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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Circle De Lumber Co. v. Humphrey (03/03/2006) sp-5994
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| CIRCLE DE LUMBER COMPANY, | ) |
| LIBERTY MUTUAL INSURANCE | ) Supreme Court No. S-11086 |
| COMPANY, | ) |
| ) Superior Court No. | |
| Appellants, | ) 3AN-01- 3754 CI |
| ) 3AN-01-5167 CI | |
| v. | ) 3AN-01-9452 CI |
| ) | |
| OTTO C. HUMPHREY, ALASKA | ) O P I N I O N |
| WORKERS COMPENSATION | ) |
| BOARD, | ) No. 5994 - March 3, 2006 |
| ) | |
| Appellees. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Michael L. Wolverton, Judge.
Appearances: Colleen Libbey, Libbey Law
Offices, Anchorage, for Appellant Circle De
Lumber Company, and Randall J. Weddle, Holmes
Weddle & Barcott, Anchorage, for Appellant
Liberty Mutual Insurance Company. Tim
MacMillan, Attorney at Law, Anchorage, for
Appellee Otto C. Humphrey.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
CARPENETI, Justice.
I. INTRODUCTION
Circle De Lumber Company was ordered to pay workers
compensation benefits to Otto Humphrey for a work-related injury
that Humphrey suffered in 1993. Circle De appeals the Alaska
Workers Compensation Boards methods of calculating permanent
total disability benefits rates and temporary total disability
benefits rates, the retrospective interest awards to Humphrey for
late-paid benefits, and the award of attorneys fees to Humphrey
in excess of the statutory minimum. We affirm the boards
decision in all respects.
II. FACTS AND PROCEEDINGS
On February 22, 1993 the Circle De Lumber Company
(Circle De) hired Otto Humphrey, a resident of Soldotna, as a
logging equipment operator. In May 1993 Humphrey suffered a head
injury during his employment with Circle De.1 Humphrey was
riding on the top of a skidder when it struck a tree, causing the
top of the tree to break off and hit Humphrey on the head.
According to his workers compensation claim, Humphrey suffered
from severe headaches, head trauma, loss of hearing in his right
ear, short-term memory loss, loss of equilibrium in his right
ear, impaired equilibrium in his left ear, and ringing in his
right ear as a result of the accident.
Circle De paid Humphrey temporary total disability
(TTD) benefits from May 29, 1993 until November 16, 1995. From
November 11, 1995 until December 6, 1996 Circle De paid Humphrey
permanent total disability (PTD) benefits. Then Circle De
resumed paying TTD benefits, as well as permanent partial
impairment (PPI) benefits, until December 9, 1999. On December
7, 1999 a panel of physicians examined Humphrey at Circle Des
request and determined that he was permanently and totally
disabled. Following this determination, Circle De paid Humphrey
PTD benefits effective December 9, 1999. In June 2000 the
parties entered into a stipulation declaring that Humphrey was
permanently and totally disabled. The stipulation was approved
by the Alaska Workers Compensation Board (hereinafter the board)
in Humphrey v. Circle De Lumber Co. (Humphrey I).2 The board
also determined that Humphrey had been permanently and totally
disabled beginning on December 7, 1999.
In Humphrey II,3 issued in November 2000, the board
considered Humphreys request to adjust his PTD weekly
compensation rate from $110 per week to $351 per week, based on
the wage rate in 1998 of an experienced tree faller ($21.50 per
hour), a fifty-hour work week, and a six-month logging season.4
Following Gilmore v. Alaska Workers Compensation Board,5 the
board agreed to calculate Humphreys lost earnings based on the
nature of his employment and work history under the version of AS
23.30.220(a)(2) that was in effect in 1993,6 rather than based on
the historical average calculation under AS 23.30.220(a)(1).7
The board accepted Humphreys calculation, resulting in gross
weekly earnings of $560 and a weekly PTD compensation rate of
$351, awarded retrospectively to December 7, 1999, the date of
the PTD classification.8 The board also required Circle De to
pay interest on any late-paid PTD benefits, and awarded Humphrey
the statutory minimum in attorneys fees and costs.9
Following the boards decision in Humphrey II, Humphrey
asked the board to retroactively increase his TTD compensation
rate. On January 19, 2001, in Humphrey III, the board
retroactively adjusted Humphreys TTD compensation rate from $110
per week to $236.55 per week.10 As in Humphrey II, the board
departed from the standard practice of calculating Humphreys
gross weekly wage by using former AS 23.30.220(a)(1), this time
using his hourly wage at the time of injury to compute his
compensation rate.11 The board also awarded Humphrey interest on
any late TTD benefits payments, statutory minimum attorneys fees,
and costs.12
On July 23, 2001, in Humphrey IV,13 the board granted
Humphreys request for retroactive PPI benefits, paid at his TTD
compensation rate; granted Humphrey interest on his retroactive
PPI benefits; found Circle De in default for failure to pay
interest on Humphreys TTD benefits; awarded Humphrey interest and
a penalty on Circle Des defaulted interest payments; and granted
Humphrey attorneys fees of thirty-five percent, in excess of the
statutory minimum.14
Circle De appealed the boards decisions in Humphrey II-
IV to the superior court. Its appeals were consolidated and
heard by Superior Court Judge Michael L. Wolverton. Circle De
argued that the board erred in setting Humphreys PTD and TTD
compensation rates; that interest should have accrued only after
the boards due date for payment set in its order, not on the date
when Humphrey originally became entitled to TTD or PPI benefits;
and that the board erred in awarding enhanced attorneys fees in
Humphrey IV. Judge Wolverton found the boards compensation rates
for Humphreys PTD and TTD benefits to be supported by substantial
evidence. However, because the boards order was unclear on
whether the awarded compensation rates were excessive under the
statute, he remanded the case for additional findings.15 Judge
Wolverton affirmed the boards awards of interest, reasoning that
the purpose of an interest award is to recognize the time value
of money and to reimburse the aggrieved party for value lost.
Judge Wolverton also remanded the award of enhanced attorneys
fees; in order to determine whether the enhanced award was
manifestly unreasonable, Judge Wolverton needed findings by the
board that explained the basis for its decision.
Upon remand, in Humphrey V16 the board found that
Humphrey worked for Circle De for nine weeks and four days.17 The
board calculated that, using this period of employment, the PTD
compensation rate set by the board ($351 per week) did not exceed
Humphreys gross weekly earnings at the time of injury (which the
board calculated to be $421.18 per week).18
In a separate decision, Humphrey VI, the board ruled on
attorneys fees and costs.19 The board supported its earlier award
by finding the award of enhanced fees to have been reasonable and
necessary for the successful presentation of Humphreys claim, and
that the failure to award attorneys fees in excess of the
statutory minimum would result in manifest injustice.20
Circle De then brought an appeal to this court,
alleging error in the boards findings in Humphrey IIVI. However,
because the boards findings in Humphrey V and VI had not first
been appealed to the superior court, we concluded that we lacked
appellate jurisdiction under Alaska Rule of Appellate Procedure
202(a).21 We therefore remanded the issues presented in Humphrey
V and VI to the superior court for a final judgment, while
staying our consideration of all other issues appealed by Circle
De. On remand, Judge Wolverton held that the board did not err
in its conclusions in Humphrey V and VI. Circle De now seeks
review on all of its contentions.
III. STANDARD OF REVIEW
When the superior court acts as an intermediate court
of appeals, we independently review the decision of the
administrative agency.22 If the parties raise a question of law
that does not involve any special agency expertise, we review the
legal question under the substitution of judgment standard.23
Under the substitution of judgment standard, we apply our
independent judgment and adopt the rule of law that is most
persuasive in light of precedent, reason and policy.24 If, on the
other hand, the question of law involves agency expertise, we
review the decision of the administrative agency under the
reasonable basis test and defer to the agency if its
interpretation is reasonable.25 We review an administrative
agencys determinations of fact under the substantial evidence
standard.26 Substantial evidence is such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion.27
It is the exclusive province of the board to make determinations
of witness credibility.28
Unless statutory interpretation is required, we review
the boards award of attorneys fees for an abuse of discretion.29
We will uphold the award unless it is manifestly unreasonable.30
IV. DISCUSSION
Circle De challenges Humphreys PTD compensation rate of
$351 per week, his TTD compensation rate of $236.55 per week, the
interest awarded to Humphrey, and the grant of attorneys fees in
excess of the statutory minimum. We consider each contention in
turn.
A. PTD Compensation Rate
In the case of a permanent and total disability, during
the continuance of the disability an employee is entitled to a
compensation award of eighty percent of the employees spendable
weekly wages.31 Under former AS 23.30.220(a), the employees
spendable weekly wage is the employees gross weekly earnings
minus payroll tax deductions.32 Gross weekly earnings were
calculated pursuant to former AS 23.30.220(a)(1): by dividing by
100 the gross earnings of the employee in the two calendar years
immediately preceding the injury. However, in Gilmore v. Alaska
Workers Compensation Board,33 we held that the equal protection
clause of the Alaska Constitution forbids the determination of
gross weekly earnings under AS 23.30.220(a)(1) when the amount
earned by the employee in the two years before the injury is not
an accurate predictor of the losses due to the injury.34 In such
cases, the board should calculate gross weekly earnings pursuant
to former AS 23.30.220(a)(2): by considering the nature of the
employees work and work history, with the caveat that the
compensation may not exceed the employees gross weekly earnings
at the time of injury.35
In Humphrey II the board found substantial evidence
that [Humphreys] gross weekly wage calculated under AS
23.30.220(a)(1) is not an accurate predicator of the employees
losses due to his injury.36 First, Humphreys earnings in the two
years prior to his injury had been the two lowest earning years
in his most recent ten years of employment.37 Second, the board
found several indications that [Humphreys] earning pattern was
changing at the time of his injury, resulting in an increased
future earning potential.38 Following Gilmore, the board
therefore calculated Humphreys PTD compensation rate under former
AS 23.30.220(a)(2) by considering the nature of the employees
work and work history.39
Circle De agrees that it was proper for the board to
use this alternative calculation, but argues that the board
failed to properly execute this calculation. More specifically,
Circle De argues that the board, in setting the PTD compensation
rate at $351 per week, committed error by: (1) relying on
statistical wage rates rather than on Humphreys actual earnings
history; (2) making a factual finding that Humphreys earning
patterns were improving unsupported by substantial evidence; and
(3) awarding Humphrey a PTD compensation rate in excess of his
gross weekly earnings at the time of injury.
1. The board did not fail to consider Humphreys
individual history of earnings and employment when
making its PTD award.
Circle De argues that the board committed error by
using the statistical wage rates for a tree faller, rather than
Humphreys actual earnings history, when calculating his
compensation rate under former AS 23.30.220(a)(2). The board
predicted Humphreys losses due to injury by using the 1998 hourly
wage rate of an experienced tree faller ($21.50) and multiplying
that by the number of hours Humphrey generally worked (fifty per
week).40 The board factored in that Humphreys work was seasonal
in nature and discounted his weekly wage according to the fact
that Humphrey would probably work only about six months per year.41
Circle De contends that using Department of Labor average wage
data to set a PTD compensation rate is contrary to our decision
in Wrangell Forest Products v. Alderson.42
In Wrangell Forest Products we held that when using the
alternative method of calculating gross weekly earnings the board
should focus[] . . . on the particular employee rather than on a
hypothetical employee similarly circumstanced.43 Circle De argues
that, by ignoring Humphreys individual labor and earnings
situation and relying on average wage rates, the board
erroneously focused on a hypothetical employee. However, the
boards decision clearly indicates the consideration of numerous
facts specific to Humphreys situation and their possible effect
on his earnings level. While determining his PTD compensation
rate, the board took into account the nature of Humphreys
employment, the hours and months out of the year that he
typically worked, his work history, and the job offer in
management he received prior to his injury.44 The use of a
statistical average wage rate, in conjunction with the
consideration of Humphreys past work history and his future
earnings potential, does not mean that the board failed to engage
in the kind of personalized assessment that we required in
Wrangell Forest Products.
Circle De also objects to the use of the average wage
rate for an experienced tree faller ($21.50), rather than for an
equipment operator ($14.00), the job it says Humphrey held with
Circle De at the time of his injury. The board awarded Humphrey
PTD compensation using the 1998 average wage rate for an
experienced tree faller because it concluded that such a rate
more accurately predicted Humphreys losses due to his injury and
resulting disability.45 The board pointed to Humphreys testimony
that although he was working as an equipment operator at the time
of his injury, he had experience as a tree faller and preferred
work as a tree faller.46 Because a PTD award is designed to
compensate a worker for his or her economic losses resulting from
permanent exclusion from the work force, consideration of ones
long-term employment prospects in light of prior employment can
be a reliable method for predicting the likely losses following
an employees injury.
We conclude that the boards decision to use the tree
faller wage rate in this case is supported by substantial
evidence. Humphrey testified that he had previously worked as a
tree faller, and his rehabilitation reports suggest that at a
minimum he was employed primarily as a tree faller for each of
the five years from 1987 to 1991. He also testified that he in
fact preferred such employment. And, as discussed in the next
section, the boards factual findings support the notion that
Humphreys earning patterns were stabilizing and improving.
Additionally, the board used the average wage rate for 1998
because that was near the time at which the employee was declared
permanently and totally disabled.47 These findings, in
conjunction with Humphreys past employment as a tree faller,
adequately support the boards calculation of PTD benefits.
2. The boards findings regarding Humphreys earning
patterns are supported by substantial evidence.
Circle De vigorously challenges the boards finding that
Humphreys earnings pattern was changing in a favorable direction
at the time of his injury. First, Circle De questions the boards
reliance on Humphreys testimony that he hoped his job at Circle
De would be permanent because Circle De logged through the
winter, and argues that such subjective hopes should be
disregarded.48 We reject this absolutist position. In Justice v.
RHM Aero Logging, Inc., we stated that [a]n injured workers
intentions at the time of injury regarding future employment are
relevant to determining the reliability of the employees past
work history as a predictor of future lost income.49 Thus we
conclude that Humphreys testimony regarding his intentions and
preferences, to which the board gave credence, cannot be
considered irrelevant in determining his losses resulting from
the injury.
Circle De also challenges the value of other findings
used by the board to support its earnings pattern finding for
example, that Humphrey was offered a job in management elsewhere,
but turned it down; that prior to his 1993 hire he had performed
subcontractor work for Circle De in 1992; that the amount of his
earnings in 1993 demonstrated a more consistent work pattern than
in the previous two years; and that he had purchased a sawmill
and considered using it to earn income.50 The board did not
explain the relative weight it gave to each of these independent
factors in reaching its conclusion. But while it may be that no
one of these factors independently proves that his earnings were
improving, we are satisfied that these factors, when considered
in the aggregate, point toward an improving earnings potential at
the time of injury and that these factors outweigh any evidence
presented pointing in the opposite direction.
3. Humphreys PTD compensation rate did not exceed the
statutory maximum.
When the board applies the alternative calculation
under former AS 23.30.220(a)(2), the rate of compensation is
subject to a ceiling amount it may not exceed the employees
gross weekly earnings at the time of injury. The parties agree
that Humphrey earned a total of $7,752.50 during his 1993
employment with Circle De, but because they cannot agree on the
number of weeks that Humphrey worked at Circle De prior to his
injury, the parties dispute the amount of his weekly earnings at
the time of disability. Circle De contends that Humphreys term
of employment was thirteen weeks, resulting in a gross weekly
wage at the time of injury ($310.10) less than the awarded rate
of compensation ($351).51 In contrast, Humphrey argues that he
actually worked at Circle De for only nine weeks and four days
before his injury, which would lead to a gross weekly wage at the
time of injury ($421.18) well above his awarded compensation
rate. The board agreed with Humphreys characterization of the
facts,52 and this finding is also supported by substantial
evidence.
Though Humphrey was formally hired on February 22,
1993, he argued that he did not actually begin working for
approximately one month.53 After reviewing the evidence, the
board concluded that, though Humphrey had agreed to work for
Circle De on February 22, he did not begin working, or earning a
wage until nine weeks, four days prior to his injury.54 It also
noted that the employer was not obligated to pay the employee
wages until the season could begin and that to calculate his
earnings on time periods that he did not work [is] inherently
unfair.55 In light of our deference to the boards findings of
fact and determinations of witness credibility,56 we uphold the
boards determination of the length of actual employment.
Accordingly, Humphreys PTD compensation rate is not excessive
under former AS 23.30.220(a)(2). In sum, we affirm Humphreys PTD
benefits award.
B. TTD Compensation Rate
Circle De next challenges the boards setting of
Humphreys TTD weekly compensation rate at $236.55. Under former
AS 23.30.220, the calculation of an employees spendable weekly
wage for PTD benefits and for TTD benefits is the same.57
Following the logic of Humphrey II, as explained above, in
Humphrey III the board held that former AS 23.30.220(a)(1) was
not an accurate predictor of Humphreys losses, so it instead
considered the nature of the employees work and work history in
computing Humphreys benefit rate under former AS 23.30.220(a)(2).58
But the board also departed from the Humphrey II calculation
because it found it inappropriate to apply the 1998 wage rates to
a period of temporary disability that spanned from 1993 [to]
1998.59 Instead, the board calculated Humphreys weekly earnings
by multiplying his hourly wage at the time of injury ($14.00)
with his estimated yearly work period (fifty hours per week and
six months per year), resulting in gross weekly earnings of $364
and a weekly TTD compensation rate of $236.55.60 In Humphrey IV,
the board also applied this rate in calculating Humphreys
retroactive PPI benefits owed by Circle De.61
Though the TTD rate is lower than the PTD rate, Circle
De challenges the boards TTD calculation and the boards
underlying findings that Humphrey would have worked fifty hours
per week and six months per year between 1993 and 1998.62 Circle
De posits that Humphreys 1993 earnings with Circle De support a
forty-hour work week, not a fifty-hour work week. However,
Circle Des calculations in this regard are deficient because they
are based on its claimed employment period of thirteen weeks, and
not the actual employment period, as determined by the board, of
nine weeks and four days.63 Having already upheld the fifty-
hour/six-month figures under the boards PTD calculation and the
nine-plus week employment period, as above, we now conclude that
the use of these employment estimations for the TTD calculation,
based on Humphreys work history and future earning potential, is
supported by substantial evidence.
C. The Award of Interest on Humphreys TTD/PPI Benefits
Circle De challenges three awards of interest to
Humphrey by the board. First, after retrospectively increasing
Humphreys TTD benefits compensation rate, in Humphrey III the
board awarded interest on all late-paid TTD benefits.64 Second,
the board did the same in Humphrey IV with respect to late-paid
PPI benefits.65 Third, in Humphrey IV the board concluded that
Circle De was in default for its interest payments on the TTD
benefits under Humphrey III, and accordingly awarded interest on
the defaulted interest payments.66
Circle De argues that the board erred in retroactively
accruing interest from the date that Humphrey was originally
entitled to TTD or PPI benefits, on May 29, 1993. Circle De
contends that the due date for payment for the board-calculated
benefits was not when Humphrey was initially entitled to receive
the benefits, but rather after the boards TTD decision in
Humphrey III and PPI decision in Humphrey IV. In other words,
Circle De argues that any interest on late-paid benefits does not
begin to accrue until after the post-order due date has passed.
We therefore consider when these benefit payments were due, which
will determine the date on which interest for Humphrey began to
accrue.
An employee is entitled to interest on compensation
that is not paid when due.67 Our cases and the purposes behind
interest awards support the boards decision to make the payments
due retroactively to the date Humphrey was entitled to TTD and
PPI benefits, May 29, 1993. We have recognized that awards of
prejudgment interest in workers compensation cases are a way to
recognize the time value of money, and they give a necessary
incentive to employers to . . . release money due. 68
Accordingly, we have held that a workers compensation award shall
accrue lawful interest . . . from the date it should have been
paid.69 We later reiterated the general principle in Houston
Contracting, Inc. v. Phillips70 that interest should be awarded
from the date that an employee was originally entitled to receive
such benefits. There we rejected the assertion that interest
should only accrue after the employer received notice of the
employees claim for increased benefits.71 Similarly, we have
rejected an employers argument that prejudgment interest could
not be awarded on medical payments because medical benefits have
no due date until the board has made a specific order of payment.72
Circle De attempts to distinguish the above line of
authority by stressing the fact that the TTD and PPI benefits
were retroactively increased under the alternative calculation of
former AS 23.30.220(a)(2). Because this alternative calculation
grants the board discretion in setting the employees gross weekly
earnings, Circle De complains that it was incapable of
independently determining the compensation rate at the time of
Humphreys entitlement the adjusted compensation rate could not
be determined by the employer, only the Board can calculate
compensation under AS 23.30.220(a)(2). We do not agree that the
boards decision to use the alternative calculation which is only
done upon a showing that the normal calculation fails to
accurately predict the employees losses should reduce or divest
the employees right to obtain interest on his late-paid benefits.
Although awards of interest are intended to encourage employers
to make timely payments of compensation benefits, they are not
imposed to punish employers; rather, their primary function is to
fairly compensate an injured worker for the time value of money
lost over the period of time in which he did not have access to
money that was owed to him. Moreover, even Circle De concedes
that it remains able to estimate an employees compensation rate
under former AS 23.30.220(a)(2), and to distribute benefits
accordingly. The risk of erroneous estimation on the part of the
employer does not demand a departure from the ordinary interest
rule.
We conclude that the board did not err in awarding
interest on late-paid TTD and PPI benefits, where the due date
for these payments was set on May 29, 1993, the date on which
Humphrey was originally entitled to these benefits.73
D. The Award of Attorneys Fees in Excess of the Statutory
Minimum
Lastly, Circle De argues that the board erred in
granting Humphrey attorneys fees in excess of the statutory
minimum without the prior filing of a fee affidavit by Humphreys
attorney. Attorneys fees for a workers compensation claimant are
governed by AS 23.30.145. Subsection (a) of this statute74
establishes a statutory minimum for attorneys fees: fees may not
be less than twenty-five percent on the first $1,000 of
compensation or part of the first $1,000 of compensation, and ten
percent of all sums in excess of $1,000 of compensation.
Subsection (b)75 provides that the board shall make an award for
costs, including reasonable attorneys fees, if the employer fails
to file timely notice of the controversy, fails to pay
compensation or benefits in a timely manner, or otherwise resists
payment of compensation or benefits.76
Detailed regulations address the application of these
statutory provisions. Under 8 AAC 45.180(b),77 the statutory
minimum set out in AS 23.30.145(a) may be departed from only upon
the filing of an affidavit itemizing the hours expended, as well
as the extent and character of the work performed. If the
request and affidavit are not properly provided, the board will
deny the request for a fee in excess of the statutory minimum
fee, and will award the minimum statutory fee.78 Likewise, under
8 AAC 45.180(d)(1)79 the reasonable attorneys fees discussed in AS
23.30.145(b) will be awarded only if verified by an affidavit.
Failure to file the proper affidavit is considered a waiver of
the attorneys right to recover a reasonable fee in excess of the
statutory minimum fee under AS 23.30.145(a) unless the board
determines good cause exists to excuse the failure to comply.80
The procedural requirements of both subsections can be set aside
only if manifest injustice to a party would result from a strict
application of the regulation; they may not be set aside merely
to excuse a party from failing to comply . . . or to permit a
party to disregard the requirements of the law.81
In Humphrey IV the board departed from the statutory
minimum and awarded Humphrey attorneys fees of thirty-five
percent of the award.82 Since the board relied on the attorneys
fees provision of AS 23.30.145(a) in augmenting the fees, the
affidavit requirements of 8 AAC 45.180(b) would apply unless
modified or waived under 8 AAC 45.195.83
The superior court remanded the issue of augmented
attorneys fees back to the board for findings to support the
boards decision. On remand in Humphrey VI,84 the board made
findings to set aside the procedural requirements because they
worked a manifest injustice. The board stated:
The nature, length, and complexity of the
services provided by Attorney Reinhold were
such to justify the award of attorneys fees
in excess of the statutory minimums. The
employee suffered a head injury which
resulted in on-going short-term memory loss
making attorney-client communication
unusually difficult. This was a highly
contentious dispute with complex issues. The
employees attorney Rhonda Reinhold
successfully prosecuted the employees claims.
Attorney Rhonda Reinhold was instrumental in
obtaining the benefits sought by the
employee. She was also a strong and
effective advocate for her client. The Board
in Humphrey IV awarded substantial benefits
including an increased PPI rate from $110 per
week to $236.55 per week, interest on the
retroactive PPI benefits, an award of penalty
and interest on the interest employer failed
to pay as directed in Humphrey III, and a
supplementary order of default for benefits
ordered by the board in Humphrey III.
Statutory minimum fees would be inadequate in
proportion to the services performed. We
find the fees awarded in Humphrey IV were
reasonable and necessary for the successful
presentation of employees claim.
Accordingly, pursuant to 8 AAC 45.195 we find
that failure to award attorneys fees in
excess of the statutory minimum would result
in manifest injustice.[85]
The board reached this conclusion without the prior filing of a
fee affidavit by Humphreys counsel, and in Humphrey VI Humphrey
was represented by new counsel, not the attorney who obtained the
enhanced award.86 The superior court later upheld the boards
findings.
The boards conclusion regarding the inadequacy of the
statutory minimum would unquestionably be sustainable if the
enhanced fees were awarded on the basis of either a fee affidavit87
or a finding by the board of good cause excusing the filing of an
affidavit.88 In the absence of an affidavit or a finding of good
cause by the board, the only basis for upholding the award of
greater than the minimum statutory fees is 8 AAC 45.195, the
boards regulation permitting procedural requirements to be waived
or modified in cases of manifest injustice. It appears that the
board relied on this regulation, because it found manifest
injustice would result were fees greater than the statutory
minimum not awarded.
In assessing the boards invocation of its power to
waive or modify board regulations, we believe that it is
appropriate to apply a standard that is at least as deferential
as that which we apply when reviewing a trial courts decision to
relax the Civil Rules pursuant to Civil Rule 94. In such cases,
the trial courts invocation of Rule 94 will only be reversed for
abuse of discretion.89 Here, in view of the boards detailed
findings as to the extent and quality of attorney Reinholds
services, and in the absence of any timely claim by the appellant
that the lack of an affidavit impeded its challenge of the boards
award,90 we are unable to conclude that the board abused its
discretion in deciding to waive the affidavit requirement of 8
AAC 45.180(b). Accordingly, we affirm the superior courts
decision to uphold the boards award of attorneys fees to
Humphrey.
V. CONCLUSION
Because the PTD and TTD compensation rates set by the
board were properly calculated under the law and were supported
by substantial evidence, we AFFIRM these rates. Because the
award of interest on Humphreys late-paid TTD and PPI benefits
began to accrue as of the date of TTD and PPI classification, we
also AFFIRM the interest awards. Finally, because the board did
not abuse its discretion in awarding attorneys fees, we AFFIRM
that award.
_______________________________
1 There are discrepancies in the record concerning the
date on which Humphreys injury occurred. The boards decision
states that the injury took place on May 28, 1993. The
occupational injury report, which a Circle De supervisor
completed on May 28, 1993 and submitted to the Alaska Department
of Labor, indicates that the injury occurred on May 27, 1993.
Workers compensation filings and Humphreys hearing brief agree
that the injury occurred on May 27. However, the superior court
decision, which we now review, and Circle De indicate that the
injury occurred on May 23, 1993.
2 AWCB Decision No. 00-0140 (July 11, 2000).
3 Humphrey v. Circle De Lumber Co. (Humphrey II), AWCB
Decision No. 00-0235 (Nov. 20, 2000).
4 Id. at 1, 5-6.
5 882 P.2d 922 (Alaska 1994).
6 See infra note 32.
7 See Humphrey II at 8.
8 Id. at 8-9.
9 Id. at 9-10.
10 Humphrey v. Circle De Lumber Co. (Humphrey III), AWCB
Decision No. 01-0018, 8 (Jan. 19, 2001).
11 Id. at 7-8.
12 Id. at 8-9.
13 Humphrey v. Circle De Lumber Co. (Humphrey IV), AWCB
Decision No. 01-0140 (July 23, 2001).
14 Id. at 4-6.
15 The version of AS 23.30.220(a)(2) that was in effect
provided that PTD and TTD weekly benefits may not exceed the
employees gross weekly earnings at the time of injury. See infra
note 32. The board awarded weekly benefits of $350.11. Humphrey
II at 8. The parties agreed that Humphrey had earned $7,752.50
in his employment with Circle De, but they disputed the length of
his employment. Circle De argued that Humphrey had been employed
for thirteen weeks, resulting in a gross weekly wage at the time
of injury of $310.10, less than that awarded by the board;
Humphrey argued that he had worked less than ten weeks, resulting
in a gross weekly wage rate more than that awarded by the board.
Because the board had not made a factual finding as to the length
of Humphreys employment with Circle De, Judge Wolverton remanded
for additional findings. See infra Part IV.A.3.
16 Humphrey v. Circle De Lumber Co. (Humphrey V), AWCB
Decision No. 03-0104 (May 13, 2003).
17 Id. at 5. The board noted that, although Humphrey
signed an employment contract on February 22, 1993, he did not
begin work until approximately one month later, which led to a
period of employment of nine weeks, not thirteen weeks as
contended by Circle De. Id. at 4-5.
18 Id.
19 Humphrey v. Circle De Lumber Co. (Humphrey VI), AWCB
Decision No. 03-0134, 1 (June 12, 2003).
20 Id. at 5.
21 Appellate Rule 202(a) provides: An appeal may be
taken to the supreme court from a final judgment entered by the
superior court . . . See also City & Borough of Juneau v.
Thibodeau, 595 P.2d 626, 629 (Alaska 1979) ([A] decision of a
superior court, acting as an intermediate appellate court, which
reverses the judgment of the court below or the decision of an
administrative agency and remands for further proceedings, is a
non-final order of the superior court.).
22 Bradbury v. Chugach Elec. Assn, 71 P.3d 901, 905
(Alaska 2003).
23 Robinson v. Municipality of Anchorage, 69 P.3d 489, 493
(Alaska 2003).
24 Alyeska Pipeline Serv. Co. v. DeShong, 77 P.3d 1227,
1231 (Alaska 2003).
25 DeNuptiis v. Unocal Corp., 63 P.3d 272, 277 (Alaska
2003).
26 Robinson, 69 P.3d at 493.
27 Robertson v. Am. Mech., Inc., 54 P.3d 777, 779 (Alaska
2002) (internal quotation omitted).
28 Bradbury, 71 P.3d at 905.
29 Williams v. Abood, 53 P.3d 134, 139 (Alaska 2002).
30 Id.
31 AS 23.30.180(a).
32 Alaska Statute 23.30.220 was revised in 1995. See ch.
75, 9-10, SLA 1995. (The pre-1995 version of AS 23.30.220(a)
can be found in ch. 79, 37, SLA 1988.) Because the injury
occurred in 1993, the board properly applied the statute in
effect during 1993; accordingly, we review the boards decisions
under this statute. Thompson v. United Parcel Serv., 975 P.2d
684, 688 (Alaska 1999) (applying version of workers compensation
statute in effect at time of injury).
33 882 P.2d 922 (Alaska 1994).
34 Id. at 928-29; see also Thompson, 975 P.2d at 689.
35 Gilmore, 882 P.2d at 924 n.1 (quoting former AS
23.20.220(a)(2)).
36 Humphrey II, AWCB Decision No. 00-0235, 7 (Nov. 20,
2000).
37 Id. Humphreys earnings from 1983-1993 were as follows:
Year Earnings
1983 $12,907.41
1984 $ 6,294.20
1985 $13,099.63
1986 $21,676.69
1987 $14,349.41
1988 $15,584.33
1989 $19,195.28
1990 $20,680.98
1991 $ 3,815.14
1992 $ 5,773.80
1993 (injury) $ 7,752.00
Id. at 2-4. Humphreys compensation rate was originally
calculated under AS 23.30.220(a)(1) by dividing his gross
earnings in the years 1991 and 1992 his two lowest earnings
years by one hundred. Id. at 2.
38 Id. at 8. The board considered the following evidence
in concluding that Humphreys history of temporary and seasonal
jobs may be changing into a more consistent work pattern: Circle
De logged year round; Humphrey testified that he hoped his job
would be more than temporary; Humphreys work for Kenai Pacific
Lumber Company in 1992 was actually subcontracting work for
Circle De; Humphrey earned almost as much during part of the year
at Circle De as he had earned during the entirety of the two
previous years; and Humphrey had purchased a sawmill prior to his
injury and received a job offer in management elsewhere. Id.
39 Id.
40 Id.
41 Id.
42 786 P.2d 916 (Alaska 1990).
43 Id. at 918.
44 Humphrey II at 7-9.
45 Id. at 8. Indeed, in rejecting the ordinary
calculation for the compensation rate under AS 23.30.220(a)(1)
and following the alternative method under AS 23.30.220(a)(2),
the board concluded that Humphreys actual past earnings were not
an accurate predictor of his losses.
46 Id. at 4.
47 Id. at 8.
48 Id. at 4.
49 42 P.3d 549, 558 (Alaska 2002).
50 Humphrey II at 5, 8.
51 Circle Des calculation follows the boards approach in
calculating gross weekly wages: assuming a six-month period of
employment over the course of a year and dividing his projected
yearly income at Circle De by fifty weeks. Humphrey II at 8.
52 Humphrey V, AWCB Decision No. 03-0104, 4-5 (May 13,
2003).
53 Id. at 4.
54 Id. at 5.
55 Id.
56 See Robertson v. Am. Mech., Inc., 54 P.3d 777, 779
(Alaska 2002).
57 Alaska Statute 23.30.185 provides that compensation for
a workers TTD benefits shall be eighty percent of the employees
spendable weekly wage.
58 Humphrey III, AWCB Decision No. 01-0018, 7 (Jan. 19,
2001).
59 Id.
60 Id. at 8.
61 Humphrey IV, AWCB Decision No. 01-0140, 4 (July 23,
2001).
62 Circle De also proposes that the board should have
calculated Humphreys spendable weekly wage simply by taking his
average wage over the past ten years. But Circle De makes no
showing that its backward-looking approach was superior to the
boards decision to use Humphreys actual hourly wage at the time
of injury.
63 See supra Part IV.A.3.
64 Humphrey III at 8.
65 Humphrey IV at 4.
66 Id. at 5.
67 Dougan v. Aurora Elec., Inc., 50 P.3d 789, 794 (Alaska
2002); 8 AAC 45.142 (If compensation is not paid when due,
interest must be paid at the rate established in AS 45.45.010 for
an injury that occurred before July 1, 2000 . . .).
68 Childs v. Cooper Valley Elec. Assn, 860 P.2d 1184, 1191
(Alaska 1993) (quoting Moretz v. ONeill Investigations, 783 P.2d
764, 766 (Alaska 1989)).
69 Land & Marine Rental Co. v. Rawls, 686 P.2d 1187, 1192
(Alaska 1984) (emphasis added).
70 812 P.2d 598 (Alaska 1991).
71 Id. at 602.
72 Childs, 860 P.2d at 1191.
73 Because we uphold the boards interest awards, we also
uphold the boards imposition of a penalty under AS 23.30.155(f)
against Circle De for the defaulted interest payments on
Humphreys TTD benefits. Humphrey IV, AWCB Decision No. 01-0140,
5 (July 23, 2001). Circle Des contention regarding this penalty
recognizes that the propriety of the penalty is contingent on the
propriety of the award of interest. Humphrey II, AWCB Decision
No. 00-0235, 5-6 (Nov. 20, 2000).
74 AS 23.30.145(a) provides:
Fees for legal services rendered in respect
to a claim are not valid unless approved by
the board, and the fees may not be less than
25 percent of the first $1,000 of
compensation or part of the first $1,000 of
compensation, and 10 percent of all sums in
excess of $1,000 of compensation. When the
board advises that a claim has been
controverted, in whole or in part, the board
may direct that the fees for legal services
be paid by the employer or carrier in
addition to compensation awarded; the fees
may be allowed only on the amount of
compensation controverted and awarded. When
the board advises that a claim has not been
controverted, but further advises that bona
fide legal services have been rendered in
respect to the claim, then the board shall
direct the payment of the fees out of the
compensation awarded. In determining the
amount of fees the board shall take into
consideration the nature, length, and
complexity of the services performed,
transportation charges, and the benefits
resulting from the services to the
compensation beneficiaries.
75 AS 23.30.145(b) provides:
If an employer fails to file timely notice of
controversy or fails to pay compensation or
medical and related benefits within 15 days
after it becomes due or otherwise resists the
payment of compensation or medical and
related benefits and if the claimant has
employed an attorney in the successful
prosecution of the claim, the board shall
make an award to reimburse the claimant for
the costs in the proceedings, including a
reasonable attorney fee. The award is in
addition to the compensation or medical and
related benefits ordered.
76 Although we have previously noted that subsections (a)
and (b) are construed separately (see Haile v. Pan American, 505
P.2d 838, 840 (Alaska 1973)), they are not mutually exclusive.
Rather, in a controverted case, the claimant is entitled to a
percentage fee under subsection (a) but may seek reasonable fees
under subsection (b). In prior cases we have looked to hourly
measures of reasonable compensation, even though the cases
qualified for treatment under subsection (a). See, e.g., Bailey
v. Litwin Corp., 780 P.2d 1007, 1011 (Alaska 1989) (affirming
boards conclusion that claimant was not limited to statutory
minimum fee calculated under subsection (a), but rather claimant
was entitled to additional reasonable compensation).
77 This subsection provides:
A fee under AS 23.30.145(a) will only be
awarded to an attorney licensed to practice
law in this or another state. An attorney
seeking a fee from an employer for services
performed on behalf of an applicant must
apply to the board for approval of the fee;
the attorney may submit an application for
adjustment of claim or a petition. An
attorney requesting a fee in excess of the
statutory minimum in AS 23.30.145(a) must (1)
file an affidavit itemizing the hours
expended, as well as the extent and character
of the work performed, and (2) if a hearing
is scheduled, file the affidavit at least
three working days before the hearing on the
claim for which the services were rendered;
at the hearing, the attorney may supplement
the affidavit by testifying about the hours
expended and the extent and character of the
work performed after the affidavit was filed.
If the request and affidavit are not in
accordance with this subsection, the board
will deny the request for a fee in excess of
the statutory minimum fee, and will award the
minimum statutory fee.
78 8 AAC 45.180(b).
79 8 AAC 45.180(d) provides:
The board will award a fee under AS
23.30.145(b) only to an attorney licensed to
practice law under the laws of this or
another state.
(1) A request for a fee under AS
23.30.145(b) must be verified by an affidavit
itemizing the hours expended as well as the
extent and character of the work performed,
and, if a hearing is scheduled, must be filed
at least three working days before the
hearing on the claim for which the services
were rendered; at hearing the attorney may
supplement the affidavit by testifying about
the hours expended and the extent and
character of the work performed after the
filing of the affidavit. Failure by the
attorney to file the request and affidavit in
accordance with this paragraph is considered
a waiver of the attorneys right to recover a
reasonable fee in excess of the statutory
minimum fee under AS 23.30.145(a), if AS
23.30.145(a) is applicable to the claim,
unless the board determines that good cause
exists to excuse the failure to comply with
this section.
80 8 AAC 45.180(d)(1).
81 8 AAC 45.195.
82 Humphrey v. Circle De Lumber Co. (Humphrey IV), AWCB
Decision No. 01-0140, 6 (July 23, 2001).
83 8 AAC 45.195 provides:
A procedural requirement in this chapter may
be waived or modified by order of the board
if manifest injustice to a party would result
from a strict application of the regulation.
However, a waiver may not be employed merely
to excuse a party from failing to comply with
the requirements of law or to permit a party
to disregard the requirements of law.
84 Humphrey VI, AWCB Decision No. 03-0134 (June 12, 2003).
85 Id. at 5-6.
86 Id. at 3.
87 8 AAC 45.180(b).
88 8 AAC 45.180(d)(1).
89 City & Borough of Juneau v. Comml Union Ins. Co., 598
P.2d 957, 960 (Alaska 1979).
90 Circle De did not raise the argument that the lack of
an attorneys fees affidavit prevented it from even challenging
the award until its reply brief in this court.
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