LYNNE DORR, Employee/Appellant, v. NATIONAL MARROW DONOR PROGRAM and CNA INS. CO., Employer-Insurer.

WORKERS’ COMPENSATION COURT OF APPEALS
JULY 8, 2013

No. WC13-5543

HEADNOTES

ATTORNEY FEES - EXCESS FEES.  The compensation judge’s determination that the employee’s attorney had waived his claim to additional excess contingent fees is supported by substantial evidence where the attorney had stated in a previous attorney fee hearing that he was capping his claim for contingent fees at the amount he was claiming in that proceeding.

Affirmed.

Determined by:  Stofferahn, J., Hall, J., and Cervantes, J.
Compensation Judge:  Cheryl LeClair-Sommer

Attorneys:  Timothy P. Jung, Lind, Jensen, Sullivan & Peterson, Minneapolis, MN, for the Appellant.  Mark A. Kleinschmidt and Whitney L. Teel, Cousineau McGuire, Minneapolis, MN, for the Respondents.

 

OPINION

DAVID A. STOFFERAHN, Judge

The employee’s attorney appeals from the compensation judge’s denial of his claim for additional contingent attorney fees.  We affirm.

BACKGROUND

On November 8, 2008, the employee, Lynne Dorr, sustained serious personal injuries when a deer crashed into the car she was driving.  Ms. Dorr retained Attorney Timothy Jung to pursue a workers’ compensation claim on her behalf and asserted that her injury arose out of and in the course of her employment with National Marrow Donor Program.  After a hearing, the compensation judge denied the claim and an appeal was taken to this court.  We reversed the compensation judge, concluding that Ms. Dorr was on a special errand for her employer at the time of her injury and was in the course of her employment when injured.[1]

The employee’s attorney filed a statement of attorney fees in December 2010 in which he requested $13,000 in contingent fees, $26,000 in excess contingent fees, and additional fees to be paid by the employer and insurer.  He documented 429.9 hours spent on the case up through the date of the summary affirmance by the Minnesota Supreme Court and noted that approximately $1.8 million had been paid in permanent total disability, medical expenses, and rehabilitation services.  The employer and insurer objected to the fee request and a hearing was set.

A hearing on the attorney fee claim was held on February 28, 2011.  The recording system at the hearing failed and no transcript was available in the later appeal.  The compensation judge prepared a transcript of her notes and submitted her proposed statement of the proceeding to the parties for additions, changes, or deletions.  No comments were received.  In the final statement of proceedings, the compensation judge stated, “[i]n answer to an inquiry from Judge LeClair-Sommer, Attorney Jung further stated that he is claiming contingency fees capped at $39,000, even on the permanent total disability and permanent partial disability benefits.”

In her findings and order on the attorney fee claim of April 14, 2011, the compensation judge determined that a majority of the itemized hours submitted by the employee’s attorney were for services before the Workers’ Compensation Court of Appeals and the Minnesota Supreme Court and, as a result, would not be considered by her in determining attorney fees.  She found a reasonable fee for services provided at the hearing level to be $50,000 and concluded that an award of employer-paid fees would not be appropriate since the employee’s benefits were sufficient to pay this amount.

The compensation judge did not award $50,000 in contingent attorney fees.  The compensation judge found, “[a]lthough the employee had additional monetary benefits available for contingency fees to be withheld and payable to Attorney Jung in the future, Attorney Jung opted to cap his claim for contingency fees at $39,000.  The claim for excess fees beyond the presumptive contingency fee of $13,000 is reasonable.”  (Finding 10.)

The employee appealed the compensation judge’s decision.  On appeal, the employee argued that the compensation judge erred in denying the claim for employer-paid attorney fees.  There was no appeal from the finding that the employee’s attorney had opted to cap his request for contingent fees at $39,000.  This court affirmed the compensation judge’s decision.[2]

In October 2011, the employee’s attorney wrote to the attorney for the employer and insurer requesting that payment be made of the balance of the employee’s permanent partial disability in a lump sum, withholding $11,000 for a “future potential statement of attorney fees.”  The lump sum payment, less the possible attorney fees, was then made by the employer and insurer.

The employee’s attorney filed a statement of attorney fees on October 20, 2012, in which he requested an additional $11,000 in contingent fees and $3,300 to the employee under Minn. Stat. § 176.081, subd. 7.  The employer and insurer objected to the fee and a hearing on the fee request was held on December 3, 2012.

The compensation judge issued her decision on December 18, 2012, and denied the claim for additional contingent fees.  She concluded that in capping his claim for contingent fees at $39,000 in the February 2011 hearing, the employee’s attorney had waived his right to a contingent fee in excess of that amount.  The employee’s attorney has appealed.

DECISION

On appeal, the employee’s attorney argues that the compensation judge erred in concluding that he had waived his claim to additional contingent fees by his comments in the first attorney fee hearing.  The appellant cites to Frandsen v. Ford Motor Co., 801 N.W.2d 177, 182, 71 W.C.D. 377, 382 (Minn. 2011), for the proposition that waiver requires an “intentional relinquishment of a known right.”  According to the appellant’s argument, since an attorney has no “right” to fees in excess of $13,000, there could not have been a waiver of fees in excess of that amount.  We are not persuaded.

In Frandsen, the court considered whether the failure of an employer to expressly reserve the retirement presumption found in Minn. Stat. § 176.101, subd. 4, in a stipulation for settlement constituted a waiver of its right to apply the retirement presumption later.  The court held that specific language in the stipulation of the employer’s intent to waive the application of the presumption was required for an employer to waive the retirement presumption.

Frandsen does not resolve the present appeal since it deals only with the question of the validity of an implied waiver of a possible defense in a stipulation.  The compensation judge did not conclude that the employee’s attorney had made an implied waiver of his claims for additional contingent fees.  Instead, the compensation judge referred to the attorney’s statement that he was capping his contingent fee at $39,000.  In her memorandum, the compensation judge noted that the employee’s attorney is “learned in the workers’ compensation laws, which can be quite complicated.  His affirmative statement to cap his fees is evidence of his intent to waive the right to additional contingency fees beyond $39,000.”  The appellant does not dispute the compensation judge’s assessment of this statement.  Instead he claims that the compensation judge could not find that he waived additional contingent fees.  Only a waiver of a right is valid and there is no right to excess contingent attorney fees.

We conclude that appellant misconstrues the nature of the “right” that may be waived in workers’ compensation.  It is true that an attorney does not have a right to a specific fee in excess of $13,000 and an excess fee must be awarded by a compensation judge or other competent authority.  Irwin v. Surdyk’s Liquor, 599 N.W. 2d 319 (Minn. 1999).  However, an attorney does have a right to claim fees in excess of $13,000 in those cases in which the Irwin factors are met.  Vaughn v. Allina Health Sys., 69 W.C.D. 232 (W.C.C.A. 2009), summarily aff’d (Minn. June 30, 2009).  The question here is whether the right to a claim is a right which may be waived by an express statement.

In Rackow v. Kujak Transport, slip op (W.C.C.A. Jan. 8, 1991), this court held that an employee’s oral waiver of possible claims in another state was valid and was sufficient to establish jurisdiction in Minnesota under Minn. Stat. § 176.041, subd. 4.  In Case-Belich v. St. Mary’s Med. Ctr., slip op (W.C.C.A. Aug. 22, 2002), the court held that the employer’s stipulation of permanent total disability constituted a waiver of its defense that the employee had not met the permanent partial disability threshold.  Even in Frandsen, the case relied upon by appellant, the court did not hold that an employer could not waive its defense of a retirement presumption in a stipulation, but, instead, stated that such a waiver must be express.  We conclude, then, that an attorney may waive a claim to excess fees.

At the most recent hearing, counsel for the employer and insurer argued that waiver and estoppel applied in the present case so as to bar the claim for additional attorney fees.  Collateral estoppel is a limited form of res judicata in which an earlier determination on an issue which has been fully presented to the compensation judge bars re-litigation on the same issue.  Fischer v. Saga Corp., 498 N.W.2d 449, 48 W.C.D. 368 (Minn. 1993).  Here, by the statements of the employee’s attorney, the question of excess contingent attorney fees was fully determined in the first attorney fee hearing.  We conclude the compensation judge’s determination that the employee’s attorney waived his claim to additional excess fees in the February 2011 hearing is supported by the evidence and case law.  Further, collateral estoppel bars a reconsideration of the same issue in the present appeal.

The decision of the compensation judge is affirmed.



[1] Dorr v. National Marrow Donor Program, 70 W.C.D. 690 (W.C.C.A. 2010), summarily aff’d (Minn. Nov. 29, 2010).

[2] Dorr v. National Marrow Donor Program, No. WC11-5278 (W.C.C.A. Jan. 5, 2012).