Opinion
CLAIM NO. E107285
OPINION FILED JUNE 4, 1996
Upon review before the FULL COMMISSION in Little Rock, Pulaski County, Arkansas.
Claimant represented by the HONORABLE LAWRENCE FITTING, Attorney at Law, Fort Smith, Arkansas.
Respondents represented by the HONORABLE JAMES A. ARNOLD, II, Attorney at Law, Fort Smith, Arkansas.
Decision of Administrative Law Judge: Reversed.
OPINION AND ORDER
The respondents appeal an opinion and order filed by the administrative law judge on February 10, 1995. In that opinion and order, the administrative law judge found that the respondents inappropriately paid the claimant's portion of a lump sum attorney's fee from benefits owed to the claimant which had accrued prior to an order of the Full Commission became final. After considering this matter, we find that the administrative law judge's decision in this regard must be reversed.
The claimant sustained an admittedly compensable injury on April 26, 1991. The respondents paid temporary total disability compensation through June 6, 1992, and they accepted a permanent physical impairment rating of 51%. However, they controverted the claimant's entitlement to any permanent disability compensation in addition to this impairment rating. Therefore, a hearing was held on October 4, 1993, to consider the extent of the claimant's permanent disability, and, on October 21, 1993, the administrative law judge filed an opinion and order finding that the claimant was entitled to additional permanent disability compensation in an amount equaling 24% to the body as a whole. The administrative law judge's decision was appealed to the Full Commission, and, in an opinion and order filed May 24, 1994, we found that the claimant was permanently and totally disabled. No appeal was taken from that decision.
When the respondents began paying permanent partial disability compensation for the 51% impairment rating on June 6, 1992, the weekly compensation rate was reduced from the temporary total disability compensation rate to the permanent partial disability compensation rate. Thus, when the Full Commission found the claimant to be permanently and totally disabled on May 24, 1994, the claimant was entitled to a lump sum payment of benefits that had accrued representing the difference between these two rates for the period extending from June 6, 1992 through May 24, 1994. The accrued benefits owed to the claimant plus interest totalled $6325.74.
When the Full Commission's May 24, 1994, opinion and order became final, the claimant's attorney petitioned for a lump sum attorney's fee. The discounted attorney's fee totaled $12,060.38, so the claimant was responsible for paying $6030.19 of the fee, and, the respondents withheld this amount from the accrued benefits that were owed to the claimant to satisfy the claimant's obligation for attorney's fees. However, the claimant contends that the respondents should pay the claimant's portion of the lump sum attorney's fee and then recoup its expenditure from the weekly compensation paid to the claimant in the future.
We find no merit to the claimant's contention. Ark. Code Ann. § 11-9-716 (1987) provides the following:
The Workers' Compensation Commission is authorized to approve lump-sum attorney's fee for legal services rendered in respect of a claim before the commission. The lump-sum attorneys' fees are allowable notwithstanding that the award of compensation to the injured employee is to be paid on an installment basis. Lump-sum attorney's fees, if approved by the commission, shall be discounted at the rate provided in § 11-9-804, as that provision may be amended from time to time.
In Aluminum Company of America v. Neal, 4 Ark. App. 11, 626 S.W.2d 620 (1982), the Court found that the General Assembly enacted this section to remedy the problem of attorneys failing to receive full payment for their services to a workers' compensation claimant or beneficiary, where the attorney received his compensation installments on the same schedule that benefits were paid to the recipient but where the claimant or beneficiary dies or remarried prior to the attorney's receipt of the total fees awarded to him.
Apparently, neither the Courts nor the Commission have previously considered whether the claimant's portion of the attorneys' fee can be paid from compensation that accrued prior to a final award of compensation. However, Ark. Code Ann. § 11-9-715 (1987) provides that the claimant's portion of the fees are to be "by the injured employee or dependents of a deceased employee out of compensation payable to them." [Emphasis added]. Notably, the fees are allowed only on the amount of compensation controverted and awarded, so, in most cases where indemnity compensation is awarded, there will be accrued benefits which will be payable to the claimant when the order becomes final. However, nothing in the language of this statute or elsewhere in the Arkansas Workers' Compensation Law limits the payment of compensation payable to the claimant subsequent to the award. Therefore, we find that the claimant's portion of a lump sum attorney's fee can be paid out of compensation payable to the claimant which accrued prior to the time that the compensation award became final.
Accordingly, we find that the respondents appropriately withheld the claimant's portion of the lump sum attorney's fee from compensation payable to the claimant that accrued before the compensation award became final. Therefore, we find that the administrative law judge's decision with regard to this issue must be, and hereby is, reversed.
IT IS SO ORDERED.
DISSENTING OPINION
I must respectfully dissent. I believe it is improper to deduct claimant's entire share of the lump sum attorney's fees from accrued benefits. Claimant's share of the attorney's fees based on accrued benefits should be withheld from these particular benefits in proportion to the amount of attorney's fees which would be due if no lump sum of future attorney's fees had been contemplated. Then, the amount of lump sum attorney's fees attributable to future compensation can be discounted and paid directly to claimant's attorney by respondent, with an appropriate deduction from claimant's future compensation checks until the advance by respondent is recouped.
PAT WEST HUMPHREY, Commissioner