Case Title: Painter v. State ex rel. Wyoming Worker's Compensation Div

Citation: 

Docket Number: 95-244

State: wyoming

Court: Wyoming Supreme Court

Date: 1997-01-31T00:00:00Z

Document:
Painter v. State ex rel. Wyoming Worker's Compensation Div1997 WY 17931 P.2d 953Case Number: 95-244Decided: 01/31/1997Supreme Court of Wyoming

Donald L. PAINTER, Appellant (Respondent),

 

and

 

Lee Melrose, Appellant 
(Respondent/Employee),

v.

The STATE of Wyoming, ex

rel. WYOMING WORKER'S COMPENSATION DIVISION, Appellee 
(Petitioner).

 

                                 

Appeal from  
District Court, Natrona County, Dan Spangler, 
J.

 

 Donald L. Painter, Casper, for 
Appellants (Respondents)

  William 
U. Hill, Attorney General; John W. Renneisen, Deputy Attorney General; Gerald W. 
Laska, Senior Assistant Attorney General; and Jennifer A. Evans, Assistant 
Attorney General, for Appellee (Petitioner).

 

Before TAYLOR, C.J., and THOMAS, MACY and LEHMAN, 
JJ., and BRACKLEY, District Judge.

 

    LEHMAN, 
Justice.  

 [¶1]        The sole issue presented by this 
appeal is at what point an injured worker's right to appointed counsel attaches 
in a worker's compensation case. In this case, a hearing examiner appointed 
counsel for an injured worker and awarded attorney fees although no contested 
case was requested. The district court found that since there was no contested 
case, the hearing examiner lacked jurisdiction to appoint an attorney and award 
fees. Absent further guidance from the 
legislature, we hold that an injured employee is entitled to paid legal counsel 
when the Worker's Compensation Division issues a final determination on 
compensability of the injury or a claim.

  

  [¶2]      We reverse the district court's order 
denying the hearing examiner's award of attorney fees and remand to the district 
court for further consideration of the payment of attorney fees incurred in 
responding to the Division's appeal.

 

ISSUES

 

  [¶3]      Appellants Lee Melrose, the injured 
employee, and Donald Painter, his attorney, state the issues 
as:

 

            1. 
Whether Employee-Claimant is entitled to an award of attorney's fees for 
services rendered by the undersigned on behalf of 
Employee-Claimant.

 

            2. 
Whether Employee-Claimant is entitled to an award of attorney's fees incurred in 
District Court in defense of the 
attorney's fees originally incurred.

 

  [¶4]      Appellee, Wyoming Worker's Compensation 
Division (Division), frames the issues as:

 

            A. 
Whether the Office of Administrative Hearings lacked subject matter jurisdiction 
to enter orders appointing an 
attorney and awarding attorney's fees where no party had objected to the 
Division's final determination and 
the matter had not been referred to the Office of Administrative Hearings for 
hearing.

 

            B. 
Whether the district court abused its discretion in denying the application for 
attorney's fees incurred in 
defending the order awarding attorney's fees entered by the Office of 
Administrative Hearings.

 

                                
FACTS

 

 [¶5]        On December 8, 1994, after 
unloading a Christmas turkey from his employer's truck, Melrose slipped on a 
patch of ice on his employer's property and sustained a back injury. On December 
20, 1994, Melrose and his employer timely filed a report of injury.  On that report, the employer took the 
position that the injury was not 
compensable because Melrose had clocked out for the evening twenty minutes prior 
to the accident.

 

  [¶6]      The Division, in its Final Determination 
Regarding Coverage and Compensability, dated December 22, 1994, found the injury 
was covered by the Wyoming Worker's Compensation Act (Act). A claim was then filed and forwarded to the employer, who 
disapproved payment on January 4, 1995. The following day Melrose filed a motion 
for appointment of counsel. The record is silent until January 19, 1995, when 
Melrose filed a motion for award of attorney fees. In the meantime, the employer 
filed no request for a hearing, thereby 
withdrawing its objection to payment of the claim.

 

  [¶7]      The hearing examiner granted Melrose's 
motion for appointment of counsel and awarded $281.24 in attorney fees. 
Appealing, the Division asserted that in the absence of a contested case the 
hearing examiner lacked jurisdiction to award attorney fees under W.S. 
27-14-602(d). The district court agreed and held that under the contested case 
provisions of the Act, the Office of Administrative Hearings (OAH) had no 
authority to appoint an attorney. In addition, the district court found it 
improper to award attorney fees for the appeal to the district court because the 
only issue on appeal was the denial of previously awarded attorney 
fees.

 

DISCUSSION

 

  [¶8]      Judicial review of an agency action is 
governed by W.S. 16-3-114, which allows any person aggrieved or adversely 
affected by the actions or inactions of an agency to obtain review by the 
district court. As the reviewing court, we are required to hold unlawful and set 
aside agency action found to be "[a]rbitrary, capricious, an abuse of discretion or otherwise not 
in accordance with law;" or "[i]n excess of statutory jurisdiction, authority or 
limitations or lacking statutory right." W.S. 16-3-114(c)(ii)(A), (C) 
(1990).

 

  [¶9]      In order to resolve this case, we must 
interpret the Worker's Compensation Act with respect to when a worker's right to 
paid legal representation accrues and apply that interpretation to the facts. 
Statutory interpretation is a matter of law and is reviewed de novo. Chevron 
U.S.A., Inc. v. State Board of Equalization, 918 P.2d 980, 983 (Wyo. 1996). The 
applicable law is that which was in effect on December 8, 1994, the date of 
Melrose's injury. See Matter of Worker's Compensation Claim of Jacobs, 924 P.2d 982, 984 (Wyo. 1996); Matter of Shapiro, 703 P.2d 1079, 1081-82 (Wyo. 
1985).

 

 [¶10]     Section 27-14-602(d) (Supp. 1994) 
provides the statutory authority for the appointment of 
counsel:

 

Upon request, the hearing examiner may appoint an 
attorney to represent the employee or claimants and may allow the appointed 
attorney a reasonable fee for his services at the conclusion of the proceeding. 
An appointed attorney shall be paid according to the order of the hearing 
examiner either from the worker's compensation account, from amounts awarded to 
the employee or claimants or from the employer.

 

The Act is silent as to when 
an employee's right to paid legal representation accrues. It is our task, then, 
to determine the legislature's intent in that regard.

 

  [¶11] 
  The Division asserts that 
unless and until a formal request for a hearing is made, and the case is 
subsequently referred to the OAH by the Division, a hearing examiner has no 
authority to appoint an attorney or award fees. The Division's argument assumes 
that the hearing examiner's authority to appoint an attorney is necessarily dependent on the jurisdiction 
of the OAH to decide the underlying disputed claim on its merits. Clearly, a 
hearing examiner acquires jurisdiction to decide a disputed claim once the 
Division has referred the case to the OAH. The statutory language does not, 
however, unambiguously support the contention that a hearing examiner cannot appoint an attorney 
until that time. Subsection (d) simply provides that upon request, the hearing 
examiner may appoint an attorney to represent the employee and award attorney 
fees at the conclusion of the proceeding.

 

  [¶12] 
  We have often stated the 
precept that the worker's compensation statutory scheme should be construed as a 
whole, its component parts in pari materia. Newton v. State ex rel. Workers' 
Compensation Div., 922 P.2d 863, 865 (Wyo. 1996); Little America Refining Co. v. 
Witt, 854 P.2d 51, 55 (Wyo. 1993). After examining the Act as a whole, looking at the 
component parts as well as its purposes and underlying policy considerations, we 
conclude that an employee is entitled to paid legal representation when the 
Division issues a final determination regarding compensability of an injury, 
whether or not a formal request for a contested case is 
filed.

 

  [¶13] 
  Article 6, entitled 
"Contested Cases," contains provisions covering the entire claim process, from 
beginning to end. W.S. 27-14-601 through -616 (1991 & Supp. 1994). The 
article describes the steps the Division must follow in reviewing an initial 
injury and subsequent claims for compensation, notice requirements, and review 
and settlement of claims, in addition to contested cases.  The Act establishes a scheme whereby the 
Division issues final determinations on compensability. W.S. 27-14-601(a)-(d). 
Notice of a final determination must include a statement of reasons and a notice 
of the right to a hearing; any interested party may request a hearing on the 
final determination. W.S. 27-14-601(k)(iii), (iv).

 

 [¶14]     The issuance of a final 
determination by the Division initiates a critical stage in the worker's 
compensation process during which the assistance of an attorney will likely be 
extremely important to the claimant. The employee has only fifteen days to 
request a hearing or the final determination is forever precluded from further 
administrative or judicial review. W.S. 27-14-601(k)(iv), (vi). Allowing an 
employee paid legal representation at that point will enable the employee to 
make an educated decision whether to agree to settlement of a claim, accept a 
partial award, or request a hearing.

 

 [¶15]     In addition, affording legal 
counsel to an injured employee when the Division has issued a final 
determination is in accord with the stated legislative intent in creating the 
Act. The legislature intended "that the laws be administered by [the Division] * 
* * to assure the quick and efficient delivery of indemnity and medical benefits 
to injured and disabled workers at a reasonable cost to the employers who are 
subjected to the * * * Act." W.S. 
27-14-101 (Supp. 1994). The Act "is not remedial in any sense and is not to be 
given a broad liberal construction in favor of any party." Id. Both employee and 
employer benefit when an employee is provided legal counsel at an early stage of 
the proceedings. The employee benefits because he is able to make a 
fully-informed decision about the proper course of action to pursue. The 
employer benefits because settlement outside the contested case context is more 
likely. Denying an employee paid legal representation when the final 
determination is issued creates an incentive for the employee to contest the 
case, regardless of whether a settlement could otherwise be reached. A contested 
case proceeding results in greater time and expense for everyone involved. No 
doubt the $281.24 charged by Painter was considerably less than a contested case 
proceeding would have entailed, and resolving the problem without a contested 
case certainly involved less 
time.

 

 [¶16]     The Division issued its final 
determination on the compensability of Melrose's injury on December 22, 1994. At 
that point in time, the hearing examiner had jurisdiction to appoint counsel 
upon request and award fees at the conclusion of the proceeding. We emphasize 
that our conclusion does not require the hearing examiner to award attorney fees to a 
claimant's attorney.  That 
determination will continue to be made by the hearing examiner on a case-by-case 
basis pursuant to statutory standards.  
See W.S. 27-14-602(d) (Supp. 1994); W.S. 27-14-608 (1991).  Factually, this situation is somewhat 
unusual, because the final determination issued by the Division was favorable to 
the employee. However, after that determination was issued, a claim was 
submitted and the employer disapproved payment. Only then did Melrose request 
counsel. The record contains no indication that the claim was frivolous or in 
any way not justified, either factually or legally. In fact, the employer 
ultimately withdrew its objection. Therefore, we reverse the district court's 
order on appeal which reversed the 
hearing examiner's award of fees.

 

 [¶17]     By its order dated August 16, 
1995, the district court denied Melrose's motion for attorney fees incurred in 
the appeal to the district court, determining that an award of attorney fees 
would not be proper because the issue in the case was the denial of a previous 
award of attorney fees. The district court is awarded considerable discretion in awarding attorney fees 
under W.S. 27-14-615 (Supp. 1996), but an abuse of discretion occurs where the 
court commits an error of law under the circumstances.  Matter of Worker's Compensation Claim of 
Hemme, 914 P.2d 824, 827 (Wyo. 1996); State, Dep't of Family Services v. DDM, 
877 P.2d 259, 262 (Wyo. 1994). In light 
of our holding that the hearing examiner acted within his jurisdiction when he 
appointed an attorney to represent Melrose and subsequently awarded fees, we 
remand to the district court for further consideration.

 

CONCLUSION

 

 [¶18]     The hearing examiner had 
jurisdiction to appoint an attorney and award attorney fees once the Division 
issued a final determination on the compensability of Melrose's injury.  Therefore, the district court's order 
denying attorney fees awarded by the hearing examiner is reversed, and the 
district court's order denying attorney fees incurred in the appeal to the 
district court is remanded for further consideration pursuant to W.S. 27-14-615.

 

THOMAS, J., files a dissenting 
opinion.

 THOMAS, 
Justice, dissenting. 

  [¶19] 
  I must dissent from the 
decision reflected in the majority opinion in this case. The district court 
correctly reversed the award of attorney fees by the hearing examiner because 
the hearing examiner had no jurisdiction. Further, there is no authority to be 
found in the statute for a hearing examiner to award attorney fees except in the 
instance of a contested case, and there was no contested case here. The decision 
of the district court should be affirmed.

 

 [¶20]     I take it that there is no 
disagreement among the members of the court that the office of hearing examiners 
is an administrative agency. The office of hearing examiners is established 
pursuant to WYO. STAT. § 9-2-2201 (Supp. 1994), which 
provides:

 

            (a) The office of 
administrative hearings is created as a separate operating agency pursuant 
to W.S. 
9-2-1704(d).

 

  

The referenced statute, WYO. 
STAT. § 9-2-1704 (Supp. 1994), makes the agency status of the office of hearing 
examiners even more clear:

 

(a) Pursuant to this act and other laws establishing 
individual departments, the entire executive branch of state government shall be 
organized into not more than fourteen (14) principal departments except for the 
offices of the following officials and except as provided in subsection (d) of 
this section:

 

            (i) 
Governor;

 

            (ii) Secretary of 
state;

 

            (iii) State 
treasurer;

 

            (iv) State 
auditor;

 

            (v) Attorney 
general;

 

            (vi) 
Superintendent of public instruction.

 

            
 * * *

 

            (d) The entities 
of state government specified in this subsection are designated as separate 
operating agencies, which are 
separate and distinct from the departments and offices specified in subsection 
(a) of this section because of their 
quasi-judicial responsibility or because of their unique, specialized function 
which precludes their inclusion in another department. This act does not 
otherwise apply to separate operating agencies. Separate operating agencies are 
as follows:

 

            * * 
*

 

            (xi) Office of 
administrative hearings created by W.S. 9-2-2201;

 

 [¶21]     Similarly, the statutory process 
for placing a worker's compensation matter before the office of hearing 
examiners is straightforward. The relevant statute, WYO. STAT. § 27-14-601 
(Supp. 1994), provides in pertinent part:

 

            (k) 
Determinations by the division pursuant to this section and W.S. 27-14-605 shall 
be in accordance with the 
following:

 

            
* * *

 

(iv) Any interested party may request a hearing 
before a hearing examiner on the final determination of the division by filing a 
written request for hearing with the division within fifteen (15) days after the 
date the notice of the final determination was mailed by the division. If the 
division has not rendered a final determination within sixty (60) days following 
the date the claim was filed, any interested party may request a hearing before 
a hearing examiner in the manner prescribed by this paragraph. If the written 
request for hearing is sent to the 
division by certified or registered mail, postage prepaid, return receipt 
requested, proof of such mailing within the time provided by this subsection 
with a receipt signed by an agent of the state of Wyoming shall be presumed to 
be timely filing of the request with the division;

 

        
    (v) Upon receipt 
of a request for hearing, the division shall immediately provide notice of 
the request to the appropriate 
clerk of court and the appropriate hearing authority as 
determined pursuant to W.S. 
27-14-616[.]

 

 [¶22]     The award of attorney fees by the 
hearing examiner is specifically provided for in the statutes, and it must be 
limited to those situations. The relevant provision is found in WYO.  STAT. § 27-14-602 (Supp. 1994) (emphasis 
added):

 

            (a) A hearing 
examiner designated by the office of administrative hearings created by W.S. 
9-2-2201 shall conduct contested 
cases under this act in accordance with this section.

 

            
 * * *

 

(d) Upon request, the hearing examiner may appoint 
an attorney to represent the employee or claimants and may allow the appointed 
attorney a reasonable fee for his services at the conclusion of the 
proceeding. An appointed attorney shall be paid according to the order of 
the hearing examiner either from the worker's compensation account, from amounts 
awarded to the employee or claimants or from the employer. If the employer or 
division prevails, the attorney's fees allowed shall not affect the employer's 
experience rating. Fees allowed shall be at an hourly rate established by the 
director of the office of administrative hearings and any application for 
attorney's fees shall be supported by a verified itemization of all services 
provided. No fee shall be awarded in any case in which the hearing examiner 
determines the claim to be frivolous and without legal or factual 
justification.

 

  [¶23] 
  An administrative agency 
has only the power granted to it by statute, and the justification for the 
exercise of any authority by the agency must be found in the statutes. E.g., Tri 
County Telephone Assoc., Inc. v. Wyoming Public Service Comm'n, 910 P.2d 1359 
(Wyo. 1996); Kerr-McGee, Corp. v. Wyoming Oil & Gas Conservation Comm'n, 903 P.2d 537, 541 (Wyo. 1995); 
Union Pacific Resources Co. v. State, 839 P.2d 356 (Wyo. 1992); Jackson v. State 
ex rel. Workers' Comp. Div., 786 P.2d 874 (Wyo. 1990). The jurisprudential 
principle applicable in this case was stated clearly by the court in LoSasso v. 
Braun, 386 P.2d 630, 631 (Wyo. 1963) (citations omitted):

 

            If the 
legislature did in fact have such an intention, it failed to express it, and of 
course, we could not if we would 
act for the legislature by adding an exception which is clearly omitted. 
Such action would be in violation 
of the general rule that courts cannot supply omissions in a statute and 
will not read into a statute 
exceptions not made by the legislature. * * *

 

            As stated in 
State ex rel. Morrison v. Anway, 87 Ariz. 206, 349 P.2d 774, 776, it is a 
universal rule that courts will not 
enlarge, stretch, expand or extend a statute to matters not falling within 
its express 
provisions.

 

 [¶24]     That is exactly what the court has 
done in the majority opinion. The decision enlarges, stretches, expands and 
extends the statute to approve the award of attorney fees that is not justified 
by the express provisions of the statute. It has supplied a perceived omission 
in the statute, by adding to the authority of the hearing examiner beyond that 
provided by the statute. It is bad jurisprudence, and my experience teaches me 
that normally bad jurisprudence results 
in bad law. The decision of the district court should be 
affirmed.