The employee appealed from an award of attorney fees to be paid from his permanent partial disability benefits.
The employee, sustained a serious work injury on June 22, 2017, which resulted in significant disability affecting his cervical spine, thoracic spine, and right arm. The employer admitted liability and commenced payment of temporary total disability benefits and medical expenses.
The Employee retained an attorney and signed a retainer agreement agreeing to pay a contingent fee from benefits obtained on his behalf. His claim petition sought payment of 64.7% PPD as rated by his treating physician. The Employer and Insurer arranged for an IME by Dr. Smith, who found the Employee was not at MMI and that an additional 7% PPD was appropriate.
The attorney for the employer and insurer wrote to Mr. Lagasse on February 26, 2019, advising that the insurer would pay PPD benefits once the employee was no longer receiving TTD benefits. The employee was told he would be paid benefits for a 68.66% PPD rating once TTD benefits were no longer being paid. This would be $164,784. The employee terminated the services of Mr. Lagasse on April 22, 2019.
The Employee’s attorney filed a Statement of Attorney Fees requesting an award of $26,000.00 in contingent fees, $20,000.00 in excess fees. The employee objected to the requested fee and a hearing was held. In her Findings and Order, issued May 15, 2020, the compensation judge awarded the attorney his requested contingency fee to be paid from the employee’s PPD benefits, denied the excess fee claim.
The criteria for an award of fees set out in Minn. R. 1415.3200, subp. 7, which is titled “genuinely disputed portions of claims.” If the claimed benefit was not in dispute and was timely paid, no fee is to be awarded. Minn. R. 1415.3200, subp. 7(B). If there was a dispute on a portion of the claim, only the disputed portion of the claim may be used for the fee. Id. at subp. 7(C). The difference between the amount of compensation eventually paid or awarded, and the amount admitted and timely paid, is used to compute the fee. Id. at subp. 7(I).
At issue in this case were PPD benefits. PPD benefits are not payable while an employee is receiving TTD benefits and not until the employee has reached MMI. Minn. Stat. § 176.101, subd. 2a. Until a benefit is payable, whether there is a dispute as to the extent of disability or any other dispute concerning payment of PPD benefits cannot be ascertained.
The WCCA found that there was no evidence that permanent partial disability benefits were payable and it was an error to award an attorney fee from those benefits. We vacate the award.
Takeaway: An award of attorney’s fees is generally only given for genuinely disputed portions of claims, and it cannot be determined whether PPD benefits are in dispute until they are actually due.