Summary
In Jackson, the employer appealed the superior court's award of attorney's fees to the claimant in a workers' compensation case, arguing that the award was improperly based on an hourly rate that exceeded the $35 hourly rate set by department rule.
Summary of this case from McNALLY v. DEPARTMENT OF PATHOpinion
No. 89-515
Opinion Filed March 29, 1991
1. Attorney and Client — Fees — Court's Power To Determine
Regulation promulgated by commissioner of labor and industry limiting attorney's fees to a maximum of $35 per hour for matters before that agency did not apply to attorney's fees for representation of client before superior court or supreme court. 21 V.S.A. § 678(b).
2. Appeal and Error — Preservation of Questions — Differing Grounds for Objection
Trial court's ruling that attorney's fees of $75 per hour was reasonable could not be objected to on appeal where defendant's sole objection below to fee had been that department of labor and industry rule applied to limit rate of compensation to $35 per hour and not that $75 per hour was an unreasonable fee.
3. Attorney and Client — Fees — Assessment
Decision of the trial court awarding attorney's fees of $75 per hour for representation both before the commissioner of labor and industry and before appellate courts was remanded to permit the commissioner to determine appropriate attorney's fee for work done at the administrative level. 21 V.S.A. § 678(b); Department of Labor and Industry Rule 10.
Appeal from award of attorney's fees in workers' compensation case. Rutland Superior Court, Mahady, J., presiding. Affirmed in part, reversed and remanded in part.
Christopher P. Sullivan, Rutland, for Plaintiff-Appellee. Keith J. Kasper of McNamara, Fitzpatrick McCormick, Burlington, for Defendant-Appellant.
Present: Allen, C.J., Peck, Gibson, Dooley and Morse, JJ.
Defendant employer appeals from a superior court judgment awarding plaintiff attorney's fees and costs in the amount of $24,323.30. We affirm in part, reverse in part, and remand the matter to the Commissioner of Labor and Industry.
Plaintiff sought a workers' compensation award from the Commissioner of Labor and Industry for an injury that occurred while he was employed by defendant. Defendant contested compensability and prevailed in proceedings before the Commissioner. Plaintiff appealed to the superior court, where a jury rendered a verdict in his favor on the question certified to the court under 21 V.S.A. § 671. Defendant appealed to this Court, and we affirmed that verdict. Jackson v. True Temper Corp., 151 Vt. 592, 563 A.2d 621 (1989). Thereafter, plaintiff petitioned the superior court for payment of costs and attorney's fees under 21 V.S.A. § 678(b), claiming an hourly rate of $75 per hour for 283.25 hours of service, which included time spent preparing and presenting his claim to the Commissioner and to the courts.
21 V.S.A. § 678(b) states:
In appeals to the superior or supreme courts, the claimant, if he prevails, shall be entitled to reasonable attorney's fees as approved by the court, and interest at the rate of 12 percent per annum on that portion of any award the payment of which is contested. Interest shall be computed from the date of the award of the commissioner.
Defendant filed no response to the petition, and its only opposition was its assertion at a superior court hearing on the fee petition that Rule 10 of the Department of Labor and Industry allows only $35 per hour. Defendant did not contest either the reasonableness of the hourly rate or the number of hours of service claimed.
Rule 10 states:
(a) Liens against compensation for attorney's fees under 21 V.S.A. § 682 will be approved, and may be deducted and advanced against the end of compensation due, when an agreement for attorney's fees is filed with the Commissioner within 30 days of the date of agreement, and the agreement substantially conforms to the following:
(1) a charge of not more than $35.00 per hour, supported by an itemized statement, or
(2) a contingency fee to cover all legal services not to exceed 20% of the compensation awarded, or $3,000., whichever is less.
(b) Awards of attorney's fees against a party in a contested case under 21 V.S.A. § 678 shall not exceed the amounts permitted by lien under part (a) of this Rule. Evidence establishing the amount or reasonableness of the attorney's fees claimed shall be offered no later than that date upon which the final documents in the case are filed with the Department. Failure to comply with this section may result in denial of an award of attorney's fees.
The court granted plaintiff's request for attorney's fees at the hourly rate of $75. The court stated:
Customarily, the judiciary accords considerable deference to the regulations adopted by an administrative agency under statute which that agency is charged to implement. However, an agency may not adopt a regulation which is unreasonable and which defeats the intention of the legislature. The clear legislative intent behind 21 V.S.A. 678(b) is to provide reasonable compensation to attorneys for claimants in such cases and to thereby assure the availability of legal services for such claimants. Rule 10 provides for attorneys' fees which are far from reasonable in today's world and would defeat the purpose of ensuring legal services for claimants.
(Citations omitted.) The present appeal followed.
Defendant argues that the trial court intruded on the Commissioner's prerogative by awarding attorney's fees at a rate higher than those allowed by duly adopted regulations. It contends that the trial court's rationale boiled down to an assertion that the hourly rate set by the Commissioner was "far from reasonable in today's world," and that no evidence supported that assertion.
Defendant's argument fails entirely for hours spent on appeals to the superior court and to this Court. Clearly 21 V.S.A. § 678(b), rather than § 678(a) or the rules adopted thereunder, applies to fee awards for judicial appeals and gives the courts authority to set reasonable hourly rates. Nothing in § 678(b) suggests that the court should be limited to the maximum rate set by the Commissioner for matters before her. Likewise, nothing in Rule 10 establishes fees for court appeals; rather, it refers only to proceedings before the Commissioner.
Defendant correctly states that plaintiff did not present evidence supporting the $75 hourly rate. Because defendant only argued that Rule 10 governed the fee award both in proceedings before the Commissioner and in court appeals, plaintiff and the court could reasonably have inferred that defendant did not question the reasonableness of that rate. Matters not raised at trial may not be presented for the first time on appeal. Garrow v. Garrow, 150 Vt. 426, 431, 553 A.2d 569, 572 (1988). Consequently, the trial court's ruling that $75-per-hour was a reasonable rate for attorney time spent on appeals to the superior court and to this Court is affirmed.
But that part of the fee award covering services in proceedings before the Commissioner stands on a different footing. Although defendant erred in believing that Rule 10 should have applied to both administrative and judicial proceedings, Rule 10 is at least a starting point for a determination of the appropriate hourly rate for attorney time spent on the proceedings before the Commissioner. Hence, that ground was adequately presented and preserved for this appeal.
The superior court had no knowledge of the nature and extent of representation before the Commissioner, however. Attorney's fees for work at the administrative level should be determined, in the first instance, by the Commissioner. Accordingly, this matter is remanded to the Commissioner for consideration of that portion of the award and for the issuance of a new order. 21 V.S.A. § 672.
Affirmed as to the fee award for attorney's time on judicial appeals. Reversed and remanded to the Commissioner of Labor and Industry for further proceedings in accordance with this opinion as to the balance of the fee award and the entry of an appropriate order.
I respectfully dissent. Defendant employer "put all its eggs in one basket" in the superior court by maintaining that $35 per hour for attorneys' fees, reasonable or not, were all that were allowed at any stage of the proceedings. No differentiation was made as to what fees were reasonable in court or reasonable in proceedings before the Commissioner. In short, defendant took a one-or-the-other approach ($35 or $75) for all work at all stages and stipulated that the superior court would award all attorneys fees and expenses. It became the law of the case.
This Court now remands for a hearing before the Commissioner on whether $35 per hour is reasonable for work done before her, an approach not raised in superior court or here. What more was required of the trial court, given the parties' position, is a mystery.
This Court is indulging here in "practice-makes-perfect" jurisprudence. See also B.B. J. v. Bedell, 156 Vt. 203, 208, 591 A.2d 50, 53 (1991) (Morse, J., dissenting). Instead of allowing the parties to fashion the issues as they see fit, we second-guess their strategy and give the losing party another chance. I can think of no reason justifying this wasteful and expensive procedure.
I would affirm.