STEPHEN HERBST, Employee/Appellant, v. AMANO MCGANN, INC., and TOKIO MARINE & FIRE GROUP, Employer-Insurer.
WORKERS’ COMPENSATION COURT OF APPEALS
MARCH 24, 2014
No. WC13-5642
HEADNOTES:
ATTORNEY FEES - RORAFF FEES. Application of the factors set out in Irwin v. Surdyk’s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999), and Kahn v. State, Univ. of Minn., 327 N.W.2d 21, 35 W.C.D. 425 (Minn. 1982), results in a determination that a reasonable Roraff fee in this matter is $2,457.00.
Reversed.
Determined by: Stofferahn, J., Milun, C.J., and Cervantes, J.
Compensation Judge: Kathleen Behounek
Attorneys: Raymond R. Peterson, McCoy, Peterson & Jorstad, Minneapolis, MN, for the Appellant. Elizabeth Chambers-Brown, Brown & Carlson, Minneapolis, MN, for the Respondents.
OPINION
DAVID A. STOFFERAHN, Judge
The employee appeals from the compensation judge’s denial of the requested Roraff/Irwin attorney fee.[1] We reverse and substitute an award of $2,457.00.
BACKGROUND
Stephen Herbst sustained an injury to his right shoulder on September 15, 2010, while he was working for Amano McGann. The employer and its insurer admitted primary liability for the injury and paid wage loss and medical benefits.
In March 2013, the employee filed a medical request which sought reimbursement for clinic visits with a health care provider, as well as reimbursement of out-of-pocket medical expenses. In its response, the employer and insurer denied responsibility for these expenses, relying on the opinion of an independent medical examiner that the employee’s work injury had resolved and the treatment at issue was not related to the employee’s work injury.
An administrative conference on the medical request was held on April 3, 2013. At the conference, the attorneys for the parties reached an agreement in which the employer and insurer agreed to pay the employee’s out-of-pocket medical expenses. The clinic charges had previously been paid by the employer and insurer, but the employer and insurer contended at the conference that those payments had been made by mistake and a denial of ongoing liability was maintained.
On April 18, 2013, the employee’s attorney filed a petition for attorney fees for his services in obtaining payment of medical expenses for the employee. The attorney requested a Roraff/Irwin fee of $2,457.00. In his statement of fees, the employee’s attorney itemized 6.3 hours spent in handling this matter, and claimed an hourly rate of $390.00 The employer and insurer objected to the requested fee, contending the amount of time spent by the employee’s attorney on the claim was excessive and unreasonable.
A hearing on the attorney fee request was held on August 5, 2013, before Compensation Judge Kathleen Behounek. In her findings and order of October 4, 2013, the compensation judge awarded an attorney fee of $1,000.00. The employee’s attorney has appealed.
DECISION
Determination of a Roraff attorney fee is done by a consideration of factors identified by the court in Irwin: time and expense necessary to prepare for trial, the responsibility assumed by counsel, the experience of counsel, the difficulty of the issues, the nature of the proof involved, and the results obtained.
At the hearing, the parties argued these factors in their presentations to the compensation judge. In her opening statement, counsel for the employer and insurer argued that the 6.3 hours itemized by the employee’s attorney was excessive. In response to a demand, the time records for the attorney representing the employer and insurer were produced and showed 6.6 hours had been spent in defending the employee’s claim.
The parties stipulated that the hourly rate requested by the employee’s attorney was reasonable. The employee testified at the hearing as to the importance to him of continuing medical care for his work injury and the benefit he believed he had received from his attorney’s services.
In her decision, the compensation judge made findings on each of the Irwin factors. She concluded her review by awarding a fee of $1,000.00, 40 percent of the requested fee. The compensation judge did not provide a rationale for the fee reduction other than finding that, with regard to the difficulty of the issue, “the issue was straight forward and not difficult.” The compensation judge also noted that the disputed medical expenses totaled $198.00.
On appeal, the employee contends the characterization of the medical dispute as “straight forward and not difficult” is incorrect. The employee notes that the employer and insurer’s refusal to pay the disputed medical bills was based on an independent medical examination (IME) opinion that the effects of the injury had resolved. The issue in dispute, therefore, was primary liability for the employee’s ongoing care. The employee also states in his appeal that, at the hearing, the objection of the claimed fee was stated by the compensation judge as being “the employer and insurer’s position, the dispute here, is essentially that the amount of hours claimed in representing the employee in this case is being argued as being unreasonable, unnecessary, and excessive.” The employee claims that having found the time and hourly rate to be appropriate, the claimed fee was patently reasonable and should have been awarded.
In response, the employer and insurer argue that the compensation judge’s conclusion that this was not a complex case is correct and the reduction in the attorney fee was appropriate. They further contend that an award of attorney fees is one of discretion for the compensation judge and that, in accordance with case law, we must affirm the compensation judge’s decision in the present case.
It is true that in affirming a compensation judge’s award of attorney fees, this court has often deferred to compensation judge’s discretion. However, this court often does so in the context of litigation before the compensation judge and the attorney fee claim from that litigation was heard by the same compensation judge who then considered the applicability of the various Irwin factors in light of that litigation. Dimon v. Metz Baking, 64 W.C.D. 143 (W.C.C.A. 2003); Borgan v. Bob Hegland, Inc., 62 W.C.D. 452 (W.C.C.A. 2002); Coffing v. IDS 194, WC06-231 (W.C.C.A. Feb. 5, 2007). In the present case, there had been no proceedings before the compensation judge prior to her consideration of the attorney fee request and the information considered by the compensation judge is the same information considered by this court.
The primary purpose of the “statutory scheme for application and review of attorney fee requests” is “to insure that attorneys who represent compensation claimants will receive reasonable compensation for their efforts, and is in furtherance of public policy of this State that injured employees have access to representation by competent counsel knowledgeable of the intricacies of the workers’ compensation law.” Kahn v. State, Univ. of Minn., 327 N.W.2d 21, 24, 35 W.C.D. 425, 429 (Minn. 1982); McCarthy v. Al Bakers, 61 W.C.D. 805 (W.C.C.A. 2001); Vaughn v. Allina Health Sys., 69 W.C.D. 232 (W.C.C.A. 2009).
The parties agreed, and the compensation judge found, that the employee’s attorney’s hourly rate of $390 was reasonable. That being so, the compensation judge’s award of a fee of $1,000.00 represents about 2½ hours for which the employee’s attorney would be compensated. At the same time, the employer and insurer’s attorney spent 6.6 hours in defending the claim. This court is aware that payment of medical expenses related to a work injury is important to injured workers, and having those expenses paid often depends on the ability to hire an attorney with the knowledge and experience to successfully handle a medical bill claim. The result here discourages attorneys from these claims and is contrary to what has been stated to be a primary purpose of the statute. Accordingly, we reverse the compensation judge’s award of fees, and substitute an award of $2,457.00 with fees pursuant to Minn. Stat. § 176.081, subd. 7, on this amount to be paid to the employee.
[1] Roraff v. State, Dep’t of Transp., 288 N.W.2d 15, 32 W.C.D. 297 (Minn. 1980); Irwin v. Surdyk’s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999).