Devitt v. Barrett Moving and Storage

MATTHEW L. DEVITT, Employee, v. BARRETT MOVING AND STORAGE, and VANLINER INS. CO., Employer-Insurer/Appellants.

ATTORNEY FEES - HEATON FEES. When retraining benefits were the subject of the dispute for which attorney services were provided, Heaton fees are paid only if the contingency fees from benefits received by the employee are not adequate to reasonably compensate the employee=s attorney.

The employer and insurer have appealed from the decision of the compensation judge awarding Heaton fees to the employee=s attorney.^[1] We reverse.

Matthew Devitt, the employee, sustained a personal injury to his low back arising out of his employment with Barrett Moving on November 6, 1998. Eventually, he underwent fusion surgery and was unable to return to his previous employment as a furniture mover.

In Findings and Order, served and filed December 19, 2001, the compensation judge approved a request by the employee to be retrained as a paralegal and awarded retraining benefits to the employee. That decision was affirmed on appeal by this court.^[2]

On August 19, 2002, the attorney for the employee filed a statement of attorney fees requesting an award of $12,600 to be paid by the employer and insurer. The employer and insurer objected to the requested fees. The employee also filed a claim petition on August 23, 2002 seeking additional weekly compensation during the retraining pursuant to Minn. Stat. ' 176.102, subd. 11(a).

The employee=s claim petition and the statement of attorney fees filed by the employee=s attorney were consolidated for hearing and were considered by the compensation judge in a hearing on January 3, 2003. In her Findings and Order, served and filed March 21, 2003, the compensation judge denied the employee=s claim for additional weekly compensation. She awarded Heaton attorney fees of $12,600 to the employee=s attorney. The employer and insurer have appealed the award of attorney fees.

During the period of retraining the employee will receive temporary total disability benefits pursuant to Minn. Stat. ' 176.102, subd. 11(b). This court has held that these payments represent a stream of benefits from which contingency attorney fees should be paid. A decision which orders all of the fees of the employee=s attorney to be paid by the employer and insurer in a retraining case is reversible. Burger v. Coca Cola Bottling Co., 47 W.C.D. 263 (W.C.C.A. 1992); Scott v. Greater Anoka County Humane Soc=y, slip. op (W.C.C.A. July 22, 1999).

On appeal, the employee argues that the holding in these cases was changed by the decision in Turan v. Park Constr. Co., 61 W.C.D. 602 (W.C.C.A. 2001). In Turan the employee had filed a medical request for approval of surgery and was successful at hearing. The employee=s attorney requested that his fees be paid by the employer and insurer under Minn. Stat. ' 176.081, subd. 1. The employer and insurer objected and argued at hearing that the surgery which was ordered would necessarily expand the employee=s entitlement to temporary total disability benefits so that there would be a stream of benefits from which fees could be paid. The compensation judge rejected that contention, noting that the only issue for hearing had been the medical issue and that there had been no dispute over weekly benefits. This court found that the compensation judge=s determination to be reasonable.

The Turan decision is not applicable in this case. The claim brought by the employee=s attorney and the benefits sought at hearing were for retraining-weekly benefits and expenses. In accordance with Burger and Scott, the fees of the employee=s attorney are to be paid from these benefits. The award of $12,600 in Heaton fees was in error and is reversed.

It is clear from the employee=s testimony at hearing that the ending date of his retraining program is uncertain. Accordingly, the amount of weekly benefits the employee will receive and amount of attorney fees to be paid from those benefits are uncertain as well. Given that uncertainty, it is premature for an award of attorney fees in a specific amount to be made at this time. Borgan v. Bob Hegland, Inc., 62 W.C.D. 452 (W.C.C.A. 2002). We conclude that the employee=s attorney should be paid contingency fees from the temporary total disability benefits paid to the employee during his retraining program. When that program is completed and attorney fees are no longer being paid, the employee=s attorney may petition for Heaton fees if the attorney believes that the contingency fees have not provided adequate compensation.

The compensation judge=s determination of attorney fees is vacated and the award of Heaton fees is reversed.

^[1] Heaton v. J.E. Fryer & Co., 36 W.C.D. 316 (W.C.C.A. 1983).

^[2] Devitt v. Barrett Moving, slip. op (W.C.C.A. July 25, 2002).