= Compensation Court of Appeals. The compensation judge properly found she lacked jurisdiction to award fees related to work before this court.
The Workers= Compensation Court of Appeals vacated the award on stipulation by decision filed June 9, 1999. On July 29, 1999, the employee filed a claim petition seeking payment of the medical expenses at McKennan Hospital. This claim was ultimately settled by stipulation filed January 7, 2000. The compensation judge found the employee=s attorney devoted 2.7 hours to the successful prosecution of the claim petition. This finding is consistent with the time itemization attached to the fee statement. (Pet. Ex. A.) The compensation judge=s award of $405.00 in Roraff fees is affirmed.
We agree with the employee, however, in the very unusual circumstances presented by this case, that the minimal amount of time required to resolve the disputed medical expenses following this court=s vacation of the 1994 Award on Stipulation, does not fairly represent the time and effort required to obtain the result. Since the employee=s attorney ultimately achieved a good result for the employee, and, since the award of $405.00 does not fairly represent the time required to obtain that result, we award attorney fees of $1,000.00 to the employee=s attorney for his successful efforts on behalf of the employee before this court.
Costs
The employee seeks reimbursement of costs amounting to $1,100.68, comprised of a payment for legal services to Runchey, Louwagie & Wellman of $1,043.08, messenger service of $11.60, $10.00 for Lyon County filing fees and $25.00 to the state treasurer. The compensation judge denied all of the claimed costs.
The payment to the Runchey Law Firm was a cost incurred for litigation in the Minnesota district courts. In Johnson v. E.L. Mac Landscaping, 51 W.C.D. 75 (W.C.C.A. 1994) we stated neither this court nor a compensation judge has authority to award attorney fees and costs incurred in a district court action. The costs for messenger services are ordinary costs of running an office and are not properly taxable. Iverson v. Co-op County Farmers Elevator, 46 W.C.D. 502 (W.C.C.A. 1992). The compensation judge=s denial of these costs is affirmed.
The employee paid $25.00 to the state treasurer by check dated March 20, 1997. (Pet. Ex. A.) Minn. Stat. ' 176.421, subd. 4(3), requires a party taking an appeal to pay $25.00 to the state treasurer, Office of Administrative Hearings, to defray the cost of the preparation of the record. In this case, the employee did not file an appeal. Rather, the employee filed a petition to vacate in April 1997. No fee is required to file a petition to vacate. Accordingly, the cost is not properly taxable. The compensation judge=s denial of the claimed costs is affirmed.