Banken v. Lac Qui Parle Coop Oil

DALE R. BANKEN, Employee, v. LAC QUI PARLE COOP OIL and FARMLAND MUT. INS. CO., Employer-Insurer/Cross-Appellants, and CHANDLER INDUS. and STATE FUND MUT. INS. CO., Employer-Insurer/Appellants, and GREAT WESTERN LIFE INS. CO., ABBOTT NORTHWESTERN HOSP., BLUE CROSS & BLUE SHIELD OF MINN., and THE MONEVIDEO CLINIC, PA., Intervenors.

ATTORNEY FEES - SUBD. 7 FEES; ATTORNEY FEES - .191 FEES. When the employee=s attorney is paid fees pursuant to Minn. Stat. ' 176.191, no award to the employee under Minn. Stat. ' 176.081, subd. 7, may be made.

The compensation judge ordered attorney fees pursuant to Minn. Stat. ' 176.191 to be paid to the employee=s attorney and ordered reimbursement of fees to the employee pursuant to Minn. Stat. ' 176.081, subd. 7. Both employers and insurers appeal from the award of subdivision 7 fees. We reverse.

This case was initially heard by a compensation judge on October 2, 2001 on the employee=s claim petition for wage loss benefits and medical expenses and on the petition for contribution and reimbursement filed by Lac Qui Parle/Farmland against Chandler/State Fund. Before the hearing the parties agreed that the employee=s claims would be paid and that the primary issue for determination was the contribution and reimbursement claims between the insurers.

In his Findings and Order, served and filed December 21, 2001, the compensation judge apportioned liability for the employee=s benefits and expenses between the insurers. The compensation judge also determined that the employee=s attorney was entitled to attorney fees pursuant to Minn. Stat. ' 176.191 and apportioned those fees between the insurers.

Chandler/State Fund appealed to this court the determination that attorney fees pursuant to Minn. Stat. ' 176.191 were payable and also appealed the apportionment of fees between the insurers. This court affirmed the decision of the compensation judge that attorney fees under Minn. Stat. ' 176.191 were to be paid to the employee=s attorney and remanded this matter for determination by the compensation judge of the amount of attorney fees and the apportionment of fees between the insurers.^[1]

This matter was heard on remand by the compensation judge on January 6, 2003. In his Findings and Order, issued on March 7, 2003, the compensation judge awarded the employee=s attorney $21,073.00 pursuant to Minn. Stat. ' 176.191. Of that amount, 60 percent was to be paid by Lac Qui Parle/Farmland and 40 percent was to be paid by Chandler/State Fund. The compensation judge also ordered an additional award to the employee pursuant to Minn. Stat. ' 176.081, subd. 7. Both employers and insurers appeal the compensation judge=s award of subdivision 7 reimbursement.

The sole issue for this court to decide is whether the employee is entitled to an award under Minn. Stat. ' 176.081, subd. 7, when the employee=s attorney receives attorney fees under Minn. Stat. ' 176.191. This issue is a question of law to be determined by this court de novo. Krovchuk v. Koch Oil Refinery, 48 W.C.D. 607 (W.C.C.A. 1993).

Minn. Stat. ' 176.081, subd. 7, provides, in pertinent part, Athe compensation judge . . . . shall award to the employee . . . . in addition to the compensation benefits paid or awarded to the employee, an amount equal to 30 percent of that portion of the attorney=s fees which has been awarded pursuant to this section that is in excess of $250.00@ (emphasis added).

In Irwin v. Surdyk=s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999), the employee=s attorney was awarded attorney fees for recovering medical expenses on behalf of the employee and the employee sought an award pursuant to Minn. Stat. ' 176.081, subd. 7. In allowing the award the court noted, AThus, under the plain language of the statute, a subdivision 7 award should be based on all attorney fees paid pursuant to Minn. Stat. ' 176.081, including attorney fees based on medical expenses pursuant to Minn. Stat. ' 176.081, subd. 1(a)@ (emphasis added).

The attorney fees in the present case were not awarded under Minn. Stat. ' 176.081. There is no authority in Minn. Stat. ' 176.081 for the employee=s attorney to be paid a fee by an insurer where the dispute is primarily between insurers.^[2] The only provision for such a fee in the workers= compensation statute is found in Minn. Stat. ' 176.191, subd. 1, which is the authority under which attorney fees were awarded in this case.

The employee argues on appeal that since Minn. Stat. ' 176.081, subd. 7, begins with the phrase Aif the employer or insurer file a denial of liability,@ a subdivision 7 fee is to be awarded whenever, as happened here, the insurers deny liability. Further, employee argues, Minn. Stat. ' 176.191 deals only with the question of who pays the attorney fees and not how or when the fees are paid. We do not agree.

In the present case, while the insurers may have initially filed denials of liability, the parties agreed before the hearing on October 2, 2001 that the employee=s benefits would be paid by the insurers and the only dispute was the question of contribution and reimbursement between the insurers. The provisions of Minn. Stat. ' 176.191 became applicable and subdivision 1 states specifically that Athe claimant shall be awarded a reasonable attorney fee.@ Attorney fees to the employee=s attorney were properly payable pursuant to Minn. Stat. ' 176.191, subd. 1.

There is no provision in Minn. Stat. ' 176.191 which authorizes an award to the employee of some portion of the fees paid to the employee=s attorney. An award to the employee under Minn. Stat. ' 176.081, subd. 7, does not apply to fees which are awarded under Minn. Stat. ' 176.191.

The compensation judge=s award of subdivision 7 fees to the employee is reversed. Finding 3 and Order 3 are vacated.

^[1] Banken v. Lac Qui Parle Coop Oil, slip op. (W.C.C.A. Aug. 27, 2002).

^[2] Prior to its repeal in 1995, Minn. Stat. ' 176.081, subd. 8, had authorized such a fee.