Summary
rejecting award of attorney's fees where the Board failed "to give adequate consideration to the Cox factors"
Summary of this case from Larue v. SteelOpinion
C.A. No. 01A-07-002
Submitted: February 1, 2002
Decided: April 26, 2002
Upon Consideration of Appellant's Appeal From the Industrial Accident Board
Reversed and Remanded
Walt F. Schmittinger, Esq., Dover, DE.
J. R. Julian, Esq., Wilmington, DE.
Upon consideration of the briefs of the parties and the record of this case, it appears that:
1. The claimant, Gloria Woodall, appeals a decision of the Industrial Accident Board ("Board") which awarded her attorney's fees of $250.00 ancillary to an award for disfigurement. She contends that the Board abused its discretion by awarding such a low amount of attorney's fees. She also contends that the Board's decision is inconsistent with the policy and intent of the legislature underlying the attorney's fees statute. The employer contends that the award of attorney's fees was appropriate. It also contends that there has been an accord and satisfaction because claimant's counsel negotiated a check for the $250.00 sent by the employer after the Board's decision. It also contends that the plaintiff and her attorney are estopped from complaining about the attorney's fees because employer's counsel stated at the hearing that the employer had no objection to the "usual" fixed fee, and claimant's counsel offered no opposing remarks. For the reasons which follow, I agree with the claimant that the Board abused its discretion in setting the attorney's fees as it did, and I reject the employer's contentions that there was an estoppel or an accord and satisfaction.
2. The claimant sustained an injury to her left ankle while operating a fork lift at work. She and her employer entered into an agreement for compensation for permanent impairment. The petition which led to this appeal was one for compensation for disfigurement consisting of scars to the ankle. At the conclusion of a brief hearing, the claimant's attorney handed the Board an affidavit regarding attorney's fees. The affidavit is not contained in the record submitted to this Court by the Board, but the transcript of the hearing clearly indicates that an affidavit was handed over at the end of the hearing. When the affidavit was submitted, the attorney for the employer stated that "[i]t's my understanding that the Board routinely awards a fixed fee for disfigurements based on what these . . . hearings involve. And we would not object to such a fee." Counsel for the claimant did not make any comment concerning attorney's fees. The employer's answering brief indicates that the affidavit stated that three hours were spent preparing for the hearing.
3. Thereafter, the Board issued a written decision which awarded the claimant seven weeks of benefits and attorney's fees. The portion of the Board's decision concerning attorney's fees reads as follows:
$2,353.89. This award for disfigurement is not appealed.
Because Claimant has received a benefit, she is entitled to receive attorney's fees. 19 Del. C. § 2320(j). Based upon the time involved, result and lack of complexity in the application for those benefits, the Board finds that attorney's fees in the amount of $250.00 are reasonable.
4. The Board rendered its decision on July 10, 2001. On July 14, 2001, the claimant filed this appeal. On July 20, 2001, the employer sent two checks to the claimant's attorney, one for the amount of the award for disfigurement and another for the $250.00 attorney's fees. A cover letter with the checks stated that the $250.00 "represent[ed] the Board ordered attorney's fee." Both checks were negotiated.
5. On appeals from the Industrial Accident Board, the Court's limited function is to determine whether the Board's decision is support by substantial evidence and free of legal error. Substantial evidence means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. 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. The Court must give deference to "the experience and specialized competence of the Board." Where the amount of attorney's fees to be awarded a prevailing claimant is involved, the Board's decision will not be disturbed unless there has been an abuse of discretion. An abuse of discretion arises when the Board's decision "exceeds the bounds of reason" in light of the circumstances.
Histed v. E.I. DuPont de Nemours Co., 621 A.2d 340, 342 (Del. 1993); Johnson v. Chrysler Corp., 213 A.2d 64, 66 (Del. 1965).
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).
Johnson, 213 A.2d at 66.
Histed, 621 A.2d at 342.
DiGiacomo v. Board of Pub. Educ., 507 A.2d 542, 546 (Del. 1986).
Floundiotis v. State, 726 A.2d 1196, 1202 (Del. 1999) (citing Lilly v. State, 649 A.2d 1055, 1059 (Del. 1994).
5. At the time relevant to this case, a prevailing claimant was entitled to receive reasonable attorney's fees not to exceed 30% of the award or $2,250, whichever was smaller. The purpose of an award of attorney's fees is to reduce or eliminate the necessity of a claimant having to use a portion of his or her award for payment of counsel. In deciding the amount of a reasonable attorney's fee in a particular case, the Board must take into account the following factors:
19 Del. C. § 2320(g)(1). The statute has since been amended to increase the maximum allowable fee.
Robinson v. Metal Masters, Inc., 2000 Del. LEXIS 264 (Del.Super.)
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.
General Motors Corporation v. Cox, 302 A.2d 55, 57 (Del. 1973).
6. In this case the Board's decision suggests that it may have considered factors (1) and (4). However, even this is unclear. For example, whether the Board's view of "time involved" included the three hours preparing for the hearing reported in the attorney's affidavit, or not, is uncertain. If the Board's view of "time involved" is the three hours of prehearing time plus the time at the hearing, the Board's award is less than $83.00 an hour. The Court does not believe that the Board would conclude that $83.00 an hour is a reasonable rate for calculating attorney's fees even where, as here, the case is not complex and does not require a substantial expenditure of time. If the Board based its decision on an amount of time less than three hours plus the hearing, it is not possible from this record for the Court to determine what that amount of time might be. In addition, it would appear that the Board did not consider factors (2), (3) or (5)-(10) at all. The Board's failure to give adequate consideration to the Cox factors is an abuse of discretion. On remand the Board should arrive at an award of reasonable attorney's fees based upon the enumerated Cox factors. A claimant with a modest claim is as entitled to competent and thorough representation commensurate with the case as a person with a substantial claim.
7. An accord and satisfaction exists where (1) a bona fide dispute exists as to an amount owed based on mutual good faith, (2) the debtor tenders an amount to the creditor with the intent that payment would be in total satisfaction of the debt, and (3) the creditor agrees to accept the payment in full satisfaction of the debt. The burden of proving an accord and satisfaction is upon the party claiming it. It is questionable whether the doctrine of accord and satisfaction can apply to disputes over benefits arising from the workman's compensation law, but I need not address that issue here. In this case, the facts do not support a finding that the claimant or his attorney agreed to accept the $250.00 in full satisfaction of the claim for attorney's fees.
Acierno v. Worthy Bros. Pipeline Corp., 693 A.2d 1066, 1068 (Del. 1997).
Id. at 1068-1069.
Kelley v. ILC Dover, Inc., Del. Super. 2001 WL 392484 (2001).
8. The employer's estoppel argument is rejected as well. The forms of estoppel which might arguably be relevant to the comments made at the Board hearing are equitable estoppel and judicial estoppel. Equitable estoppel may be found where a party by his conduct leads another, in reliance on that conduct, to change his position detrimentally. Judicial estoppel prevents a litigant from taking a position in a legal proceeding inconsistent with a previous position which would allow the party to benefit from manipulation of the judicial process. I have carefully reviewed the transcript of the hearing in which the issue of attorney's fees is discussed. While it is true that claimant's counsel did not argue the point after the employer's counsel said he had no objection to a routine fixed fee, the record falls short of indicating that claimant's counsel agreed to or acquiesced in such an approach, or that he has been inconsistent on this issue. I find no basis for concluding that the conduct of claimant's counsel was of such a nature as to give rise to an estoppel.
Robertson v. Stephen Gest, M.D., 608 A.2d 729 (Del. 1991).
Siegman v. Palomar Medical Technologies, Inc., Del. Ch., 1998 LEXIS 115 (1998).
9. Therefore, the decision of the Board is reversed and remanded for further proceedings on the issue of attorney's fees.
IT IS SO ORDERED.