VINCENT BAKER AND EDMOND COLLETT v. LESLIE HAULERS, INC.; ROBERT L. WHITTAKER, DIRECTOR OF SPECIAL FUND; HON. VONNELL C. TINGLE, ARBITRATOR; HON. SHEILA C. LOWTHER, CHIEF ADMINISTRATIVE LAW JUDGE; AND WORKERS' COMPENSATION BOARD
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RENDERED: June 22, 2001; 10:00 a.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1999-CA-002438-WC
VINCENT BAKER AND EDMOND COLLETT
v.
APPELLANTS
PETITION FOR REVIEW OF A DECISION
OF THE WORKERS' COMPENSATION BOARD
ACTION NO. WC-95-26098
LESLIE HAULERS, INC.; ROBERT L.
WHITTAKER, DIRECTOR OF SPECIAL FUND;
HON. VONNELL C. TINGLE, ARBITRATOR;
HON. SHEILA C. LOWTHER, CHIEF ADMINISTRATIVE
LAW JUDGE; AND WORKERS’ COMPENSATION BOARD
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
BUCKINGHAM, JOHNSON AND TACKETT, JUDGES.
JOHNSON, JUDGE: Vincent Baker and his attorney, Edward Collett,
filed a petition for review of an opinion rendered by the
Workers’ Compensation Board on September 10, 1999.
Having
concluded that the December 12, 1996, amendment to KRS
342.320(2)(a), which limits the maximum attorney’s fee for
representing an injured worker before an arbitrator to $2,000.00,
was properly applied to Baker’s claim which arose before the
amendment’s effective date; and having concluded that the statute
is constitutional, we affirm.
Baker suffered a work-related injury on June 11, 1995.
On December 12, 1996, at the culmination of a special session of
the Kentucky General Assembly, a major revision to the Workers’
Compensation Act became effective.
On July 9, 1998, Baker
contracted with Collett for Collett to represent him concerning
his workers’ compensation claim.
Baker’s application for
adjustment of injury was filed on September 21, 1998.
The
Arbitrator issued a decision on March 11, 1999, which found Baker
to be totally and permanently disabled as a result of his work
injury.
The Arbitrator denied Collett’s request for an
attorney’s fee award of $15,000.00 to be apportioned $7,500.00 to
the employer and $7,500.00 to the Special Fund.
Instead, the
Arbitrator awarded Collett an attorney’s fee of $2,000.00, in
accordance with the statutory cap on attorney’s fees provided for
in the 1996 version of KRS 342.320.
Baker and Collett requested
a de novo review by an Administrative Law Judge of this award;
and Chief Administrative Law Judge Sheila C. Lowther affirmed the
award on June 17, 1999.
Baker and Collett appealed the ALJ’s
decision to the Board, which also affirmed on September 10, 1999.
This appeal followed.
On the date of Baker’s injury, KRS 342.320(1) provided
for a maximum attorney’s fee of $15,000.00 to the claimant’s
attorney, with the attorney’s fee being based upon the amount of
the award and factors such as the nature and complexity of the
services rendered.
The statutes provided that the date of the
worker’s injury or last exposure controlled the maximum
attorney’s fee, except that the maximum attorney’s fee for a
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working miner’s claim pursuant to KRS 342.732(1)(a) was
controlled by the date of the claim.
The statutory scheme placed
no limit on the maximum attorney’s fee which could be paid to an
employer’s attorney.
As amended effective December 12, 1996, KRS 342.320
provided, in pertinent part, as follows:
(2)
Attorney’s fees for services under
this chapter on behalf of an
employee shall be subject to the
following maximum limits:
(a)
Twenty percent (20%) of the
award not to exceed two
thousand dollars ($2,000) for
services performed up to and
including the date of a
written determination by the
arbitrator. This fee shall be
paid by the employee from the
proceeds of the award or
settlement.
. . . .
(d)
(3)
Attorney-client employment
contracts entered into and
signed prior to December 12,
1996, for injuries or date of
last exposure occurring prior
to December 12, 1996, shall
not be subject to the
conditions of paragraph (a),
(b), and (c) of this
subsection, and the law
existing at the date of the
injury or last exposure to the
hazards of an occupational
disease shall apply.
In approving an allowance of
attorney’s fees, the administrative
law judge or arbitrator shall
consider the extent, complexity,
and quality of services rendered,
and in the case of death, the
Remarriage Tables of the Dutch
Royal Insurance Institute. An
attorney’s fee may be denied or
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reduced upon proof of solicitation
by the attorney. However, this
provision shall not be construed to
preclude advertising in conformity
with the standards prescribed by
the Kentucky Supreme Court. The
date of injury or last exposure
shall control the applicable
maximum attorney’s fee.
(4)
No attorney’s fee in any case
involving benefits under this
chapter shall be paid until the fee
is approved by the arbitrator or
administrative law judge, and any
contract for the payment of
attorney’s fees otherwise than as
provided in this section shall be
void.
. . . .
(8)
Attorney’s fees for representing
employers in proceedings under this
chapter pursuant to contract with
the employer shall be subject to
approval of the administrative law
judge or arbitrator in the same
manner as prescribed for attorney
representation of employees.
Employer attorney’s fees are
subject to the same limitations as
to maximum fees at each level
except that fees for representation
before administrative law judges
shall not exceed ten thousand
dollars ($10,000) and fees for
representation before arbitrators
shall not exceed two thousand
dollars ($2,000). Fees for
representing employers shall not be
dependent upon the result achieved.
As enacted effective December 12, 1996, KRS 342.0015
stated, in pertinent part, as follows:
Procedural provisions of [the 1996 Act],
shall apply to all claims irrespective of the
date of injury or last exposure, including,
but not exclusively, the mechanisms by which
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claims are decided . . . . The provisions of
KRS . . . 342.320 . . . are remedial.1
Baker and Collett make a wide-ranging constitutional
argument that KRS 342.320 is arbitrary and capricious, but they
fail to cite any particular section of the Constitution which has
been violated.
They claim in their brief that KRS 342.320 (a)
“deprives injured workers access to attorneys because of the
diminution of attorney’s fees and allows non-attorneys to
represent injured workers with no constraints upon the fees that
they may charge the claimant in that the statute refers only to
‘attorney fees’”; (b) the cap should be considered substantive
and not procedural; and (c) the cap “violates the attorney’s
right to contract without due process and in this instance,
required [Collett] to handle and process a claim, a portion of
which he was denied compensation for; denying [Collett] the
discretion as to whether he wished to provide a portion of his
services on a pro bono basis.”
Having concluded that the statute
is constitutional, we affirm the award of an attorney’s fee of
$2,000.00.
In support of their argument that KRS 342.230 “deprives
injured workers access to attorneys because of the diminution of
attorney’s fees and allows non-attorneys to represent injured
workers with no constraints upon the fees that they may charge
the claimant in that the statute refers only to “attorney fees,”
1
In the 2000 legislative session, House Bill 992 was
enacted. It eliminated the arbitrator level of adjudication and
authorized an attorney’s fee of up to $12,000.00 for
representation before an ALJ. Thus, the $2,000.00 limitation
which is presently at issue only applied from December 12, 1996,
until July 14, 2000, the effective date of the 2000 amendments.
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Baker and Collett argue that “[w]hen this [$2,000.00] cap was
considered by [the] Legislature . . . it was taken into
consideration that the proposed amendments to the Act would take
into account the fact that the Special Fund would be eliminated
from claims in the future as prior non-disabling conditions
brought into disabling reality by an injury would no longer be
considered in the disability process.”
They argue that since the
Special Fund was a defendant in this case, Collett’s
representation included obtaining a settlement from the Special
Fund, whereby Collett’s representation became involuntarily, pro
bono representation.
As our Supreme Court observed in the recent case of
Daub v. Baker Concrete,2 which addressed the constitutionality of
the 1996 amendments to KRS 342.320(2)(a):
Workers’ compensation is a legislative, not a
common law remedy. The legislature has set
limits on the type and amount of benefits
which a worker may receive and, likewise, has
set limits on the amount of the attorney’s
fee which the worker will be required to pay.
Participation in the legislative remedy
offered by the Workers’ Compensation Act is
voluntary, and those workers who choose to
pursue that remedy must come within the
provisions of the Act. . . . We are not
persuaded that KRS 342.320 represents an
unconstitutional interference in the
attorney-client relationship with regard to a
workers’ compensation claim.”3
When enacting the amendments in 1996 to the provisions
authorizing attorney’s fees, the Legislature recognized that
there would be old Act claims that would be governed under the
2
Ky., 25 S.W.3d 124 (2000).
3
Id. at 128.
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new procedures codified by the amended KRS 342.320.
The
Legislature specifically addressed these situations by enacting
KRS 342.320(2)(d), which allows the former attorney’s fee
provisions to apply to those representation contracts entered
into before December 12, 1996.
The representation contract
entered into on July 9, 1998, between Baker and Collett simply
does not come within the saving provision of KRS 342.320(2)(d).
The Supreme Court in Daub emphasized the necessity for a claimant
to come within the provisions of the Act in order to benefit from
its remedies.
Certainly, the fact that the representation
contract between Baker and Collett did not meet the requirement
necessary to come under KRS 342.320(2)(d) does not render that
section of the statute unconstitutional.
Baker and Collett next argue that the $2,000.00
attorney’s fee cap should be considered substantive law and not
procedural law; and that “[t]he date of the injury should control
instead of the date of the contractual agreement as per all the
previous decisions on attorney fees.”
However, the Supreme Court
in Daub characterized the changes in KRS 342.320 as procedural,
when it stated “the procedural changes which were enacted in 1996
were an apparent attempt to expedite the resolution of workers’
compensation claims. . .” [emphasis added].4
Furthermore, even
if this Court were convinced that the changes should be
considered substantive in nature, there was no violation of
Baker’s and Collett’s substantive due process rights.
To show
that their substantive due process rights were violated by this
4
Daub, supra at 127.
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Legislative enactment, which does not involve a fundamental
right, Baker and Collett must establish that the statute is
“clearly arbitrary and unreasonable, having no substantial
relation to the public health, safety, morals, or general
welfare.”5
Baker and Collett have failed to identify any rights,
fundamental or otherwise, which KRS 342.320 violates; and our
Supreme Court in Daub held the statute to not be clearly
arbitrary or unreasonable.
The Daub Court declared that the
statute was rationally related to the objective of “expedit[ing]
the resolution of workers’ compensation claims.”6
Baker and Collett in their final argument claim the
$2,000.00 attorney’s fee cap “violates the attorney’s right to
contract without due process and in this instance, required
[Collett] to handle and process a claim, a portion of which he
was denied compensation for; denying [Collett] the discretion as
to whether he wished to provide a portion of his services on a
pro bono basis.”
this issue.
We, once again, find Daub to be dispositive of
In Daub and in case sub judice, the representation
contract between the claimant and his attorney were entered into
after the amendments to the attorney’s fee scheme was enacted by
the Legislature on December 12, 1996.
As the Supreme Court
pointed out in Daub:
5
Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 395,
47 S.Ct. 114, 121, 71 L.Ed. 303 (1926)(citing Cusack Co. v. City
of Chicago, 242 U.S. 526, 530-31, 37 S.Ct. 190, 192, 61 L.Ed. 472
(1917); Jacobson v. Mass, 197 U.S. 11, 30-31, 25 S.Ct. 358, 49
L.Ed. 643 (1905)).
6
Daub, supra.
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The attorney asserts that he had a vested
right to be compensated at the rate on the
date of injury, as provided in the 1994 Act;
however, he does not explain how that right
vested before December 12, 1996, when the
representation was not undertaken until
months later. Likewise, he does not explain
how the amendment could impair a contract
which did not exist until after the amendment
was enacted.7
Similarly, Baker and Collett have failed to explain how a right
to an attorney’s fee award provided for prior to December 12,
1996, could have vested in a representation contract which did
not come into existence until 1998, nor do they explain how the
amended Act impairs a contract which did not exist until after
the amendment was enacted.
Having concluded that KRS 342.320 (2)(a) is
constitutional, the opinion of the Board awarding an attorney’s
fee of $2,000.00 is affirmed.
ALL CONCUR.
BRIEF FOR APPELLANTS:
BRIEF FOR APPELLEE, SPECIAL
FUND:
Edmond Collett
Hyden, KY
David R. Allen
Frankfort, KY
BRIEF FOR APPELLEE, LESLIE
HAULERS, INC.:
No brief filed
.
7
Id. at 129.
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