Day v. City of Middletown

The interests of claimant’s former counsel were represented by James Quinn, Esq., Furniss & Quinn, 248 Hudson St., Hartford, CT 06106. Notice also sent to Kenneth Bartlett, Esq., 742 Chapel St., New Haven, CT 06510.

The respondents were not represented at oral argument. Notice sent to Cotter, Cotter & Sohon, 500 Boston Post Road, Milford, CT 06460.

This Petition for Review from the February 2, 1996 Findings of Facts and Award of the Commissioner acting for the Eighth District was heard November 1, 1996 before a Compensation Review Board panel consisting of the Commission Chairman Jesse M. Frankl and Commissioners George A. Waldron and Robin L. Wilson.

OPINION

JESSE M. FRANKL, CHAIRMAN. The claimant has petitioned for review from the February 2, 1996 Findings of Facts and Award of the Commissioner acting for the Eighth District. He argues on appeal that the commissioner improperly awarded his trial counsel $30,000 in attorney’s fees in light of a previous agreement for $20,000. We find error, and reverse the trial commissioner’s decision.

The trial commissioner found that the claimant incurred a 20% permanent partial disability from work-related hypertension that was the subject of a 1982 Finding and Award. He had a stroke in 1988, and underwent angioplasties in 1993 and 1994. The respondents denied the compensability of the stroke and the angioplasties and any related medical bills. The claimant hired the law firm of Furniss & Quinn on September 27, 1993, to handle the prosecution of his claim. In an attorney’s fee agreement, he agreed to pay 20% of the gross amount of the award, with any fee subject to the approval of a commissioner. Subsequently, James Quinn, Esq., became the primary representative of the claimant in the proceedings before this Commission.

Attempts to mediate the claim at several informal hearings failed, and four formal evidentiary hearings were held between July 1994 and January 1995. Also, four depositions were taken from three different doctors. The claimant then discharged Furniss & Quinn, and hired Kenneth Bartlett, Esq. as his representative in March 1995. The parties reached a settlement agreement on September 21, 1995, through which the claimant was entitled to $100,000 in disability benefits, $33,340 for payment of outstanding medical bills, and placement on the employer’s medical insurance plan for the rest of his life. Although the claimant was willing to pay a total attorney’s fee of $20,000 based on the $100,000 disability settlement, he objected to any additional payment sought by his attorneys.

The commissioner noted that the work done by Furniss & Quinn established the requisite causal connection in this matter, and that another commissioner had recommended a $30,000 attorney’s fee at a September 21, 1995 informal hearing after including the value of the medical insurance and the payment of the claimant’s bills in his determination. The commissioner concluded that a directive issued by the Chairman of this Commission did not limit attorney’s fees in this claim to 20% of the stipulation, and that he could consider the work done by counsel in assessing an appropriate fee. (See also the commissioner’s February 2, 1996 Memorandum of Decision, in which he elaborates on his reasoning.) He ruled that the $30,000 recommendation made earlier was fair in light of the extent of their legal work and the results obtained from it, and ordered the claimant to pay that amount to his attorneys in this case. The claimant has appealed that decision.1

As the trial commissioner noted in his Memorandum of Decision, § 31-327(b) C.G.S. provides that “[a]ll fees of attorneys, physicians, podiatrists or other persons for services under this chapter shall be subject to the approval of the commissioner.” We have stated that this language gives the trier the power to examine all attorney’s fee agreements to ensure that they are consistent with the fee guidelines promulgated by the Chairman pursuant to § 31-280(b)(11)(c) C.G.S., even if neither party raises an objection. Ayala and Asselin & Associates v. Konover Residential Corp., 14 Conn. Workers’ Comp. Rev. Op. 87, 89, 1931 CRB-2-93-12 (May 12, 1995). The reasonableness of an attorney’s fee depends on many factors, including the preparation required, the novelty and intricacy of the case, the results obtained, and customary charges. Id., citing Balkus v. Terry Steam Turbine, 167 Conn. 170, 179-80 n. 8 (1974). This board will not reverse a fee award unless it results from an abuse of the trier’s discretion. Ayala, supra, 90.

With respect to a settlement or stipulation, the fee guidelines limit an attorney’s fee to 20% of the total of the settlement or stipulation, less medical bills that are paid by the claimant. Id. In a contested case or formal hearing, an attorney “may charge a contingency fee not more than 20% or an amount to be determined by the Commissioner based on time spent.” Sept. 10, 1993 Directive, ¶ 5. The trier correctly observed that a commissioner is not precluded from considering the amount of time that an attorney has spent on a contested case in ruling on a fee award.

However, the commissioner’s $30,000 award was primarily based on a recommendation made by a prior commissioner at an informal hearing. Although time spent was factored into that amount, the findings indicate that the prior commissioner “reasoned that the value of the medical protection and the payment of the medical bills should be included in determining the amount of the attorney’s fee.” (See October 13, 1995 Transcript, p. 5; Claimant’s Exhibit C.) It thus appears that the trial commissioner indirectly considered the value of the medical bills that the respondents paid pursuant to the settlement, which is improper under the fee guidelines.

Moreover, the claimant signed fee agreements with both Furniss & Quinn and Attorney Bartlett. The former agreement, dated September 27, 1993, states that Furniss & Quinn “shall be entitled to a fee of 20% of the total gross amount of money or benefit realized, before the deduction of any expenses or bills. . . . It is expressly understood that any such fee is subject to the approval of the appropriate workers’ compensation commissioner.” (Claimant’s Exhibit 1.) Although this agreement seems to contemplate the inclusion of the value of medical bills in the “total gross amount,” the agreement also recognizes that the commissioner would have to approve any award. In doing so, he would necessarily have to apply the fee guidelines.

The latter fee agreement with Attorney Bartlett was made part of the Full and Final Settlement Stipulation approved by the prior commissioner on September 21, 1995. It provides simply that “the first $20,000 payable pursuant to this stipulation represents a reasonable attorney’s fee.” The commissioner approved that stipulation, and then decided at an informal hearing on the same day that a $30,000 attorney’s fee was more appropriate. As we discussed above, however, the decision at the informal hearing was partially based on the value of the medical bills that the respondents were liable for in the settlement, which should not have been factored into the equation.

The settlement agreement contains a provision awarding $20,000 in attorney’s fees. That agreement was effectively reopened by the trial commissioner when he awarded $30,000 as an attorney’s fee instead. Although Attorney Quinn was not a party to that agreement, we do not believe that he is immune from the effect of the settlement agreement. As for the reopening of that stipulation, it appears that the revised award of $30,000 strayed somewhat from the Chairman’s fee guidelines insofar as the value of the medical bills paid on the claimant’s behalf was taken into account in reaching that figure. Thus, there is doubt as to the propriety of that amount. Under these circumstances, we cannot say that the commissioner properly exercised his discretion in reassessing the attorney’s fee. Thus, we reverse his decision to modify the settlement agreement.

Commissioners George A. Waldron and Robin L. Wilson concur.

1 Apparently, the claimant reached a settlement with Attorney Bartlett, and it is only the fees due to Furniss & Quinn that are still in dispute. BACK TO TEXT