DAVID J. KOHN, JR., Employee/Appellant, v. A&M BUSINESS INTERIORS and ACE USA, Employer-Insurer.

 

WORKERS= COMPENSATION COURT OF APPEALS

JANUARY 27, 2005

 

No. WC04-254

 

HEADNOTES

 

ATTORNEY FEES; STATUTES CONSTRUED - MINN. STAT. ' 176.081, SUBD. 1(c).  Where the employee=s attorney had filed a Medical Request alleging entitlement to only payment of medical expenses rather than a Claim Petition alleging entitlement to other benefits as well, and where, after the attorney had prevailed on the Medical Request and had been paid Roraff attorney fees for his work on that proceeding, the insurer had paid temporary partial disability benefits based only on the attorney=s post-litigation submission of copies of the employee=s pay stubs, the compensation judge properly denied the attorney=s request for contingent fees on the employee=s temporary partial disability benefits on grounds that those benefits had never been Agenuinely  disputed@ for purposes of Minn. Stat. ' 176.081, subd. 1(c).

 

Affirmed.

 

Determined by: Pederson, J., Johnson, C.J., and Rykken, J.

Compensation Judge: Peggy A. Brenden

 

Attorneys: Lawrence C. Miller, Miller & Carlson, Minneapolis, MN, for the Appellant.  Kathryn M. Perlinger, Knutson Flynn & Deans, Mendota Heights, MN, for the Respondents.

 

 

OPINION

 

WILLIAM R. PEDERSON, Judge

 

The employee appeals from the compensation judge=s denial of contingent attorney fees from temporary partial disability benefits paid to the employee on grounds that no genuine dispute existed regarding the issue of temporary partial disability benefits.  We affirm.

 

BACKGROUND^[1]

 

On November 18, 1999, David J. Kohn, Jr. [the employee], sustained an admitted injury to his low back while working for A&M Business Interior Services [the employer].  The employer and its insurer evidently paid for medical treatment related to the employee=s injury until June of 2000, at which time a doctor at the Park Nicollet Medical Clinic evidently released the employee to return to work, having concluded that the employee had reached maximum medical improvement after sustaining a 0% permanent partial disability rating as a result of his work injury.

 

The employee evidently returned to Park Nicollet for treatment in June of 2002 and was subsequently referred to orthopedist Dr. Manuel Pinto for a surgical consultation.  On November 14, 2002, the employee retained the services of attorney Lawrence Miller.  On December 20, 2002, after  obtaining certification of a medical dispute by the Department of Labor and Industry,^[2] the employee filed a Medical Request, seeking payment of certain outstanding medical bills and authorization for the surgical consultation with Dr. Pinto.  On February 10, 2003, the employer and insurer filed a Medical Response, denying liability for the claimed medical bills and for the proposed consultation, on grounds that the claimed treatment and consultation were not causally related to the employee=s work injury and that the chain of causation between the work injury and the treatment at issue had been broken by a superseding intervening injury.

 

An Administrative Conference was held on the employee=s Medical Request on February 27, 2003.  In a Decision and Order issued March 3, 2003, and an Amended Decision and Order issued March 13, 2003, a compensation judge ordered the employer and insurer to pay the claimed medical expenses and for the proposed consultation.  On March 31, 2003, the employer and insurer filed a Request for Formal Hearing.

 

The matter came on for a hearing before Compensation Judge Nancy Olson on May 15, 2003.  Issues at hearing included whether the employee=s low back injury on November 18, 1999, was a temporary or permanent injury and whether the employee had sustained an intervening injury in September of 2000 that broke the chain of causation between the 1999 work injury and the employee=s need for medical care since June 2002.  In a Findings and Order issued June 9, 2003, the compensation judge determined that the employee=s work injury was not a temporary injury and that the employee=s flare-up of pain in September of 2000 was not the result of a superseding intervening injury.  She therefore awarded payment of the disputed medical bills and authorized the surgical consultation with Dr. Pinto.

 

On June 20, 2003, Mr. Miller filed a Statement of Attorney=s Fees, requesting Irwin/Roraff fees^[3] for his representation of the employee in the medical dispute.  The employer and insurer objected to the claimed fees, and the parties entered into a compromise settlement.  Pursuant to an Award on Stipulation served and filed on August 22, 2003, Mr. Miller was awarded $3,450.00 in fees, and the employee was awarded $960.00 under Minn. Stat. ' 176.081, subd. 7.

 

About four months later, by correspondence dated January 2, 2004, Mr. Miller apparently submitted copies of certain of the employee=s pay stubs to the insurer for calculation and payment of temporary partial disability [TPD] benefits.  Additional pay stubs were submitted to the insurer on February 9, 2004.  In response, the insurer evidently paid to the employee TPD benefits for the period of August 15, 2002, through January 31, 2004, withholding $1,823.45 in contingent attorney fees.  The employee=s claim for TPD benefits was not the subject of any separate litigation.

 

On February 26, 2004, Attorney Miller filed a second Statement of Attorney=s Fees, claiming entitlement to payment of the contingent fees withheld by the insurer from the TPD benefits recently paid.

 

A hearing on Mr. Miller=s claim for contingent fees was held on July 12, 2004, before Compensation Judge Peggy A. Brenden.  At the hearing, Mr. Miller reduced his claim for fees to $1,620.00, evidently reflecting the time that he had actually spent on the employee=s claim following Judge Olson=s Findings and Order.  In a decision issued August 4, 2004, Judge Brenden determined that Mr. Miller was not entitled to the claimed contingent fees because the employer and insurer had commenced payment of TPD benefits Avoluntarily,@ because the employee=s entitlement to TPD benefits was never the subject of litigation, and because there was never a Agenuine dispute@ regarding the issue of TPD benefits.  Mr. Miller appeals.

 

DECISION

 

The threshold issue before the compensation judge was whether there was a genuine dispute over the employee=s entitlement to TPD benefits after August 15, 2002.  The compensation judge found that TPD benefits had not been a subject of the dispute resolved by Judge Olson=s June 9, 2003, Findings and Order and, implicitly, had never been a contested issue thereafter either.  Mr. Miller contends that, given the nature of the employer and insurer=s original defenses to the employee=s Medical Request, it was apparent that liability for all workers= compensation benefits was being denied.  It was a tactical decision on his part, he contends, to file a Medical Request rather than a Claim Petition, so that the employee could obtain a quicker decision on the causation issues raised by the defense.  He argues that, because TPD benefits were paid only after the insurer=s underlying liability had been litigated and secured, the subsequent payment of TPD by the insurer cannot be considered voluntary.  We are not persuaded.

 

Minn. Stat. '176.081, subd. 1(c), reads in relevant part as follows:

 

In no case shall fees be calculated on the basis of any undisputed portion of compensation awards.  Allowable fees under this chapter shall be based solely upon genuinely disputed claims or portions of claims, including disputes related to the payment of rehabilitation benefits or to other aspects of a rehabilitation plan.  The existence of a dispute is dependent upon a disagreement after the employer or insurer has had adequate time and information to take a position on liability.

 

As the compensation judge suggested in her memorandum, the issue of what is genuinely in dispute in an employee=s claim is generally determined at the time of an award.  In this case, the only issue in dispute at the May 15, 2003, hearing was medical benefits.  Mr. Miller chose to file a Medical Request rather than to join the employee=s TPD claim with the medical claim in a Claim Petition.^[4]  A Roraff fee was paid to Mr. Miller following the hearing on the medical dispute precisely because no Amonetary benefits@ were at issue.  TPD benefits were not Ain dispute@ before Judge Olson and were not disputed by the insurer when payment of them was subsequently requested in 2004.  The fact that an attorney is instrumental in establishing primary liability for an employee=s claim does not necessarily give rise to a claim for contingent fees on all workers= compensation benefits thereafter paid.  See Irwin, 599 N.W.2d at 143-44, 59 W.C.D. at 338.  While it may be argued that Judge Olson=s decision affected the employee=s entitlement to TPD benefits, it remains a fact that the issue of TPD benefits was never raised in the context of the litigation before Judge Olson.  Here, there being no evidence that a dispute ever arose concerning the employee=s entitlement to those benefits, the judge=s denial of contingent fees is affirmed.