Fleury v. Kessel Duff Construction

NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
as well as formal revision before publication in the Vermont Reports.
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.


                                No. 88-100


Glenn Fleury                                 Supreme Court

                                             On Appeal from
     v.                                      Commissioner of Labor
                                             and Industry

Kessel/Duff Construction                     June Term, 1989



Jeanne Van Vlandren, Commissioner

Anthony B. Lamb and David D. Barra of Paul, Frank & Collins, Inc.,
  Burlington, for plaintiff-appellant

Harold E. Eaton, Jr., of Miller, Cleary & Faignant, Ltd., Rutland, for
           defendant-appellee



PRESENT:  Allen, C.J., Peck, Dooley and Morse, JJ., and Keyser, J. (Ret.),
          Specially Assigned


     DOOLEY, J.   Plaintiff, Glenn Fleury, appeals the denial by the
Commissioner of Labor and Industry (Commissioner) of an award of attorney's
fees in connection with a workers' compensation proceeding before the
Commissioner.  Plaintiff argues that he prevailed in his case and thus is
entitled to attorney's fees even though his request was made after the
underlying award was affirmed in this Court.  We reverse and remand.
     This is the third time we have rendered a decision in this case.  The
case was first here as an appeal by the employer of an award of permanent
total disability benefits to plaintiff.  Plaintiff prevailed fully in that
appeal.  Fleury v. Kessel/Duff Constr. Co., 148 Vt. 415, 533 A.2d 1197
(1987) (Fleury I).  Plaintiff then sought attorney's fees, and the employer
challenged the statute under which plaintiff sought the fees.  We upheld the
statute and awarded fees for the appeal to this Court but ruled that
plaintiff would have to return to the Commissioner for an award of fees
incurred at the original proceeding in the Department of Labor and
Industries.  Fleury v. Kessel/Duff Constr. Co., 149 Vt. 360, 543 A.2d 703
(1988) (Fleury II).
     On the same day that plaintiff requested fees in this Court, he also
filed a request with the Commissioner, pursuant to 21 V.S.A. { 678(a), for
attorney's fees arising from the original proceedings.  The Commissioner
found that the parties filed their final document in September of 1984,
prior to the Commissioner's ruling, that the ruling was made on July 25,
1985, and that plaintiff made no request for fees until September 30, 1987.
She reviewed Rule 10(b) of the department's Processes and Procedures for
Claims Under the Vermont Workers' Compensation and Occupational Disease
Acts, which requires that the documents showing the reasonableness of a fee
be filed no later than the filing of the "final documents in the case" and
found that the prior practice was to require that a request for attorney's
fees be made within a reasonable time after the hearing on the merits.
Consequently, she denied the request as untimely.
     On December 3, 1987, plaintiff filed a motion for reconsideration of
the Commissioner's decision.  In response, the Commissioner amplified her
decision without changing it.  She reasoned that she had no jurisdiction
over the request because the mandate in Fleury I affirmed without remanding
the case back to her.  She held that Rule 10(b) applied to the case, but
that it made no difference since the prior practice was to follow the
Vermont Rules of Civil Procedure, which would have required a request within
ten days.  See V.R.C.P. 59(e).  We were aware of the Commissioner's denial
when we issued Fleury II.  We said in that opinion: "Assuming an appeal is
properly filed pursuant to 21 V.S.A. { 672, we do not preclude review of a
Commissioner's denial decision."  149 Vt. at 365, 543 A.2d  at 706.
Plaintiff perfected a proper appeal and brought the question of fees
incurred before the Commissioner to this Court.
     The Commissioner's authority to award attorney's fees is contained in
21 V.S.A. { 678(a), which reads:
           Necessary costs of proceedings under this chapter
         shall be assessed by the commissioner against the
         employer or its workers' compensation carrier when the
         claimant prevails.  The commissioner may allow the
         claimant to recover reasonable attorney fees when he
         prevails.  Costs shall not be taxed or allowed either
         party except as provided in this section.  (Emphasis
         added).
Although this version of the statute contains amendments added since
plaintiff's injury, the amendments have no bearing on this appeal. (FN1) 
The Commissioner has adopted a rule governing the procedure for awarding
attorney's fees.  Rule 10(b) states, in part:
         Evidence establishing the amount or reasonableness of
         the attorney's fees claimed shall be offered no later
         than that date upon which the final documents in the
         case are filed with the Department.  Failure to comply
         with this section may result in denial of an award of
         attorney's fees.

The rule went into effect on February 20, 1985, prior to the benefit award
by the Commissioner in this case.  See Vermont Dep't of Labor and Industry,
Processes and Procedure for Claims Under the Vermont Workers' Compensation
and Occupational Disease Acts, 2 Code of Vermont Rules, Rule 24010003, at 21
(1989) (rules filed as Vermont Secretary of State Rule No. 85-16 effective
3/20/85).  It clearly was not in effect in September of 1984 when the final
documents in the case were filed.  The earlier practice was to require a
request for fees to be submitted within a reasonable time after a hearing on
the merits.
     Although the procedures to be used in processing claims clearly fall
within the discretion of the Commissioner, we have difficulty with each of
the rationales used by the Commissioner.  Rule 10(b), relied upon by the
Commissioner, went into effect before the decision was rendered at the
administrative level.  Rule 18(a), 2 Code of Vermont rules, Rule 24010003,
at 20, provides that "[p]rocedures under these rules, not affecting the
substantive rights of a party, shall apply to current and future claims and
cases."  Thus, to the extent the procedures in Rule 10(b) did not affect
plaintiff's substantive rights, they covered this proceeding.  As
interpreted by the Commissioner, however, the rule eliminated plaintiff's
right to collect attorney's fees because the last document in the case had
been filed prior to the rule's effective date.  We do not believe the rule
can be applied retroactively in that fashion so as to cut off a right to
claim fees that remained alive under the prior procedure.
     We also have difficulty with the Commissioner's alternative holding
that plaintiff's request was untimely under prior procedure.  Her reasoning
is based in part on her view that the prior procedure incorporated the
Vermont Rules of Civil Procedure, Rule 59(e) of which would require a
request for fees to be made within ten days of the entry of judgment.
However, V.R.C.P. 59(e) sets the time limit for a motion to alter or amend a
judgment.  It does not apply to a motion for attorney's fees as part of
costs because such a motion is collateral to the main issues before a court.
See White v. New Hampshire Dep't of Employment Security, 455 U.S. 445, 451
(1982); State v. Champlain Cable Corp., 147 Vt. 436, 438, 520 A.2d 596, 598
(1986).  White dealt with a situation comparable to that here and held that
requests for attorney's fees under the federal Civil Rights Attorney's Fees
Awards Act, 42 U.S.C. { 1988, were not restricted by the limit of Fed. R.
Civ. P. 59(e), which is identical to V.R.C.P. 59(e).  455 U.S.  at 451-54.
White was distinguished in Champlain Cable Corp., a case dealing with a fee
request under the Vermont Fair Employment Practices Act (VFEPA), 21 V.S.A.
{{ 495-496, because attorney's fees are not ordinarily part of costs and
because we had ruled in an earlier case that attorney's fees are not part of
costs in VFEPA cases. 147 Vt. at 438, 520 A.2d  at 598.  The statute
applicable in this case makes clear that attorney's fees are awarded as part
of costs.  See 21 V.S.A. { 678 (statute is titled "Costs" and covers
attorney's fees).
     We are left with the Commissioner's earlier practice of allowing
attorney's fees requests if made within a reasonable time.  White defined
the critical issues in determining the reasonableness of a delay in seeking
attorney's fees as the extent to which the delay "unfairly surprises or
prejudices the affected party."  455 U.S.  at 454.  White itself involved a
case already on appeal when the fee award was requested.  A number of
federal and state cases have held that a request made after a party prevails
on appeal is timely.  See, e.g., Hicks v. Southern Maryland Health Systems
Agency, 805 F.2d 1165, 1166-67 (4th Cir. 1986); Farmers Insurance Exchange
v. Pickering, 104 Nev. 660, 662, 765 P.2d 181, 182 (1988) (per curiam); see
also City of Palm Bay v. Bauman, 475 So. 2d 1322, 1327 (Fla. Dist. Ct. App.
1985) (request for fees made three months after judgment, prior to appeal;
indicating that a request subsequent to appeal may be timely).  We are
unable to see any unfair surprise or prejudice to defendant if the
Commissioner considers the fee award at this time.  See Royer v. Adams, 121
N.H. 1024, 1028, 437 A.2d 316, 319 (1981) (per curiam) (an attorney's fee
claim is not within a reasonable time only if special circumstances make the
award unjust); compare Baird v. Bellotti, 724 F.2d 1032, 1034-36 (1st Cir.
1984) (thirty-month delay in filing attorney's fee request unreasonable
where loss of memories of witnesses would be prejudicial to non-prevailing
party and it would be difficult to reconstruct accuracy of fees); Urban
League v. Mayor of Carteret, 115 N.J. 536, 552-56, 559 A.2d 1369, 1378-80
(1989) (request for attorney's fees not made within a reasonable time where
delay suggests unfair surprise and trial court would have to conduct mini-
trial to determine entitlement to and amount of fees). The request here was
made shortly after plaintiff determined he was entitled to fees because he
prevailed in this Court.  Defendant has kept this litigation alive by
appeals.  The issues of entitlement and amount can be determined from
existing records.   We conclude that in the absence of a governing rule, the
request here was timely.
     While we agree that plaintiff's request was timely filed, we are
unwilling to compel the Commissioner to award attorney's fees pursuant to 21
V.S.A. { 678(a).  The statute makes clear that such an award is within the
Commissioner's discretion.  Accordingly, we remand the request to the
Commissioner for consideration.
     Reversed and remanded.

                                        FOR THE COURT:



                                        Associate Justice





FN1.    The current version quoted above contains the amendments added by
1981, No. 204 (Adj. Sess.), {10.  The version at the time of plaintiff's
injuries was as enacted by 1969, No. 237 (Adj. Sess.).  The second and third
sentences of the earlier version are identical to those sentences in the
current version.  Since this issue is governed by the second sentence of {
678(a), it makes no difference which version is considered.