JANET HUFNAGEL, Employee/Appellant, v. DEER RIVER HEALTH CARE CTR. and MHA INS. CO. and ESSENTIA HEALTH – DEER RIVER and BERKLEY RISK ADM’RS CO., Employer-Insurer/Respondents, and MIDWEST SPINE & BRAIN INST. and ESSENTIA HEALTH, Intervenors.

The employee’s counsel appeals the compensation judge’s award of Roraff attorney fees as insufficient under the Irwin factors, and the denial of any award of fees under Minn. Stat. § 176.191, subd. 1 (.191 fees).^[1] The compensation judge’s denial of .191 fees to the employee’s attorney was in error, due to the nature and extent of the dispute between the employers and insurers regarding responsibility for the payment of benefits to the employee. Additionally, the compensation judge erred in treating the time spent on the 2009 injury as unreasonable where the attorney did not prevail on a theory of the case but did prevail in the overall award of benefits. Because the amount of Roraff/Irwin fees awarded and the denial of .191 fees renders the overall award of fees inadequate, the award is vacated and the matter remanded for determination of adequate fees including .191 fees.

The employee suffered an admitted work injury to her low back on June 22, 2009, while employed as a certified nursing assistant by Deer River Health Care (Deer River). The injury resulted in low back and SI joint-related symptoms for which the employee obtained ongoing treatment, including nerve block and facet injections, radiofrequency (RF) denervation, and SI joint injections. The employee did not experience lasting pain relief from any of those procedures.

The employee underwent independent medical examinations (IMEs) with John Dowdle, M.D., in 2010 and 2011, on behalf of Deer River. Dr. Dowdle concluded that the employee’s low back condition arose from the June 22, 2009, work injury, but contended that the employee would soon be able to return to work without restrictions upon completion of a core strengthening program.

On January 6, 2012, Dr. Dowdle conducted a third IME, and opined that the employee would benefit from a proposed multi-level RF procedure that would put the employee at maximum medical improvement (MMI) one month after the procedure. On May 22, 2012, the employee underwent a five-level RF neurolysis, which provided complete pain relief for about one month, followed by a resumption of the pain to the same intensity as before the procedure. At a follow-up examination in August 2013, the employee’s treating physician recommended repeating the RF procedure.

By August 2013, the employer’s name changed to Essentia Health (Essentia) and the workers’ compensation insurer changed also.

On January 10, 2014, Dr. Dowdle conducted his fourth IME of the employee. Dr. Dowdle agreed that another RF procedure was appropriate and opined that all of the employee’s low back condition was related only to the June 22, 2009, work injury.

A stipulation was entered into in early 2014 regarding issues of temporary total disability, medical mileage, and Roraff fees arising out of the employee’s ongoing medical care and treatment.

While working for Essentia, the employee experienced increased low back pain assisting a resident in toileting in August 2014. The employee was taken off of work due to the pain and treated with a chiropractor and also underwent an SI joint injection. Following these treatments, the employee reported that her low back pain had stabilized and she was able to return to work.

A subsequent increase in SI joint pain occurred while the employee worked at Essentia on June 10, 2015. The employee subsequently sought emergency room care and was diagnosed with acute inflammation in the SI joint region. The employee was taken off of work for three days.

Deer River retained Dr. Dowdle for the fifth time on October 30, 2015. He concluded that the employee had suffered three discrete work injuries occurring on June 22, 2009, August 14, 2014, and June 10, 2015. Dr. Dowdle assessed the first two work injuries as temporary and having resolved, and all of the employee’s current SI condition as arising from the June 10, 2015 work injury. The employee underwent SI joint and ligament injections that provided partial pain relief.

Eric M. Deal, M.D. conducted an IME on behalf of Essentia on April 13, 2016. Dr. Deal opined that the employee reached MMI on the June 22, 2009, work injury no later than August 2009, that the employee suffered no work injuries on August 14, 2014, or June 10, 2015, that no further medical care was required to treat any condition arising out of the 2009 work injury, and that the employee could work without restrictions.

On August 7, 2016, the employee’s treating physician, Rohaan Mehta, M.D., provided a narrative letter indicating that the employee’s June 22, 2009, work injury resulted in ongoing right SI joint disorder and lumbar facet joint pain.

The employee sought temporary total disability (TTD) benefits for periods following August 14, 2014, and June 10, 2015, and payment for medical services for which the providers also intervened. The matter came on for hearing before Compensation Judge James Kohl. The employee was the only witness to testify. Counsel for the employee attempted to introduce into evidence an excerpt from a deposition of Dr. Deal that had been taken in a different proceeding involving a different employee and employer. The introduction of this document was strenuously objected to by both employers and insurers. Post-hearing briefing was conducted and the deposition excerpt was ruled inadmissible. The parties stipulated that the employee sustained a compensable work injury on June 22, 2009. The issues were identified by the parties as: 1) did the employee sustain a work injury on either August 14, 2014, or June 10, 2015; 2) nature and extent of any such injury; 3) are any of the employee’s work injuries a substantial contributing cause of the employee’s current condition and need for treatment; 4) are TTD benefits warranted following the claimed 2014 and 2015 injuries; 5) reasonableness, necessity, and causal connection of medical treatment to any of the three claimed work injuries; 6) apportionment of any benefits awarded between the various injuries; and 7) reimbursement of intervenors.

The compensation judge found that the employee had suffered work injuries on August 14, 2014, and June 10, 2015, and that these injuries were temporary and had resolved. TTD benefits were awarded for those two injury dates and the intervenors were awarded their claimed interests. All of the benefits ordered were paid by Essentia. No apportionment was ordered. The compensation judge also found that the June 22, 2009, work injury continued to be a substantial contributing factor to the employee’s current medical condition and need for ongoing medical treatment. The compensation judge relied on the employee’s testimony and exhibits in arriving at these findings.^[2] No appeal was taken from the October 27, 2016, Findings and Order.

Counsel for the employee filed a Statement of Attorney Fees and Costs, followed by an Amended Statement on January 9, 2017. Counsel claimed $31,773.84 in fees under .191 and Roraff/Irwin, based on 78.15 hours of time at hourly rates ranging from $405.00 to $435.00, and after offsetting contingent fees. Taxable costs in the amount of $793.14, were also claimed.

Objections to the claimed .191 and Roraff/Irwin fees were filed by Deer River and Essentia. On January 30, 2017, the fee request was heard before Judge Kohl. Contingency fees and Minn. Stat. § 176.081, subd. 7 (Subd. 7) fees were identified as $1,976.16 and $653.37, respectively. All of the fees claimed are against the August 14, 2014, and June 10, 2015, work injuries. In the alternative, employee’s counsel suggested 50% be attributed to the June 22, 2009, work injury and 25% to each of the latter two injuries. The amount of costs claimed and the attorney fee hourly rate were stipulated to as reasonable.

In argument before the compensation judge, employee’s counsel emphasized the complexity of the issues, as the two employers had put the permanence of all of the employee’s injuries at issue, the records were voluminous, and some issues were described as unique. Essentia and Deer River contended that the excess fees claimed were excessive and the .191 fees were not applicable. Essentia noted that the benefits obtained were $10,444.32 ($3,266.86 in medical expense), while contingent fees from those benefits came to $2,088.87. Deer River expressed an understanding that no Roraff fees were being sought against that employer/insurer and that only .191 fees were being sought against Deer River. Deer River noted that it had raised the issues of the August 14, 2014, and June 10, 2015, work injuries, not employee’s counsel.

By Findings and Order, served and filed on March 16, 2017, the judge awarded employee’s counsel $2,088.87 for contingent fees, $426.33 for Subd. 7 fees, $653.37 in contingent Roraff fees, and $793.14 in taxable costs. These fees were found to be insufficient to reasonably compensate employee’s counsel for his representation in this proceeding. The judge awarded $8,000.00 as excess Roraff/Irwin fees. The judge limited the excess fee award in part due to what he considered an unreasonable amount of time put in by the employee’s attorney to establish some liability for the 2009 injury. All of the foregoing fees were expressly attributed to the August 14, 2014, and June 10, 2015, work injuries and payable by Essentia. The judge denied the .191 fee request. The employee’s counsel appealed the fee award.

On appeal, the Workers’ Compensation Court of Appeals must determine whether “the findings of fact and order [are] clearly erroneous and unsupported by substantial evidence in view of the entire record as submitted.”^[3] Substantial evidence supports the findings if, in the context of the entire record, “they are supported by evidence that a reasonable mind might accept as adequate.”^[4] Where evidence conflicts or more than one inference may reasonably be drawn from the evidence, the findings are to be affirmed.^[5] Similarly, findings of fact should not be disturbed, even though the reviewing court might disagree with them, “unless they are clearly erroneous in the sense that they are manifestly contrary to the weight of evidence or not reasonably supported by the evidence as a whole.”^[6]

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.^[7]

The employee’s counsel asserts that the excess Roraff fee request is reasonable due to the complexity of the case, noting that the employee underwent five IMEs with Dr. Dowdle and another with Dr. Deal, and that three dates of injury were involved. He also asserts entitlement to .191 fees as the dispute was primarily between employers and insurers.

Essentia contends that the judge’s analysis of the fee issues is consistent with the Roraff/Irwin standards and the judge did not abuse his discretion in awarding $8,000.00 for excess fees. Essentia notes that Deer River had joined the dates of injury under which benefits were awarded, over employee’s counsel’s objection. Essentia argues that .191 fees cannot be awarded in this proceeding as apportionment was not a primary issue in the proceeding.

Deer River maintains that substantial evidence supports the judge’s excess fee award and the Roraff/Irwin standards were followed in making the award. Deer River noted that it was not required to pay any benefits in the underlying matter and this precludes any award of Roraff fees payable by Deer River, relying on Worasi v. Hyatt Regency Hotel, 41 W.C.D. 371, 373-74 (W.C.C.A. 1988) (a "[p]etitioner is entitled to Roraff fees only where he assists in the successful resolution of a medical dispute"). As to .191 fees, Deer River cites Sundquist v. Kaiser Eng’rs., Inc., 456 N.W.2d 86, 42 W.C.D. 1101 (Minn. 1990) and Patnode v. Lyon's Food Prods., Inc., 251 N.W.2d 692, 29 W.C.D. 392 (Minn. 1977), for the proposition that apportionment was not a primary dispute and therefore .191 fees are properly denied.

Under Minn. Stat. § 176.191, attorney fees are authorized where the primary issue is apportionment of benefits.^[8] Counsel for the employee contends that .191 fees were payable by Deer River. Both Deer River and Essentia assert that apportionment was not a primary issue in the proceeding. Deer River maintains that any award of .191 fees must be apportioned in the same manner as benefits were awarded, which would result in no attorney fees to be paid by Deer River.

In this matter, the compensation judge considered the sole issue of importance to be whether the June 22, 2009, work injury continued to be a significant factor in the employee’s ongoing condition. This determination fails to consider the degree to which the two employers sought to place on each other the sole responsibility for payment of the employee’s benefits. These efforts rendered apportionment a significant issue in this case and greatly increased the burden on the employee’s counsel to provide effective representation. In the absence of .191 fees and the judge’s determination that the amount of time the attorney spent on the 2009 injury was unreasonable, the employee’s counsel was not awarded adequate compensation for his service to the employee in this case. For that reason, the compensation judge’s Findings and Order served and filed March 16, 2017, is vacated. Contrary to Deer River’s contention, there is no restriction of apportionment of fees awarded under Minn. Stat. § 176.191 to the benefits awarded.^[9] In consideration of this matter on remand, the compensation judge must determine: 1) the appropriate amount of .191 fees to be awarded in addition to the Roraff/Irwin fees; and 2) what measure of apportionment, if any, of .191 fees awarded is appropriate in this case.

In order to obtain an excess Roraff fee, counsel must demonstrate: 1) an award of medical benefits; and 2) a determination that the attorney fees otherwise awarded do not adequately compensate the employee’s attorney.^[10] In this matter, the only medical benefits awarded were payable by Essentia for the August 14, 2014, and June 10, 2015, work injuries. The judge found that the other contingent fees awarded in this matter are insufficient to compensate counsel for the employee and no party has suggested that these findings are unsupported by substantial evidence. Thus an award of excess Roraff fees in some amount is appropriate.

In Irwin, the Minnesota Supreme Court held a reasonable attorney fee in cases involving medical expense claims is determined by considering the statutory guidelines on fees and “the amount involved, the experience of counsel, the responsibility assumed by counsel, the time and expense necessary to prepare for trial, the difficulty of the issues, the nature of the proof involved, and the results obtained.”^[11] The employee’s counsel asserts that the compensation judge incorrectly applied the Irwin factors by placing undue emphasis on the results obtained.

The case law is clear that all of the Irwin factors are to be applied in arriving at an attorney fee award. As set out by the Minnesota Supreme Court, whether the compensation judge applied the appropriate legal analysis is reviewed de novo.^[12] Where the compensation judge performed the correct legal analysis, an attorney fee award is reviewed for an abuse of discretion.^[13]

In this matter, while the judge applied all of the Irwin factors and provided an extensive discussion of those factors in the memorandum attached to the award of attorney fees, the judge inappropriately treated the time spent on the 2009 injury as unreasonable, and did not award .191 fees. As to apportionment, this was inappropriate due to the nature of the arguments advanced by the two employers in this matter. This requires that the fee award be vacated and remanded for application of the correct legal standard. On remand, the analysis must consider whether the totality of fees awarded is adequate to compensate the employee’s attorney for the representation provided.^[14] Attorneys are obligated to fully and thoroughly prepare for hearing. This preparation will, without the aid of hindsight, include various theories of the case, some of which may be unsuccessful. Such a result does not make the time spent unreasonable. The inability to obtain reasonable attorney fees in workers’ compensation proceedings can have a chilling effect on attorneys’ willingness to take on representation of employees with complicated issues and multiple employers and insurers.^[15]