541 S.W.3d 422
Ark.2018Background
- In 2002 Oscar Gerard suffered a compensable work injury; AG&F paid benefits and authorized three surgeries.
- In 2014 Gerard reached MMI; initial treating surgeon rated 16% impairment and AG&F accepted 10% wage loss; two other physicians later opined 23% impairment and AG&F accepted 23%.
- Gerard sought additional benefits in 2015 (permanent/temporary disability and additional permanent-partial benefits based on a 7% increase and wage-loss), and the claim was controverted.
- An ALJ awarded Gerard an additional 25% wage-loss (total 35% wage-loss award), found Gerard entitled to attorney’s fees of $7,790.62, and ordered each side to pay one-half; AG&F paid its half.
- Because Gerard’s additional payable benefits were offset by his APERS retirement under Ark. Code Ann. § 11-9-411, Gerard moved to enforce payment of his one-half of fees; the ALJ and Commission ordered AG&F to pay Gerard’s half out of the compensable amount prior to the § 11-9-411 offset.
- The Court of Appeals reversed; the Arkansas Supreme Court granted review and affirmed the Commission, holding § 11-9-715 requires the claimant’s one-half to be taken from compensation payable to him prior to any § 11-9-411 offset (so the employer effectively funds both halves when offset eliminates the claimant’s payable benefits).
Issues
| Issue | Gerard's Argument | AG&F's Argument | Held |
|---|---|---|---|
| Whether § 11-9-715 requires the claimant’s half of court-awarded attorney’s fees to be paid out of compensation payable to the claimant even if an offset under § 11-9-411 reduces payable benefits to zero | The statute mandates the claimant’s half be taken from the compensation awarded to him (i.e., from the payable amount), so if offset eliminates payable benefits the employer must still supply the claimant’s half | The plain language makes the claimant responsible for his half out of compensation payable to him; if § 11-9-411 reduces compensation to zero the employer need not pay the claimant’s half and is not liable to fund both halves | Court held § 11-9-715 requires the claimant’s one-half to be derived from the compensation payable to him prior to any § 11-9-411 offset; where offset would eliminate payable benefits, the employer must effectively make the claimant’s half available so claimant’s counsel is paid (affirming the Commission) |
| Whether § 11-9-715 has priority over the offset in § 11-9-411 so that fee deduction occurs before applying offset | Fees have statutory priority and must be deducted from the compensation award before any § 11-9-411 dollar-for-dollar offset | The offset statute should apply first; if offset eliminates benefits, there is nothing "payable" to deduct the claimant’s fee from and the employer should not be forced to cover that half | Court held § 11-9-715 takes priority for payment of the claimant’s share (fee deduction precedes application of § 11-9-411 offset) |
Key Cases Cited
- Cleek v. Great Southern Metals, 335 Ark. 342, 981 S.W.2d 529 (1998) (employer liability for attorney’s fees serves social purposes and places litigation burden on the party that made litigation necessary)
- Aluminum Co. of America v. Henning, 260 Ark. 699, 543 S.W.2d 480 (1976) (discusses policy justifying employer payment of attorney’s fees when employer controverts claim)
- Ortho-McNeil-Janssen Pharm., Inc. v. State, 2014 Ark. 124, 432 S.W.3d 563 (2014) (rules on statutory construction: give words ordinary meaning and effect to every word)
- Miller v. Enders, 2013 Ark. 23, 425 S.W.3d 723 (2013) (workers’ compensation statutes are strictly construed; use plain meaning)
- Jones Bros., Inc. v. Whitlock, 366 Ark. 254, 234 S.W.3d 864 (2006) (when this court grants review, it considers the appeal as though originally filed in this court)