Wednesday, September 23, 2009

Attorney's fees and liens

Fee on future medical benefits

The Commission corrected a clerical error awarding an attorney fee on future medical and noted the record had not reported such a request for a fee and it was generally against their policy to approve a fee on future medical in a temporary award.    Buchanan v SRG Global, 2014 Mo WCLR Lexis 134

Bayer v Panduit Corp., 2016 IL 119553 (Sept. 22, 2016)

Claimant fell while working a warehouse and became a quadriplegic with grave and permanent injuries.  A jury awarded him $64 million. 

 He was hired by Area Erectors, who was a contractor for Garbe Iron works which built the warehouse for Panduit Corp.   After a series of various claims and counter suits,  Bayer ultimately went to the jury solely against Panduit.

Area Erectors, which had settled the comp claim, was entitled to recover against part of the $64 million for the "substantial' benefits it had paid for medical expenses, vocational and temporary disability.  Area suspended making any further payments on 2013.

The issue in  as whether there was a claim  to attorney's fees as a percentage of unpaid future benefits.   Bayer's attorneys sought 25% of the fees they would have to pay but for the suspension of obligations.

The court found that section 5(b) was changed in 1957 to require employers to contribute the necessary costs of the their employees' recoveries against negligent third parties when the employer seeks reimbursement form the recovery.  As long as the amount of the judgment is not exhausted, Area Erectors will continue to be relieved from having to pay any recovery and reduce its ongoing obligations.  The court found the use of the phrase "gross amount of compensation" to include future medical.

The court found affirmed the circuit court that Area Erectors was obligated to pay attorney fees on future medical expenses incurred by Bayer.   

Attorney's fees limited in death claim

Claimant sustained a severe head injury when he fell from a ladder and died about two years later in a long-term care facility.  The medical experts disputed whether the cause of death was related to the accident.

The ALJ denied a request for cost for unreasonable termination of benefits and a request for a 25% attorney's fee based on contract.  The termination of benefits was not unreasonable because of the conflicting medical opinion about the  cause of death and the initial determination that the cause of death was due to end stage leukemia.  There was no statutory basis under .203  to contest termination of  TTD benefits after claimant  died because the only entitlement would have been death benefits.  The request for attorney's fees, representing nearly $146,000, was neither fair nor reasonable.  The Commission affirmed an award that capped fees as $10,000.  The ALJ considered the weekly benefit amount as "pre-ordained" and found the employer paid benefits up until claimant's death.

The parties struck a deal that the wife and two children outside the marriage would divide the death benefit proceeds 70%, 15% and 15%.  The ALJ found the agreement was not in the best interest of the children and awarded benefits evenly by one third based on the statutory language of 287.240 that benefits should be divided evenly.    The Commission affirmed.  Claimant had 4 children, including two children born outside of marriage.  The ALJ reports he was in a religion that believed in plural marriage. 

The Commission affirmed the award but also awarded burial expenses. The employer on appeal did not dispute liability for burial expenses. Bynun v SF Shannon Real Estate, etal, 2016 MO WCLR Lexis 29 (May 3 2016)

ALJ  Hart
Atty:  Moten
Experts:  Payne, Hogan

Attorney fee rejected 'in this case' for voluntarily paid disputed bills
Is an attorney entitled to a fee when disputed medical bills are paid after a comp claim is filed but before a hearing?   The court of appeals affirmed a denial of attorney's fees for the bills but relied upon the limited evidentiary record in the case.  Sterling v Mid America Car, 2014 MO App. Lexis 1441 (Dec. 23, 2014). 

The Commission adopted the opinion of the ALJ without a separate opinion.  The court noted that litigation undoubtedly led to securing payment of the medical bills.  Claimant incurred $38,462.07 in medical bills when he sought treatment for a burn injury and infection from hot slag.  The employer after several months paid the bills directly to the provider at a 50% discount and agreed to hold claimant harmless but did not pay any attorney's fee. 

An attorney is allowed a fee only to the extent allowed by the Commission regardless of an attorney-client contract.   The Commission may awarded attorney's fees under 287.260.1 and 8 C.S.R. 50-2.010(15)  for disputed medical bills.    "If the services of an attorney are found to be necessary in proceedings for compensation, the administrative law judge shall set a reasonable fee considering relevant factors which may include, but are not limited to, the nature, character and amount of services rendered, the amount in dispute, and the complexity of the case and may allow a lien on the compensation due to the claimant."

The court noted, however, the facts in the case not establish an abuse of discretion.   "The record before us does not establish, as a matter of law, that limiting Counsel's lien to 25% of the compensation award was so inadequate and so unreasonable as to constitute an abuse of discretion....
There is no evidence in the record, however, detailing Counsel's specific efforts to recover payment from Employer for Appellant's medical bills. Therefore, based upon the limited record before us and the amount of deference owed to the Commission, we cannot say that the denial of a 25% lien on the undiscounted medical bills amounted to an abuse of discretion." (emphasis added).

The court distinguished the case from Crowell v Hawkins, 68 S.W.3d 432 (Mo. App. 2001) which awarded fees and costs based on a confession of judgment when the employer originally voluntarily paid benefits before a hearing.  The award in Crowell was supported by statutory authority in 287.203 which allowed for attorney's fees when an employer had paid benefits and then terminated them. 

The court  chastises employers for trying to negotiate medical bills.   Medical bills are routinely discounted  for 'accepted' claims and for non-occupational injuries. Discounting is criticized  because it "manipulate the system and escape liability" and  "directly negotiating with and paying medical providers after initially denying liability, employers interfere with an attorney's ability to collect attorney's fees..."  

Missouri is not a fee-schedule state and charges for medical services vary widely. Missouri allows original bills to be awarded in disputed cases unless the employer can demonstrate personal liability has been extinguished.  Farmer-Cummings v Personnel Pool of Platte County, 110 S.W.3d 818 (Mo. 2003).  This rule creates numerous awards for the 'original' bills which workers can received widely different awards for the same medical services even after their own carrier has re-priced and paid any charges directly to the provider.   Sterling involves a novel situation in which personal liability has been extinguished but the attorney sought fees based payment on the original undiscounted charges.  The Commission affirmed a finding that the claimant had not established entitlement to fees from the original charges.  The court of appeals did not address the issue.

Attorney fee for MHRA violation not limited by proportionality to award

Claimant sued his employer for a Missouri  human rights violation when he stated that his brain tumor prevented him from operating a truck long distance and the employer would not alter his routes and wrote him up for disciplinary violations.  Claimant took the case twice up on appeal to fight over the amount of attorney’s fees to a prevailing party when the court cut the legal bill by 60 hours, found the issue was not complicated, and the requested fees were disproportionate to the award. Dewalt v Davidson Surface Air ED 101245(Sept. 23, 2014). The case goes back a third time to try again. 

Claimant’s attorney originally asserted that he should have been awarded more than $133,000 in fees for the $7,500 verdict because he was a prevailing party against the company owner although he did not prevail in a claim of punitive damages or against the company itself.   In the first appeal the case was remanded when the court did not fully explain why it limited the attorney’s fees about 10 times of the verdict.  The court noted the request for fees could also include the time preparing a request for fees to show the vigor of protecting public policy interests. 
Attorney fee on medical bills
When an employer pays medical bills on a denied case after an attorney enters his appearance can the attorney collect a fee on value of the undiscounted bills?  Not in this case.  Sterling v Mid America Car, 2014 Mo WCLR Lexis 87 (July 16, 2014). 

Claimant had a compensable accident in 2011 from a burn to his elbow and after the claim was filed the employer paid about $19,000 in re-priced medial bills and agreed to hold claimant harmless on any balance. Claimant was  "forced" to incur the expense to obtain an expert who concluded  the original charges of about $38,000 was reasonable to treat a burn to the elbow. 

The ALJ noted that an attorney's lien attaches with the filing of a claim based on 484.130 but the amount is still subject to review by the ALJ based on 287.260.  The ALJ denied any attorney's fees on the medical bills and limited to the award to undisputed TTD, PPD and disfigurement noting there was a failure of proof that any "significant" time to secure payment of the bills. 

The case did not embrace the "no jurisdiction" argument .  Glasby, supra.

Atty:   McKay, Stigall
Expert: Koprivica

No lump sum for attorney fees to estate
In a very unusual set of facts,  an attorney was awarded fees for a permanent total award and when the  attorney died his estate obtained an order from the Commission  to be paid a lump sum rather than periodic payments of attorney's fees.  The court of appeals reversed an award of lump sum benefits of $17,251  to the attorney's estate and found the Commission exceeded its authority.  Keaney v Treasurer of the State of Missouri, ED 10033 (Mo. App. 2013)  2013 MO App. Lexis 1475 (Dec. 17, 2013).

Appellant received payment of part of an attorney's fee  for 17 years.  The attorney died and his estate sought to commute the award pursuant to 287.260.  The court found the statute provides no authority to commute a final award in these circumstances.  The court noted that the Commission lost its authority when no appeal was taken pursuant to 287.495 and it was unreasonable to modify the award to pay an attorney when the award could not modified to benefit the employee.  Section 287.530, which allowed commutation payable to an employee or the employee's dependents, allowed no statutory authority to pay off the attorney.

Atty:  Reeves, Keaney

Court denies attorney's fee on disputed bills
Claimant seeks an attorney's fee on disputed medical bills which the employer initially refused to pay and then paid directly to the medical providers.  The parties dispute whether there was an agreement to pay the bills with a lien or not.  No written records were offered concerning what sort of agreement existed.  Some of the bills were "accepted" but remained unpaid due to funding delays by the City.

The employer questioned whether an accident had occurred but agreed to pay the bills after reviewing a videotape.    The claimant asserts the claim was denied with an incomplete investigation without even asking about the accident and the employer ignored recommendations for a referral from its own clinic.   The ALJ awarded an additional 35% against the employer after a 3-level surgery and PTD against the Fund. Claimant had a 17 year history of back injuries and she had  prior multiple settlements of 42.5% BAW.  She claims a new  need to lie down after surgery rendered her unemployable.

The ALJ found no "jurisdiction"  to award fees on bills when the bills were paid.  The Commission concluded the employer met its burden to show that personal liability was extinguished.   The ALJ noted that the claimant may have other remedies "outside comp" and the Commission made a point of noting that the claimant had not sought to recover fees under 287.560.  The Division rejected a personal comfort doctrine defense asserted on the day of the hearing.   Glasby v City of St. Louis, DOLIR 1-14-2014.
ALJ  Hart
Atty  Hoffman, Goeddel, Maurer
Treater:  Mirkin
Experts:  Lalk

Court considers 25% attorney's fee on Medicaid lien
In Lake v Levy, 2013 Mo App. Lexis 63 (January 15, 2013) the court reversed a judgment on the pleadings that denied claimant’s counsel of  25% of the $45,000 medicaid lien the employer agreed to pay directly as a condition of a settlement.

The court of appeals attempted to harmonize what appears to be conflicting statements in 287.266 regarding whether the state or the attorney obtains priority over the lien.  It reviewed the case on a narrow legal issue whether claimant’s counsel had a viable claim upon which relief could be granted and remanded without rendering a judgment to either party. The court construed a legislative intent to allow attorney’s fees to “incentivize” attorneys to recovery state debt.

“Section 287.266.7 grants priority to an attorney lien over the lien for the debt due the Department as to the proceeds of the workers' compensation award. It does not logically follow that in a case where there are insufficient funds in the award of medical expenses to pay the claimant's attorney lien in full and also the Department's Medicaid lien in full that this somehow means that the Department is paying a portion of the claimant's attorney fees. It only means that there were not enough funds to pay both liens, and the Department receives from the workers' compensation award only the amounts remaining after the claimant's attorney fee lien has been satisfied. The Department is not paying the attorney fee; it is merely receiving less than the total amount of its lien because there are insufficient funds to pay the higher priority lien in full and also pay the Department's lien in full. The amount of the debt owed to the Department that remains unpaid is still subject to collection by the Department through mechanisms otherwise available under the Medicaid program. See Section 473.398.”

The court notes the preferred procedural method to resolve the issue would have been an interpleader action to the disputed funds and the court asserted no position whether the state must return any payments made to them directly. The court of appeals identifies a computational error in the amount in dispute.

Attorney fee modified
The Commission modified an award for PPD  and attorney's fees due to an unexplained inconsistently between the amount requested and the amount awarded by the ALJ.  Zhukov v Treasurer of Mo, 2013 Mo WCLR Lexis 4 (1-10-13)
ALJ  Denigan

Claimant's counsel asserts fee for work after he was discharged
The Commission limited an award of attorney's fees to $875 based on a claim by the attorney that he spent 13 1/2 hours on the case even after he was discharged by his client.  Rader v Amerisafe, 2009 Mo WCLR 186.
ALJ:  Tilley
Atty:  Nielson