Opinion
C.A. No. 02A-02-004 WLW.
Submitted: November 13, 2002.
Decided: February 3, 2003.
Upon Appeal of the Decision of the Industrial Accident Board.
Reversed and Remanded.
Walt F. Schmittinger, Esquire of Schmittinger and Rodriguez, P.A., Dover, Delaware, attorneys for the Claimant Below-Appellant.
J. R. Julian, Esquire of J. R. Julian, P.A., Wilmington, Delaware, attorneys for the Employer Below-Appellee.
ORDER
I. Introduction
Before this Court is a limited appeal from the decision of the Industrial Accident Board (IAB) taken by Sylvia Roland, Claimant Below-Appellant (Roland or Appellant). Roland's appeal is limited to the IAB's determination of attorney's fees. After reviewing the parties' submissions and the transcript from the proceeding before the IAB, this Court determines the IAB abused its discretion when it awarded attorney's fees in this case because it failed to adequately analyze each of the Cox factors. Therefore, the order of the IAB is reversed and this case is remanded.
II. Background
The underlying facts of this case are fairly straight forward. On August 29, 2000, Roland injured her knee while working for Playtex Products, Inc (Playtex), the Employer Below-Appellee. On July 2, 2001, Playtex filed a Petition to Terminate Total Disability. The next day, July 3, 2001, Roland filed a Petition to Determine Additional Compensation Due because she was seeking payment for her knee surgery. Less then one week prior to the hearing before the IAB, the parties stipulated to the termination of Roland's benefits. According to Playtex, prior to the hearing the majority of the communication between counsel addressed the issues presented by the Petition to Terminate.
In support of this contention Playtex, in its Answering Brief, points to a variety of correspondences and actions of Roland's counsel all in preparation of defending against the termination of benefits including: (1) a letter written by counsel for Roland enclosing Roland's "most recent look for work efforts" for 19 different dates; (2) Roland's counsel sending out several subpoenas to employers listed on the Labor Market Survey prepared on behalf of Playtex's Petition to terminate benefits; and (3) Roland's counsel sent letters to employers listed on the Labor Market Survey to check the manner in which the survey was conducted.
A hearing was held before the IAB on January 28, 2002 to decide the Petition to Determine Additional Compensation. After hearing the testimony, on February 7, 2002, the IAB awarded Roland medical expenses in the amount of $20,813.63. In addition, the IAB made a limited ancillary award of attorney's fees. It is the latter decision that is the subject of Roland's appeal before this Court.
The IAB granted attorney's fees pursuant to Delaware Code Annotated Title 19, § 2320(10). The amount of the award was $2,500. The IAB's findings with respect to this issue are set forth below in its entirety:
Claimant's attorney attested that he spent twenty-two hours preparing for the hearing, which lasted approximately one and a half-hours.
Playtex counsel argued that those hours are excessive for this hearing and probably included preparation for the termination issue, which was not litigated. Claimant's initial contact with her was January 17, 2001.
Claimant's attorney has been practicing law in Delaware for over thirty years. Based on these factors, and on the results obtained, the Board awards one attorney's fee in the amount of $2,500.00.
Sylvia Roland v. Playtex Products, Inc., IAB Hearing No. 1176757, 8-9 (February 7, 2002).
On February 13, 2002, Roland filed this limited appeal from the IAB's decision challenging the amount of attorney's fees awarded. On March 11, 2002, Playtex's counsel mailed a check in the amount of $2,500.00 to Roland's counsel, reflecting the Board's award of attorney's fees. This check was negotiated on March 14, 2002.
III. Analysis
A. Standard of Review
The scope of review for appeal of an IAB decision is limited to examining the record for errors of law and determining whether substantial evidence is present on the record to support the IAB'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." This Court, when sitting as an appellate court, does not weigh the evidence, determine questions of credibility, or make its own factual findings. This Court simply determines if the evidence is legally adequate to support the agency's factual findings. This Court must give "due account of experience and specialized competence of the agency and of the purposes of the basic law under which the agency acted." Specifically, the standard of review for the IAB's 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."
Histed v. E. I. Dupont de Nemours Co., 621 A.2d 340, 342 (Del. 1993); Willis v. Plastic Materials, 2003 Del. Super. LEXIS 9 (Del.Super.Ct. 2003); Robinson v. Metal Masters, Inc., 2000 Del. Super. Lexis 264 (Del.Super.Ct. 2000).
Olney v. Cooch, 425 A.2d 610, 614 (Del. 1981).
Johnson v. Chrysler Corp., 213 A.2d 64, 66 (Del. 1965).
DEL. CODE. ANN. tit. 29, § 10142(d) (1997); see also Willis, 2003 Del. Super. LEXIS at *2.; ILC of Dover, Inc. v. Kelley, 1999 Del. Super. LEXIS 573, at *3 Del. Super. Ct. 1999).
DEL. CODE. ANN. tit. 29, § 10142(d); see also Histed, 621 A.2d at 342.
Darnell v. BOC Group, Inc., 2001 Del. Super. LEXIS 283, *28-*29 (Del.Super.Ct. 2001), aff'd, 792 A.2d 188 (Del. 2002).
Willis, 2003 Del. Super. LEXIS at *2-*3.
B. Law Governing IAB's Award of Attorney's Fees
According to Title 19 of the Delaware Code Annotated § 2320 (10) "A reasonable attorney's fee in an amount not to exceed 30 percent of the award or 10 times the average weekly wage in Delaware . . . whichever is smaller, shall be allowed by the Board to any employee awarded compensation." According to the language of the statute, a claimant who receives a compensation award has a statutory right to an award of reasonable attorney's fees. The IAB does have discretion in determining the amount of attorney's fees it awards, provided it acts in a manner consistent with the purpose of the Worker's Compensation Act. In General Motors Corp. v. Cox, the Delaware Supreme Court developed a list of ten factors that the IAB must consider in deciding what amount of attorney's fees is reasonable. The Cox factors are as follows:
Id.
Robinson, 2000 Del. Super. LEXIS at *7.
General Motors Corporation v. Cox, 304 A.2d 55, 57 (Del. 1973).
(1) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) The fees customarily charged in the locality for similar legal services;
(4) The amount involved and the results obtained;
(5) The time limitations imposed by the client or by the circumstances;
(6) The nature and length of the professional relationship with the client;
(7) The experience, reputation, and ability of the lawyer or lawyers performing the services;
(8) Whether the fee is fixed or contingent;
(9) The employer's ability to pay;
(10) Whether the attorney for the claimant received or expects to receive compensation from any other source.
Id. and Pollard v. The Placers, Inc., 1996 Del. Super. LEXIS 327 (Del.Super.Ct. 1996).
All of the factors must be considered to make an appropriate determination of attorney's fees, and to provide the Court with sufficient information on appeal to make an informed decision. Failure to consider all the factors is abuse of discretion. Furthermore, although the attorney's fees awarded must be reasonable in relation to the benefit to the client, the fee is not dependent on the amount of the award.
Willis, 2003 Del. Super. LEXIS at *5 (citing Robinson, 2000 Del. Super. LEXIS 264).
Vaughn v. Genesis, 2000 Del. Super. LEXIS 253, *5 (Del.Super.Ct. 2000).
C. Analysis of Appellant's Appeal
1) Did the IAB Abuse its Discretion when it Entered the Award for Attorney's Fees in this Case?
As set forth above, the IAB's findings with respect to attorney's fees is set forth in a single paragraph. In its decision the IAB did not analyze each of the Cox factors as is required in cases where attorney's fees are being awarded. In its findings the IAB only touches upon the first, fourth, sixth, and seventh factors, and then only in a summary fashion. There does not seem to be an analysis or weighing of the Cox factors that the IAB does mention. Its findings mention factors in a cursory way without tying them to the Cox factors. This Court has no way of knowing how the IAB utilized these factors in awarding the attorney's fees. Furthermore, it does not appear that the second, third, fifth, eighth, ninth or tenth factors were considered by the IAB at all. "This Court cannot exercise its function on appeal if the Board does not make an adequate finding concerning each Cox factor." Failure to consider all of the Cox factors is an abuse of discretion, and has lead the court to reverse the IAB's decision concerning attorney's fees in several recent cases. Playtex, in its answering brief, gives a detailed analysis of how the Cox factors could have been analyzed in this case; however, this analysis can not substitute for a careful analysis of each factor by the IAB on the record. It would have been helpful to this Court if the IAB directly referred to each Cox factor, citing the factor and the findings for this Court to review if necessary.
See supra II. of this Opinion.
Willis, 2003 Del. Super. LEXIS at *5.
See, e.g., Willis, 2003 Del. Super. LEXIS at *5-*6; Taylor v. Walton Corp., 2002 Del. Super. LEXIS 63 (Del.Super.Ct. 2002); Woodall v. Playtex Products, Inc., 2002 Del. Super. LEXIS 422 (Del.Super.Ct. 2002; Thomason v. Temp Control, 2002 Del. Super. LEXIS 422 (Del.Super.Ct. 2002); Robinson, 2000 Del. Super. LEXIS 264; Vaughn, 2000 Del. Super. LEXIS 253 (Del.Super.Ct. 2000).
Roland additionally argues that a higher fee in this case is warranted because of the intent of the Legislature in enacting the statutory provision for attorney's fees. It is established that the purpose of an award of attorney's fees is to reduce or eliminate the necessity of a claimant having to use a portion of his or her award for payment of counsel. Based on this, counsel for Roland implicitly argues that the fees in this case should have been 30% of the award. However, this Court rejects that the fees necessarily should be 30% of the award because it is clear from the language of § 2320 that the 30% figure is a ceiling for how much the IAB may award. It in no way states that this percentage is how much the IAB should award. The IAB should analyze each of the Cox factors in order to determine the appropriate amount of attorney's fees not merely give 30% of the compensation award.
Woodall v. Playtex Products, Inc., 2002 Del. Super. LEXIS 425 (Del.Super.Ct. 2002).
In the opening brief counsel for Roland made statements such as-"The appeal is confined to the issue of the Board's award of an attorney's fee limited to $2,500 rather than 30% of the award, as described by statute;" and that the fees given in this case represent 12% of the benefits recovered which "represents less than half of the 30% that the Legislature has determined is an appropriate fee."
Based on the lack of analysis under each of the Cox factors in the present case, this Court finds that the IAB's award of attorney's fees in this case constituted an abuse of discretion.
2) Can Playtex Properly Assert the Defense of Accord and Satisfaction in the Case?
Playtex argues that by negotiating the check for attorney's fees, Roland is estopped from asserting an appeal regarding attorney's fees under the doctrine of accord and satisfaction. The elements of an accord and satisfaction are as follows: (1) a bona fide dispute exists as to an amount owed based on mutual good faith; (2) the debtor tenders an amount to the creditor with the intent that payment would be in total satisfaction of the debt; and (3) the creditor agrees to accept the payment in full satisfaction of the debt. The burden of proving an accord and satisfaction is upon the party claiming it, and each element of accord and satisfaction must be proven before this Court will apply the affirmative defense. Furthermore, the Supreme Court has determined that:
Acierno v. Worthy Bros. Pipeline Corp., 693 A.2d 1066, 1068 (Del. 1997); see also Woodall, 2002 Del. Super. LEXIS at *6-*7; Kelley v. ILC Dover, Inc., 787 A.2d 751, 755 (Del. 2001), aff'd, 784 A.2d 1080, 2001 Del. LEXIS 396 (Del. 2001).
Acierno, 693 A.2d at 1068-1069.
An accord and satisfaction is a bilateral contract. An overt manifestation of assent, not a subjective intent, controls the formation of a contract. The unexpressed subjective intention of a party is therefore not relevant. A Court should consider only a creditor's objective manifestation, not his subjective intent, when a check is negotiated that was offered as payment in full.
Id. at 1070.
This Court has expressed doubts concerning the availability of this defense in cases such as the case at bar. However, this Court does not need to address availability of this defense because the facts of this case do not support a finding of accord and satisfaction.
Woodall, 2002 Del. Super. LEXIS at *7; Kelley, 787 A.2d at 756. In Woodall the court was dealing with an appeal from an award of attorney's fees, very much like the case at bar, and the court in Woodall stated "It is questionable whether the doctrine of accord and satisfaction can apply to disputes over benefits arising from workman's compensation law."
In this case, Playtex sent counsel for Roland a check in the amount of $2,500 for attorney's fees, after Roland filed this appeal. The check was negotiated on March 14, 2002. Both parties agree that the first element of accord and satisfaction, that there be a bona fide dispute, has been satisfied given the present appeal. The Super. Ct. second element of accord and satisfaction requires that Playtex tendered the check to Roland's counsel with the intent that payment would be in total satisfaction of the debt. Playtex tendered a check to Roland's counsel along with a letter. In determining whether this element is met this Court can only look to the objective manifestation of intent because "the unexpressed subjective intention of a party is not relevant." In this case, Playtex did not indicate an objective intent that the tender of $2,500 was intended to be in total satisfaction of the debt in either the check or the letter presented to counsel for Roland. Therefore, Playtex failed to establish the second element of the affirmative defense of accord and satisfaction. Since Playtex has the burden of proving all elements of the defense, this Court need not address the final element. Consequently, Playtex failed to prove all elements of accord and satisfaction, thus the affirmative defense fails in this case.
Acierno, 693 A.2d at 1070.
The letter from Playtex's counsel to Roland's counsel states in relevant part: "I am enclosing the following: 1) Sedwig check number 00002559 in the amount of $2,500.00 payable to Schmittinger Rodriguez that represents the Board ordered attorney's fee." Playtex Products, Inc.'s Answering Brief on Appeal, Exhibit M.
IV. Conclusion
In conclusion, the IAB abused its discretion when it awarded attorney's fees in this case because it failed to adequately analyze each of the Cox factors. On remand the IAB should reassess the award of attorney's fees on the basis of all ten Cox factors. Roland must provide the IAB with sufficient information to enable it to do so. Furthermore, Playtex has not proven the defense of accord and satisfaction in this case. Therefore, the IAB's decision on attorney's fees is reversed and the matter is remanded for further proceedings consistent with this Order.
IT IS SO ORDERED.