LIONEL L. LANN, Employee/Appellant, v. STAN KOCH & SONS TRUCKING, INC., and RTW, INC., Employer-Insurer.
WORKERS’ COMPENSATION COURT OF APPEALS
MARCH 6, 2013
No. WC12-5524
HEADNOTES
ATTORNEY FEES - SUBD. 7 FEES. The provision in Minn. Stat. § 176.081, subd. 7, stating that the award to the employee is 30 percent of attorney fees after the fee is reduced by $250.00, is applied only to the first award of fees arising out of an injury.
Reversed.
Determined by: Stofferahn, J., Wilson, J., and Milun, C.J.
Compensation Judge: Catherine A. Dallner
Attorneys: Raymond R. Peterson, McCoy, Peterson & Jorstad, Minneapolis, MN, for the Appellant. Gregg A. Johnson and Joseph P. Mitchell, Heacox, Hartman, Koshmrl, Cosgriff & Johnson, St. Paul, MN, for the Respondents.
MAJORITY OPINION
DAVID A. STOFFERAHN, Judge
The employee appeals from the compensation judge’s award to the employee under Minn. Stat. § 176.081, subd. 7. We reverse.
BACKGROUND[1]
Lionel Lann, the employee, sustained a work injury on June 1, 2004, while in the employ of Stan Koch & Sons Trucking. The employer and insurer accepted liability for the employee’s injury.
In 2012, the employee filed a medical request requesting approval of an MRI scan recommended by his doctors. The parties eventually resolved the dispute and the medical request was dismissed.
The employee’s attorney filed a statement of attorney fees, requesting a fee for his services in resolving the medical dispute. The attorney’s requested fee was $543.75, based on the time he had spent on the dispute. The attorney also requested reimbursement to the employee under Minn. Stat. § 176.081, subd. 7, in the amount of $163.13.[2] Attorney fees had been paid previously in connection with an earlier claim arising out of the 2004 work injury, and the subdivision 7 award at that time was calculated with the $250 reduction provided by the statute.
The employer and insurer did not object to the fee requested by the employee’s attorney, but stated that the appropriate subdivision 7 reimbursement was $88.13. It was their position that the $250 reduction applied to every award under subdivision 7.[3]
The statement of attorney fees and the arguments of the parties were submitted to a compensation judge without hearing. In her order determining attorney fees, the compensation judge awarded subdivision 7 fees of $88.13. The employee appeals.
DECISION
Minn. Stat. § 176.081, subd. 7, provides, in relevant part, that when an attorney for an employee is successful in the resolution of a dispute, the employee is entitled to an award against the employer or insurer “in addition to the compensation benefits paid or awarded to the employee, an amount equal to 30 percent of that portion of the attorney’s fee which has been awarded pursuant to this section that is in excess of $250.” The question here is whether the $250 deduction in the statute is applied every time there is an award of attorney fees in a single injury or only at the time of the first award. This issue is one of first impression for this court.[4]
Before 1975, the statute did not limit the amount of attorney fees charged by the employee’s attorney and there were no provisions for an award to the employee based on attorney fees. The 1975 amendments set the fee for the employee’s attorney at 25 percent of the first $4,000 in compensation benefits recovered on behalf of the employee, and 20 percent of the next $20,000 in compensation benefits, resulting in a maximum fee of $5,000 for one injury. Subdivision 7 was also added to the statute at that time and provided for an award to the employee of 25 percent of the attorney fees in excess of $250. Both sections have been amended since that time, with attorney fees increased in 1983 and 1995 and the present language in subdivision 7 added in 1995. An amendment in 1992 also provided that “all fees for legal services related to the same injury are cumulative.”
Because the language limiting attorney fees in subdivision 1 and the provisions of subdivision 7 were added to the statute at the same time, and because both sections were generally amended at the same time, it is reasonable to conclude that these provisions are elements of a single design by the legislature of compensating attorneys for successful representation of an employee and compensating employees for the necessity of hiring an attorney.[5] We consider the present question in the light of that intent.
The employer and insurer note that a likely reason this issue has not been heard before this court previously is because the amount in dispute in any one case is always $75.[6] We realize that the additional award to the employee may not be significant in any single case. We are also aware, however, that it is common for multiple claims to arise out of any one injury and for multiple awards of attorney fees to be made in one injury. We do not believe that $75 multiplied three or more times is an amount most employees would find to be insignificant. Adopting the position of the employer and insurer would reduce the payment to the employee under subdivision 7 and, in our opinion, would not be consistent with the legislative intent of compensating employees who face the necessity of hiring a lawyer to make a successful claim.
The employer and insurer also argue that their position is bolstered by what is referred to as the “common practice” of employees’ attorneys requesting 25 percent of the initial $4,000 in benefits recovered for the employee in every claim for fees, including multiple claims resulting from one injury. The employer and insurer contend that this demonstrates that every fee request begins anew with every new claim and, under the same rationale, every subdivision 7 award begins anew with every claim. Accordingly, the $250 deduction in the statute should be made in every claim.
This court is not in a position to state what may or not be common practice and, in any event, our mandate is to apply the statute in this case. On this point, we conclude that the statutory language compels a different result than that argued by the employer and insurer. Minn. Stat. 176.081, subd. 1(b), states “All fees for legal services related to the same injury are cumulative.” In our opinion, that language requires a focus on the injury and not on the claim in considering an award under subdivision 7. Since, in the present case, the $250 deduction was made in an earlier award, applying the deduction again would be contrary to the cumulative nature of fees for a single injury.
We reverse the compensation judge and order payment to the employee under Minn. Stat. § 176.081, subd. 7, as claimed by the employee.
DISSENTING OPINION
DEBRA A. WILSON, Judge
I acknowledge that all legal fees related to the same injury are “cumulative.” However, that language is contained in the statutory provision setting a maximum fee of $13,000 for each injury, a limit not at issue here.[7] Minn. Stat. § 176.081, subd. 1(b). Other provisions of Minn. Stat. § 176.081 clearly contemplate evaluation of fees on a claim-by-claim basis. For example, attorney fees are not payable until “the issue” for which the fee was incurred has been resolved. Minn. Stat. § 176.081, subd. 11. Workers’ compensation cases often involve multiple separate benefit claims and corresponding multiple separate claims for fees. I see nothing in the statute that would compel the conclusion that the $250 deduction in subdivision 7 is to be taken only once.
The majority’s analysis would logically apply not only to subdivision 7, but to calculation of contingent fees under Minn. Stat. § 176.081, subd. 1(a). This would be contrary to my understanding of how fee claims have been handled for many years. I am unwilling to overturn nearly 40 years of fee calculation based on less than clear evidence of statutory intent.[8] For these reasons, I dissent.
[1] There is no dispute as to the facts in this matter. Since there was no record from OAH, the information here is taken from the briefs filed by the parties.
[2] 30 percent of $543.75.
[3] $543.75 - $250.00 = $293.75. $293.75 x .30 = $88.13.
[4] The employee cites to our decision in Vezina v. Best Western Inn Maplewood, slip op. (W.C.C.A. July 28, 2000). It is true that in that decision, this court made an award to the employee under subdivision 7 using the approach argued by the employee, but it appears that the appropriate calculation under subdivision 7 was not an issue argued by the parties.
[5] The same conclusion, using somewhat different language, was reached by the court in Mack v. City of Minneapolis, 333 N.W. 2d 744, 749, 35 W.C.D. 875, 884 (Minn. 1983).
[6] $250 x 30 percent.
[7] And, of course, that statutory maximum is no longer enforceable. See Irwin v. Surdyk’s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999).
[8] Whether fees awarded over those 40 years should now be recalculated is an open question. The majority decision means that employees have been underpaid in tens of thousands of cases.