2015 UT App 79

THE UTAH COURT OF APPEALS

SMITH’S FOOD & DRUG, INC. AND KROGER CO.,

Petitioners,

v.

LABOR COMMISSION AND MARY DEE COX,

Respondents.

Opinion

No. 20131145-CA

Filed April 2, 2015

Original Proceeding in this Court

Bret A. Gardner and Kristy L. Bertelsen, Attorneys 

for Petitioners

Jaceson R. Maughan, Attorney for Respondent 

Labor Commission

Aaron J. Prisbrey and Trevor C. Sanders, Attorneys 

for Respondent Mary Dee Cox

JUDGE JAMES Z. DAVIS authored this Opinion, in which JUDGES 

STEPHEN L. ROTH and MICHELE M. CHRISTIANSEN concurred.

DAVIS, Judge:

¶1 Smith’s Food & Drug, Inc. and Kroger Co. (collectively, 

Kroger) seek our review of the Utah Labor Commission’s 

decision affirming the administrative law judge’s (ALJ) order 

awarding legal fees to Mary Dee Cox. We decline to disturb the 

Commission’s decision. 

BACKGROUND

¶2 Cox injured her right shoulder in March 2005 while she 

was working for Kroger. Kroger paid medical benefits related to 

the industrial accident through a third-party administrator (the 
Smith's v. Labor Commission

20131145-CA 2 2015 UT App 79

Adjuster). In 2008, Cox’s physician recommended that she 

undergo surgery on her right shoulder. The Adjuster’s internal 

medical review approved a total shoulder replacement, but Cox 

ultimately underwent only a partial shoulder replacement. 

¶3 Cox continued experiencing shoulder pain after the 

surgery, and in 2011, her physician recommended that she see a 

specialist at the University of Utah. Cox sought authorization 

from the Adjuster to see a specialist, but the Adjuster failed to 

respond. Cox subsequently hired an attorney and filed an 

application for hearing with the Commission, seeking medical 

benefits and attorney fees. She later clarified that she sought 

benefits relating to her request to see a specialist and for a total 

shoulder replacement.

¶4 By the time the ALJ held an evidentiary hearing, ‚Kroger 

had accepted liability for the total shoulder replacement,‛ 

leaving only ‚the issue of attorney fees . . . in dispute.‛ The ALJ

concluded that attorney fees were warranted because ‚*t+he 

filing of the Application for Hearing is what generated a review 

of the insurance company’s position of denial and allowed for 

the approval of medical benefits for continued treatment of Ms. 

Cox’s right shoulder industrial injury.‛ See Utah Code Ann. 

§ 34A-1-309(4)(a)(ii) (LexisNexis 2011) (permitting the 

commission to award attorney fees if, ‚after the employee 

employs an attorney, medical benefits are paid or ordered to be 

paid‛).

¶5 The ALJ rejected Kroger’s argument that ‚at the time the 

Application for Hearing was filed no benefits had been denied‛ 

because Cox had not requested approval for a total shoulder 

replacement since 2008 and the 2008 request had been granted. 

Kroger sought the Commission’s review of the ALJ’s decision, 

reiterating its argument that it never denied Cox’s request for 

benefits because ‚it did not learn of *her+ requested surgery until 

after she filed her application for hearing and that it originally 
Smith's v. Labor Commission

20131145-CA 3 2015 UT App 79

believed she was only seeking medical expenses related to the 

consultation *with a specialist+.‛

¶6 The Commission considered Cox’s 2008 request for the 

total replacement surgery to have gone unanswered until Cox’s 

application for hearing prompted Kroger’s approval in 2012. The 

Commission noted that in 2008, ‚*f+or some reason, Ms. Cox 

received authorization for only a partial procedure . . . despite 

[the Adjuster internally] approving payment for a total shoulder 

replacement.‛ Accordingly, the Commission reasoned that 

‚Kroger was aware of [the] required treatment in 2008 but did 

not actually approve it until . . . 2012.‛ The Commission 

concluded that Kroger’s approval did not occur within a 

reasonable amount of time, observing that ‚an insurance carrier 

or a self-insured employer like Kroger‛ generally is ‚allowed 21 

or 45 days to approve medical benefits such as Ms. Cox’s 

requested total shoulder replacement.‛ Therefore, the 

Commission upheld the ALJ’s award of attorney fees to Cox 

under Utah Code section 34A-1-309(4)(a). 

ISSUE AND STANDARDS OF REVIEW

¶7 Kroger seeks our review of the Commission’s decision to 

award attorney fees under Utah Code section 34A-1-309(4)(a). 

That statute provides the Commission with the discretion to 

award fees if certain conditions are met. See id. § 34A-1-309(4)(a)

(indicating that ‚the commission may award reasonable attorney 

fees‛ (emphasis added)). Accordingly, we review the 

Commission’s decision for an abuse of discretion, which requires 

us ‚to ensure that *the decision+ falls within the bounds of 

reasonableness and rationality.‛ See Murray v. Utah Labor 

Comm'n, 2013 UT 38, ¶ 32, 308 P.3d 461 (‚Reasonableness . . . is 

essentially a test for logic and completeness rather than the 

correctness of the decision.‛); see also id. ¶ 29 (‚*F+or an ‘abuse of 

discretion’ standard to apply on appeal, the agency action under 

review must involve ‘discretion.’‛).
Smith's v. Labor Commission

20131145-CA 4 2015 UT App 79

¶8 Kroger’s challenge necessarily focuses on a subsidiary 

determination inherent to the Commission’s award of fees—that 

the facts of this case satisfy the conditions outlined in section 

34A-1-309(4)(a). ‚*T+he question of whether a set of facts falls 

within a legal standard is . . . a question of law.‛ Id. ¶ 33. 

Whether the facts satisfy the statutory requirements turns on 

‚the legal effect of‛ the facts. See id. ¶¶ 34, 40. While some of the 

facts here are disputed, namely, whether the Adjuster actually 

communicated to Cox that it had approved a total shoulder 

replacement in 2008, ‚the ultimate question is the legal effect of 

the facts rather than witness credibility or demeanor.‛ See id. 

¶ 40. Accordingly, in conducting our review, we afford the 

Commission’s application of the law to the facts no deference. 

See Sawyer v. Department of Workforce Servs., 2015 UT 33, ¶ 11; see 

also Murray, 2013 UT 38, ¶¶ 36–40 (explaining the difference 

between issues that are more ‚law-like‛ and issues that are more 

‚fact-like‛).

ANALYSIS

¶9 Kroger interprets section 34A-1-309(4)(a) as requiring ‚a 

current dispute over a denied medical benefit at the time the 

Application for Hearing is filed by the claimant with the Labor 

Commission‛ as a precondition to an award of attorney fees. 

Kroger asserts that because there was ‚no current medical 

benefit dispute between the parties,‛ there was no need for Cox 

to hire an attorney and file an application for hearing. 

¶10 ‚In interpreting a statute, *we+ must look first to its plain 

language.‛ Valcarce v. Fitzgerald, 961 P.2d 305, 318 (Utah 1998). 

And ‚we assume, absent a contrary indication, that the 

legislature used each term advisedly according to its ordinary 

and usually accepted meaning,‛ and ‚*w+hen the meaning of *a+ 

statute can be discerned from its language, no other interpretive 

tools are needed.‛ Marion Energy, Inc. v. KFJ Ranch P'ship, 2011 
Smith's v. Labor Commission

20131145-CA 5 2015 UT App 79

UT 50, ¶¶ 14–15, 267 P.3d 863 (second alteration in original)

(citations and internal quotation marks omitted).

¶11 Section 34A-1-309(4)(a) provides, 

[T]he commission may award reasonable attorney 

fees on a contingency basis for medical benefits 

ordered paid . . . if:

(i) medical benefits are not approved by:

(A) the employer or its insurance carrier; . . .

. . .

(ii) after the employee employs an attorney, 

medical benefits are paid or ordered to be paid; 

(iii) the commission’s informal dispute resolution 

mechanisms are reasonably used by the parties 

before adjudication; and

(iv) the sum of the following at issue in the 

adjudication of the medical benefit claim is less 

than $4,000: 

(A) disability or death benefits; and

(B) interest on disability or death benefits. 

Utah Code Ann. § 34A-1-309(4)(a) (LexisNexis 2011). We agree 

that the statute conditions the availability of attorney fees on the 

existence of a medical benefit dispute in the proceedings before 

the Commission. The statute imposes four preconditions on the 

Commission’s ability to award fees. The first condition requires 

that ‚medical benefits are not approved by . . . the employer or 

its insurance carrier.‛ Id. This language clearly predicates the 

availability of attorney fees on an insurance adjuster’s or 
Smith's v. Labor Commission

20131145-CA 6 2015 UT App 79

employer’s decision to ‚not approve*+‛ a claim for benefits. Id. 

We note that the language does not require that the insurer or 

employer specifically deny benefits.

¶12 Here, Cox’s request to see a specialist was ‚not approved‛ 

by the Adjuster by the time she filed her application for hearing.1

See id. Both parties acknowledge that Cox’s request to see a 

specialist went unanswered and that Cox attached medical 

records related to that request to her application for hearing. 

Thus, we reject Kroger’s assertion that no medical benefits were 

in dispute when Cox filed her application. The other 

requirements of section 34A-1-309(4)(a) are not in dispute. As the 

Commission stated, ‚[t]here is no dispute that medical benefits 

were paid to Ms. Cox after she retained an attorney‛ or ‚that the 

parties reasonably used the Commission’s informal dispute 

 

1. The Commission and the parties spend a significant amount of 

their analyses parsing what occurred in response to Cox’s 2008 

request for a total shoulder replacement. See supra ¶¶ 2–6. The 

Commission tied the Adjuster’s 2012 authorization for a total 

shoulder replacement to Cox’s 2008 request for that procedure 

and concluded that the Adjuster’s approval was unreasonably 

untimely. Kroger disputes the Commission’s finding that only a 

partial replacement was authorized in 2008, arguing that the 

partial replacement occurred not because the Adjuster’s 

authorization limited Cox to that procedure but because Cox’s 

treating physician opted for a partial replacement. Kroger 

characterizes Cox’s subsequent request for a total replacement as 

an entirely new claim for benefits. We do not consider the 

characterization of Cox’s 2008 request to be central to our 

analysis. Our analysis starts from the premise that, regardless of 

what occurred in 2008, the Adjuster’s undisputed failure to 

respond to Cox’s request to see a specialist existed at the time 

Cox hired an attorney and filed her application for hearing.
Smith's v. Labor Commission

20131145-CA 7 2015 UT App 79

resolution mechanisms prior to adjudication.‛2 See id. § 34A-1-

309(4)(a)(ii)–(iii).

¶13 Kroger nonetheless asserts that because Cox’s claim for a 

total shoulder replacement was not in dispute at the time she 

initiated proceedings, the Adjuster’s ultimate approval of that 

procedure cannot be considered in the Commission’s calculation 

of the attorney fee award.We disagree.

¶14 Nothing in the statute’s language ties the benefits upon 

which an attorney fee award is ultimately calculated to the 

benefits that were in dispute at the time an application for 

hearing was filed. Rather, section 34A-1-309(4)(a) provides 

attorney fees on a contingency basis based on the total amount of 

benefits ‚‘generated,’‛ i.e., ‚paid as a result of‛ the claimant 

hiring an attorney. See Utah Admin. Code R602-2-4(C), (E). In 

other words, the amount the Commission can award is a 

percentage of the total amount of benefits generated and is not 

limited to a subset of the generated benefits that reflects only the 

benefits that were in dispute at the time the application for 

hearing was filed. See id.; see also Black’s Law Dictionary 362 (9th 

ed. 2009) (‚Contingent fees are usu*ally+ calculated as a 

percentage of the client’s net recovery . . . .‛). While in practice it 

may be that the benefits generated and the benefits initially in 

dispute are similar, the statute does not impose such a limitation.

¶15 The legislative history of section 34A-1-309(4) appears to 

support our plain language interpretation. The legislature 

enacted this provision to close a gap in the statutory framework 

pertaining to the Commission’s ability to award attorney fees. As 

explained by the legislation’s sponsor, Senator Karen Mayne, 

individuals utilizing the Commission’s dispute resolution 

 

2. The requirements of subsection (iv) are also not at issue in this 

case.
Smith's v. Labor Commission

20131145-CA 8 2015 UT App 79

system often have a wage dispute, medical benefit dispute, or 

both, and until this provision was enacted, the statutory 

framework provided attorney fees for wage disputes only. See 

Recording of Utah Senate Floor Debates, 58th Leg., Gen. Sess. 

(Feb. 10, 2009) (statements of Sen. Karen Mayne). Moreover, 

Senator Mayne explained, medical benefit disputes can be 

complicated and time consuming and attorneys working on 

medical benefit disputes were simply not ‚get*ting+ paid for 

their services,‛ even when an employer or insurer would grant 

the disputed benefit on ‚the eve of the trial.‛ Id. Thus, the 

legislature appeared to intend section 34A-1-309(4) to remedy 

this ‚financial situation.‛ Id.; see also id. (Feb. 11, 2009) (‚*W+e 

have injured workers that need counsel, and we have attorneys 

that are willing to do this. So, this bill addresses that the 

attorneys will get medical fees and wage fees.‛).

¶16 Additionally, as the ALJ recognized, Kroger did initially 

resist Cox’s latest application for the total replacement surgery 

and was ‚actively preparing a defense to the claim and denying 

liability.‛ Although Kroger ‚acted ethically and fairly‛ when it 

withdrew its defense after receiving the report from its internal 

medical review that ‚was favorable‛ to Cox, we are not 

convinced that the Commission abused its discretion when it 

concluded that these circumstances met the statute’s 

requirements that ‚medical benefits *were+ paid or ordered to be 

paid‛ after and because Cox employed an attorney. See Utah 

Code Ann. § 34A-1-309(4)(a)(ii) (LexisNexis 2011).

CONCLUSION

¶17 Kroger exposed itself to liability for Cox’s attorney fees by 

failing to address Cox’s request to see a specialist. The 

Commission has the discretion to award attorney fees pursuant 

to Utah Code section 34A-1-309(4)(a), and we are not convinced 
Smith's v. Labor Commission

20131145-CA 9 2015 UT App 79

that its award was an abuse of that discretion. We therefore 

decline to disturb the Commission’s decision.3

 

3. We deny Cox’s request for attorney fees and costs as a 

sanction pursuant to rule 33 and 34 of the Utah Rules of 

Appellate Procedure. Although Kroger did not succeed on its 

appeal, its arguments are not ‚obviously without merit, with no 

reasonable likelihood of success,‛ and do not warrant imposing 

fees or costs as a sanction. See Midland Funding, LLC v. Sotolongo, 

2014 UT App 95, ¶ 41, 325 P.3d 871 (citation and internal 

quotation marks omitted) (construing rule 33 of the Utah Rules 

of Appellate Procedure).