Mitchell v. Goodyear Service Store

SMITH, Judge. We shall hold in this case that an appeal to the circuit court of the amount of an attorney’s fee in a workmen’s compensation case is not to be tried de novo. We also shall hold that under the circumstances of this case the Workmen’s Compensation Commission is entitled to appear as an appellee in the circuit court, the Court of Special Appeals, and this Court. Hence, we shall affirm the judgment of the Court of Special Appeals in Mitchell v. Goodyear Service Store, 63 Md.App. 426 , 492 A.2d 984 (1985).

We disagree with its conclusion relative to the Commission, however. I John D. Mitchell was injured in a work-related accident while in the employ of Goodyear Service Store. He filed a ²⁹ claim with the Commission. An award was made in the amount of $58,200.

The Commission awarded a fee in the amount of $6,100 to Clay M. Barnes, Esq. No question is raised in this appeal regarding that fee. Mitchell entered an appeal to the Circuit Court for Baltimore County. This resulted in his obtaining a “serious disability” award of $220 per week for life, estimated, so appellant’s brief says, “to be $303,106 or over $245,000 in excess of the initial amount awarded by the Commission, not including medical expense benefits.” Counsel sought an additional fee of $12,500.

The Commission allowed $4,000. The attorney entered an appeal to the Circuit Court for Baltimore County. The Commission contested the appeal in that court. Counsel sought a de novo trial on the issue of the fee.

This was denied. The trial judge relied upon City of Baltimore v. Bowen, 54 Md.App. 375 , 458 A.2d 1242 (1983), in his determinations relative to the fee. He concluded that “[t]he Commission did not follow the statutory mandate to ‘hear and determine’ the issue of the amount to which Mr. Barnes is entitled.” He said: “Although this Court is not authorized to set a fee, it appears that the $4,000.00 in this case is inadequate. Therefore, the Commission must conduct further proceedings to make its own determination as to the amount counsel should be awarded.

Mayor & City Council of Baltimore v. Bowen, 54 Md.App. 375, 385 [ 458 A.2d 1242 ] (1983).” An appeal to the Court of Special Appeals followed. That court said: “We conclude that Judge Hinkel properly declined to grant Barnes a de novo trial on the question of the amount of counsel fee to be awarded. The question of counsel fees is to be determined in the first instance by the Commission. If, on appeal to the circuit court, the fee is adjudged improper, the matter should be remanded to the Commission under appropriate instructions. ³⁰ “In light of the Commissioner’s statements, the claimant’s acquiescence, and the large discrepancy between the 5 percent figure contained in the guidelines, as compared with the 1.6 percent actually awarded, we hold that Judge Hinkel did not err in determining that the parsimonious $4,000 fee was inadequate.” 63 Md.App. at 433-35 , 492 A.2d at 988-89 .

It concluded, however, that “[t]he circuit court did err in allowing the Commission to enter the case as a party,” holding “that the Workmen’s Compensation Commission is devoid of standing and is an interloper, an improper party, to this appeal.” 63 Md.App. at 436-37 , 492 A.2d at 990 . We granted a writ of certiorari in order that we might address the important public issues here presented. 1 II This controversy involves the proper interpretation to be placed upon Maryland Code (1957, 1985 Repl.Vol.) Art. 101, § 57. It provides in relevant part: “No person shall charge or collect any compensation for legal services in connection with any claims arising under this article ... unless the same be approved by the Commission. When so approved, such fee or claims shall become a lien upon the compensation awarded, but shall be paid therefrom only in the manner fixed by the Commission.

Upon application of any party in interest, the Commission shall have full power to hear and determine any and all questions which may arise concerning legal services rendered in connection with any claim under this article and may order any attorney or other person receiving the same, to refund to the person paying the same, any portion of any charge for legal services which the Commission may, in its discretion, deem excessive. Or ³¹ ders of the Commission regulating payments and refunds for legal services may be enforced in the courts of this State, or may be appealed from in like manner as awards for compensation under this article.” Appellant seizes upon the last phrase of § 57 pertaining to appeals “in like manner as awards for compensation under this article.” Counsel reasons that because appeals as to compensation are heard de novo that appeals as to attorneys’ fees must likewise be so heard. The portion of the statute pertaining to appeals was not a part of the original enactment of Ch. 800 of the Acts of 1914 but was added by Ch. 869 of the Acts of 1941. No legislative history as to the enactment of this section is available.

Because in 1941 the General Assembly met every two years and the 1941 session was the next succeeding session, one may guess that perhaps this amendment in some way flowed from the Report of the Committee Appointed to Survey the State Industrial Accident Commission under the chairmanship of S. Ralph Warnken, Esq. It is found in The Daily Record of June 10, 1940. No recommendations pertaining to attorneys’ fees are to be found in that report other than that we should have a statute in Maryland similar to § 28 of the Longshoremen’s and Harbor Workers’ Compensation Act. It provided that no claim for legal services should be valid unless approved by the deputy commissioner or by the court, if proceedings for review of the order of the deputy commissioner in respect of such claim or award had been before a court.

The section further provided that it was a criminal offense for a person to receive “any fee, other consideration, or any gratuity on account of services so rendered, unless such consideration or gratuity is approved by the deputy commissioner or such court----” It also was a criminal offense under that section to solicit employment for a lawyer or for one’s self in respect of any claim or award for compensation. Notwithstanding the absence of other recommendations, however, some unkind words relative to lawyers’ and doctors’ fees are found in the report. The committee said, ³² “There have been many complaints on this subject. Almost all exorbitant charges by lawyers are in connection with lump sum awards.” It went on to say: “We have found instances where the claimant was quite content to receive weekly payments but was urged by his lawyer to seek a lump sum award.

Some lawyers have a selfish interest in giving such advice. It enables them to collect a fee much larger in amount than would probably be approved by the Commission. Claimants therefore should be protected from unscrupulous lawyers.” Although the statute in force then contained language identical with that which we have quoted from § 57 to the effect that no fee should be charged unless the same be approved by the Commission, the committee stated: “Before your Committee was appointed lawyers did not submit their proposed fee charge to the Commission for approval, except in cases where the compensation was payable weekly and the lawyer desired an immediate payment of his charge. Then an application would be made to the Commission for a lump sum allowance of his fee to be charged against the latest accruing weekly instalments.

In such cases the amount of the fee would come to the attention of the Commission.” The committee noted that one who had just stepped down as Chairman of the Commission was of the “view ... that the Commission has nothing to do with the amount charged by the lawyer unless a party in interest requests the Commission to pass on the