MARK J. JEFFREY, Employee/Appellant, v. BANANA REPUBLIC, and AMERICAN HOME ASSURANCE, adm’d by AIG CLAIM SERVS., INC., Employer-Insurer.
WORKERS’ COMPENSATION COURT OF APPEALS
MAY 1, 2007
No. WC06-273
HEADNOTES
ATTORNEY FEES - IRWIN FEES. Where the compensation judge properly applied the factors in Irwin v. Surdyk’s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999), to the facts in this case, the compensation judge’s award of attorney fees to the employee’s attorney for his representation of the employee was not clearly erroneous and not an abuse of discretion, and therefore must be affirmed.
Affirmed.
Determined by: Rykken, J., Wilson, J., and Johnson, C.J.
Compensation Judge: Paul D. Vallant
Attorneys: David C. Wulff, Law Office of David C. Wulff, Roseville, MN, for the Appellant. Nicole B. Surges and William M. Topka, Erstad & Riemer, Minneapolis, MN, for the Respondents.
OPINION
MIRIAM P. RYKKEN, Judge
The employee’s attorney appeals from the compensation judge’s award of Roraff/Irwin[1] attorney fees. We affirm.
BACKGROUND
On September 17, 2004, Mark J. Jeffrey, the employee, was injured while working as a sales clerk for The Gap Inc., d/b/a Banana Republic, the employer, which was insured for workers’ compensation liability by American Home Assurance, the insurer. The employee remained off work as a result of his injury until October 3, 2004, and received medical and chiropractic treatment. He was diagnosed as having experienced a thoracic contusion and strain and secondary lumbar strain, which resolved by November 12, 2004. The employer and insurer denied primary liability for the employee’s injury, admitting the occurrence of an incident at work but denying that the employee was injured as a result of that incident.
After retaining Attorney David Wulff to represent him in this matter, the employee filed a claim petition on November 9, 2004, seeking payment for 2.2 weeks of temporary total disability benefits, between September 17 and October 2, 2004, temporary partial disability benefits continuing after October 3, 2004, and medical expenses. The employer and insurer denied primary liability, served a discovery demand, scheduled a medical evaluation, took the employee’s deposition, obtained surveillance of the employee, and later advised the employee that it intended to call four witnesses to testify at trial.
A hearing was held on the employee’s claim petition on January 18, 2006. The employee withdrew his claim for temporary partial disability benefits before the hearing. In his findings and order served and filed on March 20, 2006, the compensation judge determined that the employee had sustained a work-related injury on September 17, 2004, which had resolved by November 12, 2004. He awarded the claimed 2.2 weeks of temporary total disability benefits at $130.00 per week for a total of $286.00, plus interest, and reimbursement of all medical expenses including mileage totaling approximately $2,371.00. The compensation judge also ordered that any claim the employee may have for additional attorney fees pursuant to Roraff or Irwin was reserved.
On May 4, 2006, the employee’s attorney filed a statement of attorney fees and costs. In his statement, the employee’s attorney indicated that his services included gathering background information such as medical records; preparation of a claim petition, discovery demands and responses; representation of the employee at depositions of the employee and of the employer and insurer’s witnesses; review of surveillance evidence; representation at trial; and verifying award payment. The attorney claimed that he had expended 35.9 hours plus one hour of his legal assistant’s time, and sought 25% contingency fees plus Roraff/Irwin fees for a total attorney fee of $9,008.39 plus $2,568.45 in subd. 7 fees, and $731.95 in costs. The employer and insurer objected.
A hearing on attorney fees was held on August 14, 2006. The parties stipulated that the employee’s attorney’s hourly rates of $225.00 in 2004, $235.00 in 2005, and $250.00 in 2006, were reasonable. The parties also stipulated that the employee was entitled to partial reimbursement of attorney’s fees pursuant to Minn. Stat. § 176.081, subd. 7. The compensation judge found that the employee’s attorney had reasonably expended 35.9 hours of attorney time and one hour of legal assistant time, and had incurred actual and necessary costs of $731.95. The compensation judge concluded that a reasonable fee in this case was $5,000.00. After deducting the contingent fee withheld, the compensation judge awarded the employee’s attorney $4,924.21 in attorney fees and $731.95 in costs. The employee’s attorney appeals.
STANDARD OF REVIEW
This court may not disturb a compensation judge’s findings of fact unless clearly erroneous and unsupported by substantial evidence in the record as a whole. Minn. Stat. §176.421, subd. 1(3). A decision, however, which rests upon the application of the law to essentially undisputed facts involves a question of law which the Workers’ Compensation Court of Appeals may consider de novo. Krovchuk v. Koch Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993), summarily aff’d (Minn. June 3, 1993).
DECISION
Attorney fees for the recovery of medical benefits may be assessed against an employer and insurer if the employee’s attorney establishes that the contingent fee on indemnity benefits “is inadequate to reasonably compensate the attorney for representing the employee in the medical . . . dispute.” Minn. Stat. § 176.081, subd. 1(a)(1); see also Roraff v. State, Dep’t of Transp., 288 N.W.2d 15, 16, 32 W.C.D. 297, 298 (Minn. 1980). A reasonable attorney fee in cases involving medical expense claims is determined by considering the statutory guidelines on fees and “the 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). A determination of the amount of Roraff fees awarded in a particular case lies within the discretion of the compensation judge. Neumann v. Graceville Health Ctr., 52 W.C.D. 194 (W.C.C.A. 1995). Because each case is factually unique, this court will give deference to the compensation judge’s judgment and discretion in determining an award of Roraff fees. Dimon v. Metz Baking, 64 W.C.D. 143 (W.C.C.A. 2003), summarily aff’d (Minn. Jan. 29, 2004). In reviewing such an award, this court will not reverse a compensation judge’s award or denial of attorney fees absent an abuse of discretion. Id. “The compensation judge abuses his or her discretion only when the award of fees is based upon a clearly erroneous conclusion given the record.” Lucking v. EPC Loudon-Cookson Plastic Molding Corp., slip. op. (W.C.C.A. Sept. 26, 2001).
The compensation judge found that the employee’s attorney had reasonably expended 35.9 hours of attorney time and one hour of legal assistant time to prepare for the trial, and had incurred costs of $731.95, that the attorney assumed full responsibility for presentation of the employee’s claim, that the attorney had practiced in the workers’ compensation area since 1984 which justified the hourly rates stipulated to by the parties, and that the attorney had obtained a good result for the employee, recovering the full 2.2 weeks of temporary total disability benefits claimed and reimbursement of all claimed medical expenses. The compensation judge also found that the issues in the case were not difficult or complex, and that the nature of the proof involved testimony of the employee, cross-examination of the employer’s witnesses, and presentation of medical records and bills. In his memorandum, the compensation judge noted that the case involved a small claim, but because the employer and insurer had defended the case vigorously, the employee’s attorney acted appropriately and that the hours expended were reasonable. The compensation judge concluded that $5,000.00 was a reasonable fee in this case after considering all of the Irwin factors, including the amount involved and the difficulties of the issues.
The employee’s attorney argues that because the compensation judge found that the number of hours claimed by the attorney was reasonable, the compensation judge must award all of the claimed fees, otherwise employees with relatively modest claims will be unable to find competent legal representation. The employee’s attorney argues that the finding concerning the amount of time he expended - - that it was reasonable - - supports a full award of the claimed fees and does not justify a reduction in fees, or, alternatively, that the number of hours expended must at least serve as the starting point for the calculation of what constitutes a reasonable fee. He argues that ignoring the number of hours worked by an attorney, and an attorney’s reasonable hourly rate, results in arbitrary and capricious awards of attorney fees. The employee’s attorney also argues that the judge’s comment in his memorandum, that the claim was “very small,” implies that the judge felt justified in reducing the fees based on the amount of the claim alone. He argues that the compensation judge misapplied the tenets of Irwin and committed a reversible abuse of discretion.
While the amount of benefits in dispute is a factor to consider in an award of attorney fees, “it is neither the only nor the determinative factor.” Moen v. G. F. Business Equip., 42 W.C.D. 952 (W.C.C.A. 1989). In addition, “a determination of a claim for Roraff/Heaton fees is not merely a matter of multiplying the attorney’s hourly rate times the amount of time spent on the case less the contingent fee awarded. The time reasonably necessary to present the case is but one of the Irwin factors. Rather, a reasonable fee must be determined based on all seven of the Irwin factors.” Borgan v. Bob Hegland, Inc., 62 W.C.D. 452, 462 (W.C.C.A. 2002). Further, the factors need not be weighed evenly. The issue is whether the judge’s decision was reasonable based on the record as a whole considering and applying all of the Irwin factors. See Wilmes v. Wal-Mart Stores, Inc. 61 W.C.D. 548 (W.C.C.A. 2001), summarily aff’d (Minn. Sept. 12, 2001). As each case is unique, this court generally will defer to the compensation judge who presided at the hearing to determine a reasonable award of attorney fees. Peterson v. Everything Clean, Inc., 55 W.C.D. 126, 132-33 (W.C.C.A. 1996), summarily aff’d (Minn. Aug. 26, 1996).
In this case, the compensation judge reviewed the Irwin factors as they apply to the unique facts of this case, and outlined his reasoning in his findings and order and memorandum. Based upon our review of the files and records herein, we conclude the compensation judge’s review of the Irwin factors, under the particular facts of this case, was reasonable and not an abuse of his discretion. Accordingly, the award of Roraff fees is affirmed.
[1] Roraff v. State, Dep’t of Transp., 288 N.W.2d 15, 32 W.C.D. 297 (Minn. 1980); see also Irwin v. Surdyk’s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999).