Opinion
C.A. No. 06A-05-003 (RBY).
Submitted: September 24, 2007.
Decided: December 12, 2007.
Upon Consideration of Appellant's Appeal of Decision of the Industrial Accident Board.
AFFIRMED.
Walt F. Schmittinger, Esq., Schmittinger Rodriguez, P.A., Dover, Delaware, attorney for Claimant Below-Appellant.
Michael R. Ippoliti, Esq., Wilmington, Delaware, attorney for Employer Below-Appellee.
OPINION AND ORDER
This is an appeal by the employee of a decision of the Industrial Accident Board (hereinafter "IAB"). The issue deals with the payment of attorneys' fees when the parties reach a voluntary settlement on the eve of the sched uled hearing. Pursuant to 19 Del. C. § 2320 (10), the Appellant is not entitled to any attorneys' fees, because no award from the Industrial Accident Board ("IAB") — the prerequisite for any contemplation of fees — was made. Accordingly, the IAB decision AFFIRMED.
Facts
The Claimant, Appellant here, was injured on August 23, 2005. He filed a Petition to Determine Compensation Due on October 20, 2005 with the IAB. On December 11, 2005, the employer, Appellee here, served Appellant with its First Request for Production. The following day, the Appellee served its Second Request for Production. On February 23, 2006 Appellee moved for an immediate Legal Hearing to Compel because the Appellant had not yet responded to either Request for Production, not completed the HIPPA form, not provided a file from the physician(s) and not provided medical records or bills. On March 3, 2006, the Appellant partially responded to the Requests for Production, providing two bills and a mileage reimbursement form. The hearing was scheduled for March 10, 2006.
The First Request sought medical records, medical bills and a HIPPA medical authorization form. The Second Request sought documentation pertaining to all medical expenses Appellant claimed were compensable.
Despite these difficulties, the parties reached a voluntary settlement regarding compensability on March 9, 2006, the day before the scheduled hearing. However, they could not agree on payment of attorneys' fees, even though the accepted settlement offer included a provision for the payment of attorneys' fees in the amount of 30% of the closed period of total disability. The IAB held a hearing solely on attorneys' fees on March 29, 2006. It determined that it was without authority to award fees to the employee because a voluntary settlement was not an "award" from the IAB within the meaning of the statute. The IAB went on to note the Appellant's flagrant disregard for the IAB rules, stating any attorneys' fees awarded would have been minimal had the IAB the authority to make such an award.
Appellee Ans. Br. at 5.
Standard of Review
The scope of review for an appeal of an IAB decision is very limited. It is restricted to examining the record for errors of law and determining whether substantial evidence is present on the record to support the Board's findings of fact and conclusions of law. Substantial evidence is defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. On appeal, the court does not weigh the evidence, determine questions of credibility, or make factual findings. The court is simply reviewing the case to determine if the evidence is legally sufficient to support the agency's factual findings.
M.A. Hartnett, Inc. v. Coleman, 226 A.2d 910 (Del. 1967).
When the issue raised on appeal from the IAB is exclusively a question of the proper application of the law, review by this Court is de novo. Absent an error of law, the standard of review for a determination of the amount to award in attorney's fees, based on those issues on which the claimant is successful, is abuse of discretion. This Court will not find that the IAB abused its discretion unless its decision has "exceeded the bounds of reason in view of the circumstances."
Duvall v. Charles Connell Roofing, 564 A.2d 1132 (Del. 1989).
Pugh v. Wal-Mart Stores, Inc. 2007 WL 1518970.
Lilly v. State, 649 A.2d 1055 (Del. 1994).
Appellant claims the IAB's decision was contrary to case precedent, making the decision an error of law. While the Appellant cites to the substantial evidence standard, the arguments in the body of the brief focus only on the alleged erro r of law. This Court will review the appeal de novo.
Discussion
Reasonable attorneys' fees are awarded to a claimant when the IAB makes an award after a formal hearing. The rationale behind this fee provision is twofold. First, injured employees should not be discouraged from pursuing merito rious claims against their employers solely due to the cost of litigation. Second, injured employees who receive an award should not have that award depleted by the payment of attorneys' fees. The overall spirit of the Workers' Compensation Act is to protect the employee. When the award of fees is appr opriate, the IAB has discretion in deciding the amount to award. Up to "30 percent of the award or 10 times the average weekly wage in Delaware," is statutorily permitted; though, as noted in the IAB decision, because of the Appellant's prior actions, no such amount would have been considered, in any event.
AB Rule 23, Kelly v. J J Corp., 447 A.2d 427 (Del. 1982), Anderson v. Wheeler, 267 A.2d 616 (Del.Super.Ct. 1970).
Lattis v. Blackwell and Son, Inc., 608 A.2d 728 (Del. 1992).
However, no attorneys' fees will be paid when the parties reach a voluntary settlement. The Appellant argues that the current 30 Day Rule allows the Court to overlook the rule stated in Anderson. However, this argument is misplaced. The 30 Day Rule applies when a settlement offer is made and rejected, allowing the case to proceed to a hearing. It specifically says:
Anderson, 267 A.2d 616.
In the event an offer to settle an issue pending before the Industrial Accident Board is communicated to the claimant or the claimant's attorney, in writing, at least 30 days prior to the trial date established by the Board on such issue and the offer thus communicated is equal to or greater than the amount ultimately awarded by the Board at the trial on that issue, the provisions of paragraph a. of this subdivision shall have no application. (Emphasis added)
Id.
This rule, on its face, does not apply to accepted settlement offers. Accepted settlement offers are voluntary agreements and, thus, no attorneys' fees were appropriate when the IAB held the Legal Hearing at issue.
The Appellant attempts to classify the settlement as an award by citing Willingham v. Kral Music, Inc. In Willingham, the Court stated that an award entitling a claimant to attorneys' fees need not be a monetary benefit. This holding is, likewise, clearly distinguishable from the case at hand because, in Willingham, the employer filed a petition to terminate the claimant's disability benefits. The employer later unilaterally withdrew the petition after the claimant's attorney had put significant time into the case. The Court recognized the benefit the claimant received because her benefits were no longer in jeopardy once the petition was withdrawn. Willingham was not an agreement of settlement. Here, the parties negotiated and jointly reached a settlement agreement where additional attorneys' fees were specifically not agreed to. While the Appellant certainly received a benefit from the settlement, Delaware law is clear that attorneys' fees are not issued by the IAB when the parties reach a voluntary settlement.
505 A.2d 34 (Del.Super.Ct. 1985)
Id.
Anderson, 267 A.2d 616.
The Appellant, however, further argues that a potential discovery violation is insufficient grounds to deny attorneys' fees, because it is not a factor in General Motors v. Cox. This argument is not applicable, since the IAB was correct in its determination that it was without authority to award attorneys' fees. The factors listed in Cox apply to the IAB's decision-making process with regard to theamount of fees to award, rather than whether fees are appropriate as a threshold issue.
304 A.2d 55 (Del. 1973).
Appellant would claim that such a "mechanical" application of this legal position leaves the employee to suffer in the presence of imprudent decisions by the attorn ey. That is not the case. A settlement, of course, is not thrust upon an employee. Rather, the employee agrees to it only when the employee elects. One would presume that the employee's counsel — also voluntarily selected by the employee — would discuss with the employee the actual amount to be received (out of any amount shown as a settlement figure) by the employee. Indeed, presumably the counsel would describe the benefits and short comings of entering into a settlement at all: the amount actually obtained after settlement might be better than or worse than an ultimate award. On that, or similar, thinking, the settlement is agreed to by the employee with eyes wide open. That would suggest the wisdom of the workings of 19 Del. C.. § 2320 (10). Any alternative approach could be utilized to provide the potential of double recovery.
At any rate, the IAB should not be put in a position of trying to determine what arrangements went on in discussions between counsel and client. Accordingly, the decision of the Board is AFFIRMED. SO ORDERED.