Case Name: Kenneth McKINNEY, Plaintiff-Appellant, v. Winfield E. LITTLE, Jr., Defendant-Appellee
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 1995-05-31
Citations: 660 So. 2d 494
Docket Number: No. 95-177
Parties: Kenneth McKINNEY, Plaintiff-Appellant, v. Winfield E. LITTLE, Jr., Defendant-Appellee.
Judges: Before KNOLL and SULLIVAN, JJ., and BROUILLETTE , J. Pro Tern.
Reporter: Southern Reporter, Second Series
Volume: 660
Pages: 494–499

Head Matter:
Kenneth McKINNEY, Plaintiff-Appellant, v. Winfield E. LITTLE, Jr., Defendant-Appellee.
No. 95-177.
Court of Appeal of Louisiana, Third Circuit.
May 31, 1995.
Rehearing Denied Oct. 10, 1995.
Frank Humphrey Walk Jr., New Orleans, for Kenneth McKinney.
Winfield E. Little, Jr., pro se.
Before KNOLL and SULLIVAN, JJ., and BROUILLETTE , J. Pro Tern.
Honorable Harold J. Brouillette participated in this decision by appointment of the Louisiana Supreme Court as Judge Pro Tempore.

Opinion:
| iBROUILLETTE, Judge Pro Tern.
Kenneth McKinney filed a claim with the Office of Workers' Compensation alleging that the fee charged by Winfield E. Little, Jr., for services | ¿rendered in connection with a workers' compensation claim, was exces sive. The administrative hearing officer found that the fee received by Little exceeded the statutory limits of La.R.S. 23:1141 B and ordered the return of that portion of the fee which exceeded that limit.
McKinney appeals the judgment alleging that the hearing officer should have returned all of the funds because no application for approval of fees was ever filed with or approved by a hearing officer as mandated by La.R.S. 23:1143 B(2). He also claims that the hearing officer erred in not awarding attorney fees or other expenses as sanctions under the provisions of La.Code Civ.P. art. 863.
APPROVAL OF ATTORNEYS FEES
On June 16, 1989, McKinney employed William McLeod, Little's former law partner, to represent him in a claim arising out of an accident near Bryan, Texas on June 2, 1989, in which he suffered personal injuries. The employment agreement specifically excluded McKinney's claim for workers' compensation benefits against his employer Matlack, Inc. Following the election of William McLeod as District Judge, Little took over the representation of McKinney apparently with McKinney's approval.
At some point later, presumably without an employment agreement, Little began representing McKinney in the workers' compensation claim. McKinney testified that it was "right before the settlement" which was on July 28, 1992 and Little testified that it was in December 1990. Although there is no documentation as to when the representation began, Little did appear as counsel in the joint petition to compromise the claim on July 28, 1992.
_JjThe joint petition to compromise and the hearing officer's approval of compromise, both dated July 28, 1992, clearly establish that the workers' compensation claim was settled for the sum of $65,000. The hearing officer's approval of the compromise provides that "the claimant's attorney be paid out of the lump sum settlement amount as provided in LSA-R.S. 23:1141(B)."
The third party tort claim against Ato-ehem, which was pending in the United States District Court, was compromised at the same time. A disbursement sheet dated July 29, 1992 in that case, signed by both McKinney and Little, provides in part as follows:
DISBURSEMENT SHEET
Settlement funds received:
Atochem $37,500.00
Matlack 55,000.00
Jeansonne & Briney 1,000.00
Less:
Expenses as set forth On Exhibit "A" 8,212,94
$85,287.06
½ Attorney's Fees 28,420.02
$56,858.04
Less:
Hospitalization at Lake Charles Memorial 5,049.90
Net to Client $51,808.14
The disbursement sheet shows the reason for McKinney's claim that Little charged an excessive fee on the workers' compensation recovery of $55,000. It indicates that Little retained one-third of the $55,000 along with one-third of the | ^recovery on the third party tort action. It is on that basis that the hearing officer reduced the fee from one-third of $55,000 to the maximum authorized by La.R.S. 23:1143 B. Little claims that he is not bound by that limitation because he represented McKinney in securing a waiver of the reimbursement by Matlack, Inc. on approximately $67,200 which had been previously paid in workers' compensation benefits and medical expenses.
The hearing officer was clearly correct in holding that the $55,000 paid in a workers' compensation compromise was subject to the statutory limitations, particularly since the hearing officer specifically ordered that the fee of the attorney was subject to the provisions of La.R.S. 23:1143 B. The more difficult issue is McKinney's assertion that Little is entitled to no fee at all on the $55,000 settlement by reason of his failure to file an application for approval of the fee as required by La.R.S. 23:1143 B. It is undisputed that Little did not apply for approval of any fee.
The pertinent provisions of the workers' compensation law are the following:
§ 1141. Attorney's fees; privilege on compensation awards
A. Claims of attorneys for legal services arising under this Chapter shall not be enforceable unless reviewed and approved by a hearing officer. If so approved, such claims shall have a privilege upon the compensation payable or awarded, but shall be paid therefrom only in the manner fixed by the hearing officer.
B. In no case shall the fees of an attorney who renders service for an employee coming under this Chapter exceed twenty percent of the first ten thousand dollars of any award and ten percent of the part of any award in excess of ten thousand dollars.
§ 1143. Excessive fees or solicitation of employment; penalty; withholding attorney fees; approval by hearing officer
B. (1) An attorney may withhold, as proposed attorney fees, the sum of twenty percent of the first ten thousand dollars recovered and ten percent of all amounts recovered thereafter in his trust account which funds shall remain the property of the claimant, pending approval of such fees by the hearing officer.
(2) An application for approval of fees shall be filed by the attorney within thirty days after the payment of the final weekly benefit, settlement of the claim, or payment of the judgment, whichever occurs later. Otherwise the funds shall be returned to the claimant.
The reasons for the judgment of the hearing officer do not address the issue of Little's failure to apply for approval of fees. Since that part of McKinney's claim is denied, presumably the hearing officer felt that ap application for approval was unnecessary or that the provision in the approval of compromise ordering "that the claimant's attorney be paid out of the lump sum settlement amount as provided in LSA-R.S. 23:1141(B)" met that requirement. Clearly, that order by the hearing officer is not an "application for approval" by the attorney.
Does a hearing officer have the authority to waive the requirement that an attorney file an application for approval of fees? And if he does, did the hearing officer in this case intend to waive that requirement? And if he does have that authority and he did intend to waive the requirement, did the wording recited above in the approval of compromise constitute such a waiver? It is significant to note that La.R.S. 23:1141 B does not set the fee of counsel in a workers' compensation claim. It stipulates that the fee may not exceed 20% of the first $10,000 and 10% of any amount in excess of $10,000. This provision should be read along with La.R.S. 1623:1141 A which provides that claims for legal services "shall not be enforceable unless reviewed and approved by a hearing officer." Following that provision is the requirement in La.R.S. 23:1143 B(2) that "[a]n application for approval of fees shall be filed by the attorney within thirty days after the payment of the final weekly benefit, settlement of the claim, or payment of the judgment, whichever occurs later."
Reading those provisions together, it is clear that they anticipate a hearing officer being supplied with an application filed by an attorney for approval of a fee and containing information as to the services rendered. Further, that based upon that information, it is the duty of the hearing officer to approve a fee which may be less than but which may not exceed the statutory limit. Clearly, the purpose of the law is to protect the employee from excessive legal charges.
La.R.S. 23:1143 B requires that an application "shall be filed" and there is nothing to suggest that this requirement may be waived by the hearing officer. A reasonable interpretation of this provision is that a hearing officer must have an application in order to have sufficient information to approve the attorney's fees. It is the duty of the hearing officer to receive and review applications for fees based upon information in the application. It would not be logical to hold that such an officer has the authority to waive the requirement because in doing so he is also relieving himself of the duty to review the application.
It is noted that the hearing officer who approved the compromise in this case, Mark Zimmerman, is not the hearing officer who decided this case. There is ^nothing in the record to show that Zimmerman intended to waive Little's duty to file an application for approval, as required by law, even if he had such authority.
In further reference to Little's assertion that he would have had the right to collect a fee on both the $67,200 of prior workers' compensation (reimbursement to which was waived), plus a fee on the $55,000 paid at the time of compromise, it is noted that he did not apply for approval of a fee on either amount. If he felt that it was his effort that preserved the $67,200 of prior benefits from being reimbursed, he could have applied to the hearing officer for the fee to be assessed on the total benefits, $122,200. Then the application could have been reviewed by the hearing officer as contemplated by the requirement of application and review. But even if such an application had been made and approved, the maximum fee which would have been approved would be $13,220, not $18,333 which was the amount retained. Obviously, the fee in this case was not "reviewed and approved by a hearing officer" because there was no application to review.
What is the penalty if an attorney fails to file such an application within the specified time? La.R.S. 23:1143 B(2) provides that "[ojtherwise, the funds shall be returned to the claimant." This appears to be punitive in nature and perhaps it is. Apparently the legislature felt that the requirement to apply for approval of fees was important enough to specify a penalty for failure to comply.
The record does not indicate an intentional violation of the discussed provisions. It was apparently Little's, opinion, although an erroneous one, that he was not bound by the requirements of the Workers' Compensation Law either as to the limitation on the fee or as to requirement of application for approval of the fee. We find that neither of the hearing officers nor this court has the authority to refuse to |8enforce the legislature's mandate of La.R.S. 23:1143 B(2). Accordingly, the entire fee on the $55,000 compromise settlement must be returned to plaintiff.
SANCTIONS
Although not mentioned in her reasons for judgment, apparently the administrative hearing officer found no merit in McKinney's claim for sanctions under La. Code Civ.P. art. 863. It is Little's position that in view of the combined settlement of the third party tort claim and the workers' compensation claim, that no fee was charged on the workers' compensation claim. His allegation to this affect is what is claimed to support a claim for sanctions. Although we have concluded that he was in error in that assertion, his failure to prevail does not necessarily trigger a sanction award. The clear listing of "Matlack $55,000" in the disbursement sheet, which he signed, shows clearly that he was not attempting to conceal the source of the funds. The slightest justification for the exercise of a legal right precludes sanctions. Murphy v. Boeing Petroleum Services, 600 So.2d 823 (La.App. 3 Cir.1992); Fairchild v. Fairchild, 580 So.2d 513 (La.App. 4 Cir.1991); Loyola v. A Touch of Class Transportation Service, Inc., 580 So.2d 506 (La.App. 4 Cir.1991).
CONCLUSION
For the foregoing reasons, the judgment of the administrative hearing officer is amended to order the return to the plaintiff of the entire fee retained out of the $55,000 worker's compensation settlement, i.e. $18,333.33 plus legal interest | gfrom date of judicial demand until paid. Otherwise, the judgment of the administrative hearing officer is affirmed at appellee's cost.
AMENDED AND AFFIRMED.
KNOLL, J., dissents in part and assigns written reasons.
Funds to be received at later date from Jean-sonne for reimbursement of Court Costs.
. "The limitation on the fees of an attorney is just that — a maximum amount payable. It is not a minimum which must necessarily be awarded, and the attorney does not have a right to that amount. The fee is at the discretion of the hearing officer, who of course must recognize the right of an attorney to a reasonable fee for work done." Workers' Compensation Law and Practice, Malone & Johnson, Third Edition, § 386 p. 379.