Minnesota Supreme Court Upholds Award of Hourly Attorney Fees Exceeding Amount of Disputed Medical Benefits

Court Reaffirms Irwin Analysis While Noting MWCA Prevents Claimant’s Attorney from Recovering Fees Earned Representing an Employee on an Issue that Could Have Been Raised – But Was Not – During the Pendency of Other Issues

Curtis Braatz, an employee of Parsons Electric Company, asserted claims for wage loss benefits, medical benefits, and rehabilitation benefits. Before the hearing, Braatz dropped the wage loss and rehabilitation claims and addressed liability and medical benefits only. The compensation judge found Braatz sustained a Gillette injury and awarded him medical benefits of $11,893.69. The judge awarded Braatz’s attorney $2,578.74 in hourly fees based on application of the 25/20 formula to disputed medical bills. Braatz’s attorney requested additional hourly fees $33,740 (96.40 hours of work at his hourly rate of $350) and asserted a claim for “subdivision 7 fees” of $10,047 payable to the claimant.

The compensation judge found the hourly fees based on application of the 25/20 formula ($2,578.74) inadequate to compensate Braatz’s attorney and awarded an additional $10,000 as additional Roraff attorney fees (rather than the requested $33,740) under Irwin v. Surdyk’s Liquor, 599 N.W.2d 132 (Minn. 1999). Based on the total $12,578.74 in hourly fees awarded, the compensation judge also awarded the employee $3,698.62 in “subdivision 7” attorney fee reimbursement.

Employer Parsons appealed and the WCCA affirmed. The WCCA rejected Parsons’ arguments that Braatz’s failure to join and address all reasonable related claims at the hearing acted as either a forfeiture of his right to seek attorney fees or a cap on the fees the judge could award. The WCCA also rejected Parsons’ argument that the compensation judge failed to apply the “lodestar analysis” set out in Green v. BMW of North America, LLC, 826 N.W.2d 530 (Minn. 2013). Parsons appealed to the Minnesota Supreme Court.

The Minnesota Supreme Court held an employee who fails to file and address all reasonably related claims at the same time forfeits attorney fees for claims that could have been, but were not, addressed in an earlier proceeding, but the employee does not forfeit the right to seek attorney fees for claims addressed. The Minnesota workers’ compensation statute prevents an attorney from recovering fees earned by representing an employee on an issue that could have been raised – but was not – during the pendency of other issues. The Court noted Braatz did not forfeit the right to seek attorney fees for the medical benefits claim litigated before the compensation judge. However, if Braatz requests attorney fees for work on a separate issue, Parsons can deny the request and argue the issue could have been addressed “during the pendency” of the medical benefits issue previously litigated.

The Minnesota Supreme Court agreed with the WCCA that the compensation judge did not abuse his discretion in awarding hourly Roraff attorney fees ($12,578.74) that exceeded the medical benefits awarded to the employee ($11,893.69) because the judge considered the Irwin factors to ensure the attorney recovered reasonable fees for representing the employee.

Practice Tips:

1. When evaluating your claim, know that under certain circumstances, such as in Braatz, a claimant’s attorney may recover hourly Roraff fees (and subd. 7 fees for the claimant on dates of injury before 10/1/2013) exceeding the amount of medical bills in dispute.

2. Claimant’s attorneys who “piecemeal” litigation run the risk that if they fail to file and address all reasonably related claims at the same time they will forfeit attorney fees for claims that could have been, but were not, addressed in an earlier proceeding.

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