RENDERED: MARCH 20, 2015; 10:00 A.M.
NOT TO BE
PUBLISHED
Commonwealth of Kentucky
Court of Appeals
larry d. ashlock, real party
IN INTEREST, AS ATTORNEY FOR
CLAIMANT PHILLIP MOORE. APPELLANT
PETITION FOR REVIEW OF A DECISION
v. OF THE WORKERS’ COMPENSATION BOARD
ACTION NO. WC-10-81535
JESSE JAMES
RIDING STABLES, INC.;
PHILLIP MOORE; CHED JENNINGS;
HON. THOMAS G. POLITES,
ADMINISTRATIVE LAW JUDGE;
AND WORKERS’
COMPENSATION BOARD APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE: CLAYTON, MAZE, AND TAYLOR, JUDGES.
MAZE, JUDGE: Larry D. Ashlock (Ashlock) petitions for review of an Opinion
by the Workers’ Compensation Board (Board) that affirmed an order by the
Administrative Law Judge (ALJ) awarding attorney fees in a claim brought by
Phillip Moore and apportioning those fees between Ashlock, Moore’s former
counsel, and Ched Jennings, Moore’s current counsel. We agree with the Board that the ALJ is not
required to make specific findings concerning the value of services provided by
a discharged attorney, but may apportion the total award upon finding that the
prior attorney was not discharged for cause.
We further conclude that the ALJ’s findings were sufficient to support
the total award and that the apportionment of attorney fees was within the
ALJ’s discretion. Hence we affirm.
The relevant and undisputed
facts of this matter are set forth in the Board’s opinion as follows:
Ashlock agreed to represent Moore in a
workers’ compensation claim arising from an August 3, 2010 injury. On August 10, 2010, Moore signed an attorney
fee agreement with a contingency fee amount to be paid pursuant to KRS
342.320. Ashlock filed Moore’s claim on
September 17, 2010. The employer
voluntarily paid temporary total disability (“TTD”) and medical benefits
beginning August 4, 2010, the day after Moore’s injury. However, a dispute arose over the proper
average weekly wage and Ashlock filed a motion for interlocutory relief on
October 25, 2010. The motion was
overruled.
Thereafter, the claim was placed in abeyance
on February 25, 2011 because Moore continued to be treated for his injury. Moore’s employer filed a medical fee dispute
during the period of abeyance, to which Ashlock responded. Nearly a year later, on January 6, 2012, the
claim was removed from abeyance. Between
January and July of 2012, Ashlock attended a benefit review conference,
litigated a second medical fee dispute, and submitted medical evidence.
At some point in July of 2012, Moore
discharged Ashlock as his attorney.
Ashlock filed an attorney lien requesting an attorney fee for his
representation as well as expenses. On
August 20, 2012, Hon. Ched Jennings (“Jennings”) filed a notice of
representation. Thereafter, a second
benefit review conference was conducted and a final hearing was scheduled. At the final hearing, the parties reached a
settlement of the claim and a form 110 was submitted. By the terms of the agreement, Moore received
a lump sum of $55,000 and retained his rights to future medical benefits. The agreement was approved on June 11,
2013.
Jennings filed a motion for approval of
attorneys’ fees in the amount of $7,500, which was approved. Thereafter, Ashlock filed a petition for
reconsideration of the attorney fee approval order, which was sustained. The ALJ amended the attorney fee order to
reflect that the previously approved attorney fee was subject to Ashlock’s
lien.
The parties then litigated whether Ashlock is
entitled to any portion of the $7,500 attorney fee award. Ashlock asserted he is entitled to an
attorney fee for his representation on a quantum
meruit basis and for obtaining wrongfully denied TTD benefits pursuant to
KRS 342.040(2). Additionally, Ashlock
requested a hearing. Jennings responded
Ashlock was discharged for cause, and therefore not entitled to any portion of
the award, even under a theory of quantum meruit.
The ALJ denied Ashlock’s request for a
hearing, noting the parties had been afforded the opportunity to file briefs
and a hearing is not required by KRS 342.320.
Further, the ALJ rejected Ashlock’s claim he is entitled to an attorney
fee for obtaining wrongfully denied TTD benefits, reasoning any allegation TTD
benefits were wrongfully denied was waived by virtue of the settlement
agreement. The ALJ then analyzed the
work Ashlock contributed to the matter, and awarded him an attorney fee of
$2,500 plus expenses.
Ashlock petitioned for reconsideration,
arguing he was entitled to a hearing before the ALJ on the issue. Additionally, he claimed he is entitled to a
larger portion of the overall attorney fee award because he contributed more to
the overall litigation than Jennings.
The ALJ overruled the petition.
In its opinion, the Board
first found that the ALJ did not err by ruling on this matter without a hearing. Turning to the substantive question, the
Board then considered whether Ashlock was entitled to attorney fees pursuant to
KRS 342.040(2). That provision permits a
claimant’s attorney to collect a fee from the employer for recovery of overdue
TTD benefits. Such an award is permitted
“if the administrative law judge determines that the delay was without
reasonable foundation.” The Board found
no evidence the record to support the allegation that any TTD payments were
withheld without reasonable foundation.
Consequently, the Board determined that Ashlock was not entitled to any
additional fee paid by Moore’s employer.
This petition for review followed.
Ashlock argues that attorney
fee disputes in Workers’ Compensation claims should be governed by the standard
set out in Baker v. Shapero, 203
S.W.3d 697 (Ky. 2006). In Baker, the Kentucky Supreme Court held
that, when an attorney employed under a contingency fee contract is discharged
without cause before completion of the contract, he or she is entitled to fee
recovery on a quantum meruit basis
only, and not on the terms of the contract.
Id. at 699. The ALJ expressly found that Ashlock was not
discharged for cause. Consequently,
Ashlock contends that he was entitled to present evidence showing the value of
the services which he provided to Moore.
But as the Board noted, the
right to attorney fees in workers’ compensation cases is governed by the
provisions of KRS 342.320. Under the
statute, all attorney fees are subject to the approval of the ALJ and any
contract provision for attorney fees are subject to the ALJ’s discretion and
the statutory caps. KRS 342.320(1)-(2). Given this statutory framework, the ALJ was
entitled to enter a total award of attorney fees and then apportion that amount
between the two counsel. Furthermore, we agree with the Board that the
ALJ was not required to determine the value of the services provided. Moreover, Ashlock does not allege that he was
denied an opportunity to present relevant evidence to the ALJ concerning the
amount of time which he worked on the claim and the value of those services in
relation to the benefits that Moore received.
Therefore, we find no error.
Ashlock next argues that the
ALJ failed to specify whether the attorney fees must be paid by the employer,
as required by KRS 342.040(2), or by Moore.
However, KRS 342.040(2) specifies that the employer is responsible for
payment of attorney fees if the ALJ determines that the denial or delay of TTD
benefits was “without reasonable foundation.”
The ALJ found that the delay was not without reasonable foundation. Since the employer was not responsible for
payment of attorney fees, Moore remained responsible for payment of his own
attorneys’ fees. Rager v. Crawford & Co., 256 S.W.3d
4, 6 (Ky. 2008).
Finally, Jennings argues
that Ashlock’s arguments are so lacking in merit that they warrant imposition
of sanctions under KRS 342.310. But
given the limited authority concerning apportionment of attorney fees under 342.320,
we cannot say that Ashlock’s petition for review was patently frivolous. Therefore, we agree with the Board that
sanctions are not appropriate at this stage in the proceedings.
Accordingly, we affirm the March 28, 2014 Opinion of the Board which affirmed the October 17, 2013 Order of the ALJ.
all concur.
BRIEF FOR APPELLANT: Larry D. Ashlock Lexington, Kentucky |
BRIEF FOR APPELLEES: Ched Jennings Louisville, Kentucky |