The primary issue in this appeal concerns the jurisdiction of the Workers’ Compensation Commission (Commission) over
a dispute between attorneys for legal fees related
I.
The basic facts in this case are not contested. The dispute is between two law firms over the division of $12,500 in attorney’s fees approved by the Commission in 1995. The Commission’s approval related to the $200,000 settlement of a claim filed on bеhalf of Vonnie Colson, an employee of Owens-Corning Fiberglass, for work-related injuries to his back.
Both Appellant and Appellee represented Colson in pursuit of his claim for workers’ compensation benefits before the Commission during the years 1989 to 1995. Appellant Engel & Engel, P.A. (Engel) represented Colson from 1989 to 1992. In 1992, Colson discharged Engel and retained Ingerman & Horwitz (Ingerman), the Appellee in this case, as new counsel. The evidence of the alleged fee-sharing contract is based on a letter sent by Engel on December 3, 1992, to Ingerman. The letter mentions Engel’s transfer of Colson’s file to Ingerman and purports to confirm an agreement between the two law firms of a 50-50 division of attorney’s fees generated as a result of Colson’s claim. In relevant part, the letter stated:
“It is my understanding that due [to] the extensive work undertaken by our office in these matters, you hаve agreed to split any fees recovered in these matters on a 50-50 basis. You have also agreed to reimburse our office for the expenses incurred in the appeal that was tried before the Circuit Court for Baltimore City as it relates to [Colson’s] injury. Our expenses for same total $116.00.”
On January 27,1993, in apparent response to Engel’s letter, Ingerman sent Engel a check for the $116.00 in expenses. A brief letter sent with the check did not dispute the terms of Engel’s December 3 letter. Ingerman then served as Colson’s counsel until the settlement was reached in 1995. While Ingerman was retained as Colson’s counsel, Philip Sturman was responsible for most of the work on the Colson case. Sturman’s work on the case initially took place as an employee of Ingerman but later, after he left the firm to begin a solo practice, as a subcontractor to Ingerman pursuаnt to a written agreement under the terms of which Sturman was paid an hourly rate. Sturman submitted to Ingerman monthly bills for his work, which Ingerman paid. Sturman was the individual ultimately responsible for negotiating the settlement with Owens-Corning.
After the settlement was reached, Ingerman submitted a petition, drafted by Sturman, to the Commission for attorney’s fees totaling $12,500, which were approved. Engel then sought 50 percent, or $6,250, of the fees pursuant to the agreement stated in his December 3,1992, letter. Engel filed suit in the District Court of Maryland sitting in Baltimore City after Ingerman refused Engel’s repeated demands for $6,250. The District Court denied Ingerman’s motion for summary judgment, which contended that the court had no jurisdiction to hear a case concerning attorney’s fees arising out of a workers’ compensation claim. Based on testimony from witnesses for both parties, the District Court judge, Alan M. Resnick, concluded that the correspondеnce indicated that a 50-50 fee-sharing agreement had been reached and entered a judgment on the merits for Engel for $6,250 plus costs.
On Ingerman’s appeal, the circuit court reversed the District Court’s decision without reaching the merits of Engel’s claim. The circuit court found that, although no cases addressed Ingerman’s jurisdictional defense, “the language ... in the various cases appears to suggest that the legislative policy [requiring Commission approval of attorney’s fees related to claims before the Commission] is an all encompassing preemption of the field of attorney’s fees.” That court there
fore concluded as a matter of law that the
II.
A.
The statute conferring jurisdiction on the Commission over attorney’s fees, Md.Code (1991 RepLVoL), Labor and Employment Art., § 9-731, 2 states as follows:
“(a) In general.—(1) Unless approved by the Commission, a person may not charge or collect a fee for:
(i) legal services in connection with a claim under this title;
(ii) medical services, supplies, or treatment provided under Subtitle 6, Part IX of this title; or
(in) funeral expenses under Subtitle 6, Part XIII of this title.
(2) When the Commission approves a fee, the fee is a lien on the compensation awarded.
(3) Notwithstanding paragraph (2) of this subsection, a fee shall be paid from an award of compensation only in the manner set by the Commission.
(e) Attorney’s fees—Administrative review.—On application of a party, the Commission may:
(1) hear and decide any question concerning legal services performed in connection with a claim; and
(2) order a person who received a fee for legal services to refund to the payer any part of the fee that the Commission may find to be excessive.
(d) Same—Enforcement and appeal.—An order of the Commission regulating payment or refund of payment for legal services may be enforced or appealed in the same manner as a compensation award.”
The attorney’s fee provisions were originally enacted in 1957 as § 57 of Article 101 and their recodification as § 9-731 occurred in 1991 without any substantive changes relevant here. As a result, throughout this opinion our references to Maryland Code (1957, 1964 Repl.Vol., 1977 Cum.Supp.), Article 101, § 57 should be viewed as synonymous with § 9-731.
In the typical workers’ compensation case, the Commission will approve the legal fee for the attorney’s work upon approving an award to a worker-claimant. For guidance as to the appropriate fee, the Commission has promulgated a schedule of fees. Code of Maryland Regulations (COMAR) 14.09.01.25. The schedule establishes maximum amounts for attorney’s fees based on the extent of the disability and the amount of the award. Id. The regulations also allow for a claimant’s attorney to file a petition with the Commission for a fee in excess of the fee schedule. COMAR 14.09.01.24(B)(describing necessary contents of petition); COMAR 14.09.01.25(B)(2)(stating that the Commission “may approve an attorney’s fee in excess of the limits set forth in this section only if exceptional circumstances are shown”).
In one of our leading cases interpreting Md.Code (1957, 1964 Repl.Vol., 1977 Cum.Supp.), Art. 101, § 57,
Feissner v. Prince George’s Co.,
We explained in Feissner that:
“[U]nder the Maryland statutory scheme, the payment of legal fees does not become an independent obligation of the employer or his insurer, but instead remains at all times the personal responsibility of the claimant. Thus legal fees are not among the enumerated benefits available to the claimant from his employer under the workmen’s compensation laws of this state.”
B.
Because this case requires us to determine the reach of the statute conferring jurisdiction to the Commission over attorney’s fees, we pause here to examine the context of that statute and the objectives the legislature sought to achieve through its enactment. As we observed in
Kaczorowski v. Mayor of Baltimore,
“legislative purpose is critical, that purpose must be discerned in light of context, and that ‘statutes are to be construed reasonably with reference to the purpose to be accomplished.... ’ The purpose, in short, determined in light of the statute’s context, is the key.”
We previously have observed that the legislative act creating the Commission was
“designed to protect workers and their families from hardships inflicted by work-related injuries. More particularly, it is designed to provide workers with compensation for loss of earning capacity resulting from accidental injury, disease or death arising out of and in the course of employment, to provide vocational rehabilitation, and to provide adequate medical services.”
Queen v. Agger,
As in litigation generally, in a workers’ compensation case the party seeking compensation is responsible for his or her own attorney’s fees. See supra Part II. A. Since workers’ compensation law is designed to provide financial assistance to the injured or disabled worker in lieu of lost wages, the legislature recognized that the purpose of the law would be subverted if a worker’s recovery were dissipated as a result of excessive fees incurred in recovering the compensation. As Professor Larson has observed, when the general rule that a party must pay his or her own legal fees
“is superimposed upon a closely calculated system of wage-loss benefits, a serious question arises whether the social objectives of the legislation may to some extent be thwarted. The benefit scales are so tailored as to cover only the minimum support of the claimant during disability. There is nothing to indicate that the framers of the benefit rates included any padding to take care of legal and other expenses incurred in obtaining the award.” (Footnote omitted).
3 Arthur Larson, Larson’s Workmen’s Compensation Law § 83.11, at 15-1271 (1989). See also Chanticleer Skyline Rm., supra. Thus, in Feissner we recognized that
“a serious risk exists that the purpose of the compensation award will be frustrated if benefits are exhausted by payment of excessive legal fees. Consequently, the primary function of [Md.Code (1957, 1964 Repl.Vol., 1977 Cum. Supp.), Art. 101,] § 57 is to protect against this possibility by authorizing the Commission to adopt appropriate safeguards.” (Footnote omitted).
“prohibit the dissipation of an employee’s compensation through the payment of excessive legal fees out of the award by giving the Commission the power to regulate when and how much remuneration an attorney who represents a claimant in [workers’] compensation litigation is to receive from the employee for legal services rendered to him.”
C.
While claimants must be protected from exorbitant legal fees, there also exists a need to ensure that workers are able to obtain competent counsel to pursue their claims. Attorney’s fees should not be so large as to be excessive, but they also should not be so low as to make representing claimants undesirable to the legal practitioner. 3 Arthur Larson, Larson’s Workmen’s Compensation Law § 83.16, at 15-1347-1349 (1989)(stating that attorney’s fees may not be fixed so low as to deny claimants’ effective legal representation).
See also Mitchell v. Goodyear Service Store,
The role of the courts with respect to Commission-approved fees is much more limited. The courts retain a supervisory role over the Commission’s approval of legal fees to guard against agency abuses of discretion and arbitrariness, but the courts may not substitute their own judgment as to the appropriate fee for the judgment of the Commission. As the Court of Special Appeals has observed: “The agency’s expertise in setting attorney’s fees in workmen’s compensation cases is not to be undermined.”
Mitchell,
Keeping in mind the purposes of the Workers’ Compensation Act generally and the attorney’s fee provision specifically, as well as the Commission’s special expertise in these areas, we now turn to the jurisdictional question posed by the instant case.
III.
This case concerns a dispute over the division of a fee that has already been approved by the Commission, rather than a dispute as to the Commission-approved fee itself. Thus, this appeal requires us to consider the scope of § 9-731, which gives the Commission jurisdiction over attorney’s fees made “in connection with” a claim filed before the Commission.
Ingerman contends that Engel should have pursued his claim for 50 percent of the attorney’s fee before the Commission and nоt the courts, a position with which the circuit court agreed. Ingerman argues that both the plain meaning of the statute and a reading of the case law give the Commission exclusive jurisdiction over any dispute involving legal fees for services rendered in the course of pursuing a worker’s claim for compensation. We disagree. We initially explain why we believe that the plain words of the statute do not give the Commission exclusive jurisdiction and why the appellate decisions of this State fail to resolve the jurisdictional question posed in this appeal. We then look to the legislature’s purpose and statutory scheme to determine how § 9-731 should apply in the instant case.
A.
We begin by examining the text of § 9-731 to determine whether its meaning is plain and unambiguous. “If the language of the statute is plain and clear and expresses a meaning consistent with the statute’s apparent purpose, no further analysis is ordinarily required.”
Gargliano v. State,
Section 9-731(a)(l) states in pertinent part that: “Unless approved by the Commission, a person may not charge or collect a fee for: (i) legal services in connection with a claim under this title.” (Emphasis added). These words provide no indication that the Commission must approve the payment of monies by one attorney to another attorney which, coincidentally, relate to a workers’ compensation claim. Under such circumstances the attorney seeking payment is not charging or collecting a fee from a claimant’s compensation; rather, that attorney is seeking to enforce a contractual obligation. Thus, we reject Ingerman’s argument that, because the statute “does not make exceptions for cases which do not affect the overall amount of the lien on the Claimant’s award,” the Commission has exclusive jurisdiction over the fee-sharing dispute. Since the fee-sharing dispute does not involve charging or collecting a fee from a claimant, no statutory “exception” is needed to conclude that jurisdiction properly lies with the District Court.
The only possible ambiguity that may be read into subsection (a)(1) stems from its failure tо expressly indicate from, whom a person may not charge or collect a fee without Commission approval. Perhaps, ideally, the legislature would have indicated in specific terms from whom one may not charge or collect a fee, but such additional language seems unnecessary when one considers the implications of Ingerman’s argument. Ingerman’s contention presumes that attorney A (here, Engel) may not attempt to collect a portion of a fee from attorney B (Ingerman) without Commission approval, if the fee earned by attorney B was for compensation for a claim before the Commission and attorney A’s services included work on the worker’s claim. Thus, Ingerman’s argument would apparently encompass any lawyer’s claim against any other lawyer if there is any connection to a claim before the Commission.
This argument is bеlied by the facts of this case. Ingerman does not dispute that Philip Sturman, the former employee of the firm who later worked as a subcontractor, performed much of the work on the Colson case. Sturman was paid on an hourly basis and performed most, if not all, of the work on Colson’s case, following Ingerman’s involvement, including negotiating the ultimate settlement and drafting the petition for legal fees. It was Ingerman, however, who was named counsel and whose name was on the petition for attorney’s fees filed with the Commission. Ingerman’s petition did not mention Sturman’s role or the fact of his compensation for work on the Colson case. Ingerman paid Sturman for his services on the Colson case pursuant to their contract. Therefore, under Ingerman’s broad reading of the statute, Sturman, with Ingerman’s assistance, would have violated the statute by “charging] or colleet[ing] a fee ... for legal services in connection with a claim.” Section 9-731 requires that persons obtain Commission approval of all charges or collections in connection with a claim; since the statute does not distinguish between contested and uncontested charges or collections, there is little to differentiate the Sturman-Ingerman contractual relationship from the relationship alleged by Engel. The fact that Sturman’s contract was concurrent with Ingerman’s representation of Colson, while Engel’s was successive, is too slim a reed to distinguish the two situations and a distinction not available from even an extremely liberal reading of the statute.
Furthermore, if Ingerman had refused to pay Sturman, Sturman would not be precluded from filing suit in the courts for Ingerman’s breach of their contract because of the mere fortuity that the contract involvеd services rendered in the pursuit of a claim under the Commission’s jurisdiction. It would be even clearer that the courts have jurisdiction over the breach of contract if, in the posed hypothetical, Sturman’s contract also involved services for working on matters unrelated to work before the Commission. Surely we would not require Sturman to pursue his claim for breach of contract in two different arenas.
Like the hypothetical situation involving Ingerman’s refusal to pay Sturman, Engel’s claim is for breach of a contract. Instead of a contract for payment by the hour, the
A case that sheds further light on the “in connection with” language of § 9-731 is
Livingston Fire Pro. v. Hubbard,
The Court of Special Appeals then reversed the circuit court. The court rejected Hubbard’s contention that Md.Code (1957, 1964 Repl.Vol., 1977 Cum.Supp.), Art. 101, § 57 gives the Commission jurisdiction over payment or allocation of legal fees.
Livingston Fire Pro.,
The instant case is analogous to Hubbard’s request to the Commission for attorney’s fees relating to the third-party claim. In Hubbard, a broad reading of the “in connection with” language of § 9-731 would have given the Commission jurisdiction to rule on attorney’s fees, since Hubbard initially had been awarded compensation in a claim before the Commission and the tort recovery effectively operated as a substitute for the compensation claim for which the Commission had already approved attorney’s fees. Nonetheless, the payment from a third party ended the Commission’s role in the case, including its jurisdiction over attorney’s fees. In the same way that the recovery from the third-party tortfeasor operated to divest the Commission from jurisdiction over Hubbard’s rеquest for attorney’s fees in Hubbard, the Commission’s order granting Ingerman’s request for fees in this case operated to divest the Commission of exclusive jurisdiction over the legal fees involved in preparing Mr. Colson’s compensation claims. Arguably, the attorney’s fees sought by counsel in Hubbard are even more strongly “connected” with the worker’s claim than in the instant case, since those fees stemmed from a tort action that resulted in a recovery that actually substituted for the compensation the claimant was due to receive under the Commission’s previous order. In sum, in both cases an overly broad reading of the “in connection with” language would give the Commission exclusive jurisdiction over both claims for fees, but a much more logical reading limits the scope of the statute to requests for attorney’s fees directly arising from a worker’s claim. In essence, the scope of § 9-731 does not reach to collateral matters, and particularly when those matters are unrelated to the purposes of § 9-731, which will be discussed in more detail below. See infra Part III.C.1.
We also disagree with Ingerman’s contention that the Maryland cases interpreting § 9-731 and its predecessor, Md.Code (1957, 1964 Repl.VoL, 1977 Cum.Supp.), Art. 101, § 57, indicate that the Commission has exclusive jurisdiction over a dispute concerning the division of legal fees recovered in a worker’s compensation case. We agree with Ingerman that the language in some of our cases refers in broad terms to the Commission’s regulation of attorney’s fees. For example, in
Chanticleer Skyline Rm., supra,
we observed that through the enactment of the attorney’s fee provision “the Legislature has attempted to formulate a comprehensive mechanism by which the award of an attorney’s fee is regulated.”
However, as the circuit court and the parties to this appeal apparently recognized, no appellate decisions in Maryland express a view on whether the legislature intended that the Commission’s jurisdiction over the regulation of attorney’s fees in workers’ compensation cases preempts, as the circuit court phrased it, “something as remote as [the subsequent distribution of a Commission-approved attorney’s fee].” Thus, the question we face on this appeal is a matter of first impression. We may not extract language from our cases considering the propriety of Commission-approved fees and apply that language to the entirely different context of a dispute among attorneys over a fee that the Commission has already approved.
Our review of the case law of other jurisdictions uncovered only one case in which a court considered the jurisdiction of the state workers’ compensation agency to entertain a dispute between attorneys over the distribution of the fee.
See Feldman v. Edwards,
“State Board of Workmen’s Compensation has authority to examine and approve contracts between claimants and their counsel as to the amount of attorneys fees but it has no authority ... to examine and approve contracts between attorneys as to the division of their fees when associated to represent claimants. The only contracts before the Board were the contracts between Edwards and the claimants and such were the only contracts that the board could examine.” (Citations omitted).
Feldman,
C.
1.
Assuming,
arguendo,
that the scope of the “in connection with” language of § 9-731 is ambiguous, we will now consider the present
Furthermore, the Commission has no special expertise that would serve as a policy basis for conferring to it exclusive jurisdiction over the existence of, or a disagreement regarding, the terms of a fee-sharing contract between attorneys. The Commission simply has no special knowledge or skills relevant to ordinary contract claims or equitable claims for
quantum meruit.
Indeed, the dispute in this case is entirely unrelated to the Commission’s mandate of “protecting] workers and their families from hardships inflicted by work-related injuries.”
Queen,
Finally, the ethical considerations often involved in disputes over attorney’s fees provide further reason for our holding that jurisdiction in this case properly lies in the courts. Attorney’s fee disputes often involve ethical considerations that are properly considered by a court of law and over which the Commission has no special expertise and no jurisdiction.
See
Maryland Rule of Professional Conduct 1.5 (governing lawyer’s fees);
Post v. Bregman,
2.
Not only do we fail to see any policy basis for reading into § 9-731 exclusive jurisdiction of the Commission over a fee-sharing dispute among attorneys, we believe that a holding resulting in Commission review of the substance of Engel’s claim could subvert the purposes of § 9-731 and the Commission’s legitimate interest in the finality of its decisions.
The Commission would have one of two choices if it were to entertain Engel’s request for a percentage of the legal fees relating to Colson’s claim and find in favor of his request, as did the District Court. First, it could find the claimant, Colson, liable for additional fees payable to Engel. Under this scenario, the imposition of new fees would reduce Colson’s recovery and, thus, directly and adversely implicate the purpose behind § 9-731 of protecting the claimant’s recovery from diminution by excessivе legal fees. Although it had earlier approved a reasonable attorney’s fee for the costs of the case, the Commission would further reduce Colson’s recovery by awarding an additional attorney’s fee, this time payable to Engel. It is apparent from oral argument that, should this dispute be placed once again before the Commission, Ingerman would in fact claim that any fees owed to Engel should come from Colson and not Ingerman. Ingerman claimed at argument that its petition for attorney’s fees did not include any work performed by Engel. It is clear, however, that the fee approved by the Commission was based on the $200,000 settlement of Colson’s claim, which was the culmination of all the attorneys’ work, including that of Engel and Sturman, and upon a Commission finding that “exceptional circumstances” justified a fee in excess of the regular fee schedule. 5 See COMAR 14.09.01.25(B)(2). Ingerman concedes that its petition to the Commission for approval of fees failed to indicate that additional fees might be sought by other attorneys. Furthermore, Ingerman’s argument is undermined by the fact of Ingerman’s payment to Sturman as a subcontractor, even though Sturman also had not been named in the fee petition (particularly given that he had prepared the petition). Thus, if we were to hold as Ingerman would have us, we would risk undermining the clear purpose of § 9-731 by exposing Col-son’s recovery to further diminution after a reasonable fee for all the legal work giving rise to the settlement had already been approved.
Under the second scenario, the Commission could find that the fees owed by Ingerman to Engel should be taken from the total fee that it had previously approved. Presumably, the Commission would then have to review the nature of thе work involved in preparing Colson’s claim to determine the total amount of work and which attorney was responsible for the work. Since the Commission’s original approval of the total amount of attorney’s fees already involved a review of the work performed in preparing and litigating Colson’s case, the Commission would have to revisit the same record a second time.
Like courts, administrative agencies have an interest in the finality of their decisions.
Cf.
II Kenneth Culp Davis & Richard J. Pierce, Jr., Administrative Law Treatise § 13.8, at 248 (1994)(“The policy in favor of repose that underlies application of res judicata, or claim preclusion, to judicial decisions applies with equal strength to agency adjudications.”) In approving the attorney’s fees in this case the Commission found them reasonably related to the services rendered; thus, the Commission’s task should be complete, and it should not be required to reopen its examination of the record to consider a contract collateral to the overall fee itself. The Commission had no knowledge that Ingerman’s petition was subject to either Engel’s or Sturman’s claim, and to require it to reopen the matter in order to entertain such
On the other hand, by allowing the courts to exercise jurisdiction over the alleged fee-splitting agreement, our holding leaves as final the Commission’s approval of the total attorney’s fees for which Colson is liable and it places before the courts what is, in reality, a contractuаl dispute over the distribution of a fee previously approved by the Commission. Indeed, we believe that little distinguishes the context of this case from
Vogelhut v. Kandel,
IV.
In sum, this matter involves an alleged contract between a discharged attorney and a successor attorney governed by the contract law principles we set forth in Vogelhut, supra. The language of § 9-731 supports this interpretation, and Maryland case law does not contradict it. To hold otherwise would not further the objectives of § 9-731 and of workers’ compensation law generally; rather, such a holding would place those purposes at a substantial risk of being undermined. Having fulfilled its statutory mandate of protecting a claimant’s compensation from diminution from excessive attorney’s fees and providing adequate compensation for the services rendered, the Workers’ Compensation Commission should not be burdened with a matter over which it has no policy interest nor any special expertise.
JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE CITY REVERSED. CASE REMANDED TO THAT COURT FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION. COSTS IN THIS COURT TO ABIDE THE RESULT.
Notes
. Engel also argues that the circuit court erred by failing to grant its motion to dismiss based on Ingerman’s failure to properly file a transcript of the District Court proceedings. We need not address this contention.
. Unless otherwise indicated, hereinafter all statutoiy references аre to Maryland Code (1991 Repl.Vol. & 1998 Supp.), Labor and Employment Article.
. Former Md.Code (1957, 1964 Repl.Vol., 1977 Cum.Supp.), Art. 101, § 33 is currently codified at Md.Code (1991 Repl.Vol., 1998 Supp.), Labor and Employment Art., § 9-610.
. Ingerman does not contend that recovery from Engel would contravene any ethical standards. From the transcript of the District Court proceeding, it is apparent that Engel did a substantial amount of work for Colson before he was discharged. Asked on direct examination what types of services he performed for Colson, Mr. Engel responded:
"[T]he initial preparation of the complaint, the setting up and verifying medical care and treatment, accumulation of the medical records. The matter was contested by the employer and insurer as a result of their having videotapes of Mr. Colson removing a tire from his trunk and changing the tire. They believed that he was not involved in an accident related injury that had causally related problems to his back. That was lost at the Commission, that was appealed, and it was tried before a jury in Baltimore County, Judge Dana Levitz. And we prevailed on all issues, the issues for medical treatment, accidental injury, causal relationship, and temporary total disability. And that was prevailed upon, and the matter was then remanded back to the Commission, for a future hearing on nature and extent.”
Indeed, when the District Court judge found in favor of Ingerman he noted that he was "appalled” at the conduct of the lawyers in the case and observed that Ingerman’s recovery was quite substantial given that Sturman, as a subcontractor to Ingerman, earned only $3,000 even though he performed all the work for which Ingerman was compensated.
. The record does not contain any order or other documentation of the Commission’s approval of the fee, but the approval is not contested by either of the parties.