The employee’s attorney appeals from the compensation judge’s denial of his claim for attorney fees to be paid by the employer and insurer and from her determination of a reasonable fee for his services.

Lynne Dorr sustained severe personal injuries in a motor vehicle accident on November 8, 2008.  She claimed that at the time of her injury she was in the course of her employment with National Marrow Donor Program.  The employer and its insurer denied liability and the employee subsequently filed a claim petition for workers’ compensation benefits.

The employee’s claims were heard by a compensation judge in September 2009.  At the hearing, the parties stipulated that the employee was permanently and totally disabled as of the date of her injury, that the medical treatment received by the employee was reasonable and necessary, and that the employee was entitled to a rehabilitation consultation.  The only issue before the compensation judge was whether the employee was in the course of employment when injured.

In her decision, issued January in 2010, the compensation judge found the employee was not in the course of employment when injured and denied the employee’s claim.  The employee appealed to this court and we reversed the compensation judge’s decision, concluding that the employee was on a special errand for her employer when she was injured and that her injuries were compensable.^[1]  The employer and insurer appealed to the Minnesota Supreme Court and the decision of this court was summarily affirmed.^[2]

The employee’s attorney filed a statement of attorney fees on December 16, 2010.  The statement indicated the employer and insurer had paid approximately $1.8 million in permanent total disability benefits, rehabilitation services, and medical expenses.  The employee’s attorney identified 429.9 hours spent on the case from the date his firm was retained by the employee through the date of the supreme court’s affirmance.  Hourly charges totaled over $91,000.  The employee’s attorney requested $13,000 in contingent fees under Minn. Stat. § 176.081, subd. 1(a), $26,000 in excess fees, $13,000 as a Roraff fee, $500 as a Heaton fee and an additional unspecified amount to be paid by the employer and insurer pursuant to Irwin.^[3]  The employer and insurer objected to the requested fees.  A hearing on the attorney fee request was held on February 28, 2011.

The compensation judge issued her decision on fees on April 14, 2011.  In unappealed findings, the compensation judge determined that through December 16, 2010, the employer and insurer had paid $42,667.14 in permanent total disability benefits.  Because of the Social Security offset, the employee’s weekly rate for ongoing permanent total disability benefits was $225.58 from which $45.12 was being withheld for possible attorney fees.  The employee had been paid $89,950.25 in permanent partial disability benefits; a total payment of approximately $400,000 was anticipated.  The employee was being paid ongoing permanent partial disability at a weekly rate of $835.73, with $167.15 withheld as fees.  $28,012.89 had been withheld by the employer and insurer for attorney fees.  The employer and insurer had also paid approximately $685,000 in medical expenses.

In findings and conclusions appealed by the employee’s attorney, the compensation judge found that about half of the itemized legal services had been provided solely for the appeals and would not be considered by her in determining a reasonable fee.  The hourly charges for those services were approximately $45,000.  The compensation judge reviewed the Irwin factors and concluded that the employee’s attorney had significant experience as a workers’ compensation attorney, that the responsibility assumed by the attorney was of “the highest order,” that considerable time and expenses were necessary to prepare for trial, that the legal issues were complex, as was the evidence necessary to prove the claim.  She determined a reasonable fee to be $50,000.

The compensation judge determined that indemnity benefits paid to the employee were adequate to provide a reasonable fee to the employee’s attorney.  The request for Roraff, Heaton, or other employer-paid fees was denied.  Because the employee’s attorney had stated at the hearing that he was not requesting more than $39,000 in fees from the employee’s benefits, the compensation judge ordered the employer and insurer to pay that amount for an attorney fee.  The employee’s attorney has appealed.

At the hearing on attorney fees, the compensation judge was presented with two issues: 1) what was a reasonable fee for the services provided by the employee’s attorney, and 2) should any part of that fee be paid by the employer and insurer.  We consider each of these issues in turn.

In reviewing the reasonableness of the fee awarded by the compensation judge, the first question is whether the compensation judge was correct in not considering the value of legal services provided on appeal.  We conclude this determination was correct since we have held in previous decisions that a compensation judge may not award fees for services before this court.  Schoeder v. Centrol Inc., 46 W.C.D. 133 (W.C.C.A. 1991); Milner v. Schwan’s Sales Enters., slip op. (W.C.C.A. Aug. 2, 2000).  The question for this court is whether the compensation judge awarded a reasonable fee for services provided at the hearing level.

Determination of a reasonable attorney fee is within the sound discretion of a compensation judge.  Jeffrey v. Banana Republic, 67 W.C.D. 246 (W.C.C.A. 2007).  “In reviewing such an award, this court will not reverse an award or denial of attorney fees absent an abuse of discretion.”  Dimon v. Metz Baking, 64 W.C.D. 143, 147 (W.C.C.A. 2003).  “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 in the present case considered the fee in light of the Irwin factors.  On appeal, the employee’s attorney does not argue that the compensation judge failed to apply Irwin.  Rather, the argument is that appropriate consideration of the Irwin factors by the compensation judge should have led to an award of fees paid by the employer and insurer.  However, this argument does not address the question of what amount constitutes a reasonable fee for the services provided at the hearing level.  At the hearing, the employee’s attorney emphasized the significant amount of the benefit paid by the employer and insurer and suggested that a reasonable fee should be commensurate with such a recovery.  No claim was made as to what a reasonable fee would be.

There is no question but that the employee, as the result of her tragic injuries, has been paid and will be paid a very large amount of workers’ compensation benefits.  However, there is not necessarily a dollar for dollar correlation between fees and benefits in determining a reasonable attorney fee.  While we might have found a higher fee to be appropriate, given the record before us and the lack of any specific request by the employee’s attorney, we are unable to conclude that the compensation judge abused her discretion in making her determination.  The compensation judge’s conclusion that a reasonable fee for services at the hearing level is $50,000 is affirmed.

The next question is the source from which that fee should be paid.  A contingent attorney fee of up to $13,000 may be paid from compensation awarded to an employee.  Minn. Stat. § 176.081, subd. 1.  The contingent fee is presumed to be adequate and an additional fee may be assessed against the employer and insurer only when the contingent fee is shown to be inadequate.  Minn. Stat. § 176.081, subd. 1(1).  While the court in Irwin invalidated the absolute cap set out in the 1995 statute and reaffirmed the authority of a compensation judge to award a reasonable contingent fee in excess of $13,000, the statutory provision that an employer-paid fee is awardable only when the contingent fee is inadequate remains in effect.

At the hearing before the compensation judge, the employee’s attorney sought $13,000 in contingent fees and $26,000 in excess fees to be paid from the employee’s benefits.  The employee’s attorney argued that he was not obligated to request any additional fees from the employee’s benefits and could instead claim fees paid by the employer and insurer to reach a reasonable fee.  As authority for this position, the employee’s attorney cites to our decision in Fredrickson-Ellison v. Methodist Hosp., slip op. (W.C.C.A. July 24, 2002).

In Fredrickson, the employee’s attorney claimed contingent/excess fees as well as Roraff fees.  The employer did not object to the amount of the fee claimed by the attorney, but argued at the hearing that the fee could be paid from ongoing benefits paid to the employee.  The employer and insurer argued that the employee’s attorney should request additional contingent/excess fees to be paid from the continuing benefits.  Because of the date of injury, the compensation judge applied the 1992 attorney fee statute which did not include the limiting language currently found in Minn. Stat. § 176.081, subd. 1(1).  More importantly, in Fredrickson, it was uncertain how long benefits would be paid to the employee and, as a result, it was uncertain whether it was possible for the employee’s attorney to receive a reasonable fee from those benefits alone.  Because of this uncertainty, the compensation judge in Fredrickson found the employee’s attorney was not obligated to request additional excess fess and she awarded Roraff fees to be paid by the employer and insurer.  This court affirmed the compensation judge’s determination.

We did not in Fredrickson set out a general rule that an attorney may refuse to request an excess fee and instead request only employer-paid fees when the $13,000 maximum contingent fee has been met.  The employee’s attorney’s argument is an overly broad interpretation of Fredrickson that we do not accept.

As we noted earlier, as of December 16, 2010, the employer and insurer had withheld $28,000 in fees and additional fees were being withheld from ongoing payments of permanent partial disability and permanent total disability benefits.  No argument has been made that this stream of benefits is inadequate to provide a reasonable attorney fee.  While this fee comes from the employee’s benefits, it needs to be mentioned that the employee receives reimbursement of 30% of these fees under Minn. Stat. § 176.081, subd. 7, significantly reducing the employee’s out-of-pocket costs.

We find no abuse of discretion by the compensation judge in the award of attorney fees and her decision is affirmed.