REINHARD KARST, Employee/Appellant, v. ANOKA HENNEPIN IND. SCH. DIST. #11 and LIBERTY MUT. INS. CO., Employer-Insurer, and ANOKA HENNEPIN ISD MEDICAL PLAN/ADMIN=D BY MEDICA, Intervenor.

 

WORKERS= COMPENSATION COURT OF APPEALS

JUNE 5, 2003

 

HEADNOTES

 

ATTORNEY FEES - RORAFF FEES.  Under the circumstances of this case, especially given the unappealed finding that the contingent fee was not adequate to compensate the attorney=s attorney for his work on the employee=s behalf, the employee=s attorney was entitled to $2,000 in Roraff fees, and the judge=s denial of the Roraff fee claim was reversed.

 

Reversed.

 

Determined by Wilson, J., Rykken, J., and Pederson, J.

Compensation Judge:  Jeanne E. Knight.

 

OPINION

 

DEBRA A. WILSON, Judge

 

The employee=s attorney appeals from the judge=s decision denying Roraff attorney fees.^[1]  We reverse.

 

BACKGROUND

 

The employee sustained a work-related injury to his low back on January 19, 1984, while working for Anoka Hennepin Independent School District [the employer].  The employer and its workers= compensation insurer, Liberty Mutual Insurance Company [insurer], admitted liability for the injury and paid various benefits.  On November 17, 2000, the employee underwent an L4 decompression laminectomy, with a bilateral L4-5 extensive foraminotomy, and an L5 decompression laminectomy.  The surgery was paid for by Medica Choice [Medica], administrator for the employer=s self-funded medical plan. 

 

On June 19, 2001, the employee filed a claim petition, seeking benefits for an 11% whole body impairment,^[2] reimbursement to Medica for medical expenses paid, reimbursement of out-of-pocket prescription costs of $2,040,^[3] and Roraff fees.  The employer and insurer answered, contending that the employee=s claimed disability and need for medical treatment, if any, were the result of significant disease processes and/or some other incident, or solely the result of a superseding, intervening incident for which the employer and insurer were not responsible.  Medica intervened to recover $12,545.93 in medical expenses.  On August 2, 2001, attorney Kirk Thompson filed a notice of representation on behalf of Medica.

 

The parties eventually reached a partial settlement in this matter, and a partial stipulation for settlement was filed on September 10, 2002.  Under the terms of the stipulation, the employee was paid $2,000 in a lump sum for a full, final, and complete settlement of any and all claims for permanent partial disability, from which $500 was withheld for attorney fees; the intervenor was paid $10,000; and the employee was paid $2,040.00 for reimbursement of prescription and medical expenses.  The stipulation for settlement specifically indicated that the employee=s attorney=s claim for Roraff fees was left open.  An award on stipulation was filed on September 12, 2002.

 

Thomas Klint, the employee=s attorney, filed a petition for attorney fees on November 13, 2002, seeking $500 in contingent fees and $3,667.75 in Roraff fees.^[4]  Mr. Klint also sought payment of attorney fees pursuant to Minn. Stat. ' 176.081, subd. 7.  The employer and insurer apparently objected, and the matter was set for hearing.^[5]

 

In Findings and Order on Attorney Fees, filed on January 13, 2003, the compensation judge found, in unappealed findings, that the parties did not object to the time spent on the case or to Mr. Klint=s hourly rate, and that the contingent fee was inadequate to compensate Mr. Klint for his efforts on the employee=s behalf.  The judge also found that Mr. Thompson had actively represented the intervenor in the settlement negotiations, that the primary issue in the case was permanent partial disability, that the issues were not difficult or unusual, that Mr. Klint=s time records did not break down his work on the out-of-pocket expenses, and that Mr. Klint was not entitled to Roraff fees.  Mr. Klint appeals.

 

STANDARD OF REVIEW

 

In reviewing cases on appeal, the Workers= Compensation Court of Appeals must determine whether Athe 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, Athey 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).  Where evidence conflicts or more than one inference may reasonably be drawn from the evidence, the findings are to be affirmed.  Id., at 60, 37 W.C.D. at 240.  Similarly, A[f]actfindings are clearly erroneous only if the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed.@  Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).  Findings of fact should not be disturbed, even though the reviewing court might disagree with them, Aunless 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.@  Id.

 

DECISION

 

In Roraff v. State, Dep=t of Transp., 288 N.W.2d 15, 32 W.C.D. 297 (Minn. 1980), the Minnesota Supreme Court interpreted Minn. Stat. '176.135 to allow for reasonable attorney fees to be paid by an employer and insurer in a proceeding related solely to the recovery of medical expenses.  Subsequent cases expanded that holding to allow for payment of attorney fees in cases where both medical expenses and wage and permanency benefits were payable if medical expenses were of primary importance or a central issue and it was clear that the contingent fees alone would not reasonably compensate the employee=s attorney for the services provided.  See, e.g., Gau v. Coast to Coast Stores, 44 W.C.D. 280 (W.C.C.A. 1990); Kopish v. Sivertson Fisheries, 39 W.C.D. 627 (W.C.C.A. 1987).

 

In determining a reasonable fee, consideration must be given to the criteria contained in Minn. Stat. ' 176.081, subd. 5(d) (repealed 1995), the law in effect on the date of the employee=s injury.  Those criteria include: (1) the amount involved; (2) the time and expense necessary to prepare for trial; (3) the responsibility assumed by counsel; (4) the expertise of counsel in the workers= compensation field; (5) the difficulties of the issues involved; (6) the nature of proof needed to be adduced; and (7) the results obtained.  Id.

 

  The compensation judge, in the instant case, found that the amount involved was approximately $10,000 in medical expenses paid by the intervenor,^[6] $2,040 in out-of -pocket medical expenses, and benefits for an 11% permanent partial disability of the body as a whole.  With regard to the time and expense necessary to present the case, the judge noted that this case did not go to trial but that the parties did not object to the time spent on the case by Mr. Klint or to his hourly rate.  The judge further found that Mr. Klint has practiced in the area of workers= compensation for twenty years, has practiced exclusively as an employee=s attorney in workers= compensation since 1985, and has demonstrated experience and competence in the field of workers= compensation.  She also found that the issues were not unusual or difficult, and that, if the case had gone to trial, the employee would have needed to testify on his own behalf and that the medical evidence would most likely have been submitted by report.  The results obtained, under the stipulation for settlement, were $2,000 in permanent partial disability benefits, $10,000 in reimbursement to the intervenor, and $2,040 in payment of out-of-pocket medical expenses to the employee.^[7]

 

In an unappealed finding, the judge determined that the $500 contingent fee was inadequate to compensate Mr. Klint for his efforts on the employee=s behalf.  However, the judge denied Roraff fees because the intervenor had its own attorney, who played an active part in the case and its resolution, and because Mr. Klint did not show what portion of his time was spent on the out-of-pocket medical expenses or  that those expenses were even disputed.  Mr. Klint contends that the compensation judge erred in denying his Roraff fee claim, and, under the circumstances, we agree.

 

Mr. Klint testified at hearing that he expended time securing medical records and a report from Dr. Wengler, which provided the causation opinion necessary to reach settlement on the medical expense issues.  The employer and insurer did not dispute that allegation.  While the intervenor was represented throughout this proceeding by Mr. Thompson, it is difficult to understand how the intervenor could have prevailed in the absence of a causation opinion supporting reimbursement.  Clearly some of Mr. Klint=s efforts had a direct effect on the recovery made by the intervenor.  With regard to the judge=s finding stating that Mr. Klint did not break down his hours, this court has previously held that it is not necessary to determine which attorney work was directly related to medical benefits recovery and which was related to other issues. Peterson v. Everything Clean, Inc., 55 W.C.D. 126 (W.C.C.A. 1996).  Finally, with regard to the judge=s finding that the records do not show whether the employer and insurer were disputing the out-of-pocket expenses, we note that those expenses were claimed on the claim petition and that the employer and insurer denied liability for all claimed benefits in their answer.  In addition, the stipulation for settlement clearly sets forth that the expenses were still outstanding at the time the stipulation was prepared.  As out-of-pocket expenses were not paid until after the filing of a claim petition and an award on stipulation, we can only assume that those expenses were disputed.

 

While we conclude that Mr. Klint is entitled to Roraff fees for representation of the employee on medical expense issues, Roraff fees are not determined merely by multiplying the attorney=s hourly rate by the amount of time spent on the case.   See Borgan v. Bob Hegland, Inc., slip op. (W.C.C.A. June 12, 2002).  In the instant case, while the judge found that Mr. Klint had expertise in the area of workers= compensation, she also found that the issues were not unusual or difficult, that the only evidence necessary at hearing would have been the employee=s testimony and medical records, and that the intervenor had its own attorney.  Under these circumstances, we conclude that $2,000 is a reasonable Roraff fee, and we therefore reverse the judge=s decision and substitute a $2,000 Roraff fee award.^[8]