Jurgensen v. Dave Perkins Contracting

Jurgensen v. Dave Perkins Contracting, No. WC23-6534 (March 5, 2024)

The Employee sustained an admitted shoulder injury that required surgery. The Employee agreed to a full, final and complete settlement with future medical benefits closed in exchange for a $150,000 lump sum payment. Of this lump sum, $26,000 was to be paid to the employee’s attorney as contingent attorney fees pursuant to Minn. Stat. § 176.081. An additional $4,000.00 was to be paid to the employee’s attorney as an excess fee. The Employee, Employer and Insurer agreed this was fair and reasonable.

The compensation judge issued a Partial Award on Stipulation ordering the Employer and Insurer to escrow the additional $4,000 in excess fees pending a hearing. The compensation judge, after reviewing the Irwin factors, found that the maximum statutory contingency fee of $26,000 was adequate compensation. The employee’s attorney appealed arguing the judge did not have jurisdiction to disapprove a stipulation’s provision for excess fees or to then review the claim for those excess fees. The employee’s attorney also argued that the compensation judge abused her discretion. The W.C.C.A. disagreed.

The W.C.C.A. reiterated that Minn. Stat. § 176.521, subd. 2, requires that where a settlement purports to close out the employee’s right to medical compensation or rehabilitation, it must be reviewed by the commissioner or a compensation judge and is to be approved only if its provisions are in conformity with the Workers’ Compensation Act. Moreover, the W.C.C.A. agreed that consistent with Minn. Stat. § 176.081, subd. 1, the compensation judge was required to approve the $26,000 fee to the employee’s attorney as said fee was clearly in conformity with the statute.

Next, the W.C.C.A. discussed the policy components behind Minn. Stat. § 176.081. The W.C.C.A. noted that a subsequent review of the claim for excess fees in this case was required and that the compensation judge properly denied the portion of the stipulation that provided for excess fees.

The W.C.C.A. also analyzed the Irwin factors and found that substantial evidence of the record supported the compensation judge’s findings on said factors.

Lastly, the employee’s attorney argued that the statute underlying the compensation judge’s denial of the stipulated excess attorney fees violated Article I, section 11 of the Minnesota Constitution, which prohibits any law impairing the obligations of contracts. The W.C.C.A. noted that constitution issues were outside the jurisdiction of the Workers’ Compensation Court of Appeals and did not address the issue.

Takeaway: The compensation judge had jurisdiction to review the excess attorney fee and did not abuse her discretion by denying the excess attorney fees (despite mutual agreement between the parties) after adequate consideration of the Irwin factors.