RODNEY WOLTERS, Employee/Appellant, v. CURRY SANITATION, INC., and MINNESOTA ASSIGNED RISK PLAN/RTW, INC., Employer-Insurer.
WORKERS’ COMPENSATION COURT OF APPEALS
SEPTEMBER 11, 2012
No. WC12-5425
HEADNOTES
ATTORNEY FEES - IRWIN FEES. The compensation judge did not err by denying an attorney fee claim for over $13,000.00 for medical expenses under the statutory 25/20 formula where an itemization of hours was not included with the statement of fees and where the employee’s date of injury was before the 1995 amendments to Minn. Stat. § 176.081 took effect.
Affirmed.
Determined by: Milun, C.J., Wilson, J., and Stofferahn, J.
Compensation Judge: Kathleen Behounek
Attorneys: William J. Krueger, St. Paul, MN, for the Appellant. Timothy J. Manahan, Brown & Carlson,, Minneapolis, MN, for the Respondents.
OPINION
PATRICIA J. MILUN, Chief Judge
The employee appeals the compensation judge’s denial of his claim for attorney fees for a medical expense claim under the statutory 25/20 formula where an itemization of hours was not included with the statement of fees and where the employee’s date of injury was before the 1995 amendments to Minn. Stat. § 176.081 took effect.
BACKGROUND
On July 9, 1987, Rodney Wolters, the employee, sustained a low back injury while working for Curry Sanitation, Inc., the employer, which was insured for workers’ compensation liability by the Minnesota Assigned Risk Plan, administered by RTW, Inc. In 1990, the parties settled the employee’s claims on a full, final, and complete basis except for future reasonable and necessary medical expenses. In 2010, the employee sought treatment for increased back pain, and his physicians recommended a lumbar spine fusion. The employer and insurer objected.
On November 19, 2010, the employee filed a medical request for approval of the proposed fusion surgery. The employer and insurer responded, requesting a second opinion which concluded that the employee was not a candidate for the proposed surgery. A hearing was held on March 16, 2011. The compensation judge found that the proposed surgery was reasonable and necessary, and granted the employee’s request for approval of the surgery. The employee underwent the surgery on September 9, 2011. Costs associated with the surgery totaled $140,858.52.
On October 19, 2011, the employee’s attorney served and filed a statement of attorney fees and costs listing a total of 47.3 hours spent on the surgery claim and an hourly fee of $375.00 per hour. The statement did not include an itemization of the attorney’s time as expended. The attorney claimed a fee based on the 25/20 formula under Minn. Stat. § 176.081, subd. 1, and the Irwin[1] case. The employer and insurer objected to the statement of attorney fees. A hearing was held on January 23, 2012. At the hearing, the employee’s attorney amended his claim for fees to $28,371.70 based on the 25/20 formula and introduced an itemization of the time expended on the claim as an exhibit. The employer and insurer objected to the exhibit, claiming that they did not have a chance to examine the exhibit before the hearing. The compensation judge sustained the objection and did not admit the exhibit into the record. The compensation judge denied the employee’s claim for attorney fees based on the 25/20 formula. The employee appeals.
STANDARD OF REVIEW
A decision which rests upon the application of a statute or rule to essentially undisputed facts generally 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
The employee raises three issues in this appeal: first, whether the compensation judge erred as a matter of law by excluding the itemization of hours from the record and denying the employee’s claim; second, whether the compensation judge’s decision determining that counsel had not provided a basis to award attorney fees constitutes a forfeiture of the claim for fees; and third, whether the 1995 amendments to Minn. Stat. § 176.081, subd. 1, apply to cases where the work injury predates the enactment of the amendments but the attorney services follow the enactment.
Evidentiary ruling
The employee’s attorney submitted the itemized list of the hours spent on the medical claim, marked as Exhibit A, on the day of hearing. The employer and insurer objected to the multi-page document, stating they had no opportunity to review it since the document was not filed with the statement of fees. The employee’s attorney claimed that the objection should not “rise to the level of preventing the substantive decision on the case.”[2] The judge offered to continue the hearing to allow the employer and insurer time to review the document and then address all arguments in one proceeding. At that point, a discussion was held off the record. When the parties returned on the record, the judge sustained the employer and insurer’s objection to Exhibit A and it was not admitted into the record.
On appeal the employee contends the judge erred by excluding Exhibit A from the record. We disagree. The employee argues there is “no rational distinction to say the exhibit, which just condenses what the oral testimony would be, should be kept out of evidence as untimely.”[3] This argument fails to recognize the potential for prejudice from the lack of timeliness. The employee further seeks to fault the compensation judge for not strictly applying the Minnesota Rules of Evidence. We note that in workers’ compensation proceedings a compensation judge is not bound by the common law or statutory rules of evidence and has wide discretion in evidentiary rulings.[4] The rules of evidence are only a guide. The judge did not err by considering whether the employee had an opportunity to present the document to counsel before the hearing in deciding to exclude the evidence. The employee failed to demonstrate an error that warrants reversal.
Forfeiture
The employee contends that we must reverse the order of the compensation judge and remand for further proceedings because the judge’s failure to award fees rendered the order a forfeiture of his right to claim attorney fees. The employee’s claim of potential forfeiture is not a basis of appeal. A compensation judge has not determined that the employee is precluded from claiming fees. “The existence of a justiciable controversy is prerequisite to adjudication.”[5] It is not within the authority of this court to issue an advisory opinion.[6] Further, we note that the compensation judge stated in her memorandum that the employee’s attorney had failed to provide the necessary evidence to support an award of fees “at this time.”[7]
Minn. Stat. § 176.081, subd. 1 (1995 amendments)
For workers’ compensation cases with dates of injury before October 1, 1995, attorneys could obtain hourly fees for representing employees on medical issues. The fees were determined by consideration of factors listed in Minn. Stat. § 176.081, subd. 5(d).[8] In 1995, Minn. Stat. § 176.081 was amended to change the calculation of fees for medical expense claims and to add a maximum amount of fees per claim. Minn. Stat. § 176.081, subd. 1, provides for attorney fees of 25% of the first $4,000.00 in compensation awarded to the employee and 20% of the next $60,000.00 in compensation awarded.[9] Under the amendments, attorney fees in cases in which medical benefits are recovered were also based on this formula.[10] In Irwin v. Surdyk’s Liquor,[11] the Minnesota Supreme Court found that the limitation on fees in the 1995 amendments was unconstitutional, and that any fees in addition to the fees calculated under the formula should be determined by consideration of the factors previously listed under Minn. Stat. § 176.081, subd. 5(d).[12]
Before the Irwin decision, this court held that the 1995 amendments to Minn. Stat. § 176.081, subd. 1, affected substantive rights, and therefore that the amendments apply only to fee awards where the date of injury is subsequent to the effective date of the amendments.[13] The employee contends the Irwin decision renders the remaining changes in the 1995 amendments to Minn. Stat. § 176.081, subd. 1, procedural in nature rather than substantive, and therefore the amendments should apply to work injuries which predate the enactment of the amendments. The employee maintains the law in effect at the time the attorney fee for medical benefits is determined is the applicable law, pointing to cases where other changes in the attorney fee statute have been applied to dates of injury after the changes were enacted.[14]
In this case, the employee is requesting $28,371.70 in attorney fees based upon the 25/20 formula. This claim exceeds the amount considered by the formula to be the maximum amount awarded under Minn. Stat. § 176.081, subd. 1(a).[15] Even since Irwin, any fee awarded that exceeds the statutory formula requires application of the Irwin factors.[16] The employee’s attorney fee claim, as presented at the hearing, could not be determined without consideration of the attorney’s itemized hours.[17] The compensation judge did not err by denying the employee’s claim for attorney fees as presented, and the judge’s decision is affirmed.
Since we have affirmed the compensation judge’s denial of the claim for attorney fees, we do not reach the issue of whether the 1995 amendments to Minn. Stat. § 176.081 should apply in cases where the attorney services for obtaining medical benefits follow the enactment of the amendments but the work injury predates the enactment.
[1] See Irwin v. Surdyk’s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn.1999).
[2] Tr. 12.
[3] Appellant’s brief at 16.
[4] Minn. Stat. § 176.411, subd. 1; Bey v. Oxford Properties, Inc., 481 N.W.2d 40, 42, 46 W.C.D. 198, 201 (Minn. 1992); Cici v. Methodist Hosp., 63 W.C.D. 421, 426 (W.C.C.A. 2003).
[5] Izaak Walton League of Am. Endowment, Inc. v. State, Dep’t of Natural Resources, 312 Minn. 587, 589, 252 N.W.2d 852, 854 (1977).
[6] Herrly v. Walser Buick, Inc., 47 W.C.D. 670, 675 (W.C.C.A. 1992).
[7] Memo. at 4.
[8] Minn. Stat. § 176.081, subd. 5(d) (repealed 1995) listed factors to be considered in determining a reasonable attorney fee, including 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.
[9] Minn. Stat. § 176.081, subd. 1(a), provides in part:
(a) A fee for legal services of 25 percent of the first $4,000 of compensation awarded to the employee and 20 percent of the next $60,000 of compensation awarded to the employee is the maximum permissible fee and does not require approval by the commissioner, compensation judge, or any other party. All fees, including fees for obtaining medical or rehabilitation benefits, must be calculated according to the formula under this subdivision, except as otherwise provided in clause (1) or (2).
(1) The contingent attorney fee for recovery of monetary benefits according to the formula in this section is presumed to be adequate to cover recovery of medical and rehabilitation benefit or services concurrently in dispute. Attorney fees for recovery of medical or rehabilitation benefits or services shall be assessed against the employer or insurer only if the attorney establishes that the contingent fee is inadequate to reasonably compensate the attorney for representing the employee in the medical or rehabilitation dispute. In cases where the contingent fee is inadequate the employer or insurer is liable for attorney fees based on the formula in this subdivision or in clause (2).
For the purposes of applying the formula where the employer or insurer is liable for attorney fees, the amount of compensation awarded for obtaining disputed medical and rehabilitation benefits under sections 176.102, 176.135, and 176.136 shall be the dollar value of the medical or rehabilitation benefit awarded, where ascertainable.
[10] See Roraff v. State, Dep’t of Transp., 288 N.W.2d l5, 32 W.C.D. 297 (Minn. 1980).
[11] Irwin v. Surdyk’s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999).
[12] Id. at 142, 59 W.C.D. at 334-36.
[13] Senjem v. Independent Sch. Dist. No. 625, 55 W.C.D. 656, 661-62 (W.C.C.A. 1996) (the 1995 amendments were considered substantive since they changed the fee calculation for medical claims cases and included a maximum fee, and therefore were found to apply only to fee awards in cases where the employee’s injury occurred on or after their effective date); see also Kahn v. State, University of Minn., 327 N.W.2d 21, 35 W.C.D. 425 (Minn. 1982).
[14] Larson v. National Car Rental, 35 W.C.D. 37 (W.C.C.A. 1982) (amendments to Minn. Stat. § 176.081, subd. 1, which increased the amount which could be awarded as a contingent fee without judicial approval, and did not otherwise limit or expand the amount of fees which potentially could be awarded, were held to be procedural in nature, rather than substantive, and were applicable to fee awards determined following the effective dates of the amendments).
[15] Minn. Stat. § 176.081, subd. 1(a), states that the fee is 25 percent of the first $4,000 of compensation awarded to the employee and 20 percent of the next $60,000 of compensation awarded.
[16] See Brown v. Omni Remfg., 63 W.C.D. 519, 524-25 (W.C.C.A. 2003) (fees over $13,000 are excess fees and must be determined using the Irwin factors); Cahow v. Brookdale Motors, 61 W.C.D. 427 (W.C.C.A. 2001) (for a post-October 1, 1995, injury where the only matter in dispute was a medical treatment expense, the attorney fee was appropriately based on the statutory formula without consideration of the Irwin factors).
[17] See Minn. R. 1415.3200, subp. 3.B.(1) (where a party is claiming attorney fees in excess of amounts listed in Minn. Stat. § 176.081, subd. 1(a) or (b), the party shall attach an exhibit showing specific legal services performed, the date performed, and the number of hours spent for each service).