Danville Radiologists, Inc. v. Raymond Perkins

COURT OF APPEALS OF VIRGINIA
Present: Judges Willis, Fitzpatrick and Overton
Argued at Salem, Virginia
DANVILLE RADIOLOGISTS, INC.
v. Record No. 2202-95-3 OPINION BY
JUDGE JOHANNA L. FITZPATRICK
RAYMOND PERKINS MAY 21, 1996
FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION
Robert T. Vaughan, Jr. (Daniel, Vaughan,
Medley & Smitherman, P.C., on brief), for
appellant.
No brief or argument for appellee.
In this workers' compensation case, Danville Radiologists,
Inc. (appellant) appeals the commission's award of attorney's
fees to the attorney of Raymond Perkins (claimant). The sole
question presented is when an attorney's fee award pursuant to
Code § 65.2-714 must be paid. Appellant argues that the
commission erred in requiring it to pay attorney's fees under
Code § 65.2-714 before it had been reimbursed for the medical
services provided to claimant. For the reasons that follow, we
reverse the commission's award.
Claimant was injured on March 25, 1993, while working as a
part-time truck driver for Schoolfield Lumber & Plywood, Inc.
(employer). After a hearing on December 21, 1993, an award for
temporary total disability was entered. On February 17, 1994,
claimant's counsel requested an award of attorney's fees from the
amount that inured to the benefit of six medical health care
providers pursuant to Code § 65.2-714. Appellant and the other
health care providers failed to reach an agreement with
claimant's attorney, and the matter was referred to the
commission for dispute resolution. On June 7, 1994, a deputy
commissioner held that attorney's fees were not appropriate at
that time because no evidence showed that the health care
providers had been reimbursed.
Claimant's counsel filed a second request for fees on March
7, 1995. Appellant argued that the bill for services against
which the fee was to be assessed had not yet been paid. Although
employer had paid some of the health care providers, appellant
had not received any reimbursement for the medical services
provided to claimant related to his industrial accident. A
second deputy commissioner determined that claimant's attorney
was entitled to fees from all of the medical health care
providers, including appellant. Appellant requested a review of
this decision, and the full commission affirmed. The commission
ordered appellant to pay the attorney's fees and stated as
follows: "[Appellant] is subject to § 65.2-714, even if the bill
has not been paid by the employer. The Code section permits a
fee when the Commission awards benefits for medical services that
inure to the medical care provider. The award that obligated the
employer to provide medical services established the benefit that
inured to [appellant]."
Appellant argues that the plain language of Code
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§ 65.2-714(B) mandates that the amounts awarded as a benefit to a
health care provider must be paid before the health care provider
can be required to pay attorney's fees.
Code § 65.2-714 provides as follows:
A. Fees of attorneys and physicians and
charges of hospitals for services, whether
employed by employer, employee or insurance
carrier under this title, shall be subject to
the approval and award of the Commission. In
addition to the provisions of Chapter 13 (§
65.2-1300 et seq.) of this title, the
Commission shall have exclusive jurisdiction
over all disputes concerning such fees or
charges and may order the repayment of the
amount of any fee which has already been paid
that it determines to be excessive; appeals
from any Commission determinations thereon
shall be taken as provided in § 65.2-706. No
physician shall be entitled to collect fees
from an employer or insurance carrier until
he has made the reports required by the
Commission in connection with the case.
B. If a contested claim is held to be
compensable under this title and, after a
hearing on the claim on its merits or after
abandonment of a defense by the employer or
insurance carrier, benefits for medical
services are awarded and inure to the benefit
of a third party insurance carrier or health
care provider, the Commission shall award to
the employee's attorney a reasonable fee and
other reasonable pro rata costs as are
appropriate from the sum which benefits the
third party insurance carrier or health care
provider. Such fees shall be based on the
amount paid by the employer or insurance
carrier to the third party insurance carrier
or health care provider for medical, surgical
and hospital service rendered to the employee
. . . .
(Emphasis added). When parties fail to agree on attorney's fees
under Code § 65.2-714, "[a]n attorney's fee shall be awarded from
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sums recovered for the benefit of . . . a health care provider
. . . upon filing of a statement including the name and address
of each . . . provider from whom the fee is requested, the amount
of the medical charge recovered for each . . . provider and the
amount of the fee requested." Rule 6.2(A), Rules of the Virginia
Workers' Compensation Commission (emphasis added). 1
Under Code § 65.2-714(A), the commission has authority "to
control the 'fees' and 'charges' of both attorneys and health
care providers." Pavlicek v. Jerabek, Inc., 21 Va. App. 50, 56,
461 S.E.2d 424, 427 (1995). However, "'[w]e are required to
construe the law as it is written' and '[a]n erroneous
construction by those charged with its administration cannot be
permitted to override the clear mandates of a statute.'" Id. at
58, 461 S.E.2d at 428 (quoting Commonwealth, Dep't. of Mines,
Minerals & Energy v. May Bros., Inc., 11 Va. App. 115, 119, 396
S.E.2d 695, 697 (1990)). "It is a well settled principle that
'[t]he plain, obvious, and rational meaning of a statute is
always preferred to any curious, narrow or strained
construction.'" Tumlin v. Goodyear Tire & Rubber Co., 18 Va.
App. 375, 381, 444 S.E.2d 22, 25 (1994) (quoting Branch v.
Commonwealth, 14 Va. App. 836, 839, 419 S.E.2d 422, 424 (1992)).
1
Effective January 1994, former Rule 18 of the Rules of the
Virginia Workers' Compensation Commission was restructured as
Rules 6.1 and 6.2. Under Rule 18, a claimant's counsel seeking
attorney's fees from health care providers was required to "state
the amount of the payment or reimbursement upon which the request
for fee is based." Sines v. Better Homes Realty, Inc., 66 O.I.C.
162, 165 (1987) (emphasis added).
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The relevant language of Code § 65.2-714(B) provides that
"the Commission shall award to the employee's attorney a
reasonable fee and other reasonable pro rata costs as are
appropriate from the sum which benefits the third party insurance
carrier or health care provider. Such fees shall be based on the
amount paid by the employer or insurance carrier to the third
party insurance carrier or health care provider for medical,
surgical and hospital service rendered to the employee."
(Emphasis added). Because attorney's fees are to be "based on
the amount paid by the employer . . . to the . . . health care
provider," the amount of attorney's fees payable by a particular
health care provider cannot possibly be determined until after
the employer pays the provider. Similarly, Rule 6.2(A) allows
attorney's fees to be awarded "from sums recovered for the
benefit of . . . a health care provider" and requires a
claimant's attorney to file a statement including "the amount of
the medical charge recovered for each . . . provider." (Emphasis
added). This language indicates that, until a health care
provider has been reimbursed by the employer, a claimant's
attorney cannot file the required statement listing the amount of
medical charges recovered by the provider.
We hold that Code § 65.2-714(B) requires payment by the
health care provider of its pro rata share of an award of
attorney's fees only after the provider has received
reimbursement from the employer or its insurer. In this case, no
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evidence indicates that employer has reimbursed appellant for any
medical services provided to claimant. Thus, the commission
erred in ordering appellant to pay attorney's fees to claimant's
counsel.
Accordingly, the decision of the commission is reversed.
Reversed.
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