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Banekn v. Lac Qui Parle Coop Oil

December 04, 2003

DALE R. BANKEN, RELATOR,
v.
LAC QUI PARLE COOP OIL AND FARMLAND MUTUAL INSURANCE COMPANY, RESPONDENTS, AND CHANDLER INDUSTRIES, AND STATE FUND MUTUAL INSURANCE COMPANY, RESPONDENTS, AND GREAT WESTERN LIFE INSURANCE COMPANY, ABBOTT NORTHWESTERN HOSPITAL, BLUE CROSS & BLUE SHIELD OF MINNESOTA, THE MONTEVIDEO CLINIC, P.A., INTERVENORS.



SYLLABUS BY THE COURT

An assessment of attorney fees against the party held liable in a dispute primarily between employers or insurers pursuant to Minn. Stat. § 176.191 (2002) does not preclude an additional award of fees pursuant to Minn. Stat. § 176.081, subd. 7 (2002).

Reversed and compensation judge's award reinstated.

The opinion of the court was delivered by: Gilbert, Justice.

Considered and decided by the court en banc without oral argument.

OPINION

The sole issue for review on certiorari relates to an award of attorney fees pursuant to Minn. Stat. § 176.081, subd. 7 (2002), that the compensation judge had made on remand. The Workers' Compensation Court of Appeals (WCCA) reversed the award of subdivision 7 attorney fees. We reverse and reinstate the compensation judge's award.

Dale R. Banken sustained a compensable injury on January 24, 1997 while employed by Lac Qui Parle Coop Oil. On the date of injury, Lac Qui Parle was insured for workers' compensation liability by Farmland Mutual Insurance Company. On January 25, 2001, Banken sustained another compensable injury while employed by Chandler Industries, Inc. At that time, Chandler Industries was insured for workers' compensation liability by State Fund Mutual Insurance Company. On March 23, 2001, Banken filed an amended claim petition, seeking workers' compensation wage loss and medical benefits from Lac Qui Parle and Farmland Mutual Insurance Company. On Mayá14, 2001, Lac Qui Parle and Farmland Mutual petitioned for joinder of Chandler Industries and State Fund Mutual, seeking contribution and reimbursement. The petition was granted.

The matter came on for hearing on Banken's claims for wage loss and medical benefits and Lac Qui Parle's and Farmland Mutual's claims for contribution and reimbursement. Before the hearing, the parties agreed that Banken's claims would be paid by his employers and their respective insurers and that the remaining dispute was primarily one between the employers and their insurers as to contribution and reimbursement. The compensation judge apportioned liability for Banken's benefits between the employers and their respective insurers and awarded reimbursements to intervenors, healthcare providers and a healthcare insurer. The compensation judge further found that Banken was entitled to attorney fees, payable by the employers and their respective insurers, and allocated responsibility for those fees as well.

Chandler Industries appealed to the WCCA, challenging the award of attorney fees and seeking modification of orders for reimbursements for medical expenses to conform to the compensation judge's findings. The WCCA affirmed the determination that attorney fees, payable by the employers and insurers, were appropriate but remanded the matter for a determination of the amount of fees and for reconsideration of the apportionment of those fees. The WCCA also modified the orders for medical reimbursements to conform to the findings. Banken v. Lac Qui Parle, 2002 WL 31118067, at *3 (Minn. WCCA 2002) (Banken I).

Following a hearing on remand, the compensation judge found that the case was "relatively complex" and "hard fought" and awarded $21,073 in attorney fees. The compensation judge then allocated 60 percent of the responsibility for the payment of those fees to Lac Qui Parle and Farmland Mutual and 40 percent to Chandler Industries and State Fund Mutual. The compensation judge also ordered an additional award of attorney fees pursuant to Minn. Stat. § 176.081, subd. 7 (2002). On appeal, the WCCA reversed the award of subdivision 7 fees. Banken v. Lac Qui Parle, 2003 WL 21850630, at *3 (Minn. WCCA 2003) (Banken II).

Minnesota Statutes § 176.081 governs the calculation of attorney fees in workers' compensation claims and provides for a contingent fee for the recovery of monetary benefits 25ápercent of the first $4,000 and 20ápercent of the next $60,000 of compensation awarded. Minn. Stat. § 176.081, subd. 1(a) (2002).*fn1 The contingent fee is presumed adequate in cases involving concurrent disputes over medical and rehabilitation benefits or services. Minn. Stat. § 176.081, subd. 1(a)(1) (2002). In those cases in which there is a finding that contingent fees are inadequate in a medical or rehabilitation dispute, attorney fees may be assessed against the employer and insurer in accord with the 25/20 formula for contingency fees based upon the ascertainable dollar value of the medical or rehabilitation awarded. Minn. Stat. § 176.081, subd. 1(a)(1). Subdivision 7 of section 176.081 provides that if the employer or insurer unsuccessfully disputes a claim, an additional award may be assessed to the employer or insurer, an amount equal to 30ápercent of that portion of the attorney fees which have been awarded that is in excess of $250.*fn2

In addition, pursuant to Minn. Stat. § 176.191, subd. 1 (2002), attorney fees may be assessed against the employer and insurer held liable for compensation when the dispute was "primarily" between the employers and/or their insurers. Sundquist v. Kaiser Eng'rs, Inc., 456 N.W.2d 86, 88 (Minn. 1990); Patnode v. Lyon's Food Products, Inc., 312áMinn. 570, 572, 251 N.W.2d 692, 693 (1977).*fn3 Here, where there was no dispute that the employers and insurers were obligated to pay the employee's attorney fees pursuant to Minn. Stat. § 176.191, the compensation judge awarded $21,073 in attorney fees. The compensation judge also determined that the employers and insurers were obligated to pay the additional award on their "respective attorney fee payments, pursuant to Minn. Stat. § 176.081, subd. 7." (Citing Irwin v. Surdyk's Liquor, 599 N.W.2d 132, 144 (Minn.á1999) ("[U]nder the plain language of the statute, a subdivision 7 award should be based on all attorney fees paid pursuant to Minn. Stat. § 176.081, including attorney fees based on medical expenses pursuant to Minn. Stat. §á176.081, subd. 1(a).")).

In reversing the award of subdivision 7 fees, the WCCA distinguished Irwin, noting that subdivision 7 fees there were based on all attorney fees paid pursuant to Minn. Stat. § 176.081, subd. 1(a). Banken II, 21850630, at *2. By contrast, the WCCA concluded, the attorney fees here were awarded under Minn. Stat. § 176.191 and not pursuant to Minn. Stat. § 176.081. Id. The WCCA reasoned that although there were initial denials of liability, the parties agreed by the hearing date that the only issue was contribution between the insurance companies and that there was no authority for a deáfacto reimbursement to Banken of some portion of the fees paid to his attorney when the dispute was primarily between insurers. Id. at *2-3. "The only provision for such a fee in the workers' compensation statute is found in Minn. Stat. §á176.191, subd. 1, which is the authority under which attorney fees were awarded in this case." Id. at *2.

Minnesota Statutes § 176.081, subdivision 1 provides the 25/20 formula for the calculation of contingency fees and states that "[a]ll fees, including fees for obtaining medical or rehabilitation benefits, must be calculated according to the formula under this subdivision, except as otherwise provided in clause (1) or (2)." Minn. Stat. § 176.081, subd. 1(a). Clause 1 provides for the calculation of attorney fees and assessment against the employer and insurer when contingent fees are inadequate; and clause 2 prescribes the maximum fee for disputed medical or rehabilitation claims when the dollar value is not readily ascertainable. Minn. Stat. § 176.081, subd. 1(a)(1) and 1(a)(2) (2002). While Minn. Stat. § 176.191 authorizes the assessment of fees against the party held liable in a dispute primarily between employers or insurers, Minn. Stat. § 176.081 governs the calculation of those fees. Accordingly, an assessment of fees under Minn. Stat. §á176.191 does not preclude an additional award of fees pursuant to ...


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