SHARON BECKWITH, Employee, v. SUN COUNTRY AIRLINES and KEMPER INS. COS., Employer-Insurer/Appellants.

 

WORKERS= COMPENSATION COURT OF APPEALS

NOVEMBER 18, 2002

 

HEADNOTES

 

ATTORNEY FEES - IRWIN or RORAFF FEES.  Where the compensation judge made inadequate factual findings on the Irwin factors and improperly relied almost exclusively on time spent by counsel, remand was required for reconsideration and new findings as to counsel=s entitlement to Roraff fees.

 

Reversed and remanded.

 

Determined by Wilson, J., Johnson, C.J., and Stofferahn, J.

Compensation Judge:  Jeanne E. Knight.

 

OPINION

 

DEBRA A. WILSON, Judge

 

The employer and insurer appeal from the compensation judge=s award of Roraff fees.[1]  We reverse and remand for reconsideration.

 

BACKGROUND

 

In July of 2000, the employee retained attorney Harold Sadoff to represent her in connection with shoulder injuries allegedly sustained in the course and scope of her employment with Sun Country Airlines [the employer].  In response to the employee=s claim petition, the employer and its workers= compensation insurer denied primary liability for the alleged injuries.  Shortly thereafter, Blue Cross/Blue Shield intervened in the matter to obtain reimbursement of certain medical expenses paid in connection with the alleged work injuries.  Blue Cross/Blue Shield was represented by separate counsel throughout the proceedings.

 

At a settlement conference held in late March 2001, the employer and insurer apparently agreed to pay outstanding medical expenses and the indemnity benefits claimed by the employee, based on the weekly wage alleged by the employer and insurer, together with interest.  Unresolved issues included the employee=s claim of underpayment of wage loss benefits, based on her claim of a higher weekly wage, and penalties.

 

The employer and insurer paid the employee indemnity benefits in early April 2001, and a pre-trial conference was subsequently held, on August 6, 2001, with regard to the remaining underpayment and penalty claims.  In late September 2001, the employer and insurer paid most if not all of the outstanding medical expenses, after having received appropriately coded billing statements from the providers.[2]

 

In November of 2001, the parties entered into a stipulation for settlement, settling the employee=s claims, on a to-date basis, for the lump sum of $7,200.00, less attorney fees.  The stipulation also memorialized the employer and insurer=s previous agreement to pay medical expenses related to the employee=s work-related shoulder condition.  Under the terms of the settlement agreement, Mr. Sadoff received a total of $3,006.47 in contingent fees, from the settlement proceeds and from the indemnity benefits paid in April.  Mr. Sadoff=s right to seek Roraff fees was expressly left open.  An award on stipulation was issued on November 29, 2001, just prior to the scheduled hearing date on the unsettled claims.

 

Mr. Sadoff subsequently filed a request for Roraff fees, to which the employer and insurer objected, and the matter came on for hearing before a compensation judge on April 15, 2002.  At that time, Mr. Sadoff was claiming a total fee of $14,080.00, based on 70.4 hours of time spent at $200.00 an hour.  The employer and insurer were contending that Mr. Sadoff had not rebutted the statutory presumption that the contingent fee had reasonably compensated him for his work, see Minn. Stat. ' 176.081, subd. 1(1), and that the time claimed by Mr. Sadoff was excessive in any event.

 

In her decision issued on June 11, 2002, the compensation judge concluded that Mr. Sadoff had documented 60 hours of time Aappropriately spent on this matter,@ that the contingent fee did not adequately compensate him for his work, and that he was entitled to a total fee of $12,000.00, with a resulting Roraff fee of $8,993.53.  The employer and insurer appeal.

 

DECISION

 

A reasonable attorney fee in cases involving medical expense claims is determined by considering both the statutory guidelines on fees, see Minn. Stat. ' 176.081, subd. 1, and Athe 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.@  Irwin v. Surdyk=s Liquor, 599 N.W.2d 132, 142, 59 W.C.D. 319, 336 (Minn. 1999).

 

In the present case, the compensation judge made findings relative to only some of the Irwin factors, not directly addressing the amount of the claim (as opposed to the amount actually paid), the difficulties of the issues, or the nature of proof involved.  In addition, while she recited facts relevant to some of the factors, she made very few factual conclusions regarding how those facts figured into her analysis of the fee claim -- in other words, there is little indication as to how the compensation judge weighed the evidence in making her award.[3]  Finally, we are persuaded that the compensation judge placed undue emphasis on the time spent by Mr. Sadoff on the case as a whole, writing in her memorandum, in total, as follows:

 

Mr. Sadoff is claiming a total fee of $14,000.  He must first demonstrate the fee generated by the stream of benefits is inadequate to compensate him for his efforts.  He has done so.  He certainly has demonstrated experience in the field.

 

In this case, the matter was settled prior to trial.  The indemnity benefits were paid to his client in April 2001, while the medical expenses were paid in September 2001.  The only remaining issue for hearing was the employee=s average weekly wage.

 

The Compensation Judge does not take issue with the initial conference with the employee lasting 5.2 hours.  She does agree that 2.5 hours to fill out a Claim Petition and Notice of Appearance and draft a letter requesting employment records is excessive.  Similarly 3 hours to draft 5 intervention letters and request payroll records is excessive.  Once the actual claim had been reduced to an average weekly wage issue, 7.8 hours to calculate benefits and prepare for hearing also appears excessive.  Clearly Mr. Sadoff did spend time calculating benefits and preparing for hearing, as well as notifying potential intervenors.  Therefore, the Compensation Judge has reduced the hours spent on the claim by 10 hours and has awarded fees using 60 hours spent on the case.

 

On more than one occasion, this court has cautioned that Aa determination of a claim for [Roraff] fees is not merely a matter of multiplying the attorney=s hourly rate times amount of time spent on the case less the contingent fee award.@  Duda v. Pizza Hut, Inc., slip op. (W.C.C.A. July 12, 2002), quoting Borgan v. Bob Hegland, Inc., 62 W.C.D. 452 (W.C.C.A. 2002).[4]  Given her memorandum, we can only conclude that the judge overlooked this principle in considering Mr. Sadoff=s fee claim.

 

Because the judge failed to make adequate factual findings concerning the Irwin factors and apparently relied almost exclusively on time spent by counsel, we reverse and remand the matter for reconsideration and new findings as to the Roraff fee claim.

 

 



[1] See Roraff v. State of Minn., 288 N.W.2d 15, 32 W.C.D. 297 (Minn. 1980).

[2] Mr. Sadoff contends that various out-of-pocket medical expenses remained unpaid at this time, but there is simply no way to determine this from the existing record.  We would note, however, that no outstanding out-of-pocket medical expense claims were listed in the eventual stipulation for settlement.

[3] For example, while the compensation judge listed the primary issues raised by the employee=s claim petition, she did not characterize the issues as difficult, or otherwise.  The only factor on which the judge made a factual conclusion was the experience of counsel, saying in her memorandum that Mr. Sadoff Acertainly has demonstrated experience in the field.@

[4] It also appears, from her memorandum, that the judge awarded Roraff fees for time spent by Mr. Sadoff after settlement of the medical expense claims.