Opinion
C.A. No. 01A-07-009
Submitted: February 15, 2002
Decided: May 30, 2002
Upon Claimant's Appeal from a Decision of the Industrial Accident Board. Reversed and Remanded.
Walt F. Schmittinger, Esq. of Schmittinger Rodriguez, P.A., Dover, Delaware, for Claimant Below-Appellant.
Anthony M. Frabizzio, Esq. of Heckler Frabizzio, Wilmington, Delaware, for Employer Below-Appellee.
ORDER
This 30th day of May, 2002, upon consideration of the submissions of the parties, it appears to the Court that Richard Thomason ("Claimant") has made a limited appeal from a decision of the Industrial Accident Board. This appeal is confined to the issue of whether the Board properly limited the award of attorneys' fees in this case. Because the Board did not consider all the appropriate factors in making its award, the decision of the Board regarding the award of attorneys' fees is reversed and this matter is remanded for further proceedings consistent with this opinion.
Background
1. On August 4, 2000, the Claimant, an HVAC installer for Temp Control ("Employer"), slipped in the mud while coming down off a ladder thereby suffering an injury to his right knee. On February 6, 2001, the Claimant filed a Petition to Determine Compensation Due to obtain benefits for this right knee injury.
Apparently, a Petition to Determine Additional Compensation Due (seeking permanent partial disability) was also filed and withdrawn.
2. On June 28, 2001, a hearing was held on Claimant's Petition. At that time, the Claimant's counsel submitted an uncontested Affidavit Regarding Attorneys' Fees which stated that the Claimant's attorney spent 19.1 hours in preparation for the hearing and requested a fee of 30% of the award. Claimant's attorney did not fill in the section where he was permitted to provide a statement concerning the uniqueness of the case and/or other facts pertinent to an award of attorneys' fees.
3. On July 12, 2001, the Board issued its decision which awarded medical and surgical expenses for the right knee, as well as an attorney's fee and a medical witness fee. Specifically, the Board provided the following reasoning for its attorney's fee award:
A claimant awarded compensation is entitled to payment of a reasonable attorney's fee in the amount up to the smaller of thirty percent of the award or $7,036.50 ( 19 Del. C. § 2320(j)(1), as amended July 9, 2001). The factors this Board must consider in assessing a fee are set forth in General Motors Corp. v. Cox, 304 A.2d 55, 57 (Del. 1973).
Without objection, Claimant's attorney presented an affidavit seeking a fee of thirty percent of the award and showing he had spent approximately nineteen hours preparing for the hearing. The hearing itself lasted roughly two-and-one-half hours. The affidavit discloses a professional relationship between the Claimant and counsel of less than one year. The affidavit lists no facts to support that this case was particularly unique and there do not appear to have been any unusual limitations placed on counsel's time resulting from his efforts in this matter. Claimant presented no evidence on the remaining Cox factors and, as a result, the Board will not speculate concerning these factors. The facts Claimant did present, however, were uncontradicted and are, therefore, accepted. Finally, Claimant's attorney has been practicing law for almost six years. Given these factors, the Board finds that an attorney's fee in the amount [of] 30% of the award is reasonable, provided that amount is less than $2,400.00.
Indus. Accident Bd. Dec., July 12, 2001, Hr'g No. 1174064, at 12.
Claims of the Parties
4. Cox Factors — The Claimant has filed this limited appeal seeking reconsideration of only the award of the attorney's fee. The Claimant's position is that the Board's decision is inadequate because it fails to provide a reviewable basis for the award. Moreover, the Claimant alleges that the amount awarded is arbitrary and unreasonably low in light of the results achieved here. The Employer argues that the Board awarded a reasonable attorney's fee in this case because the Claimant presented limited evidence to the Board showing entitlement to any specific fee.5. Effective Statute — The Employer contends that the Board did not apply the proper version of the attorneys' fee statute under 19 Del. C. § 2320. This statutory section was amended, effective July 1, 2001, and increases the cap on Board awards of attorneys' fees. The Employer argues that this statute applies to cases filed after the July 1st effective date.
6. In contrast, the Claimant declares that the Board properly applied the amended attorneys' fee statute, because it was effective when the fee was allowed (i.e. at the time this case was decided). Furthermore, the Claimant believes that the Employer cannot object to the application of the amended statute, because no cross-appeal was filed on that issue. Since no cross-appeal was taken, the Claimant believes that the scope of the appeal is defined by the Notice of Appeal and the issues raised in Claimant's Opening Brief. It is the Claimant's position that any other aspects of the underlying decision are considered final.
Standard of Review
7. "The Supreme Court and this Court repeatedly have emphasized the limited appellate review of the factual findings of an administrative agency." The function of the reviewing Court is to determine whether the agency's conclusions are supported by substantial evidence and are free from errors of law. The Court's review of alleged errors of law is de novo. If no questions of law are presented, the Court's role is to determine whether the agency's decision is supported by substantial evidence. Substantial evidence means such relevant evidence as "a reasonable mind might accept as adequate to support a conclusion." It is more than a scintilla of evidence, but less than a preponderance. The appellate court does not weigh the evidence, determine questions of credibility or make its own factual findings. It merely determines if the evidence is legally adequate to support the agency's factual findings. Moreover, the Court must take "due account of the experience and specialized competence" of the IAB and the purposes of the workmen's compensation.
Stoltz Management Co. v. Consumer Affairs Bd., 616 A.2d 1205, 1208 (Del. 1992); General Motors Corp. v. Freeman, 164 A.2d 686, 688 (Del. 1960).
Freeman, 164 A.2d at 688-89; Johnson v. Chrysler Corp., 213 A.2d 64, 66-67 (Del. 965).
Brooks v. Johnson, 560 A.2d 1001, 1002 (Del. 1989); Duvall v. Charles Connell Roofing, 564 A.2d 1132 (Del. 1989).
Freeman, 164 A.2d at 688-89; Johnson v. Chrysler Corp., 213 A.2d at 66-67.
Oceanport Ind. v. Wilmington Stevedores, 636 A.2d 892, 899 (Del. 1994); Battista v. Chrysler Corp., 517 A.2d 295, 297 (Del.Super.Ct. 1986), app. dism., 515 A.2d 397 (Del. 1986); Olney v. Cooch, 425 A.2d 610, 614 (Del. 1981).
Olney, 425 A.2d at 614.
Johnson v. Chrysler Corp., 213 A.2d at 66.
State v. Cephas, Del. Supr., 637 A.2d 20, 23 (1994).
Discussion — Cox Factors
8. The Industrial Accident Board has discretion in determining an award of attorneys' fees; however, the Board must exercise its discretion so as to be consistent with the purposes of the Worker's Compensation Act (the "Act"). The purpose of an award of attorneys' fees under the Act is to reduce the depleting effect such fees have on compensation benefits by decreasing or eliminating the amount of attorneys' fees that Claimants must pay from benefits received.9. To effectuate the purposes of the Act, the Board must consider certain factors when awarding attorneys' fees. These are set forth in General Motors Corp. v. Cox. They are:
(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 ability of the lawyer or lawyers performing the services;
(8) Whether the fee is fixed or contingent;
(9) The employer's ability to pay; and
(10) Whether the employee's counsel has received, or expects to receive, compensation from any other source.
Id.; DiGiacomo, 507 A.2d at 546.
10. In the case sub judice, the Court cannot determine whether the Board applied the Cox factors, or kept the purposes of the Act in mind when it calculated the award of an attorney's fee. At best, the Board's decision mentioned factors one, four, six and seven of the required Cox factors; however, the Board failed to indicate how it applied or weighed these factors to arrive at the fee awarded. Likewise, the Board failed to consider the other six Cox elements.
The Court notes that the Board's form "Affidavit Regarding Attorneys' Fees only lists three of the Cox factors to be completed by the Board (i.e. Total hearing time; Relative expertise of Claimant's attorney; Issues litigated at hearing). Perhaps it would be more appropriate if this form were revised to list all of the Cox factors to be completed by the Board.
11. "The Board's failure to give adequate consideration to the Cox factors is an abuse of discretion." "The Court cannot properly exercise its function on appeal without an adequate statement of findings by the Board. It should not be compelled to speculate or make assumptions as to what factors the Board considered in making its determination."
Woodall v. Playtex Prods., Inc., 2002 WL 749188 at *3 (Del.Super.Ct.).
Taylor v. Walton Corp., 2002 WL 264447 at *4 (Del.Super. Ct).
12. Since "the Board based its decision on improper or inadequate grounds, there has been abuse of discretion which requires reversal. On remand, the Board should reassess the award of attorneys' fees on the basis of all ten of the factors enumerated in Cox."
Id. at *4.
Effective Statute
13. Upon remand, the Board must also apply the statutory provision effective at the time of the institution of the present claim (i.e. 19 Del. C. § 2320 (10)a. effective prior to July 1, 2001). Under the statute in effect at the time this claim was filed, the Board was only permitted to award "a reasonable attorney's fee in an amount not to exceed 30 percent of the award or $2,250, whichever is smaller."14. The Court finds that the Board erred by applying the amended version of 19 Del. C. § 2320(10)a. which came into effect on July 1, 2001. The amended statute now allows the Board to award "[a] reasonable attorney's fee in an amount not to exceed 30 percent of the award or ten times the average weekly wage in Delaware as announced by the Secretary of Labor at the time of the award, whichever is smaller . . . to any employee awarded compensation . . . ."
15. The Claimant argues that the issue of which version of § 2320 to apply cannot be raised in this appeal, under Keeler v. Metal Masters Foodservice, Inc., because the scope of this appeal is limited by Claimant's Notice of Appeal. Although the Court does not decide if Keeler stands for this proposition, the Court finds that this issue is encompassed within the matters set forth in the Claimant's Notice of Appeal which states:
768 A.2d 979 (Del. 1999), aff'd 755 A.2d 389 (Del. 2000) (ORDER).
This appeal is limited to the Board's award of attorneys' fees; specifically, the Claimant takes issue with the Board's limitation of the attorneys' fees awarded to the Claimant [of] $2,400.
* * *
The grounds for the appeal are as follows:
1. The decision of the Industrial Accident Board is contrary to the law.
* * *
16. The Claimant's Notice of Appeal has raised the issue of the award of attorneys' fees on the ground that the Board erred "contrary to the law." This Court's review of alleged errors of law is de novo; thus, this Court may review what version of the statute the Board applied as well the Board's reasoning in applying it.
Brooks v. Johnson, 560 A.2d at 1002; Duvall, 564 A.2d 1132.
17. To that end, the Court finds that although "[t]here are authorities which hold that . . . the amount of the [attorneys'] fee is to be determined by the law which in force at the time the fee is allowed" (i.e. at the time of the Board's decision), the Delaware Supreme Court does not appear to have adopted that position. In Chrysler Corp. v. Viglino, the Delaware Supreme Court stated that the retroactive application of a statutory amendment increasing attorney's fees is a procedural issue, and the amended statute was "applicable to cases instituted after its adoption." The Viglino claimant did not retain counsel or file a claim for benefits until after the statutory cap on attorneys' fees had been amended.
Viglino, 260 A.2d at 161.
Id. (emphasis added).
18. Applying the Delaware Supreme Court's reasoning to the case at bar, it is apparent that this Claimant did not institute his claim after the effective date of the amendment to the statute. Hence, the amended statute would not apply. This is consistent with other Delaware decisions which have applied the prior version of the statute when the decision of the Board was after the effective date of amendment, but the claim was not instituted after.
See e.g. Woodall v. Playtex Products, 2002 WL 749188 (applying the prior unamended version of 19 Del. C. § 2320 to determine award of attorneys' fees even though Board's decision (of July 10, 2001) occurred after the effective date (July 1, 2101) of the amendment).
Conclusion
19. In determining the award of attorneys' fees in this matter, the Board failed to apply the effective statute and to consider all the essential Cox factors. "Because the Board based its decision on improper or inadequate grounds, there has been abuse of discretion which requires reversal. On remand, the Board should reassess the award of attorneys' fees on the basis of all ten of the factors enumerated in Cox," and apply the statutory provisions effective at the time of the institution of the present claim.WHEREFORE, the decision of the Board regarding the award of attorneys' fees is REVERSED and this matter is REMANDED for further proceedings consistent with this opinion.
IT IS SO ORDERED.