Opinion
NO. 2012-CA-000680-WC
04-26-2013
LORETTA LANGFORD APPELLANT JACKSON W. WATTS ATTORNEY\PARTY IN INTEREST\APPELLANT v. DANVILLE HOUSING AUTHORITY, HON. J. LANDON OVERFIELD, CHIEF ADMINISTRATIVE LAW JUDGE; AND WORKERS' COMPENSATION BOARD APPELLEES
BRIEFS FOR APPELLANTS: Jackson W. Watts Versailles, Kentucky AMICUS CURIAE BRIEF FOR KENTUCKY AFL-CIO: Eric M. Lamb Louisville, Kentucky
NOT TO BE PUBLISHED
PETITION FOR REVIEW OF A DECISION
OF THE WORKERS' COMPENSATION BOARD
ACTION NO. WC-06-84241
OPINION
AFFIRMING
BEFORE: DIXON, MAZE AND NICKELL, JUDGES. MAZE, JUDGE: Loretta Langford and her counsel, Jackson W. Watts, appeal from an order of the Workers' Compensation Board (Board) affirming orders by the Chief Administrative Law Judge (CALJ) addressing approval of an attorney fee. Langford and Watts argue that interlocutory proceedings, including a medical fee dispute, should be considered as separate from a claim for income benefits and thus not subject to the statutory cap on attorney fees set out in KRS 342.320(2)(a). We conclude that the CALJ and the Board correctly interpreted the statute and properly limited the attorney fee award as required by statute. Hence, we affirm.
The relevant facts underlying this petition for review are not in dispute. On March 21, 2005, Langford injured her lower back during the course of her employment with the Housing Authority. When her treating physician proposed fusion surgery at L4/5, the Housing Authority denied the recommendation based upon a utilization review opinion by Dr. Nicholas Tsourmas. Thereafter, on January 2, 2007, Langford filed a medical fee dispute. On June 28, 2007, Langford filed her Form 101 Application for Resolution of Injury Claim. Shortly thereafter, the CALJ bifurcated the claim for a decision first on issues related to the proposed surgery.
On February 20, 2008, the CALJ entered an interlocutory Opinion, Award and Order finding that the fusion surgery was necessary for treatment of the work-related injury. As a result, the CALJ ordered the Housing Authority to pay medical expenses for Langford's fusion surgery. The CALJ then placed the remainder of the claim in abeyance pending the outcome of the surgery and Langford reaching maximum medical improvement (MMI). As a result of the interlocutory award, Langford recovered more than $72,000 in temporary total occupational disability (TTD) benefits.
Following Langford's attainment of MMI, the claim was removed from abeyance and returned to the active docket. The parties continued presenting proof, a benefit review conference was held and a hearing was scheduled. Shortly prior to the scheduled hearing, the parties settled the claim for a lump sum of $175,000, which included a waiver of future medical expense benefits.
Thereafter, on August 5, 2011, Langford's counsel, Watts, filed two motions for approval of attorney fees. The first motion requested approval of $12,000 for the lump-sum payment, and the second motion requested approval of $8,369.19 for the TTD and medical benefits which Langford recovered from the interlocutory award. In an order entered on August 17, 2011, the CALJ concluded that KRS 342.320(2)(a) limits attorney fees to a total of $12,000. Consequently, the CALJ granted the first motion for attorney fees, but denied the second motion.
Watts then filed a petition for reconsideration. Watts argued that the language in KRS 342.320(2)(a) limiting attorney fees for "an original claim" should be narrowly construed. Watts argued that 803 KAR 25:010 § 12(6) also suggests a narrow reading of the statute. Thus, Watts concluded that the interlocutory award and the final settlement should be considered as two separate claims and not subject to the statutory limit.
In considering the motion, the CALJ expressed sympathy for Watts and for his argument. Nevertheless, the CALJ concluded that the clear language of KRS 342.320(2)(a) requires that all proceedings leading up to the final award be considered as part of the original claim. The CALJ further noted that any contrary language in the regulation cannot modify the clear language of the statute. As a result, the CALJ denied the petition for reconsideration. On further appeal, the Board affirmed. This petition for review followed.
When reviewing a decision of the Board, we are obligated to affirm absent a finding that the Board has misconstrued or overlooked controlling law or has so flagrantly erred in evaluating the evidence that gross injustice has occurred. Western Baptist Hosp. v. Kelly, 827 S.W.2d 685, 687-88 (Ky. 1992). Since the only issue presented concerns the interpretation of a statute, the question presented is an issue of law and our review is de novo. Wilson v. SKW Alloys, Inc., 893 S.W.2d 800, 801-02 (Ky. App. 1995). This case concerns the interpretation of KRS 342.320, which authorizes an award of attorney fees for successfully prosecuting a claim for income benefits. However, subsection (2)(a) limits the total amount which may be awarded:
(2) In an original claim, attorney's fees for services under this chapter on behalf of an employee shall be subject to the following maximum limits:
(a) Twenty percent (20%) of the first twenty-five thousand dollars ($25,000) of the award, fifteen percent (15%) of the next ten thousand dollars ($10,000), and five percent (5%) of the remainder of the award, not to exceed a maximum fee of twelve thousand dollars ($12,000). This fee shall be paid by the employee from the proceeds of the award or settlement.
The CALJ and the Board concluded that the term "original claim" as used in KRS 342.320(2)(a) "refers to all proceedings prior to the rendition of a decision or approval of a settlement agreement." Langford and Watts argue that the term "original claim" should not be construed to include a medical fee dispute resolved pursuant to an interlocutory order prior to the resolution of the employee's claim for income benefits. Rather, they contend that a motion for interlocutory relief, and particularly a medical fee dispute, should be considered as a separate proceeding from the final award of income benefits.
In support of this position, Langford and Watts point out that the regulations require that medical fee disputes and motions for interlocutory relief for TTD be filed in addition to the Form 101 Application for Resolution of Injury Claim. 803 KAR 25:010 §3(a); 803 KAR 25:012. They further note that 803 KAR 25:010 § 12(6) authorizes an ALJ to award attorney fees immediately upon the recovery of an interlocutory award rather than waiting for the conclusion of a claim. When these regulations and the controlling statutes are considered together, Langford and Watts maintain the regulation would be superfluous if the interlocutory award was considered as part of the same proceeding as the final award.
But while interpreting a prior version of KRS 342.320, the Kentucky Supreme Court held that the statutory cap for attorney fees applies where the award is based on a single injury, even when benefits are recovered from multiple defendants. Curry v. Toyota Motor Mfg. Inc., 91 S.W.3d 557, 558-59 (Ky. 2002). The Court also held that, since the statute limits any award of attorney fees arising from a single claim, a motion for attorney fees is not appropriate until the finality of the ALJ's last appealable order. Id. Although 803 KAR 25:010 § 12(6) now allows for a motion for attorney fees following an interlocutory award, the regulation specifically states that the attorney fee for securing interlocutory benefits is limited to "the amounts authorized by KRS 342.320...". Moreover, the regulation cannot modify the statutory cap on the total attorney fees which may be awarded from an original claim. KRS 13A.120(2)(i).
Langford and Watts point out that KRS 342.320(2)(a) does not define the term "original claim" and consequently that term should be narrowly construed. However, the case law which they cite does not support their position that an interlocutory award is a separate proceeding from the original claim. In Lamb v. Fuller, 32 S.W.3d 518 (Ky. App. 2000), and Duff Truck Lines v. Vezolles, 999 S.W.2d 224 (Ky. App. 1999), Kentucky courts allowed separate attorney fees for claims arising out of distinct claims or incurred during a reopening proceeding. But in the current case, by contrast, Langford's claim arises from a single injury and a single action leading up to a final award.
As the Board pointed out in its opinion, an order granting interlocutory benefits is not a final and appealable order. It is subject to change upon presentation of additional benefits. "Thus, interlocutory motions are part of ongoing litigation and not a distinct claim." As a result, the CALJ's ruling on the medical fee dispute in the interlocutory order must be considered as part of the "original claim" for purposes of KRS 342.320(2)(a). Consequently, the attorney fee for the entire proceeding is subject to the statutory maximum of $12,000.
Finally, Langford and Watts argue that the statutes and regulations should be interpreted broadly and in light of the overall purposes and interests of the Workers' Compensation Act. They correctly point out that "[w]orkers are best served when they are represented by counsel who have the incentive of receiving reasonable fees for all their efforts, including efforts to recover for their client the appropriate interlocutory relief." Langford and Watts contend, with some justification, that a strict interpretation of the statutory cap would discourage attorneys from accepting cases which require extensive interlocutory proceedings. They further argue that the limitation on attorney fees also encourages employers to bring such medical fee disputes during the interlocutory proceedings in order to drive up costs for the employee and her counsel.
Like the CALJ and the Board, we sympathize with these arguments. However, workers' compensation is a creature of statute and provides exclusive remedies for injured workers. Williams v. E. Coal Corp., 952 S.W.2d 696, 698 (Ky. 1997). Any right to attorney fees in workers' compensation proceedings can arise only under the specific provisions of KRS Chapter 342. While public policy would seem to support Langford and Watts's position, we are constrained by the clear language of the controlling statutory authority. KRS 342.320(2)(a) sets a maximum attorney fee of $12,000 for an original claim. All interlocutory proceedings leading up to the final and appealable award must be considered part of the original claim. Where the General Assembly has clearly spoken, as it has here, Langford and Watts's public-policy arguments are better addressed to the Legislature than to the Board or the Courts.
Accordingly, the March 8, 2012, order of the Workers' Compensation Board is affirmed.
ALL CONCUR. BRIEFS FOR APPELLANTS: Jackson W. Watts
Versailles, Kentucky
AMICUS CURIAE BRIEF FOR
KENTUCKY AFL-CIO:
Eric M. Lamb
Louisville, Kentucky