C. Jeremy Lagasse v. Larry Horton and Aspen Waste Systems, Inc. and EMC Ins. Co.

C. Jeremy Lagasse v. Larry Horton and Aspen Waste Systems, Inc. and EMC Ins. Co. No. A21-1745 (WCCA No. WC21-6412) (Supreme Court November 30, 2022)

This matter involves Larry Horton an employee who was run over by a garbage truck in June of 2017.  His injuries were extensive including numerous spinal fractures, rib fractures, right upper extremity fractures, and a permanent nerve injury, which left him unable to use his right arm and hand.  The insurer requested a Health Care Provider Report from the Employee’s treating doctor, Dr. Sipple.  After Dr. Sipple issued his report on July 9, 2018, the Insurer questioned his PPD rating and requested clarification as the Employee was able to drive a perform activities of daily living with his right arm. 

Following an unsuccessful mediation the Employee, through his attorney C. Jeremy Lagasse, filed a claim petition on November 12, 2018.  The Employer and Insurer answered that petition three days later on November 15, 2018.  In their answer the Employer and Insurer admitted liability for some injuries and denied others.  The Insurer specifically denied the Employee is entitled to PPD benefits reflecting his 64.2% rating and alleged the injuries may be the result of prior injuries and/or pre-existing degenerative processes.  Finally, they claimed the Dr. Sipple made an error in providing the PPD rating, and that it had not received the requested clarification from Dr. Sipple.  The answer asked the court to dismiss the Employee’s claim petition with prejudice.

Following this, the Employer and Insurer got an IME report on the Employee.  The report agreed with Dr. Sipple’s HCPR and assigned a higher PPD rating.  After the issuance of the report on February 25, 2019 the Employer and Insurer email the Employee’s attorney informing they would pay the PPD sought in the claim petition and more and asked for the claim petition to be dismissed.  The Employee subsequently fired his attorney. 

The Employee then requested that his PPD benefits be paid in a lump sum and that no attorney’s fees be withheld.  The Employer and Insurer filed a motion requesting an order on the withholding of attorney’s fees.  The compensation judge determined that the Employee’s PPD benefits were genuinely disputed and that Lagasse was entitled to a contingent fee and reimbursement and of costs and disbursements, and that the Employee was entitled to partial reimbursement of attorney’s fees under Minn. Stat. § 176.081, subd. 7.

The Employee appealed this to the WCCA and the Insurer filed a notice of cross-appeal solely on the issue of attorney fees awarded under subdivision 7.  The WCCA reversed the compensation judge’s award of attorney fees under both subdivision 1(c) and 7.  The WCCA found that there was no genuine dispute over the payment of PPD benefits and that Lagasse took no action which resulted in Horton being paid PPD benefits.  As such, the WCCA concluded there was no basis for an award of fees to Mr. Lagasse and held the compensation judge erred in awarding fees.  Lagasse appealed.

The Supreme Court stated that the WCCA cannot act as a fact finder and is directed to operate solely as an appellate review body.  If the findings of the compensation judge are supported by substantial evidence in view of the entire record then the WCCA affirms, if not the WCCA may substitute its own findings or remand the matter.   Should the WCCA find that find conflicting evidence it cannot substitute its views of evidence for those of the compensation judge unless the findings are unsupported by the evidence that a reasonable mind might accept as adequate. 

The Supreme Court found that a genuine dispute on the PPD was created when the attorney for the Employer and Insurer denied the PPD benefit, claimed the injuries may be the result of pre-existing conditions, and that Dr. Sipple erred in his calculations in their answer.  Since the answer denied the PPD rating a genuine dispute was created.  The Employee contended that since the dispute resolved by the time benefits were due there was no dispute, this was unpersuasive.

The Employer and Insurer also had adequate time and information to take a position on liability.  The Insurer had months to gather information before Lagasse filed a claim petition on the Employee’s behalf.  Any time between July 9, 2018, when they received the HCPR, and November 12, 2018 when the claim petition was filed the Employer and Insurer could have sought and IME.  Finally, they could have had up to 50 days to answer the claim and instead used 3 days.  The record supports that there was adequate time to take a position regarding liability and that the Employer and Insurer in fact did take a position. 

Because the evidence in the record supports what a reasonable mind might accept the WCCA was required to uphold the compensation judge’s findings.  The WCCA’s substituted findings that no dispute existed were therefore in error.

Finally, under Minn. Stat. § 176.081, subd. 7 allows an Employee to receive partial reimbursement of contingent attorney fees when an Employer and Insurer unsuccessfully resist payment and an attorney procures a benefit for their client.  The WCCA did not analyze the issue of subdivision 7 fees but rather summarily reversed the compensation judge’s award of the fees.  Due to the reversal of the WCCA and the order to uphold the compensation judge’s award of fees the issue of the Employee’s entitlement to reimbursement of subdivision 7 fees must be addressed.  Blurring of subdivision 7 fess and subdivision 1(c) by the compensation judge and the WCCA is in error.  The two subdivisions employ different language and have different requirements.  The Employer and Insurer argue that subdivision 7 fees were not raised by the Employee or Lagasse and they therefore waived the argument.  Since the compensation judge and the WCCA created the incorrect impression that subdivision 7 fees automatically follow an award of contingency fees.  Neither the compensation judge nor the WCCA properly applied subdivision 7.  Therefore it is reversed and remanded for findings on subdivision 7 fees.