C. Jеremy Lagasse, Relator, vs. Larry Horton, Respondent, and Aspen Waste Systems, Inc., and EMC Insurance Company, Respondents.
A21-1745
STATE OF MINNESOTA IN SUPREME COURT
November 30, 2022
McKeig, J. Concurring, Anderson, J.
Workers’ Compensation Court of Appeals
C. Jeremy Lagasse, Benjamin M. Kline, Aaron Ferguson Law PLLC, Roseville, Minnesota, for relator.
Kirk C. Thompson, Kirk C. Thompson Law Offices, P.A., Minneapolis, Minnesota, for respondent Larry Horton.
James S. Pikala, Emily A. LaCourse, Arthur, Chapman, Kettering, Smetak & Pikala, P.A., Minneapolis, Minnesota, for respondents Aspen Waste System, Inc. and EMC Insurance Company.
S Y L L A B U S
-
For purposes of allowable fees for legal services under the Workers’ Compensation Act, an answer to a workers’ compensation claim petition can serve as the basis for a genuine dispute under Minn. Stat. § 176.081, subd. 1(c) (2020), when it creates an authentic controversy between partiеs and the employer or insurer had sufficient time and information to take a position on liability. - The applicable standard when we review whether the WCCA properly substituted its own finding for a conflicting finding of the compensation judge is if there is any evidence in the record that a reasonable mind might accept as adequate to support the compensation judge‘s finding.
- The Workers’ Compensation Court of Appeals erred in substituting its findings for those of the compensation judge because the compensation judge‘s findings that a genuine dispute existed entitling the attorney to contingent attorney fees under
Minn. Stat. § 176.081, subd. 1(c) , were supported by substantial evidence. - The standard to award additional fees under
Minn. Stat. § 176.081, subd. 7 (2020), is distinct from the standard to award contingency fees underMinn. Stat. § 176.081, subd. 1(c) , and whether to award fees under each subdivision must therefore be anаlyzed separately.
Reversed and remanded to the compensation judge.
O P I N I O N
McKEIG, Justice.
This case involves a section in the Minnesota Workers’ Compensation Act, chapter 176, related to the award of attorney fees. Respondent Larry Horton was injured during his employment with respondent Aspen Waste Systems (Aspen) and sought permanent partial disability (PPD) benefits through Aspen‘s insurer, respondent EMC Insurance Company (the insurer). Horton retained relator C. Jeremy Lagasse to represent him in the matter. Lagasse now seeks contingent fees under
FACTS
In June 2017, Horton was injured while working for Aspen after he was run over by a garbage truck. His injuries were both extensive and severe—Horton suffered 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. Dr. Daniel Sipple treated Horton for his injuries. EMC, Aspen‘s insurer, requested that Dr. Sipple complete a Health Care Provider Report assessing Horton‘s injuries. On July 9, 2018, Dr. Sipple completed and returned the form to the insurer.
On August 8, 2018, the insurer sent a letter to Dr. Sipple requesting clarification on the rating he assigned for brachial plexopathy. The insurer stated that “Mr. Horton is able to drive and perform activities of daily living, which would require use of his right arm.” The insurer therefore questioned the rating as the rating applies to only “[t]otal or complete loss of the brachial plexus, and [t]he presence of signs or symptoms of organic disease or injury, and [a]natomic loss or alteration.”
On August 16, 2018, Horton retained representation of an attorney, Lagasse. Horton agreed that Lagasse would receive up to 20% of the benefits recovered. Following an unsuccessful mediation, Lagasse filed a claim petition on Horton‘s behalf on November 12, 2018.
Three days later, on November 15, the insurer filed an answer in response to the claim petition that admitted workers’ compensation liability for some of the injuries asserted. The answer also contained language denying part of Horton‘s claim. In particular, the insurer “specifically den[ied] the Employee is entitled to [PPD] benefits reflecting a rating of 64.2% to the body as a whole.” The insurer also affirmatively alleged that Horton‘s injuries “may be the result of prior injuries and/or pre-existing degenerative processes,” that Dr. Sipple “made an error in providing the [PPD] rating,” and that it had not received requested clarification from Dr. Sipple. The answer concluded by asking the court to dismiss Horton‘s claim petition with prejudice.
At the insurer‘s request, Horton underwent an independent medical examination on January 11, 2019. The independent medical examination confirmed the findings of the original treating doctor and assessed a higher PPD rating.
On February 25, 2019, counsel for the insurer sent Lagasse an email stating that the insurer would “pay the PPD sought (and more) in the Claim Petition,” and asked him to dismiss the Claim Petition. Lagasse‘s representation was subsequently terminated by Horton.
Between April 2019 and December 2020, Lagasse filed three separate statements of attorney fees. Each time, his requests were dismissed as premature, as Horton was still receiving temporary partial disability benefits, and thus the PPD benefits were not payable yet. When the PPD benefits became payable, Lagasse filed his fourth statement of attorney fees.
During this period, Horton requested his PPD benefits in a lump sum, while
On April 1, 2021, the parties attended a hearing before the compensation judge to resolve the dispute over attorney fees. Following the hearing, the compensation judge concluded that Horton‘s PPD benefits were genuinely disputed; that Lagasse was entitled to a contingent fee under
Horton appealed to the WCCA, and the insurer filed a notice of cross-appeal, solely on the issue of the attorney fees awarded undеr subdivision 7. The WCCA reversed the compensation judge‘s award of attorney fees under both subdivision 1(c) and subdivision 7. The WCCA found that no genuine dispute existed over the payment of PPD benefits and that Lagasse took no actions that resulted in Horton being paid PPD benefits. The WCCA therefore concluded that “[t]here is no basis for an award of fees to Mr. Lagasse” and held that the compensation judge erred in awarding fees under both subdivisions.
Lagasse appealed to this court.
ANALYSIS
This case involves disputes over two separate fees: contingency fees under Under the Minnesota Workers’ Compensation Act, attorneys are entitled to contingency fees based “solely upon genuinely disputed claims or portions of claims . . . .” We start by analyzing the phrase “genuine[] dispute[]” as used in In interpreting statutes, we begin with the plain language of the text. State v. Thonesavanh, 904 N.W.2d 432, 435 (Minn. 2017). When a term is not defined by statute, we may use dictionary definitions. Id. at 436; see also Shire v. Rosemount, Inc., 875 N.W.2d 289, 292 (Minn. 2016) (using dictionary definitions to determine the plain meaning of a provision in the Workers’ Compensation Act). “Genuine,” is not defined within the statute, but is defined within the dictionary as “not spurious or counterfeit; authentic.” Genuine, American Heritage Dictionary (New College Ed. 1980). “Dispute,” is defined as “a conflict or controversy, esp. one that has given rise to a particular lawsuit.” Dispute, Black‘s Law Dictionary (11th Ed. 2019). Therefore, “genuine dispute” means a conflict or controversy that is authentic. The respondents and WCCA seem to claim, and Horton explicitly claims, that an answer is insufficient as a matter of law to create a genuine dispute. This ignores, however, This is further confirmed by We do not, however, go so far as to hold that an answer will always categorically give rise to a “genuinely disputed claim[]” as a matter of law for purposes of Our interpretation is further supported by the Minnesota Administrative Rules, which provide additional principles to guide the determination of whether a benefit was genuinely disputed. See Minn. R. 1415.3200, subp. 7 (2021). Though this court is not bound in mаtters of statutory interpretation by determinations of administrative agencies, “[t]he manner in which the agency has construed a statute may be entitled to some weight . . . where (1) the statutory language is technical in nature, and (2) the agency‘s interpretation is one of long-standing application.” Arvig Tel. Co. v. Nw. Bell Tel. Co., 270 N.W.2d 111, 114 (Minn. 1978). Here, the Minnesota Department of Labor and Industry has a set of long-standing, published rules guiding the interpretation of Workers’ Compensation Act provisions. Under Rule 1415.3200, subp. 7(B), “[i]f there was no dispute concerning the rate, amount, duration, or eligibility for a benefit and the benefit was timely paid, the benefit may not be used to compute the fee.” If a party raises an objection to any of the items listed in Rule 1415.3200, subp. 7(B), a genuine dispute exists for the purposеs of In contrast, the WCCA‘s and respondents’ respective arguments for a different rule are without merit. The WCCA claimed that, in addition to the existence of a genuine dispute, an attorney must procure a benefit on behalf of the employee to be entitled to a contingency fee. But this requirement is completely absent from Finally, respondents’ argument that parties are not entitled to compensation when a dispute resolves by the time benefits were due is unpersuasive. Under Rule 1415.3200 (2021), when evaluating whether a bеnefit was genuinely disputed, “[b]enefits timely paid may not be used to compute the fee except where primary liability for the entire claim or eligibility for the benefit had been generally denied.” Having established the meaning of a genuine dispute, we review the WCCA‘s findings to determine whether a genuine dispute exists in the present case. We begin by clarifying our standard of review. Then, we apply our standard of review to assess the decision made by the WCCA. Our relationship to the WCCA differs from our relationship with other appellate courts. Consequently, the standard under which the WCCA reviews decisions made by workers’ compensation judges, and the standard under which we review factual determinations of the WCCA, differs from how we typically apply a clear error standard. See In re Civ. Commitment of Kenney, 963 N.W.2d 214, 221 (Minn. 2021) (stating that clear error review does not permit an appellate court to reweigh the evidence when reviewing for clear error). We recognized and explained the unique nature of the WCCA in Hengemuhle v. Long Prairie Jaycees, 358 N.W.2d 54 (Minn. 1984). We noted that the Legislature expressly set forth the standard under which the WCCA reviews compensation judge decisions in In Hengemuhle, we reviewed 1983 amendments to the appellate review provisions of the Workers’ Compensation Act, We then summarized the standard under which the WCCA reviews the order and findings of a compensation judge: The [WCCA] can no longer disregard the compensation judge‘s findings and order. The [WCCA], instead, determines if the findings and order are supported by substantial evidence in view of the entire record as submitted. If the findings аnd order are so supported, the [WCCA] affirms. If not, then, in that event only, the [WCCA] may substitute its own findings, or it may remand to the compensation judge for a rehearing. Id. at 59. We clarified that the question the WCCA must ask is whether “in the context of the record as a whole, [the findings of the compensation judge] are supported by evidence that a reasonable mind might accept as adequate.” Id. We further explained that “in applying this standard, the [WCCA] looks not only at the evidence which supports the compensation judge‘s findings, but also at the opposing evidence and the evidence from which conflicting inferences might be drawn. The evidence, in a sense, is weighed to determine its substantiality.” Id. (emphasis added). In Hengemuhle, we acknowledged that what is meant by the substantial evidence standard “eludes any definitive explanation” and that the standard could be thought of as “an admonition to the [WCCA] not to treat the findings of the factfinder lightly, while at the same time the reviewing court remains cognizant of its own responsibility to exercise good judgment in reviewing what the evidence will reasonably sustain.” Id. at 60. So, although the WCCA has somewhat broader scope to scrutinize the findings of a compensation judge than does a typical appellate court, the standard is still subject to limitation. For instance, the WCCA should defer to credibility determinations of the compensation judge. Id. at 59-60. And critical to this case, we stated: [I]n applying the substantial evidence standard, where the evidence is conflicting or more than one inference may reasonably be drawn from the evidence, the findings of the compensation judge are to be upheld. In other words, the [WCCA] is not to substitute its view of the evidence for that adopted by the compensation judge if the compensation judge‘s findings are supported by evidence that a reasonable mind might accept as adequate. Id. at 60. This means that when the evidence in the record is conflicting, the WCCA cannot substitute its views of the evidence for those of the compensation judge unless the compensation judge‘s findings are not supported by evidence that a reasonable mind might accept as adequate. In our review of workers’ compensation cases, we must therefore first determine whether a conflict exists between the findings of the workers’ compensation court and the findings of the WCCA. When a conflict exists—in which case the WCCA is substituting its findings for the findings of the compensation judge—such substitution by the WCCA is inappropriate and must be reversed, so long as there is any evidence in the record that a reasonable mind might accept as In subsequent cases, we have clarified the scope of the application of this standard of review. In Jacobowitch v. Bell & Howell, 404 N.W.2d 270 (Minn. 1987), we again applied the rule that the WCCA cannot substitute its own finding for a specific, express finding of the compensation judge if the compensation judge‘s finding is supported by evidence in the record. But Jacobowitch extended the WCCA‘s deference to compensation judge findings on ultimate issues of fact. Id. at 274. We have since extended that deference to also cover implied findings of fact. Gibberd v. Control Data Corp., 424 N.W.2d 776, 783 (Minn. 1988) (holding that where a compensation judge‘s findings of fact contained implicit findings, the WCCA erred by rejecting those findings). Consequently, following Hengemuhle and its progeny, the WCCA‘s scope of review is as follows: The WCCA reviews the entire record in the case (evidence both favorable and contrary to the findings made by the compensation judge). It exercises its judgment and weighs all the evidence to determine if the findings and order of the compensation judge are supported by substantial evidence. If the findings are supported by substantial evidence, then the WCCA must defer to the compensation judge. If they are not, then the WCCA may substitute its own findings. Further, if the compensation judge‘s findings are supported by substantial evidence, the WCCA‘s deferral to those findings still permits the WCCA to make additional findings that do not conflict with findings of the compensation judge, so long as those additional findings are also supported by substantial evidence in view of the entire record. Our scope of review of the WCCA, premised on the understanding that we are reviewing the decision of the WCCA, an executive branch court created by the Legislature to oversee a remedial scheme created by statute, is as follows: If the WCCA affirms the findings of the compensation judge, or if it makes additional findings that do not conflict with the findings of the compensation judge, Hengemuhle instructs that we view the facts in the light most favorable to the affirmed or additional findings of the WCCA and that we cannot disturb those findings unless they are manifestly contrary to the evidence, or the evidence clearly requires reasonable minds to adopt a contrary conclusion. 358 N.W.2d at 60-61. In cases of conflict between WCCA findings and workers’ compensation court findings—the substitution cases—our standard of review is more complex. In such cases, we have to answer two questions: (1) whether the WCCA was correct in setting aside the compensation judge‘s findings, which it may do there Any previous language in our cases that suggested that we view the facts in the light most favorable to the findings of the WCCA when determining whether the WCCA applied the correct standard of review in substituting its fact findings for those of the compensation judge is not the law.3 Rather, when we review whether the WCCA properly substituted its own finding for a conflicting finding of the compensation judge, we ask whether there is any evidence in the record that a reasonable mind might accept as adequate to support the compensation judge‘s finding. We do not have any аdditional obligation to somehow undertake that task while viewing the facts in the light most favorable to the WCCA‘s substituted finding. But if we determine that the WCCA applied the correct standard of review, we undertake our review of the record to see if the WCCA‘s substituted finding is manifestly contrary to the evidence by viewing the facts in the light most favorable to the WCCA‘s substituted finding. As already discussed, after stripping away the legally unsupported requirements added by the parties and the WCCA, the existence of a genuine dispute hinges on two factors: (1) is there an actual conflict between the parties as to any claim or portion of a claim? And (2) did the employer or insurer have sufficient time and information to take a position on liability? See Even though the insurer ultimately paid out greater than the claim petition originally requested once it received the results of the independent medical examination, it is difficult to see how the dispute as articulated in the insurer‘s answer is anything but genuine. The answer states that Aspen and the insurer “specifically deny the Employee is entitled to permanent partial disability benefits reflecting a rating of 64.2% to the body as a whole.” The answer also affirmatively alleged that Horton‘s injuries may be the result of pre-existing medical conditions and that Dr. Sipple erred in his PPD calculations. Furthermore, while no rule precludes an answer from serving as the sole supрort for the existence of a genuine dispute, other evidence in the record provides additional indicia of a genuine dispute. Though the evidence demonstrates that a conflict existed, we must also consider whether this dispute existed after the insurer and Aspen “had adequate time and information to take a position on liability.”4 See an extension with Horton to get the information it claimed it needed. Instead, the insurer filed an answer denying liability just three days after Lagasse filed the claim petition. It is difficult to understand how the insurer and the WCCA can claim that the insurer did not have adequate time to take a position on liability when they, in fact, took a position on liability (and much more quickly than they needed to). It is even more puzzling considering that the insurer made no attempt to either get more information or time to respond, nor claim in its answer that the time and information it had was insufficient.5 Although the WCCA does not disagree with the compensation judge‘s underlying factual findings, it draws very different inferences from those facts. But even if the WCCA‘s inferences were supported by the evidence, the compensation judge‘s interprеtation of the facts, ultimately leading to the conclusion that a genuine dispute existed, were also supported 424 N.W.2d at 779, 784. The WCCA‘s denial of Lagasse‘s contingent attorney fees based on its substituted finding that no genuine dispute existed was therefore error. See id. Lastly, under summarily reversed this part of the award without including any language specifically addressing When interpreting statutory provisions within the Workers’ Compensation Act, this court applies a de novo standard of review. Dykhoff v. Xcel Energy, 840 N.W.2d 821, 825-26 (Minn. 2013). This court likewise reviews questions of law de novo. Hale, 654 N.W.2d at 123. Minnesota Statutes Given our reversal of the WCCA and order that the compensation judge‘s award of contingent fees under The insurer argues that when Lagasse and Horton failed to raise the issue of fees under For the foregoing reasons, we reverse the decision of the Workers’ Compensation Court of Appeals and remand to the compensation judge for findings on fees under Reversed and remanded. C. Jeremy Lagasse, Relator, vs. Larry Horton, Respondent, and Aspen Waste Systems, Inc., and EMC Insurance Company, Respondents. A21-1745 STATE OF MINNESOTA IN SUPREME COURT November 30, 2022 Anderson, J. (concurring). ANDERSON, Justice (concurring). I concur in the result.I.
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CONCLUSION
C O N C U R R E N C E
Notes
In no case shall fees be calculated on the basis of any undisputed portion of compensation awards. Allowable fees under this chapter shall be based solely upon genuinely disputed claims or portions of claims, including disputes related to the payment of rehabilitation benefits or to other aspects of a rehabilitation plan. The existence of a dispute is dependent upon a disagreement after the employer or insurer has had adequate time and information to take a position on liability. Neither the holding of a hearing nor the filing of an application for a hearing alone may determine the existence of a dispute.
If the employer or insurer files a denial of liability, notice of discontinuance, or fails to make payment of compensation or medical expenses within the statutory period after notice of injury or occupational disease, or otherwise unsuccessfully resists the payment of compensation or medical expenses, or unsuccessfully disputes the payment of rehabilitation benefits or other aspects of a rehabilitation plan, and the injured person has employed an attorney at law, who successfully procures payment on behalf of the employee or who enables the resolution of a dispute with respect to a rehabilitation plan, the compensation judge, commissioner, or the Workers’ Compensation Court of Appeals upon appeal, upon application, shall award to the employee against the insurer or self-insured employer or uninsured employer, in addition to the compensation benefits paid or awarded to the employee, an amount equal to 30 percent of that portion of the attorney‘s fee which has been awarded pursuant to this section that is in excess of $250. This subdivision shall apply only to contingent fees payable from the employee‘s compensation benefits, and not to other fees paid by the employer and insurer, including but not limited to those fees payable for resolution of a medical dispute or rehabilitation dispute, or pursuant to section 176.191.
(Emphasis added.)