JOSHUA A. REPKE, Employee/Appellant, JACOBS ENG’G GRP.  and ACE USA, Employer-Insurer/Respondents.

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

Joshua A. Repke, the employee, sustained an admitted lumbar spine injury while working on a cell tower for Jacobs Engineering Group, the employer, on October 19, 2015.  The employee was treated with nonsteroidal anti-inflammatory medications, physical therapy, a home exercise program, and facet steroid injections and was given work restrictions which prevented him from returning to work for the employer.  As a result of the injury, the employer and its insurer, ACE USA, paid temporary total disability, temporary partial disability, and vocational rehabilitation benefits, as well as medical expenses.  On May 2, 2016, the employee retained the Law Office of Thomas Mottaz, n/k/a Mottaz & Sisk Injury Law, to represent him for the injury.

Dr. Rick A. Davis, an orthopedic surgeon who specializes in spine surgery, evaluated the employee on August 4, 2016, and diagnosed the employee with significant disc degeneration at L1-2, which likely caused his low back pain.  On September 7, 2017, given the employee’s symptoms, history, lack of significant improvement following facet injections, MRI imaging, and physical examination, Dr. Davis recommended an L1-2 fusion surgical procedure.  He opined that the surgery was the only available option for the employee because conservative treatment had been exhausted.  On December 1, 2017, at the request of the employer and insurer, Dr. Jeffrey C. Dick, an orthopedic surgeon, issued a report addressing the surgery recommendation of Dr. Davis.  He agreed with the employee’s diagnosis of L1-2 disc degeneration but opined that the fusion surgery recommendation was not reasonable because the employee’s symptoms could improve if he discontinued using nicotine and because the continued use of nicotine increased the risk of pseudoarthrosis.

The parties settled the employee’s claims for temporary total disability, temporary partial disability, permanent partial disability, permanent total disability, and rehabilitation benefits on a full, final, and complete basis, leaving medical expenses open, in a stipulation for settlement with an award issued on December 5, 2017.  In the stipulation for settlement, the employer and insurer maintained the denial of the proposed L1-2 fusion surgery and reserved the defenses of primary liability and the nature and extent of the lumbar injury.

The dispute relating to the L1-2 surgery was certified by the Department of Labor & Industry on January 2, 2018.  Counsel for the employee filed a medical request seeking approval of the L1-2 fusion procedure on January 18, 2018.  In support of this request, a statement was taken of Dr. Davis on June 13, 2018, wherein he restated his recommendation of an interbody and posterior lumbar fusion at L1-2 to decrease or eliminate the employee’s low back pain.  He further recommended that the employee cease smoking and be nicotine-free for 60 days prior to the fusion procedure for optimal healing.

The parties reached an agreement settling the dispute of the proposed L1-2 fusion surgery.  In a stipulation for settlement, the employer and insurer approved the L1-2 fusion surgery subject to the employee producing three nicotine-free blood tests at agreed-upon intervals before the surgery.  The employer and insurer agreed to reimburse the employee’s counsel for incurred costs and counsel for the employee agreed to reserve filing an attorney’s fee claim until after the employee underwent the fusion surgery.  Paragraph XIII of the stipulation for settlement states:

On December 2, 2022, the employee’s counsel filed a statement of attorney’s fees seeking excess fees.  The employer and insurer objected to the claimed attorney’s fees on December 12, 2022.  After a hearing held on February 2, 2023, the compensation judge issued a Findings and Order on Attorney’s Fees on February 28, 2023, denying the attorney’s fee claim because the employee had not undergone the approved fusion surgery as required by the stipulation.  The denial of attorney’s fees has been appealed to this court.

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.”  Minn. Stat. § 176.421, subd. 1(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.”  Hengemuhle v. Long Prairie Jaycees, 358 N.W.2d 54, 59, 37 W.C.D. 235, 239 (Minn. 1984).  Where evidence conflicts or more than one inference may reasonably be drawn from the evidence, the findings are to be affirmed.  Id. at 60, 37 W.C.D. at 240.  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.”  Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).

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).

The employee’s counsel asserts that the compensation judge erred by denying his claim for attorney’s fees, claiming entitlement to attorney’s fees for the L1-2 fusion procedure approved in the stipulation for settlement despite the employee not having the surgery.  Counsel requested an award of excess fees in addition to the fees paid pursuant to Minn. Stat. § 176.081, subd. 1.  (Ex. A.)  Hourly attorney’s fees for recovery of medical expenses in excess of the statutory contingent fee may be awarded pursuant to Irwin v. Surdyk’s Liquor,599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999).^[1]

Minn. Stat. § 176.081, subd. 1(c), mandates that allowable fees are based solely upon genuinely disputed claims.  Based upon the Minnesota Supreme Court decision Lagasse v. Horton,982 N.W.2d 189 (Minn. 2022), the employee’s counsel contends that attorney’s fees should be payable in this case.  In Lagasse, the issue was whether the contingent attorney’s fees withheld from permanent partial disability benefits paid to the employee should be paid to the employee’s counsel where the employer and insurer had initially denied liability for those benefits but had admitted liability before they were actually payable.  The supreme court determined that a genuine dispute had existed as to the employer’s liability for the benefits at issue, entitling payment of attorney’s fees pursuant to Minn. Stat. § 176.081, subd. 1(c).  The employee’s counsel contends that the approval of the proposed surgery by stipulation in this case constituted a genuine dispute and that an excess attorney’s fee award should be allowed even though the employee has not undergone the procedure.  We disagree.  This case involves a request for payment of attorney’s fees controlled by unambiguous language in a stipulation for settlement regarding such fees, which was bargained for and agreed to by the parties and was also reviewed and approved by the same compensation judge who heard the attorney’s fee dispute.

Public policy generally favors settlement of disputed claims without litigation.  Hentschel v. Smith,278 Minn. 86, 153 N.W.2d 199 (1967); Larson v. Univ. of Minn., 64. W.C.D. 112, 115 (W.C.C.A. 2004); see also Wiehoff v. Indep. Sch. Dist. No. 15, 74 W.C.D. 41, 44 (W.C.C.A. 2014).  Settlements of workers’ compensation disputes, as authorized by statute, should be favored to avoid the delay of litigation and to expedite the granting of relief to employees and must be fair, reasonable, and in conformity with the Workers’ Compensation Act.  Senske v. Fairmont & Waseca Canning Co., 232 Minn. 350, 45 N.W.2d 640, 16 W.C.D. 242 (1951); Wiehoff, 74 W.C.D. at 44-45.

In the stipulation for settlement, the parties resolved the employee’s request for approval of the recommended lumbar fusion surgery.  The employer and insurer agreed to approve the surgery subject to the employee producing three blood tests showing he was nicotine-free.  Any claim for attorney’s fees by the employee’s counsel was specifically reserved until after the employee completed the surgery, which has not occurred.  The employee’s counsel does not dispute the validity of the stipulation for settlement and its terms are not ambiguous.  A written provision in a workers’ compensation settlement agreement is considered valid unless grounds exist to vacate the award.  See, e.g., Hanson v. Jer Her Builders, 366 N.W.2d 294, 37 W.C.D. 565 (Minn. 1985) (a stipulation for settlement covers only those claims and rights specifically mentioned in the stipulation); Hampton v. Spectro Alloys Corp., 65 W.C.D. 541, 545 (W.C.C.A. 2005) (a settlement agreement is a contract and the purpose of construing a contract is to give effect to the parties’ intentions as expressed in the language used).

By executing a valid stipulation for settlement, the employee and his counsel were spared the cost, stress, uncertainty, and potentially more serious consequences of proceeding to a hearing.  The employee’s counsel, having negotiated the stipulation for settlement and in conjunction with explaining its terms to the employee, understood that the settlement included a reservation of the right to claim attorney’s fees until after the employee’s fusion surgery.  The terms of the stipulation were approved by a compensation judge at the Office of Administrative Hearings.  No argument has been made by the employee’s counsel that the stipulation for settlement and award are void or voidable, procured by fraud, duress, or misrepresentation, or that a mutual mistake was made, nor did the employee’s counsel express any disagreement about the stipulation for settlement’s application or meaning in its as-executed form at the time of the settlement.^[2]  Under these circumstances, the compensation judge’s denial of attorney’s fees based upon the clear and unambiguous language of the stipulation for settlement is affirmed