Opinion
C.A. No. SS08A-04-002.
Submitted: October 20, 2008.
Decided: November 25, 2008.
Walt F. Schmittinger, Esquire, Kristi N. Vitola, Esquire, Dover, Delaware.
John Gilbert, Esquire, Wilmington, Delaware.
Dear Counsel:
Kenneth Mitchell, Sr. ("Claimant") appeals a decision of the Industrial Accident Board ("Board") granting Claimant total disability benefits, medical expenses, expert witness fees and attorney's fees in the amount of thirty-percent (30%) of the award or $5,750.00, whichever is less. Claimant filed the instant appeal, arguing that the Board erred as a matter of law when it limited the award of attorney's fees. Specifically, Claimant argues that it was an error of law for the Board to limit the fee awarded based only on the monetary benefits secured for the Claimant. Claimant claims that the Board erroneously did not consider nonmonetary benefits as the proper basis for an award of attorney's fees. Additionally, Claimant argues that thirty-percent of the monetary award of the Board is $1,845.62, equating to slightly more than $80.00 per hour spent on Claimant's case, is unreasonably low. The Claimant's appeal is limited to the Board's award of attorney's fees. For the reasons that follow, the Board's decision is AFFIRMED.
BACKGROUND
Because the appeal in this matter is on the limited issue of the Board's award of attorney's fees, the Background discussion is limited to those facts germane to that issue and other factual review of the decision is not necessary to put the matter in context.
Following the hearing, the Board issued a decision dated April 8, 2008, in which the Board awarded the Claimant an acknowledgment of a work injury, the payment of medical expenses submitted by counsel at the time of the hearing, and total disability benefits sought by the Claimant. Specifically, the Board awarded the Claimant medical expenses in the amount of $1,741.59, and total disability benefits from June 13, 2007 through August 17, 2007, at the compensation rate of $467.76, amounting to $4,410.46. The Board awarded Claimant the medical witness fee and attorney's fees in the amount of thirty-percent of the award or $5,750.00, whichever is less.
In ruling upon the request for attorney's fees, the Board noted that Claimant's counsel submitted an affidavit attesting to twenty hours of preparation for a three-hour hearing, and that the case was not novel or difficult, nor did it require exceptional legal skills to try properly. The Board observed that it was argued by Claimant's fee arrangement with counsel was of a contingent nature and Claimant's counsel did not expect to receive fees from any other source.
In rendering its decision, the Board considered the Cox factors outlined in General Motors Corp. The Board noted that the Claimant bears the burden of establishing entitlement to attorney's fees. Following the consideration of the Cox factors, the Board concluded that based on the results obtained and the information presented, one attorney's fee in the amount of thirty-percent of the award, or $5,750.00, whichever is less, was reasonable.
General Motors Corp. v. Cox, 304 A.2d 55 (Del. 1973).
Subsequent to the Boards's decision, the Claimant filed the instant appeal to this Court, and the appeal is limited to the issue of the Board's award of attorney's fees.
STANDARD OF REVIEW
The Court has a limited role when reviewing a decision by the Industrial Accident Board. If the decision is supported by substantial evidence and free from legal error, the decision will be affirmed. Substantial evidence is evidence that a reasonable person might find adequate to support a conclusion. In reviewing the record for substantial evidence, the Court must consider the record in light most favorable to the party prevailing below. The Board determines credibility, weighs evidence, and makes factual findings. This Court does not sit as the trier of fact, nor should the Court substitute its judgment for that rendered by the Board. The Court must affirm the decision of the Board, if properly supported, even if the Court might have, in the first instance, reached an opposite conclusion. Only when there is no satisfactory proof in support of a factual finding of the Board may this Court overturn it. The question of whether a lower Court erred as a matter of law is reviewed de novo.
General Motors Corp. V. Freeman, 164 A.2d 686, 688 (Del. 1960).
Sirkin and Levine v. Timmons, 652 A.2d 1079 (Del.Super.Ct. 1994).
Oceanport Indus. Inc. v. Wilmington Stevesdores, Inc. 636 A.2d 892, 899 (Del. 1994).
General Motors Corp. v. Guy, 1991 WL 190491 (Del.Super.)
Johnson v. Chrysler Corp., 213 A.2d 64, 66-67 (Del. 1965).
Id. at 66.
Besk Oil, Inc. v. Brown Bigelow, Inc., 1988 WL 139953 (Del.Super.).
Johnson v. Chrysler Corp., 213 A.2d 64, 67 (Del. 1965).
State v. Cephas, 637 A.2d 20, 22-23 (Del. 1994) citing Grand Ventures, Inc. v. Whaley, 632 A.2d 63, 66 (Del. 1993).
ANALYSIS
The first issue in this case is whether the Board was correct as a matter of law in applying 19 Del. C. § 2320 in finding that the Claimant is entitled to an attorney's fee in the amount of thirty-percent of the award, or $5,750.00, whichever is less. The relevant statute, 19 Del. C. § 2320(10), provides:
(a) A reasonable attorney's fee in an amount not to exceed 30 percent of the award or 10 times the average weekly wage in Delaware . . . at the time of the award, whichever is smaller, shall be allowed by the Board to any employee awarded compensation under Part II of this title and taxed as costs against a party.
The Delaware Supreme Court in Pugh v. Wal-Mart Stores, Inc. has recently reviewed the issue of attorney's fees awarded by the Industrial Accident Board, as well as the issue of awarding an attorney's fee based upon the monetary and non-monetary benefits secured for the Claimant by Claimant's counsel. The Supreme Court in Pugh noted that the purpose of § 2127 [the predecessor to § 2320(1)] was and is to relieve a successful Claimant of the burden of legal fees and expenses, at least in part. The Pugh Court went on to cite Acme Markets, Inc. v. Fry, reaffirming that the purpose of the Act and the section regarding attorney's fees was to ensure that an employee may recover attorney's fees from his Employer based on the effort and accomplishment of his attorney. Furthermore, the accomplishment need not be monetary and an employee is entitled to an attorney's fee as a result of a favorable change of position or benefit.
945 A.2d 588 (Del. 2008).
Id. at 590.
Id. at 591 citing Acme Markets, Inc. v. Fry, 587 A.2d 454 (Del. 1991).
Id.
In the case at hand, Claimant argues that it was error of law for the Board to limit the fee awarded in this matter based solely upon the monetary benefits secured for the Claimant. The Claimant was awarded medical expenses amounting to $1,741.59 and total disability benefits amounting to $4,410.46, for a total award of $6,152.05. Thirty-percent of the monetary award of $6,152.02 is $1,845.62, which is less than $5,750.00. Claimant argues that the Board erred in not considering the non-monetary success on the compensability issue in addition to any monetary benefits conferred on the Claimant. However, during a teleconference between this Court and counsel for the purpose of clarifying matters pertaining to the non-monetary issue, both parties agreed that during the hearing before the Board, there was no direct or explicit claim for non-monetary benefits for the basis of a larger fee award. Specifically, Claimant's counsel argued the request for non-monetary benefits was implicit during the hearing before the Board.
Claimant cites the Pugh case for the proposition that the Board erred as a matter of law in limiting the fee awarded based only a monetary benefit secured for the claimant. While the Supreme Court in Pugh did hold that a fee award may be based on non-monetary benefits, the Supreme Court held that in determining a reasonable fee award, the Board may (although it is not required to) include the value of a finding of compensability and related un-liquidated benefits. In Pugh, Appellant argued unsuccessfully that the Board mistakenly believed that it was not permitted to award more than an amount calculated by reference to the monetary benefits. The Supreme Court concluded that, to the extent the Board believed that it was precluded from assigning any additional value for non-monetary benefits, the Board was mistaken, but the mistake did not vitiate the award because there is nothing in the statute or case law requiring the Board to value the non-monetary benefits and then include that value in the fee calculation.
Id. at 591.
Id.
In the case at hand, claimant argues that it was error for the Board to limit itself to thirty-percent of the monetary award and that the decision must be remanded and reversed for the Board to make an award of fees that is based upon all of the benefits obtained, both monetary and non-monetary, for the Claimant by Claimant's counsel. However, the Supreme Court addressed this issue specifically in Pugh, holding "there is nothing in the statute or case law requiring the Board to value the non-monetary benefits and then include that value in the fee calculation." Therefore, the Court is satisfied that the Board committed no error in applying 19 Del. C. § 2320 when finding that the Claimant is entitled to an attorney's fee in the amount of thirty-percent of the award, or $5750.00, whichever is less.
Pugh v. Walmart Stores, Inc., 945 A.2d 588 at 591 (Del. 2008).
The second issue in this case is whether the Board's award of attorney's fees was disproportionately low. Claimant argues that the Board's award of attorney's fees was disproportionately low in relation to the time spent and the results achieved for the Claimant in this matter. What is not argued by Claimant on appeal is that the Board failed to address the Cox factors, since the Board did thoroughly, and without error, address the Cox factors. The Board specifically held that it must consider the factors enumerated in Cox when considering an attorney's fee award to avoid an abuse of discretion.
Factors to be considered as guides in determining the reasonableness of a fee include the following: 1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly; 2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; 3) the fees customarily charged in the locality for similar legal services; 4) the amount involved and the results obtained; 5) the time limitations imposed by the client or by the circumstances; 6) the nature and length of the professional relationship with the client; 7) the experience, reputation, and the ability of the lawyer or lawyers performing the services; and, 8) whether the fee is fixed or contingent. General Motors Corp. v. Cox, 304 A.2d 55 (Del. 1973).
In the case at hand, the Board noted that Claimant's counsel submitted an affidavit attesting to twenty hours of preparation for a three-hour hearing, and that the case was not novel or difficult. The Board also noted that the case did not require exceptional legal skills to try properly, and it was argued by Claimant's counsel that acceptance of this case precluded other employment by Claimant's counsel. The Board further observed that it considered the fees customarily charged in this locality for similar legal services, the amounts involved, and the results obtained. The Board also noted that it considered the argument of Claimant's counsel that this case posed time limitations upon Claimant's counsel, the date of initial contact with the Claimant of August 14, 2007, and relative experience, reputation and ability of Claimant's counsel. The Board also observed that Claimant's counsel argued that the fee was contingent, that Claimant's counsel did not expect to receive compensation from any other sources, and that the Employer was able to pay an award.
Following the review of the Cox factors and based upon the results obtained and information presented, the Board concluded that one attorney's fee in the amount of thirty-percent of the award, or $5,750.00, whichever was less, was reasonable in accordance with 19 Del. C. § 2320. The Board explicitly noted that the attorney's fee award was reasonable, given the Claimant's counsel's level of experience and the nature of the legal task. The Board also noted that, in accordance with § 2320(10)(a), the attorney's fee awarded shall not act as an offset against fees that would otherwise be charged by counsel to Claimant under their fee agreement. Therefore, the Court is satisfied that the Board committed no error in applying the Cox factors and that the attorney's fee award was reasonable.
. . . Any fee awarded to an employee under this paragraph shall be applied to offset the fees that would otherwise be charged to the employee by that employee's attorney under the fee agreement. 19 Del. C. § 2320(10)(a).
I note that in the future it would be advisable to make the first pitch for attorney's fees based on non-monetary benefits to the Board. Since such an award may be given, but is not required to be given, the Board shall be permitted to hear the reasons why such an award is appropriate.
Finally, from a practical standpoint, if a non-monetary benefit pitch is made in every case, then the arguments for some would probably be diluted.
CONCLUSION
For the forgoing reasons, the decision of the Industrial Accident Board is hereby AFFIRMED.
IT IS SO ORDERED.