Rodney Dean Bjornson v. McNeilus Cos., Inc.

Rodney Dean Bjornson v. McNeilus Cos., Inc., No. WC23-6530 (March 11, 2024)

The issue here concerns Roraff fees.

Regarding the facts of the case, the Employee suffered two injuries while working for the Employer. The first injury occurred during Traveler’s coverage. It was an admitted injury for which benefits were paid. The second injury occurred during Hartford’s coverage. It was not admitted.

The Employee underwent surgery on July 9, 2021 at Mayo, suffered complications, and required extensive medical treatment. The Employee retained attorney David Wulff who filed a Claim Petition, claiming medical expense benefits in the amount of at least $317,000 and other benefits against both dates of injury.

An intervention notice was sent to Employee’s health insurer, Optum on behalf of UnitedHealthcare, but they did not intervene. No evidence was offered as to the specific amount paid or whether UnitedHealthcare had in fact paid any benefits. Attached to the Claim Petition was an exhibit listing the medical expenses, but no bills or treatment notes were attached establishing the causal connection to the dates of injury, the billed amounts, whether the bills were paid, and if so, the amount paid.

The Employer, Travelers, and Hartford reached a to-date settlement on February 3, 2023, for both dates of injury. In the stipulation, Hartford disputed the nature and extent of its date of injury, but it did not dispute that the Employee’s treatment at Mayo was causally related to relieve the effects of its date of injury and agreed to defend, indemnify, and save and hold the Employee harmless with regard to any claims for Spaeth balance.

The Employer and Insurer paid $15,000 to settle all benefits, including medical expenses up to the date of award on stipulation and of that amount, $3,000 was paid to Attorney Wulff. Atty Wulff then filed a statement of attorney fees claiming 20 percent of the alleged Mayo bill of $327,000. Atty Wulff claimed that because he recovered a lump sum to-date settlement for the Employee, which included medical out of pocket payments, medical mileage, and recovery of medical expenses, he was entitled to maximum compensation rate of $26,000 for each injury under Minn. Stat. 176.081, subd. 1(a)(1).

The Employer and Insurers objected and argued that there was no recovery of medical benefits which would give rise to award of attorney fees. On June 5, 2023, the attorney fee issue was heard before Comp Judge Lisa Pearson. Two issues were presented: 1) whether the contingent fee in the stipulation was inadequate to compensate Atty Wulff in a medical dispute and 2) if not, whether the disputed medical benefits were recovered and paid. Judge Pearson found the intervention interest of United Healthcare was “recovered” and ordered that Atty Wulff be paid $49,000 in attorney fees.

The Employer and Insurers appealed. They argued the judge erred in finding Atty Wulff “recovered” medical benefits when the evidence didn’t support that any medical expenses were incurred or paid. They argued there was no disputed ascertainable medical benefits awarded or paid as a result of the stipulation for settlement. Because there was no evidence in the record to support the alleged $327,000 intervention interest of United Healthcare, they argued the judge erred in awarding fees.

The WCCA affirmed the comp judge’s finding that Atty Wulff recovered a benefit for his client when the Employer and Hartford admitted that treatment rendered was causally related to cure its date of injury and agreed to defend, indemnify, and save and hold harmless the Employee from any claim by Mayo or United Healthcare. The Employer and Hartford denied primary liability and therefore the admission of liability was a recovery within the meaning of Minn. Stat. 176.081, subd. 1(a).

However, the WCCA reversed the amount of Roraff fees awarded. They found the amount awarded was not based on substantial evidence and failed to comply with the language of 176.081. When the employer or insurer are liable for attorney fees, the amount awarded shall be the dollar value of the medical benefits awarded, where ascertainable. When the dollar value of medical benefits is not reasonably ascertainable, the maximum attorney fee is $500. 176.081, subd. 1(a)(2).

The WCCA based its reversal on the fact that there was a paucity of evidence in the record which failed to establish that the bills existed, that payment was made, the actual fee scheduled amounts, and whether the treatment was reasonable and necessary. In short, Atty Wulff didn’t meet the burden of proving the dollar value of the medical benefits.

Takeaway: If medical benefits are not reasonably ascertainable, an employee’s attorney cannot claim any Roraff fees in excess of $500. Additionally, if an employer and insurer have denied primary liability in a case in which medical benefits are not reasonably ascertainable, it’s best to maintain a denial throughout litigation and up through a stipulation for settlement.