Opinion
W.C. No. 4-712-019.
February 16, 2010.
FINAL ORDER
The claimant's attorney and the respondent both seek review of an order of Administrative Law Judge Krumreich (ALJ Krumreich) dated October 6, 2009, that imposed penalties on the claimant's attorney and determined that the respondent had not properly endorsed the issue of additional attorney fees. We affirm.
In a supplemental order dated February 19, 2009 ALJ Felter ordered the claimant's attorney to reimburse the respondent for its attorney fees. In an order dated June 3, 2009 we affirmed that order. Neither party appealed our order. The respondent filed an application for hearing requesting imposition of penalties for failure to comply with the February 19, 2009 supplemental order. The matter was heard before ALJ Krumreich who found the attorney fees were due in full as of June 24, 2009 and that the claimant's attorney was not in full compliance with the order awarding attorney fees until September 24, 2009. ALJ Krumreich directed the claimant's attorney to pay penalties in the amount of $7,225. The claimant's attorney appeals that part of the order.
At the hearing before ALJ Krumreich the respondent sought not only penalties for failure to obey ALJ Felter's supplemental order but also additional attorney fees incurred in its efforts to enforce ALJ Felter's supplemental order. ALJ Krumreich determined that the respondent had not properly endorsed the issue of additional attorney fees and the respondent was not allowed to proceed on that issue. The respondent appeals that part of the order.
I.
We note preliminarily that the respondent has argued that the claimant's attorney does not have standing to appeal. Citing Colorado Rule of Professional Conduct 3.7, the respondent argues that a lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness. Because the claimant's counsel testified at the hearing the respondent argues that he violated Rule 3.7. Therefore, the respondent contends the claimant's counsel lacks standing to act as both advocate and witness. We are not persuaded that the appeal filed by the claimant's counsel must be dismissed on the basis that an alleged violation of the Colorado Rule of Professional Conduct deprives him of standing to bring such an appeal.
The consequence of a violation of the Rules of Professional Conduct is that the lawyer is subject to discipline. See Rule of Professional Conduct 8.4. The respondent has not directed us to, nor are we aware of any Rule of Professional Conduct that would deprive the claimant's attorney of standing in an administrative proceeding because of an alleged violation of those Rules. Here it appears to us that the claimant's attorney has a sufficient personal stake in the outcome of the controversy to ensure concrete adversity on a sharply defined issue and therefore he has standing. We are not persuaded by the respondent's arguments to dismiss the appeal filed by the claimant's counsel.
The claimant's attorney makes several arguments in his brief in support of the petition to review. The claimant's attorney first contends that the order under review is the product of bias on the part of ALJ Krumreich. As evidence of this bias, the claimant's attorney cites ALJ Krumreich's conclusion that he engaged in "reprehensible conduct." The claimant's attorney contends that this finding is utterly false and baseless. The claimant's attorney further contends that this finding is wholly irrelevant and gratuitous. We disagree.
In Associated Business Products v. Industrial Claim Appeals Office, 126 P.3d 323 (Colo. App. 2005) the court, in reviewing an award of penalties for constitutional excessiveness noted that one of the facts used to determine the amount of the penalty was the reprehensibility of the conduct of the party against whom penalties were sought. Therefore, it appears to us that ALJ Krumreich properly considered the nature of the actions of the claimant's attorney in determining the amount of the penalty.
In our opinion, there is record support for ALJ Krumreich's determination that statements made by the claimant's attorney evidenced reprehensible conduct. ALJ Krumreich noted that in a handwritten notation on a check in payment of the balance of attorney fees the claimant's counsel stated that the payment was "due to Thomas's successful fraud!" Exhibit P. In addition, ALJ Krumreich noted another handwritten notation written by counsel for the claimant in response to an inquiry on compliance with ALJ Felter's supplemental order, which had awarded attorney fees. In this handwritten notation the claimant's counsel stated "Both you and your client are established notorious liars, cheats frauds." Exhibit Q. In our view, such evidence may be viewed as conduct on the part of the claimant's attorney relevant to the determination of the amount of the penalty. Associated Business Products v. Industrial Claim Appeals Office, supra.
Moreover, we presume an ALJ to be competent, impartial, and unbiased "until the contrary is shown." Wecker v. TBL Excavating, Inc. 908 P.2d 1186, 1189 (Colo. App. 1995). To establish that a court was biased, a party must show that the court had "a substantial bent of mind against him or her. Speculative statements and conclusions are insufficient to satisfy the burden of proof." People v. James, 40 P.3d 36, 44 (Colo. App. 2001).
We note that the claimant's attorney made similar allegation of bias against ALJ Felter at a point earlier in the litigation. See Rodriguez v. Safeway Stores Inc., W.C. No. 4-712-019 (June 03, 2009). We further note that the claimant's attorney did not move for recusal either before or during the hearing. Here, the claimant's attorney has merely presented speculative statements and conclusions. In our opinion, the claimant's attorney has not carried his burden to overcome the presumption of impartially.
The claimant's counsel next contends that ALJ Krumreich's order imposing penalties is inconsistent with Dworkin, Chambers Williams, P.C. v. Provo 81 P.3d 1053 (Colo. 2003). Counsel for the claimant has not stated how the present decision by the ALJ is in conflict with the rule of law announced in Dworkin, nor is it apparent to us that any conflict exists. In Dworkin, the court ruled that the penalty provision of the Workers' Compensation Act (Act) does not include a claim against an attorney who fraudulently or maliciously advises an insurer to violate a lawful order. In contrast, here, the issue was whether the respondent had demonstrated entitlement to penalties against the claimant's attorney for his failure to comply with ALJ Felter's supplemental order. We perceive no conflict between ALJ Krumreich's decision and Dworkin.
The claimant's attorney next contends that, although the order states that the respondent bore the burden of proof, ALJ Krumreich erred by shifting the burden of proof to him. In support of this contention, the claimant's attorney cites paragraphs 18 and 20 of the order. We disagree that ALJ Krumreich improperly shifted the burden of proof to the claimant's attorney.
In paragraph 18, ALJ Krumreich found that the claimant's attorney had failed to prove, by a preponderance of the evidence that he had an objectively reasonable basis for his failure to comply fully with the supplemental order. In our view this finding merely represents ALJ Krumreich's understanding of the often cited rule that the imposition of penalties under § 8-43-304(1) is a two-step process. Here ALJ Krumreich first determined that the disputed conduct constituted a violation of an order. Having found such a violation, ALJ Krumreich then considered whether the actions of the claimant's attorney were objectively unreasonable. We do not perceive reversible error in this procedure. See City Market, Inc. v. Industrial Claim Appeals Office, 68 P.3d 601 (Colo. App. 2003). Further, we read nothing in paragraph 18 that shifts the burden of proof to the claimant's attorney.
In paragraph 20, ALJ Krumreich noted that a claimant generally has the burden of proving entitlement to benefits, but the party requesting imposition of a penalty bears the burden of proof. In our view ALJ Krumreich correctly identified the burden a claimant generally bears under § 8-43-201 C.R.S. 2009. Further, in our opinion ALJ Krumreich correctly identified the burden of proof borne by the party requesting imposition of a penalty. Long v. DBF, LLC, W. C. No. 4-264-006 (June 5, 1997). Here ALJ Krumreich correctly determined that the respondent had the burden of proof to establish the right to any penalty. We read nothing in paragraph 20 that improperly shifts the burden of proof to the claimant's attorney.
The claimant's counsel next argues that there was no evidence of his ability to pay the amount due under the supplemental order. Because this issue is factual in nature, we must uphold the ALJ's resolution if supported by substantial evidence in the record. § 8-43-301(8), C.R.S. 2009. This standard of review requires us to view the evidence in the light most favorable to the prevailing party, and to defer to the ALJ's credibility determinations, resolution of conflicts in the evidence, and plausible inferences drawn from the record. Wilson v. Industrial Claim Appeals Office, 81 P.3d 1117 (Colo. App. 2003). The court of appeals has noted that in this context the scope of our review is "exceedingly narrow." Metro Moving Storage Co. v. Gussert, 914 P.2d 411, 415 (Colo. App. 1995).
Here ALJ Krumreich found that the claimant's attorney, during the relevant time period, received fees from client matters resulting in funds available in the firm account sufficient to pay the entire amount due under the supplemental order. In our view, the testimony of claimant's attorney provides substantial evidence to support the finding of fact made by ALJ Krumreich. Tr. at 27-30.
Finally, we have considered the other contentions of claimant's attorney, but conclude that they present us with no grounds upon which the order of ALJ Krumreich may be set aside.
II.
In its petition to review the respondent contends that ALJ Krumreich erred in his decision to strike the issue of "attorney fees." The respondent contends that it is entitled to collection for additional attorney fees incurred in enforcing the order of ALJ Felter, which awarded attorney fees. The respondent argues that it sufficiently raised this issue in its Application for Hearing. We are not persuaded that ALJ Krumreich committed reversible error in refusing to permit litigation of this issue at the hearing.
We note preliminarily on the issue of attorney fees, that the claimant's attorney has filed a motion for extension of time to file a Brief in Opposition of the Respondent's Petition to Review. The Office of Administrative Courts on November 30, 2009 sent out a Notice and Briefing Schedule. The respondent was given twenty days from the briefing schedule to file its brief and the claimant's counsel was given twenty days after the date of the certificate of mailing of the respondent's brief to file his brief in opposition. The respondent's brief has a certificate of mailing dated December 15, 2009. The brief of the claimant's attorney was due on January 4, 2010. The Motion for Extension of Time filed by the claimant's attorney has a certificate of mailing of January 12, 2010. We deny the request for an extension of time to file a reply brief.
In the respondent's application for hearing the issues listed were penalties for failure to abide by ALJ Felter's order and "Past due attorney fees; and current attorney fees." At the time of the hearing, the respondent stated that it not only sought penalties for failure to obey ALJ Felter's order but also sought additional attorney fees incurred in their efforts to enforce the order. The claimant's attorney objected to consideration of the request for additional attorney fees. ALJ Krumreich noted that in the respondent's application for hearing, there was no statutory citation or authority for the request for additional attorney fees and he was not persuaded that the respondent had provided sufficient notice in its pleading. Therefore, ALJ Krumreich determined that the matter would not be considered at the hearing.
At the hearing, ALJ Krumreich questioned the respondent's attorney regarding the lack of statutory authority listed for imposition of attorney fees contained in the application for hearing. The respondent argued that there was no statutory authority for it but rather case law held that when a person is initially assessed attorney fees and further action is needed to secure those attorney fees then additional attorney fees may be awarded. Tr. at 5-6. The respondent was presumably discussing general civil law principles, since we are unaware of any authority under the Act for the award of attorney fees pursuant to this civil doctrine.
The respondent cites Pagosa Lakes Property Owners Ass'n, Inc. v. Caywood 973 P.2d 698 (Colo. App. 1998) arguing that the issue of attorney fees need not be pled with specificity. The respondent contends that under Pagosa Lakes Property Owners Ass'n, Inc. v. Caywood it was not required to cite statutory authority for imposition of attorney fees. In our view, the respondent's reliance on the civil litigation case of Pagosa Lakes is misplaced.
The court held in Pagosa Lakes even if the issue of attorney fees had not been raised prior to judgment, a request for attorney fees should not be denied solely because it was first presented after judgment. The court noted that when an award of attorney fees is authorized by statute and based on the achievement of a successful result, and when the fees are for services rendered in connection with the litigation, a determination of the propriety of the award need not be made until after the litigation is complete, and the result known. In Pagosa Lakes, the court noted that there was a specific statue that required an award of attorney fees after successful litigation.
In contrast here the only relevant statute under the Act concerning the award of attorney fees provides as follows: "[i]f any person requests a hearing or files a notice to set a hearing on issues which are not ripe for adjudication at the time such request or filing is made, such person shall be assessed the reasonable attorney fees and costs of the opposing party in preparing for such hearing or setting." Section 8-43-211(1)(d), C.R.S. 2009. An issue is not "ripe for adjudication" if, under the statutory scheme, there is a legal impediment to its resolution. BCW Enterprises, Ltd. v. Industrial Claim Appeals Office, 964 P.2d 533 (Colo. App. 1997).
We are not aware of, and the respondent has not directed us to a provision under the Act authorizing imposition of attorney fees incurred by a party for enforcing a previously entered award. Because the Act contains no such provision, we are not at liberty to read such a provision into the statute. Kraus v. Artcraft Sign Co., 710 P.2d 480, 482 (Colo. 1985) ("We have uniformly held that a court should not read nonexistent provisions into the Colorado Workmen's Compensation Act.")
There is, of course, a provision under the Act for an award of penalties under § 8-43-304(1) against any person for violation of an order. That is what occurred here and ALJ Krumreich imposed such a sanction for the claimant's attorney's failure to comply with the supplemental order awarding attorney fees.
However, there are no grounds for entry of an award for attorney fees under § 8-43-211(1)(d). There is no argument that any issue raised at the hearing before Krumreich ALJ was not ripe for adjudication. Therefore, we see no purpose in remanding the matter to the ALJ for a proceeding on the issue of the respondent's entitlement to additional attorney fees.
Moreover, we are not persuaded to set aside ALJ Krumreich's ruling that there was insufficient notice of the issue of an award of additional attorney fees under a general principal of equitable law. See Nesbit v. Industrial Commission, 43 Colo. App. 398, 607 P.2d 1024 (1979) (due process requires notice of the issues and evidence which will be presented). Here although the respondent had listed past due attorney fees and current attorney fees, we are not persuaded that ALJ Krumreich erred in finding that such designation failed to provide sufficient notice of the unusual claim for relief that was pursued by the respondent. Here the respondent was not proceeding under a provision of the Act but rather under a doctrine imported from civil law. Further, any prejudice to the respondent was minimal because the ALJ only prohibited the respondent from trying that matter at the hearing then scheduled.
IT IS THEREFORE ORDERED that the ALJ's order dated October 6, 2009 is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ Curt Kriksciun
____________________________________ Thomas Schrant
ALICE RODRIGUEZ, FORT MORGAN, CO, (Claimant).
SAFEWAY STORES, INC., Attn: SUE POLYAKOVICS, DENVER, CO, (Employer).
RICHARD K. BLUNDELL, ESQ., C/O: GREELEY, CO, (For Claimant)
DOUGLAS THOMAS, ESQ., C/O: THOMAS, POLLART MILLER, LLC, GREENWOOD VILLAGE, CO, (For Respondents)
SAFEWAY, INC., Attn: SUE POLYAKOVICS, PHOENIX, AZ, (Other Party)