Pierson v. City of Topeka

No. 117,987
IN THE COURT OF APPEALS OF THE STATE OF KANSAS
DAMON L. PIERSON,
Appellee,
v.
CITY OF TOPEKA,
Appellant.
SYLLABUS BY THE COURT
1.
Under K.S.A. 77-607(b)(2), nonfinal agency action is "the whole or a part of an
agency determination, investigation, proceeding, hearing, conference or other process
that the agency intends or is reasonably believed to intend to be preliminary, preparatory,
procedural or intermediate with regard to subsequent agency action of that agency or
another agency."
2.
A remand by the Workers Compensation Board to the administrative law judge on
the extent of preaward medical expenses is a nonfinal agency action.
3.
Final agency action under K.S.A. 77-607(b)(1) "means the whole or part of any
agency action other than nonfinal agency action."
4.
The law of the case doctrine prevents relitigation of the same issues within
successive stages of the same lawsuit.
1
5.
To recover penalties for failing to pay compensation awarded in a workers
compensation case, the demand for benefits not paid must set forth with particularity the
items of disability and medical compensation claimed to be unpaid and past due.
6.
K.S.A. 2017 Supp. 44-536(g) authorizes an award for attorney fees "on the basis
of the reasonable and customary charges in the locality for such services and not on a
contingent fee basis."
7.
An award for attorney fees in a workers compensation case is controlled by
statute. K.S.A. 2017 Supp. 44-536(g) specifically limits an award of attorney fees to
issues raised before the administrative law judge and Workers Compensation Board, not
on appeal.
8.
Kansas Supreme Court Rule 7.07(b)(1) (2018 Kan. S. Ct. R. 50) only authorizes
an award of attorney fees for the appeal of a case when the district court had authority to
award fees. A workers compensation case is not heard by the district court. Therefore,
attorney fees in a workers compensation case cannot be awarded under Kansas Supreme
Court Rule 7.07(b)(1).
Appeal from Workers Compensation Board. Opinion filed June 15, 2018. Affirmed in part,
reversed in part, dismissed in part, and remanded with directions.
Douglas M. Greenwald and Karl L. Wenger, of McAnany, Van Cleave & Phillips, P.A., of
Kansas City, for appellant.
Paul D. Post, of Topeka, for appellee.
2
Before SCHROEDER, P.J., MALONE, J., and STUTZMAN, S.J.
SCHROEDER, J.: The City of Topeka (Topeka) appeals and Damon L. Pierson
cross-appeals the decision of the Workers Compensation Board (the Board). We find
Topeka prematurely appealed the Board's remand for the administrative law judge (ALJ)
to determine whether Pierson's preaward medical expenses were reasonably necessary to
cure and relieve his work-related injuries. Since the remand is a nonfinal agency action,
we have no jurisdiction to address the issue, and that portion of Topeka's appeal is
dismissed. The remaining issues on appeal involve whether Pierson is entitled to payment
of his postaward medical expenses; his entitlement to penalties for the nonpayment of his
postaward medical expenses; attorney fees for the prosecution of the case for postaward
medical expenses; and attorney fees on appeal.
We find the request for payment of postaward medical expenses should be
effective as of February 11, 2016, six months before Pierson filed his motion for penalties
on August 11, 2016. The request for penalties is denied because Pierson failed to set out
his demand letter with particularity as to what postaward medical expenses needed to be
paid. We determine the Board failed to properly apply K.S.A. 2017 Supp. 44-536(g)
when assessing attorney fees, and we must remand for the Board to consider the
reasonable and customary fees charged in the locality while considering the guidance of
Kansas Rule of Professional Conduct (KPRC) 1.5(a) (2018 Kan. S. Ct. R. 294). Finally,
we determine Pierson is not entitled to attorney fees on appeal as Supreme Court Rule
7.07(b)(1) (2018 Kan. S. Ct. R. 50) does not allow attorney fees on appeal from a
Workers Compensation Board decision.
We affirm in part, reverse in part, dismiss in part, and remand with directions.
3
FACTS
Pierson, an employee of Topeka, was injured while working in September 2012.
Pierson immediately began medical treatment with his own doctor and provided notice of
the work-related injury to Topeka on October 8, 2012. Topeka denied the workers
compensation claim and did not pay or provide medical services. On July 14, 2014, the
ALJ found Pierson's work was the prevailing factor of his injury, and he had a 15 percent
permanent partial impairment rating. The ALJ noted he was "unaware of any additional
medical expense requested by the claimant. Nevertheless, all medical care necessary to
cure and relieve the effects of claimant's injury be [sic] repetitive trauma is ordered paid
by the self-insured respondent." The ALJ also found Pierson was entitled to future
medical care. Topeka appealed.
The Board found Pierson's work was the prevailing factor of his injury and
affirmed the permanent partial impairment rating of 15 percent. The Board further found
any medical treatment Pierson received before October 8, 2012, was unauthorized. The
Board ordered Topeka to pay "all medical expenses incurred by claimant commencing
October 8, 2012, necessary to cure and relieve the effects of his work injuries." The
Board concluded Pierson was "entitled to future medical benefits upon proper application
and approval."
On February 11, 2015, Topeka appealed to this court, arguing the Board lacked
sufficient evidence to conclude Pierson's permanent partial impairment was 15 percent
and that Pierson's work was the prevailing factor to his injury. Our court affirmed the
Board in an opinion issued February 19, 2016. Pierson v. City of Topeka, No. 113,247,
2016 WL 687726, at *3-5 (Kan. App. 2016) (unpublished opinion). Topeka did not
petition for review.
4
On April 7, 2015 (while the first appeal was pending), Pierson filed an application
for modification of medical benefits. The form utilized has an option for the applicant to
request postaward medical termination or modification of medical benefits. Here, Pierson
marked the box to apply for postaward medical, termination, or modification of medical
benefits authorized on July 14, 2014 (the date of the ALJ's order). Additionally, he wrote:
"Claimant continues to have symptoms from the work-related injury, and is currently in
treatment with Dr. Sankoorikal. Claimant requests that Dr. Sankoorikal be authorized."
The application does not include any other specific requests or comments.
On March 3, 2016, Pierson sent a demand letter to Topeka stating, "[A]ll
compensation ordered and awarded by the Appeals Board is now due and owing, and
[Pierson] is entitled to immediate payment of the same." Pierson did not include a list of
various medical expenses or supporting documentation. The record is silent on how
Topeka responded to the demand letter.
On August 11, 2016, Pierson moved for a penalty hearing with the ALJ because
Topeka had not paid Pierson's preaward or postaward medical expenses as demanded in
the March 3, 2016 letter. A copy of the demand letter was attached as an exhibit. A
payment ledger detailing Pierson's medical expenses was also attached as an exhibit. This
is the first time any medical bills or accounting of such bills appears in the record on
appeal.
Pierson also requested penalties for Topeka's failure to pay the medical expenses,
and in a later motion, attorney fees of $225 per hour for 16.6 hours, or $3,735. Pierson
argued he was entitled to recover fees at the rate of $225 per hour based on his attorney's
experience as well as the time and labor involved in representing Pierson in the
postaward proceedings.
5
On April 10, 2017, the ALJ entered his postaward order finding he did not have
jurisdiction to order payment for the preaward medical expenses because his authority
was limited to addressing postaward issues per Pierson's application for modification of
medical benefits dated April 7, 2015. The ALJ also found K.S.A. 2017 Supp. 44-510k
only allowed Pierson to recover for postaward medical expenses going back six months
from the date of his motion for penalty hearing. Although Pierson's application for
modification of medical benefits was filed on April 7, 2015, the ALJ disregarded this date
because there was no previous hearing or judgment on the application. The ALJ treated
Pierson's motion for penalty hearing, filed on August 11, 2016, as a new application for
postaward medical expenses, and the ALJ ordered Topeka to pay Pierson for medical
expenses starting February 11, 2016 (six months before the motion for penalty hearing
was filed).
The ALJ denied penalties, reasoning Pierson was still being treated by physicians
unapproved by Topeka but neither he nor Topeka had attempted to remedy this issue.
Finally, the ALJ awarded attorney fees, but at a reduced rate of $175 per hour, or $2,905,
because of the past practice and allowance of attorney fees approved in Bradley v.
Havens Steel Company, No. 137,873, 2015 WL 996907 (Kan. WCAB February 19,
2015).
Both Pierson and Topeka appealed the ALJ's postaward order to the Board which
entered its order on June 23, 2017. The Board found Topeka did not originally challenge
the preaward medical expenses when it pursued its previous appeal to the Court of
Appeals; thus, the Board reasoned Topeka could not now argue the preaward medical
expenses were submitted out of time. The Board further found the ALJ did not determine
if the preaward medical expenses were reasonably necessary to cure and relieve the
effects of Pierson's work injury; therefore, the Board remanded this issue to the ALJ. The
Board ordered Topeka to pay Pierson's postaward medical expenses starting October 7,
2014, six months before Pierson filed his application for modification of medical
6
benefits. The Board reasoned Pierson's application did not need to specify any relief, it
only had to be the correct form as required by K.S.A. 2017 Supp. 44-510k and K.A.R.
51-1-1. The Board further found Pierson was not entitled to statutory penalties because
his demand letter did not include any itemization of his medical bills as required by
K.S.A. 44-512a, instead Pierson sent the itemization with his motion for penalty hearing.
Finally, with no analysis, the Board affirmed the ALJ's approval of attorney fees of
$2,905, based on the reduced rate of $175 per hour.
Topeka appeals the Board's decision, once again arguing the ALJ and Board
lacked jurisdiction on Pierson's preaward medical expenses because he did not submit
evidence of his expenses before the terminal date or the ALJ's July 14, 2014 order. It also
argues the preaward medical expenses are time barred under K.S.A. 2017 Supp. 44-510k
because all of those expenses were more than six months old before the date of Pierson's
application for modification of medical benefits. Topeka further claims Pierson is not
entitled to postaward medical expenses until February 11, 2016, because it claims the six-
month jurisdictional window started when Pierson filed his motion for penalty hearing.
Topeka claims the postaward application filed on April 7, 2015, does not request any
postaward payments; it only requested Dr. Sankoorikal be authorized as a treating
provider. Additionally, Topeka argues Pierson is not entitled to penalties or attorney fees.
Pierson cross-appealed, arguing this court lacks jurisdiction over the preaward
medical expenses because the Board remanded this issue to the ALJ to determine if the
preaward medical expenses were reasonably necessary to cure and relieve the effects of
the injury. Pierson argues the law of the case prevents Topeka from litigating issues it
could have brought in its original appeal, but failed to do so. Pierson also argues he is
entitled to penalties and attorney fees as he requested from the ALJ and the Board.
Additionally, in a separate motion, Pierson argues he is entitled to attorney fees for the
cost of this appeal under Kansas Supreme Court Rule 7.07(b).
7
ANALYSIS
THIS COURT LACKS JURISDICTION TO ADDRESS THE PREAWARD MEDICAL EXPENSES BUT
HAS JURISDICTION OVER POSTAWARD MEDICAL EXPENSES, STATUTORY PENALTIES, AND
ATTORNEY FEES.
Preaward Medical Expenses
Whether jurisdiction exists is a question of law over which this court's scope of
review is unlimited. Fuller v. State, 303 Kan. 478, 492, 363 P.3d 373 (2015). K.S.A.
2017 Supp. 44-556(a) provides final orders from the Board are subject to review under
the Kansas Judicial Review Act (KJRA), K.S.A. 77-601 et seq., as amended. Under the
KJRA, a party who exhausted administrative remedies is "entitled to judicial review of
final agency action, whether or not the person has sought judicial review of any related
nonfinal agency action." (Emphasis added.) K.S.A. 77-607(a). Without final agency
action, this court lacks jurisdiction over the issue. Williams v. Gen. Elec. Co., 27 Kan.
App. 2d 792, 793, 9 P.3d 1267 (1999) (finding no jurisdiction on a matter remanded from
the Board to the ALJ because the agency action was not final).
"'Final agency action'" is defined as the "whole or a part of any agency action
other than nonfinal agency action." K.S.A. 77-607(b)(1). "'Nonfinal agency action'" is
"the whole or a part of an agency determination, investigation, proceeding, hearing,
conference or other process that the agency intends or is reasonably believed to intend to
be preliminary, preparatory, procedural or intermediate with regard to subsequent agency
action of that agency or another agency." K.S.A. 77-607(b)(2). An action is not final if
the matter is still under "active consideration" by the agency. Guss v. Fort Hays State
Univ., 38 Kan. App. 2d 912, 917, 173 P.3d 1159 (2008).
A panel of this court addressed similar circumstances in Guss. Fort Hays State
University (FHSU) went through the termination procedures and fired Guss. After
8
providing Guss with a termination letter, FHSU also began calculating his unpaid sick
leave to pay him for it. Guss petitioned the court for relief, and FHSU argued he failed to
exhaust his administrative remedies because FHSU did not finish calculating and
distributing his sick pay before he filed with the court. A panel of our court examined
whether the FHSU letter to Guss was a final action under the KJRA. Concluding it was,
our court noted "[t]here was no dispute as to the amount of Guss' accumulated sick leave
. . . [t]he fact that there remained to be done the ministerial tasks of doing the
mathematical calculation and issuing a check does not establish that the matter was still
under active consideration." Guss, 38 Kan. App. 2d at 917.
Here, the Board's remand of Pierson's preaward medical expenses to the ALJ is a
nonfinal agency action. See K.S.A. 77-607(b)(2). By its very nature, the Board's remand
is an intermediate act because the ALJ is ordered to decide what expenses were
reasonably necessary to cure and relieve the effects of Pierson's injury. See K.S.A. 77-
607(b)(2). The remand keeps the preaward medical expenses as an issue under "active
consideration" by the agency. Guss, 38 Kan. App. 2d at 917. Determining whether some
expenses were reasonably necessary to cure and relieve Pierson's injuries is not a
"ministerial task" of "mathematical calculation." See 38 Kan. App. 2d at 917. Since the
Board remanded the preaward medical expense issue to the ALJ, we do not have
jurisdiction to consider it. Thus, we dismiss that portion of Topeka's appeal.
Postaward Medical Expenses, Statutory Penalties, and Attorney Fees
The Board's order was a final agency action on Pierson's claim for postaward
medical expenses, statutory penalties, and attorney fees; therefore, the KJRA grants our
court authority to address those issues. A final agency action may be the "whole or a part
of any agency action other than nonfinal agency action." (Emphasis added.) K.S.A. 77-
607(b)(1). The Board denied statutory penalties, approved the attorney fees granted by
the ALJ, and ordered Topeka to pay postaward medical expenses for the six months
9
before the application for modification of medical benefits was filed on April 7, 2015—or
starting on October 7, 2014. The Board's decision on these three issues does not require
any future determination or subsequent agency action. We have jurisdiction to address
them.
Law of the case does not apply.
Pierson argues the law of the case from the first appeal applies and eliminates
Topeka's ability to challenge the Board's decision on postaward medical expenses in this
appeal. Whether jurisdiction exists is a question of law over which this court's scope of
review is unlimited. Fuller v. State, 303 Kan. 478, 492, 363 P.3d 373 (2015).
The law of the case doctrine prevents relitigation of the same issues within
successive stages of the same lawsuit. State v. Collier, 263 Kan. 629, 634, 952 P.2d 1326
(1998). It does not settle the parties' rights, only the law to be applied in determining their
rights. Collier, 263 Kan. at 634.
"[A]n argument once made to and resolved by an appellate court becomes 'the law' in that
case and generally cannot be challenged in a second appeal. Thus, once the court decides
an issue, that issue should not be relitigated or reconsidered unless it is clearly erroneous
or unless some manifest injustice has been imposed. [Citations omitted.]" Washington
Mut. Bank, F.A. v. Brooks, No. 110,423, 2014 WL 4082084, at *3 (Kan. App. 2014)
(unpublished opinion).
The law of the case doctrine is "'a discretionary policy which expresses the
practice of the courts generally to refuse to reopen a matter already decided, without
limiting their power to do so.' [Citations omitted.]" Venters v. Sellers, 293 Kan. 87, 99,
261 P.3d 538 (2011). Some jurisdictions apply the law of the case doctrine to prohibit
new issues raised on appeal when a party failed to raise the issue in the first appeal. E.g.
Entek GRB, LLC v. Stull Ranches, LLC, 840 F.3d 1239, 1242 (10th Cir. 2016). However,
10
Kansas courts use the law of the case doctrine if the issue in the current proceeding was
decided in the initial appeal. E.g. Collier, 263 Kan. at 634, 637 (precluding the
defendant's resentencing to a hard 40 term of imprisonment because the issue was
addressed in a prior appeal); Brooks, 2014 WL 4082084, at *3 (denying relitigation of the
same issues previously affirmed by the appellate court).
The Court of Appeals previously found the Board had sufficient competent
evidence to conclude Pierson's work was the prevailing factor of his injuries and his
permanent partial impairment rating was 15 percent. Pierson, 2016 WL 687726, at *4.
This court's decision ultimately affirmed Pierson's right to apply for postaward medical
expenses. However, the issue presently before our court is new and arises because
Pierson exercised his right to apply for the postaward benefits. In this second appeal, the
new issue was not addressed in the prior appeal—whether Pierson should recover
postaward benefits for up to six months before the date he filed his application for
modification of medical benefits on April 7, 2015, or the date he filed his motion for
penalty hearing on August 11, 2016. This case is unlike Collier where the Kansas
Supreme Court applied the law of the case to prevent resentencing the defendant to a hard
40 sentence because the court had previously ruled on the same issue in the previous
appeal. See Collier, 263 Kan. at 634, 637. Here, the law of the case doctrine does not
prohibit this court's jurisdiction over the postaward benefits because the issue was not
ripe for resolution in the previous appeal. Similarly, the statutory penalties and attorney
fees are new issues now properly before this court in Pierson's cross-appeal. These issues
are not prohibited by the law of the case doctrine because the issues did not exist in the
previous appeal and arose after Topeka failed to timely pay Pierson's postaward medical
expenses.
11
PIERSON IS ENTITLED POSTAWARD MEDICAL COMPENSATION STARTING FEBRUARY 11,
2016.
Pierson's April 7, 2015 application was not a request for postaward medical
compensation.
Topeka argues the Board erred by applying the six-month statutory period in
K.S.A. 2017 Supp. 44-510k(b) to Pierson's April 7, 2015 application for modification of
medical benefits. Topeka claims the application is insufficient to conclude Pierson sought
postaward medical expense compensation when he filed his application on April 7, 2015.
We agree.
"'When an appellant alleges the Board erroneously applied the law to undisputed
facts, an appellate court has de novo review of the issue.' [Citation omitted.]" Nuessen v.
Sutherlands, 51 Kan. App. 2d 616, 618, 352 P.3d 587 (2015). An appellate court reviews
a challenge to the Board's factual findings in light of the record as a whole to determine
whether the findings are supported to the appropriate standard of proof by substantial
evidence. See K.S.A. 2017 Supp. 77-621(c)(7). "'[I]n light of the record as a whole'" is
statutorily defined as meaning:
"[T]he adequacy of the evidence in the record before the court to support a particular
finding of fact shall be judged in light of all the relevant evidence in the record cited by
any party that detracts from such finding as well as all of the relevant evidence in the
record, compiled pursuant to K.S.A. 77-620, and amendments thereto, cited by any party
that supports such finding, including any determinations of veracity by the presiding
officer who personally observed the demeanor of the witness and the agency's
explanation of why the relevant evidence in the record supports its material findings of
fact. In reviewing the evidence in light of the record as a whole, the court shall not
reweigh the evidence or engage in de novo review." K.S.A. 2017 Supp. 77-621(d).
12
"Substantial evidence" refers to "'evidence possessing something of substance and
relevant consequence to induce the conclusion that the award was proper, furnishing a
basis [of fact] from which the issue raised could be easily resolved.' [Citation omitted.]"
Rogers v. ALT-A&M JV, 52 Kan. App. 2d 213, 216, 364 P.3d 1206 (2015).
When determining fact questions, an appellate court's responsibility is to review
the record as a whole to determine whether the Board's factual determinations are
supported by substantial evidence.
"This analysis requires the court to (1) review evidence both supporting and contradicting
the agency's findings; (2) examine the presiding officer's credibility determination, if any;
and (3) review the agency's explanation as to why the evidence supports its findings. The
court does not reweigh the evidence or engage in de novo review. [Citations omitted.]"
Williams v. Petromark Drilling, 299 Kan. 792, 795, 326 P.3d 1057 (2014).
Once an employee is awarded the right to future medical treatment, K.S.A. 2017
Supp. 44-510k(a)(1) allows the employee to file an application "for the furnishing,
termination or modification of medical treatment." The ALJ may then award medical
treatment going back no more than "six months following the filing of such application
for post-award medical treatment." K.S.A. 2017 Supp. 44-510k(b).
The Board found K.S.A. 2017 Supp. 44-510k does not require Pierson's
application to contain certain language. However, the applicant can and should add an
explanation to the form because the statute allows an employee to request different types
of relief: "furnishing, termination or modification of medical treatment." K.S.A. 2017
Supp. 44-510k. Any application under K.S.A. 2017 Supp. 44-510k, without additional
explanation, could be seeking medical treatment, an end to medical treatment, or a
change to medical treatment. Without more details from the applicant, it is unclear which
form of relief an employee seeks.
13
Pierson's additional explanation on his April 7, 2015 application specifically
provided: "Claimant continues to have symptoms from the work-related injury, and is
currently in treatment with Dr. Sankoorikal. Claimant requests that Dr. Sankoorikal be
authorized." The application does not include any other requests or comments. Pierson's
application also has a box marked for postaward medical, termination, or modification of
medical benefits. Combining this information, it is clear Pierson applied for a
modification of medical benefits because his application only seeks authorization of Dr.
Sankoorikal. Pierson's application is therefore not a request for payment of his postaward
medical expenses. Pierson's motion for penalty hearing is his only application requesting
payment of postaward medical expenses. His motion was filed on August 11, 2016, and
he is entitled to postaward medical compensation starting from February 11, 2016, or six
months before his motion. The Board erred in deciding the start date was October 7,
2014.
Pierson's postaward treatment was authorized.
Topeka incidentally argues Pierson's postaward medical treatment was not
authorized because it never approved treatment and the treatment was not allowed by the
ALJ or the Board. However, K.S.A. 2017 Supp. 44-510j(h) makes an employer liable to
the employee for the employee's payment of his or her own medical expenses when the
employer "has knowledge of the injury and refuses or neglects to reasonably provide the
services of a health care provider required by this act." The Kansas Supreme Court has
already determined an employer who fails to provide medical services when it knows of
the employee's injuries will be held liable to the employee for his or her expenses under
the plain language of K.S.A. 2017 Supp. 44-510j(h). Saylor v. Westar Energy, Inc., 292
Kan. 610, 623, 256 P.3d 828 (2011).
Here, the record shows Topeka refused to authorize medical treatment until well
after Pierson filed his motion for penalty hearing on August 11, 2016, even though
14
Topeka knew he filed notice of his injury on October 8, 2012. Additionally, prior to
Pierson's motion, Topeka knew he still needed medical care because he applied for
postaward modification to change medical providers in 2015. From the start of this case,
Topeka has refused to provide care. Under K.S.A. 2017 Supp. 44-510j(h), Topeka is
liable to Pierson for his postaward medical expenses reasonably incurred for the care and
treatment of his injury.
PIERSON IS NOT ENTITLED TO PENALTIES UNDER K.S.A. 44-512a.
On cross-appeal, Pierson alleges the Board erred in denying him penalties under
K.S.A. 44-512a. "'When an appellant alleges the Board erroneously applied the law to
undisputed facts, an appellate court has de novo review of the issue.' [Citation omitted.]"
Nuessen, 51 Kan. App. 2d at 618.
An employee may recover penalties against an employer for failing to pay for any
compensation awarded to the employee. K.S.A. 44-512a(a). In order to recover against
the employer, the employee must show he or she has served his or her employer or its
liable insurance carrier with a written demand for the payment. K.S.A. 44-512a(a)(1).
The demand must set "forth with particularity the items of disability and medical
compensation claimed to be unpaid and past due." K.S.A. 44-512a(a)(1).
Pierson's initial demand letter to Topeka lacked particularity because it did not
provide any amount of medical expenses or supporting documents. As an exhibit to his
motion for penalty hearing, Pierson provided a payment ledger detailing his past medical
expenses. However, there is nothing in the record showing these or any other details were
sent in the demand letter to Topeka. The Board correctly found Pierson's demand letter
was insufficient to invoke the penalty provision against Topeka as required by K.S.A. 44-
512a(a)(1).
15
PIERSON'S ATTORNEY FEES SHOULD BE CALCULATED IN COMPLIANCE WITH K.S.A. 2017
SUPP. 44-536(g).
Pierson alleges the ALJ and the Board did not apply the requirements of K.S.A.
2017 Supp. 44-536(g) when deciding the reasonable hourly rate of his attorney. We
agree. "'When an appellant alleges the Board erroneously applied the law to undisputed
facts, an appellate court has de novo review of the issue.' [Citation omitted.]" Nuessen, 51
Kan. App. 2d at 618.
The issue of whether an hourly rate is reasonable under K.S.A. 2017 Supp. 44-536
requires statutory interpretation. Interpretation of a statute is a question of law over which
appellate courts have unlimited review. Hoesli v. Triplett, Inc., 303 Kan. 358, 362, 361
P.3d 504 (2015). The most fundamental rule of statutory construction is that the intent of
the Legislature governs if that intent can be ascertained. Hoesli, 303 Kan. at 362. An
appellate court must first attempt to ascertain legislative intent through the statutory
language enacted, giving common words their ordinary meanings. Ullery v. Othick, 304
Kan. 405, 409, 372 P.3d 1135 (2016).
K.S.A. 2017 Supp. 44-536 awards payment for attorney fees in workers
compensation cases for preaward and postaward claims. K.S.A. 2017 Supp. 44-536(b)
awards reasonable attorney fees based on a contingency fee in the initial or original claim
for compensation. To determine if the fees are reasonable, the Board uses factors nearly
identical to those listed in KRPC 1.5(a). Compare K.S.A. 2017 Supp. 44-536(b)(1)-(8)
with KRPC 1.5.
K.S.A. 2017 Supp. 44-536(g) awards payment of postaward workers
compensation claims "on the basis of the reasonable and customary charges in the
locality for such services and not on a contingent fee basis." K.S.A. 2017 Supp. 44-
16
536(g) thus requires two steps: attorney fees must be reasonable and the customary
charge in the locality.
Kansas courts generally determine the reasonableness of attorney fees utilizing the
eight factors set forth in KRPC 1.5(a). Snider v. American Family Mut. Ins. Co., 297 Kan.
157, 169, 298 P.3d 1120 (2013). One of those factors, "the fee customarily charged in the
locality for similar legal services" is identical to the second requirement of K.S.A. 2017
Supp. 44-536(g). Thus, an attorney fees analysis under K.S.A. 2017 Supp. 44-536(g)
must incorporate the eight factors set forth in KRPC 1.5(a).
Before the ALJ and Board, Pierson argued he was entitled to recover fees at the
rate of $225 per hour based on his attorney's experience as well as the time and labor
involved in representing Pierson through the postaward proceedings. The ALJ awarded
attorney fees at $175 per hour because this rate was previously used in Bradley, 2015 WL
996907, at *4. The Board did no analysis but approved the ALJ's findings.
In Bradley, the Board awarded fees at a rate of $175 per hour. Without further
explanation, the Board determined the rate of $175 per hour was reasonable due to the
attorney's experience, reputation, and the 10 years since the Board last increased the
reasonable rate. Although the Board's decision in Bradley is based on the attorney's
experience and reputation, the Board in Bradley did not explain whether the attorney's
experience was great or minimal, or whether the attorney's reputation was good or bad.
See Bradley, 2015 WL 996907, at *4.
Here, neither the ALJ nor the Board considered "the reasonable and customary
charges in the locality" when determining whether the $225 per hour rate was reasonable
for Pierson's attorney fees. Instead, the ALJ applied a past rate from a wholly different
case. The rate in Bradley is alleged to be based upon the attorney's reputation and
experience, but neither of those factors were weighed by the ALJ or the Board in
17
Pierson's case. Moreover, the ALJ and the Board did not consider any other factors when
concluding the $175 per hour rate was reasonable. The Board erred in setting the attorney
fee rate at $175 per hour, and this issue must be remanded below, with instructions to
apply the reasonableness factors listed in KRPC 1.5(a), in conjunction with K.S.A. 2017
Supp. 44-536(g).
PIERSON IS NOT ENTITLED TO ATTORNEY FEES ON APPEAL.
Pierson has filed a motion for attorney fees on appeal under K.S.A. 2017 Supp.
44-536(g) and Kansas Supreme Court Rule 7.07(b)(1). An award for attorney fees in a
workers compensation case is controlled by statute. K.S.A. 2017 Supp. 44-536(g)
specifically limits an award of attorney fees for issues raised only before the ALJ and
Board, not on appeal: "In the event any attorney renders services to an employee or the
employee's dependents, subsequent to the ultimate disposition of the initial and original
claim, and in connection with an application for review and modification, a hearing for
additional medical benefits, an application for penalties or otherwise." Attorney fees for
costs incurred to prosecute the appeal is not one of the statutorily mandated provisions.
Rule 7.07(b)(1) authorizes an appellate court to award attorney fees for services on
appeal in a case when "the district court had authority to award fees." A Kansas court
may not award attorney fees unless there is an agreement between the parties or the court
is authorized to do so by statute or court rule. Snider v. Am. Family Mut. Ins. Co., 297
Kan. 157, 162, 298 P.3d 1120 (2013). Whether the court has authority to award appellate
attorney fees is a question of law over which appellate review is unlimited. See
Thoroughbred Assocs. v. Kansas City Royalty Co., 297 Kan. 1193, 1215-16, 308 P.3d
1238 (2013).
Pierson's request is not within the scope of Supreme Court Rule 7.07(b)(1). A
workers compensation case is not heard by the district court. Rogers, 52 Kan. App. 2d at
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220. As a panel of our court has previously explained, Kansas Supreme Court Rule
7.07(b)(1) was amended and no longer allows fees awarded on the appeal of a case when
the "trial court" had authority to do so. Rogers, 52 Kan. App. 2d at 221. The old rule was
broader than the current rule, and the older version could be interpreted to award attorney
fees in the appeal of a workers compensation case. Rogers, 52 Kan. App. 2d at 221.
However, current Kansas Supreme Court Rule 7.07(b)(1) only authorizes an award of
attorney fees for the appeal of a case when the district court had authority to award fees.
As Pierson's case was never before any district court, he cannot recover attorney fees for
the appeal of this case. See Rogers, 52 Kan. App. 2d at 220-21.
Affirmed in part, reversed in part, dismissed in part, and remanded with directions.
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