Sargent v. Town of Randolph Fire Dept. & Liberty Mutual Insurance
Annotate this Case
Sargent v. Town of Randolph Fire Dept. & Liberty Mutual Insurance (2006-179)
2007 VT 56
[Filed 14-Jun-2007]
ENTRY ORDER
2007 VT 56
SUPREME COURT DOCKET NO. 2006-179
MARCH TERM, 2007
Herbert Sargent } APPEALED FROM:
}
}
v. } Department of Labor
}
Town of Randolph Fire Department and }
Liberty Mutual Insurance }
} DOCKET NO. State File
No. L-01798;
Opinion No. 70-05 WC
In the above-entitled cause, the Clerk will enter:
¶ 1. Herbert Sargent appeals the Commissioner of Labor's denial of
attorney's fees and costs for proceedings before the Commissioner. Mr.
Sargent was unsuccessful in his claim for permanent total disability
benefits before the Commissioner, but he prevailed on that claim after a
jury trial in superior court. The employer paid attorney's fees and costs
for the superior court proceedings, and the superior court remanded the
case to the Commissioner for a consideration of fees and costs expended to
present the case to the Commissioner. The Commissioner denied attorney's
fees and costs, relying on 21 V.S.A. § 678. We hold that the Commissioner
erred in interpreting the worker's compensation statute. Therefore, we
reverse and remand the Commissioner's decision.
¶ 2. In 1997, claimant was injured on the job while volunteering
for the Town of Randolph Fire Department. As a result of the injuries, Mr.
Sargent sought permanent total disability benefits. At a hearing before
the Commissioner on April 4, 2002, claimant offered written medical
records, vocational rehabilitation records, and expert testimony from
doctors. The Commissioner denied permanent total disability benefits,
ordered vocational rehabilitation services to resume and granted claimant a
10% impairment rating for the spine injury and a 16% psychological
impairment rating. Claimant submitted a timely request for attorney's fees
and costs pursuant to Workers' Compensation Rule 10.4000. The request
included 382.8 hours of attorney time, 12.9 hours of paralegal time, and
$4,775.84 in costs incurred before the Department. The Commissioner denied
claimant's request for attorney's fees and costs because she found claimant
had not prevailed in his claim for permanent total disability benefits.
¶ 3. Claimant appealed to the Washington Superior Court in
November 2002 pursuant to 21 V.S.A. § 670. The certified questions for
retrial by the superior court were the same as the issues presented to the
Commissioner, specifically: "was Herbert Sargent permanently totally
disabled as a result of his work-related injury, and if Mr. Sargent was not
permanently totally disabled, what was the extent of his permanent partial
impairment as a result of his work-related injury?"
¶ 4. Following trial in superior court, the jury found that
claimant was entitled to permanent total disability benefits. In a
judgment order dated July 13, 2005, the trial court confirmed the jury's
verdict and ordered judgment against defendants in the amount of $40,000.00
for reasonable attorney's fees incurred for the trial.
¶ 5. Claimant then filed a motion before the Commissioner to
recover attorney's fees and costs originally incurred before the
Commissioner. Defendants opposed the motion, arguing that the request
should have been made in the appeal to the trial court, and more
importantly that claimant was not entitled to fees and costs because he had
not prevailed before the Commissioner. Defendants also argued that
claimant had advanced a different reason for his permanent total disability
at trial than he had in the hearing before the Commissioner. At trial
claimant called two new expert witnesses and did not call any of his
treating physicians. The Commissioner denied claimant's motion ruling that
"[b]ecause the claimant did not 'prevail' at this level, he is not entitled
to the fees incurred for the work performed here." The ruling did not
address whether the motion was timely made. Claimant appeals.
¶ 6. We first address the issue of timeliness. Defendants assert
that claimant's motion for attorney's fees was untimely because he did not
appeal the Commissioner's original denial of fees to the superior court.
Claimant contends that he could not raise the issue of attorney's fees in
the superior court because he had not yet prevailed. See 21 V.S.A. §
678(a), (b) (providing for award of attorney's fees if claimant prevails
before various tribunals).
¶ 7. This Court has recognized that "[a] number of federal and
state cases have held that a request [for attorney's fees] made after a
party prevails on appeal is timely." Fleury v. Kessel/Duff Constr., 156
Vt. 406, 411, 592 A.2d 904, 906 (1991) [hereinafter Felury III]. The
request here was made shortly after claimant prevailed in superior court on
his claim for permanent total disability. As is discussed herein, the
statutory scheme provides the appropriate process for seeking attorney's
fees and costs after claimant is successful in court. We hold that the
motion for attorney's fees after the superior court trial was timely.
¶ 8. Our review in workers' compensation cases is "limited to a
review of questions of law certified by the commissioner." 21 V.S.A. §
672. The Commissioner certified the following questions: "Did the
Department abuse its discretion in denying Claimant's request for attorney
fees for work performed at the administrative level? Is Claimant entitled
to costs incurred at the administrative level when he does not prevail at
that level but later prevails on his claim in Superior Court?" (FN1)
¶ 9. We afford substantial deference to the Commissioner in
reviewing the Commissioner's interpretation of the workers' compensation
statute. "Absent compelling indication of error, interpretation of a
statute by an administrative body responsible for its execution will be
sustained on appeal." Bedini v. Frost, 165 Vt. 167, 169, 678 A.2d 893, 894
(1996). Furthermore, "[w]e will not disturb a discretionary decision by an
administrative agency unless the decision demonstrates the agency abused
its discretion." Butler v. Huttig Bldg. Prods., 2003 VT 48, ¶ 9, 175 Vt.
323, 830 A.2d 44. However, "we will not affirm an interpretation that is
unjust or unreasonable." Clodgo v. Rentavision Inc., 166 Vt. 548, 550, 701 A.2d 1044, 1045 (1997). "We look to the whole statute, its effects and
consequences, and the reason and spirit of the law to determine whether the
Commissioner's interpretation conflicts with the Legislature's intent."
Id.
¶ 10. The statute that governs attorney's fees and costs in
workers' compensation cases reads in relevant part:
(a) 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
the claimant prevails. . . .
(b) In appeals to the superior or supreme courts, the claimant, if
he or she prevails, shall be entitled to reasonable attorney's
fees as approved by the court . . . .
21 V.S.A. § 678. The Commissioner interpreted subsection (a) to mean that
claimant could seek costs and fees only when the claimant prevails before
the Commissioner. Because claimant here did not prevail at the Department
level, but prevailed only in the superior court, the Commissioner denied
him attorney's fees and costs.
¶ 11. Defendants and the Commissioner rely on the second Fleury v.
Kessel/ Duff Const., opinion to support their position. 149 Vt. 360, 543
A2.d 703 (1988). In the relevant portion of that case, the claimant, who
had succeeded both before the Commissioner and on appeal in the superior
court, appealed the special master's report because it did not recommend an
award of attorney's fees for representation before the Commissioner. Id.
at 361, 543 A.2d at 703. We held that we could not "interpret subsection
(b) as allowing this Court to award attorney's fees for representation
before the Commissioner where the claimant has prevailed before the
Commissioner." Id. at 364-65, 543 A.2d at 706. The Court also noted,
"[w]e do not address, as not before us, the situation where the claimant
does not prevail before the Commissioner but wins on appeal." Id. at 365
n.3, 543 A.2d 706 n.3. Basically, we refrained from determining the
entitlement to, or amount of, attorney's fees to be awarded for legal work
before the Commissioner.
¶ 12. While the statute authorizes the superior court or
this Court to award attorney's fees to a successful claimant in a case
before it, 21 V.S.A. § 678(b), neither the statute nor our case law would
allow a court, on appeal, to determine a request for attorney's fees for
services rendered at the Department level. See Coleman v. United Parcel
Serv., 155 Vt. 646, 647, 582 A.2d 151, 153 (1990) (mem.). That does not
end the matter, however. Section 671 creates a specific mechanism for the
Commissioner to decide a motion for attorney's fees and costs upon a
claimant's successful appeal to the superior or supreme courts. 21 V.S.A.
§ 671.
¶ 13. Section 671 provides that, "upon completion of the case in
superior court, either after trial or upon remand from the supreme court,
the clerk shall certify the findings of the court to the commissioner who
shall thereupon make a new order in accordance therewith . . . . Such new
order shall have all the force and effect of an award made pursuant to the
provisions of sections 663, 664 and 665 of this title and shall supersede
the award previously made by such commissioner." Id. § 671. Thus, after
retrial or appeal, claimant's success in the superior court or in this
Court becomes success before the Commissioner. The Commissioner failed to
consider section 671 in denying claimant's request for costs and attorney's
fees.
¶ 14. We addressed a situation like the one presently before us in
Jackson v. True Temper, Corp., 156 Vt. 247, 590 A.2d 891 (1991). In that
case, the defendant prevailed before the Commissioner, and the claimant
appealed to the superior court. Id. at 248, 590 A.2d at 892. The claimant
prevailed in court, and the court awarded attorney's fees at the rate of
seventy-five dollars per hour for representation both before the
Commissioner and before the appellate court. Id. The defendant appealed
the award of attorney's fees, arguing that attorney's fees were capped at
thirty-five dollars per hour by a Department of Labor rule. Id. at 248-49,
590 A.2d 892. We held that the superior court was free under 21 V.S.A. §
678(b) to award attorney's fees at a reasonable hourly rate for work done
before the court. Id. at 249, 590 A.2d at 893. "Attorney's fees for the
work at the administrative level," however, "should be determined in the
first instance, by the Commissioner." Id. at 250, 590 A.2d at 893. We
remanded the case to the Commissioner to consider that portion of the award
under § 678(a). Id.
¶ 15. The Commissioner's decision on attorney's fees and costs must
be reversed. As Jackson indicates, § 678(a) does not prohibit the
Commissioner from awarding attorney's fees in cases where the claimant has
lost before the Commissioner but prevailed on appeal. Rather, the
statutory scheme, as shown in § 671, requires the Commissioner to treat the
claimant's success at trial or on appeal as success before the
Commissioner. Although the Commissioner's statement of the questions on
appeal suggest that she exercised discretion in declining to award
attorney's fees, it is clear from her decision that she exercised no
discretion and ruled that she could not award fees as a matter of law. The
Commissioner failed to appreciate that she had discretion to consider the
merits of Claimant's attorney's fees request for the work at the
administrative level. Claimant herein has prevailed and may seek
reasonable attorney's fees for work done at the Commissioner level.
Nevertheless, "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." Fleury III,
156 Vt. at 412, 592 A.2d at 906; see also Hodgeman v. Jard Co., 157 Vt.
461, 465, 599 A.2d 1371, 1373 (1991) (holding that award of reasonable
attorney's fees by Commissioner was not an abuse of discretion).
Accordingly we remand the request to the Commissioner for consideration on
the merits of the claim.
¶ 16. Unlike the discretion afforded the Commissioner regarding
attorney's fees, the statute mandates that the Commissioner award costs
where the claimant prevails: "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." 21 V.S.A §
678(a) (emphasis added). The distinction was made clear in Miller v. IBM,
163 Vt. 396, 400, 659 A.2d 1126, 1128 (1995), where we held that although
21 V.S.A. § 678(a) directs the Commissioner of Labor to award costs when
the claimant prevails, it provides only an authorization that the
Commissioner may award attorney's fees so that the Commissioner has
discretion under the section. The Commissioner erred in denying the
claimant costs, and that portion of the decision must be reversed.
The Commissioner's decision on costs is reversed and the Commissioner
is directed to award claimant necessary costs of the proceeding before the
Department. The attorney's fee portion of the case is remanded to the
Commissioner to consider whether attorney's fees should be awarded to the
claimant as the prevailing party.
BY THE COURT:
_________________________________________
Paul L. Reiber, Chief Justice
_________________________________________
John A. Dooley, Associate Justice
_________________________________________
Denise R. Johnson, Associate Justice
_________________________________________
Marilyn S. Skoglund, Associate Justice
_________________________________________
Brian L. Burgess, Associate Justice
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Footnotes
FN1. We omit certified question number one because our response to questions
number two and three makes it irrelevant.
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