To classify the FWCI Convention a “marathon” would be an understatement to say the least, but there were three new case discoveries I wanted to share that I learned of during the 3 day seminars. I will go through each one over the course of this week.

But first I want to address the biggest buzz I heard about during the Convention: a very recent lower court case that the Claimant’s bar is pursuing towards the First DCA regarding the constitutionality of the 7/1/09 changes to the attorney fee provision of section 440.34.

The case is Kaufmann v. Community Inclusions and you can read the Final Attorney Fee Order that is going up on appeal here.

In Kaufmann, the E/C denied compensability of Claimant’s 7/23/09 accident (note the date).   Claimant proceeded on her own to seek medical treatment under the self-help provision of the statute.  At trial, the Judge sided with Claimant and awarded “reasonable attorney’s fees and costs in connection” with the award of indemnity and medical benefits.

Cut to this summer and Claimant’s attorney files a Verified Fee Petition based on the award of benefits, calculated at around $3,400.  Ultimately, (and reluctantly)the Judge followed the 7/1/09 changes and only awarded a statutory guideline fee of $684.00.   He found the amount of hours alleged by Claimant attorney to be reasonable, but the statute only allowed an award of a guideline fee.  Claimant filed a subsequent appeal to the First DCA and the record of the hearing, which I anticipate will be huge, is being transcribed now. 

A few funny things occurred within the fee hearing that I want to highlight:

  • First, the E/C stipulated that the hours Claimant attorney spent (about 100 hours) in litigating the claim was reasonable.  I am surprised the E/C did not argue in the alternative that the statute only allows for a guideline fee and the alleged hours are unreasonable, just to cover their bases.
  • Second, the Judge awarded “reasonable fees” in his final compensation order, but he knew full well that the Legislature intended to remove the word “reasonable” from the statute when they passed CS/HB 903 last year.  
  • Third, Claimant attorney alleged the amount of indemnity benefits was about $3,400.  However, neither party provided to the Judge any value of the medical benefits that Claimant attorney obtained for his client.  The E/C argued that Claimant attorney purposefully did not present any value of medical benefits to undervalue the fee claim (this is a test case, so it behooves Claimant attorney to have an “unreasonably” low fee).  But, the E/C itself presented no evidence of the value of medical benefits, not even a payout.  Odd.
  • Fourth, the amount of costs that Claimant attorney won was $5,216.55, about 8 times more than the actually fee awarded.  That means the vendors: the Postal Service, the court reporters, the office supply companies, the IME doctors, all made more money on this case than the attorney who actually prosecuted the claim.

Thoroughout the Order, the Judge refers to constitutional and statutory construction arguments regarding the 7/1/09 changes.   Regarding the statutory construction, Claimant argued that s. 440.34(1) refers to “any fee approved” by the Judge.  While, s. 44034(2) refers to a fee “awarded” by the Judge.  Claimant argues that “approving” a fee is a simple rubberstamp, while “awarding” a fee requires the judge to ponder or consider.  . . something, I guess.   This seems like a legal tightrope, or slipping an elephant through the eye of a pin.  The appeal will require more substantive arguments than this.

As for the constitutional arguments in the order, there are none.  The Judge notes that some were made, but there are no references to the Florida or U.S. Constitutions anywhere.  All the Judge writes, in a footnote, is that he questions whether the 7/1/09 changes are consistent with the original intent of Florida Workers’ Comp law, to create a self executing system that imputes the costs of Claimant’s injuries “on industry rather than society.” 

While Claimant can make new constitutional arguments in her appeal, I thought the Claimant’s bar would make hay of the double-edged sword of inequity that exists between the strict guideline fee against E/C’s and the statute that a Claimant attorney cannot contract a fee with his own client above the guideline, see s. 440.105(3)(c).  I wrote about this, back in July, 2009:

“The argument is this: if Claimant attorney is resigned to only being paid a paltry statutory fee by the Carrier (should he obtain the benefit for his client) then he can only seek a fee from his client.  However, his client cannot pay him more than the fee schedule allows, since the JCC cannot approve above guideline fees.  If he contracts with his client to pay more than the fee schedule, then he commits a crime.   So what we have here is a legal Catch-22 for Claimant attorneys and injured workers and this is where the argument for access to courts has teeth.

If a Claimant cannot pay his own attorney what the real world calls a reasonable fee (without breaking the law), and the attorney cannot get the Carrier to pay a reasonable fee then the Claimant will never find an attorney.” 

Whether this access to courts argument will be made in the Kaufmann appeal is yet to be seen, but the “Catch-22” seems like an obvious place to start.

So, will Kauffman be the new Emma Murray?  The same Claimant’s law firm that handled Murray represents Kaufmann, so they know what they are doing.  But, Ms. Kauffman’s plight does not seem as dire as Ms. Murray’s.  Keep in mind, Emma Murray had serious surgical issues and her life was on the line.  This case does not involve any surgery.

However, the fact that the costs greatly outweigh the awarded fee could have an influence on how the appellate courts view the current law.  Also, the E/C attorney spent even more hours litigating the claim than Claimant attorney did.  Remember, in Emma Murray, the Supreme Court viewed the inequity in the E/C being able to outspend a Claimant in court. 

As for the timetable, it will be about 4-6 months before the parties and the amicus curiae briefs are locked down at the First DCA.  And the Court could kick it up to the Supreme Court like they did with Emma Murray.  So, it would likely be more than a year before we get a definitive opinion on the matter. 

Either way, with the Supreme Court refusing to address the constitutional arguments in Emma Murray, the attorney fee issue is not going away until there is a definitive answer.

Tomorrow: Workers’ Comp Convention Rond Part 2:  I breakdown one of the oral arguments heard before the First DCA at the Convention.