Workers' Compensation Commission v. May

HARRELL, Judge. This appeal stems from a decision by appellant, the Maryland Workers’ Compensation Commission (Commission), to award appellee, Eric M. May, the attorney for a claimant, an attorney’s fee of $500. Having requested a fee of $2,100, appellee noted an appeal from that decision to the Circuit Court for Montgomery County (McKenna, J.), which concluded that the Commission’s decision was arbitrary and capricious, and remanded the case to the Commission for a redetermination of legal fees with the suggestion that the award of such fees be increased by at least $1,000. In this appeal from that judgment, the Commission’s sole contention is that the circuit court erred in concluding that the amount of attorney’s fees awarded by the Commission was arbitrary and capricious.

Perceiving no reversible error, we shall affirm the judgment. Facts On the morning of 8 May 1986, Daniel Van Gorder, a route salesman employed by Shenandoah's Pride Dairy of Springfield, Virginia, injured his lower back while delivering ⁴¹¹ milk in Baltimore, Maryland. 1 He subsequently retained the services of appellee for the purpose of obtaining workers’ compensation benefits. Appellee filed a claim, on behalf of Mr Van Gorder, with the Commission, on 16 October 1986, and temporary total disability was awarded on 28 November 1986. Thereafter, appellee and Shenandoah’s insurer engaged in an unspecified amount of settlement discussions concerning the issue of permanent partial disability; however, the discussions proved unsuccessful.

Consequently, the Commission scheduled a hearing on the issue of permanent partial disability for 8 May 1989. Neither appellee nor Mr. Van Gorder attended the 8 May hearing, and the Commission rescheduled the hearing to 24 August 1989. During the late spring of 1989, Mr. Van Gorder discharged appellee as his attorney and personally negotiated a settlement with his employer and the insurer for a lump sum award of $12,075, representing a 21% permanent partial disability, thereby rendering unnecessary the 24 August hearing. Prior to the Commission’s approval of the settlement, appellee, on 11 September 1989, filed a petition for attorney’s fees of $2,100 for services rendered during his representation of Mr. Van Gorder, which he itemized only as, “conferences with the client, numerous telephone conversations with the claimant and carrier, review of medical reports, review of vocational rehabilitation reports, an unsuccessful hearing to obtain jurisdiction in Virginia, communication with the treating physician, communication with the Maryland Workers’ Compensation Commission, etc.” A settlement hearing before the Commission was held on 7 November 1989, at which Mr. Van Gorder appeared pro se.

Although appellee was provided with timely notice of the hearing, he chose not to attend, and so informed his former client. ⁴¹² During the 7 November hearing, the settlement agreement was approved, and the Commission proceeded to consider appellee’s petition for attorney’s fees, but indicated that perhaps another hearing would have to be held on that issue if Mr. Van Gorder did not agree with the claim. After being informed by Mr. Van Gorder that appellee had told him that he would not attend the 7 November hearing, the Commission responded, “Good. What do you [Mr. Van Gorder] think is a reasonably fair fee for any work he [appellee] did for the Maryland case?” Mr. Van Gorder replied, “I’ll say $500,” whereupon, the Commission allowed appellee a fee of $500. Dissatisfied with the disposition of his petition for attorney’s fees (and feeling raptus regaliter), appellee appealed to the Circuit Court for Montgomery County, arguing that the Commission’s decision to award him only $500 for the estimated 10-15 hours of work he performed for Mr. Van Gorder, in pursuit of the Maryland Workers’ Compensation claim, over the course of 2 and one-half years, was arbitrary and capricious.

On 30 August 1990, the circuit court concluded that the award of $500 for attorney’s fees was indeed arbitrary and capricious, and remanded the case to the Commission for a redetermination of the fee, suggesting that the fee be increased by at least $1,000. An order to that effect was entered on 18 September 1990. I The threshold issue presented by this case, although neither party has raised it, is whether the Commission has standing to bring this appeal. The appellate courts of Maryland have not heretofore been called upon to determine whether the Workers’ Compensation Commission, having appeared as appellee in the circuit court, may appeal the decision of the circuit court and appear as an appellant in this Court.

We and the Court of Appeals addressed the “flip side” of this question in Mitchell v. Goodyear Service Store, 63 ⁴¹³ Md.App. 426, 492 A.2d 984 (1985), aff'd, 306 Md. 27 , 506 A.2d 1178 (1986). There, on appeal to the circuit court, an attorney obtained for his client a significantly larger award than had been given by the Commission. The attorney then requested from the Commission an additional fee of $12,-500, based on the larger award. The client, after receiving independent legal advice, consented to the additional fee as requested.

There was, in other words, no dispute between lawyer and client as to the fee. The Commission, nonetheless, awarded only $4,000, whereupon the attorney, in the name of and fully supported by the client, appealed, demanding a de novo trial on the amount of the fee. The circuit court rejected the demand for a de novo trial, but found the fee awarded by the Commission inadequate and remanded the matter to the Commission for reconsideration. The attorney, in the name of the client, appealed to this Court from the rejection of his demand for a de novo trial.

Although nominally the client was the appellant and the employer was the appellee, we noted that “[t]he true appellee ... is the Workmen’s Compensation Commission,” 63 Md.App. at 429 , 492 A.2d 984 . We affirmed the decision of the trial court in both respects — reviewing the fee award on an abuse of discretion standard and concluding that the fee set by the Commission was sufficiently inadequate to be arbitrary. Applying the general rule that “usually an administrative agency may not appeal from a judgment of a court reversing the agency’s order or decision,” id. at 436, 492 A.2d 984 , we further determined that the Commission had no standing to be an appellee in this Court and was therefore “an interloper.” Id. at 437, 492 A.2d 984 . The Court of Appeals affirmed our conclusion with respect to the substance of the appeal, but expressed a different view as to the standing of the Commission to be an appellee.

Referring in part to the 1941 Report of a Committee Appointed to Survey the State Industrial Accident Commission (the former name of the Workers’ Compensation Commission), chaired by S. Ralph Warnken, Esq., the Court observed, 306 Md. at 35-36 , 506 A.2d 1178 : ⁴¹⁴ “In this instance Mitchell, the claimant, has consented to the fee. Consequently, no appearance is entered on his behalf. The amount of the fee ultimately to be paid by the claimant means nothing to the employer or its insurance company. Their liability is not affected one whit.

We do not for one minute imply that counsel in this case is unscrupulous. The Warnken committee observed, however, in 1940, ‘Claimants ... should be protected from unscrupulous lawyers.’ If the Commission is not to be heard on the matter of a fee, there will be no one to appear before any court for the purpose of protecting claimants against unscrupulous lawyers.” On this basis, the Court went on to hold, at 36, 506 A.2d 1178 : “Given the provision in § 56 relative to the Attorney General’s appearing for the Commission, the Commission’s role in protecting claimants, and the numerous cases where we have permitted boards and agencies to appear before us as appellees where it is questionable whether they would have been permitted to appear as appellants, we conclude that in a case such as this the Commission should be permitted to appear as appellee in the circuit court and in the appellate courts to argue relative to the correctness of its decision as to the attorney’s fee to be allowed. 2 ” (Footnote omitted). In the footnote to that last sentence, the Court stated that it was reserving “the question as to whether the Workmen’s Compensation Commission appearing as an appellee in the circuit court could be an appellant in the Court of Special Appeals.” That, of course, is the question now before us. We need not answer that question in its entirety.

There may be circumstances in which the Commission ought not be permitted to appeal a decision of a circuit court. But that is not the case here. Unlike the situation in Mitchell, the client here.did not support the attorney’s fee request. Indeed, he opposed it, ⁴¹⁵ believing that more than 75% of it was unwarranted.

Although the client was nominally a party to the attorney’s appeal to the circuit court, there is no indication that he was present at the hearing or that the court heard from him in any way. In rendering his decision, the judge seemed to be more influenced by a past personal experience in which he was awarded less of a fee than he thought he deserved, than by the actual amount and value of the services rendered by Mr. May. Moreover,