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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Lewis-Walunga v. Municipality of Anchorage (4/15/2011) sp-6551

Lewis-Walunga v. Municipality of Anchorage (4/15/2011) sp-6551, 249 P3d 1063

        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,   email 


JUDITH LEWIS-WALUNGA and                       ) 
WILLIAM J. SOULE,                              )       Supreme Court No. S-13825 
                  Petitioners,                 )       Alaska Workers' Compensation 
                                               )       Appeals Commission No. 08-034 
        v.	                               ) 
                                               )       O P I N I O N 
MUNICIPALITY OF ANCHORAGE,                     ) 
                                               )       No. 6551 - April 15, 2011 
                  Respondent.	               )

                Petition for Review from the Alaska Workers' Compensation 
                Appeals Commission, Laurence Keyes, Commission Chair. 

                Appearances:       Michael W. Flanigan, Walther & Flanigan, 
                Anchorage, for Petitioners.       Erin K. Egan, Russell, Wagg, 
                Gabbert & Budzinski, Anchorage, for Respondent. 

                Before:   Carpeneti, Chief Justice, Fabe, Winfree, Christen, 
                and Stowers, Justices. 

                WINFREE, Justice. 


                A successful workers' compensation claimant requested an attorney's fees 

award.     The Alaska Workers' Compensation Board decided her request was "a little 

high" for the benefits she received and reduced the requested fee award by 30 percent. 

She    appealed    the  Board's    order   to  the  Alaska    Workers'     Compensation      Appeals 

Commission.  The Commission reversed the Board's order and remanded the case to the 

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Board for further consideration of a fee award. The claimant then requested an attorney's 

fees award from the Commission for her appeal.  The Commission refused to award her 

attorney's fees, finding she was not the successful party on appeal.                We granted the 

claimant's petition to review the Commission's own attorney's fees decision. We reverse 

the Commission's decision and remand for an attorney's fees award to the claimant for 

work   performed   in   her   appeal   because  it   was   error   for   the   Commission   to   find   the 

claimant was not a successful party. 


                Judith    Lewis-Walunga       was   injured   in  2004    while   employed     by   the 

Municipality      of  Anchorage.      Shortly    after  the   Municipality     controverted    Lewis- 

Walunga's workers' compensation claim, attorney William Soule entered an appearance 

on her behalf before the Board.         In December 2006 the Municipality agreed some of 

Lewis-Walunga's injuries were compensable andpaid attorney's fees for work associated 

with that aspect of her claim.  The Municipality and Lewis-Walunga disagreed about 

several other issues, and Soule continued to represent Lewis-Walunga. 

                The Board heard Lewis-Walunga's case in April 2008.   The issues before 

the Board were additional temporary total disability (TTD), additional permanent partial 

impairment (PPI), additional medical benefits,penalties and interest, and attorney's fees. 

The Board also considered a separate claim by Dr. William Ross, Lewis-Walunga's 

chiropractor, who represented himself.          At the hearing the Municipality agreed to pay 

Lewis-Walunga's         outstanding    medical    bills  except   those   of  Dr.   Ross   exceeding 

frequency standards set by regulation. 

                In a June 2008 decision the Board  determined most disputed issues in 

Lewis-Walunga's   favor,   including   an   increased   PPI   rating   and   the   requested   TTD. 

Although the Board found Lewis-Walunga was "entitled to reasonable attorney's fees" 

under AS 23.30.145(b), it decided more evidence was needed before it could determine 

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the amount because the Municipality claimed the requested fees included hours for work 

on an abandoned issue.        The Board held a second hearing solely on the attorney's fees 

issue, at which time the attorney's fees request totaled $38,920, including time spent 

preparing for and attending the attorney's fees hearing. 

                At   the   hearing   the   Municipality   argued   that   the   requested   amount   was 

excessive   and   that   fees   should   be   awarded   under   AS   23.30.145(a)   rather   than   AS 
23.30.145(b).1     The Municipality also argued that AS 23.30.145 embodied a policy in 

favor of settlement, similar to Alaska Civil Rule 68,2 and urged the Board to reduce 

Lewis-Walunga's attorney's fee award because she had rejected what the Municipality 

described as "a good faith, viable offer." Lewis-Walunga asserted that her requested fees 

included charges the Board routinely reimbursed and that the Board should reject the 

Municipality's Rule 68 argument. 

                The Board issued an order in October 2008.   The Board affirmed its earlier 

decision that Lewis-Walunga was entitled to reasonable attorney's fees and found that 

the attorney's services "were complex, time[-]consuming and costly . . . as supported by 

his affidavits."  But the Board also found that the claimed attorney's fees were "a little 

too high for granting [the] associated [benefits] award," which the Board estimated at 

        1       AS 23.30.145 sets out two alternatives for awarding attorney's fees for work 

before the Board.      When an employer controverts a claim, the Board can award fees 
under AS 23.30.145(a), which sets out a minimum fee award but permits the Board to 
award fees based on consideration of several factors.             If the employer does not file a 
controversion notice but either fails to pay or "otherwise resists" payment, the Board can 
award reasonable attorney's fees under AS 23.30.145(b).               The Board's attorney's fees 
regulation lists several factors the Board must consider in awarding fees under subsection 
.145(b).  See 8 AAC 45.180(d)(2) (2004).             The factors in the regulation largely mirror 
those set out in AS 23.30.145(a). 

        2       Rule 68 provides a mechanism to modify awards of costs and attorney's 

fees in state court civil litigation if a party's ultimate result is not appreciably better than 
a settlement offer made under the Rule. 

                                                  -3-                                            6551

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$20,000 in value.   The Board awarded $27,244 in fees, a 30 percent reduction from the 

requested amount. 

                Lewis-Walunga appealed this order to the Commission.                  In her opening 

brief she requested that the Commission reverse the attorney's fee award and 

                remand the matter back to the Board with instructions to not 
                reduce      Attorney     Soule's    attorney[']s     fees   under    AS 
                23.30.145(b) based on the size of the benefits awarded to his 
                client, but rather to award Attorney Soule such amount of 
                attorney[']s     fees   that  the   Board    finds   were   reasonably 
                incurred in the representation of the employee in this case. 

Lewis-Walunga alternatively requested that the Commission remand the case to the 

Board "to make sufficient findings of fact and legal analysis so as to adequately explain 

the Board's decision."   The Municipality responded that the Board correctly applied the 

law to the case's facts and properly exercised its discretion in awarding reduced fees. 

Lewis-Walunga   replied   that   awarding   reduced   attorney's   fees   based   solely   on   the 

benefits amount was bad policy and contrary to Alaska law, and restated her argument 

that the Board did not make adequate findings. 

                At    oral  argument     before   the   Commission      Lewis-Walunga        expressed 

concern that the Board had implicitly adopted the Municipality's Rule 68 argument, and 

urged the Commission to remand the case to the Board with clear instructions not to 

apply a Rule 68-type analysis.   She also asked the Commission to remand the case to the 

Board because the Board did not adequately explain its reasons for reducing her fees 

request.   The Municipality abandoned its argument that a Rule 68-type analysis should 

apply   to   Board   fees   awards,   but   argued   that   the   Board   had   correctly   applied   the 

regulatory factors in making its award. 

                The Commission vacated the Board's order and remanded the fee dispute 

to   the   Board   for   further   proceedings.  The   Commission   sua   sponte   questioned   the 

applicability of AS 23.30.145(b) and decided that the Board plainly erred in failing to 

                                                  -4-                                             6551

----------------------- Page 5-----------------------

explain why it awarded fees under subsection .145(b) rather than subsection .145(a). 

Noting that AS 23.30.145(a) "establishe[d] a minimum fee, but not a maximum fee," the 

Commission   held   that   "the   record   could   support   the   [B]oard's  decision   to   award   a 

reasonable fee in excess of the statutory minimum" but determined that the Board had 

not made adequate findings. The Commission could not "discern what the [B]oard found 

to justify the conclusion that the award [was] 'a little too high' " and remanded the case 

to the Board for further findings. 

                After the Commission issued its decision Lewis-Walunga moved for an 

attorney's fees award for the appeal.  The Municipality opposed the motion, arguing that 

Lewis-Walunga   was   not   the   successful   party   because   the   Commission   rejected   her 

arguments and she "did not get the relief requested - an award of full attorney's fees." 

                The Commission declined to award fees to Lewis-Walunga, concluding she 

was not the successful party on appeal.  It stated: 

                The    [C]ommission       remanded     this  matter   to  the  [B]oard 
                without      instructions    to    award     [Lewis-Walunga]        full 
                reasonable attorney['s] fees, as [she] requested in briefing. 
                The   [C]ommission   finds   that   the   essential   element   of   the 
                relief   [she]   requested     on   appeal    was    a  remand    with 
                instructions. In the absence of such instructions, a conclusion 
                that [Lewis-Walunga] was the successful party on appeal is 
                unfounded.  The motion for an award of attorney['s] fees and 
                costs   on   appeal   is   DENIED,   without   prejudice   to   [Lewis- 
                Walunga]      to  file  a  subsequent     motion    for  an  award    of 
                attorney['s] fees and costs on appeal, should this matter come 
                before the [C]ommission again. (Emphasis in original.) 

We granted Lewis-Walunga's petition to review the Commission's refusal to award 

attorney's fees for her appeal. 


                In a workers' compensation appeal from the Commission we apply our 

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independent judgment to questions of law that do not involve agency expertise.3  When 

the Commission makes factual findings, its "findings of fact may be reversed on appeal 
if not supported by substantial evidence in light of the whole record."4               Whether the 

Commission correctly applied the law in determining an award of attorney's fees is a 
question of law that we review de novo.5 


        A.      Arguments 

                Lewis-Walunga contends that the Commission made both factual and legal 

errors in denying her request for attorney's fees.         She maintains she was a successful 

party in her appeal because she got the relief she asked for when the Commission agreed 

with her that the Board had not adequately explained its fee award.                Lewis-Walunga 

interprets the Commission's statement that the denial of fees was without prejudice to 

mean that she "could reapply for attorney[']s fees and costs, if the matter ever came 

before the Commission again," and argues that the Commission made a legal error in 

concluding "that a remand by itself was insufficient to bestow prevailing party status." 

She asserts that making an employee wait for fees until a case is entirely resolved is 

contrary to precedent from both this court and the Commission. 

                The Municipality maintains Lewis-Walunga was not a successful party 

before the Commission because it reversed and remanded the Board's order based on an 

issue   the   Commission   raised   sua   sponte   and   because   it   rejected   Lewis-Walunga's 

arguments.      The   Municipality   asserts   that   it   was   the   successful   party   before   the 

        3       Shehata v. Salvation Army, 225 P.3d 1106, 1113 (Alaska 2010) (citing 

Barrington v. Alaska Commc'ns Sys. Grp., Inc., 198 P.3d 1122, 1125 (Alaska 2008)). 

        4       AS 23.30.129(b). 

        5       See   Krone   v.   State,   Dep't   of   Health   &   Soc.   Servs.,   222   P.3d   250,   252 

(Alaska 2009) (citing Glamann v. Kirk, 29 P.3d 255, 259 (Alaska 2001)). 

                                                 -6-                                            6551

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Commission because the Municipality "successfully defended" against Lewis-Walunga's 

claims.  The Municipality disputes Lewis-Walunga's contention that she could reapply 

for attorney's fees for the work done in the present appeal even if she were successful on 


        B.       Decision 

                1.       Statutory interpretation 

                Alaska   Statute   23.30.008(d)   governs   the   Commission's   attorney's   fees 

awards and provides in relevant part:           "In an appeal, the [C]ommission shall award a 

successful   party   reasonable   costs   and,   if   the   party   is  represented   by   an   attorney, 

attorney['s]   fees   that   the   [C]ommission   determines   to   be   fully   compensatory   and 
reasonable."6     The Commission did not explicitly construe "successful party" when it 

denied Lewis-Walunga's request for attorney's fees, but its denial was based on its 

determination that Lewis-Walunga did not get the "essential element" of her requested 
relief.  And although we have interpreted AS 23.30.008(d) in another context,7 we have 

not previously considered who is a "successful party" for purposes of a Commission 

appeal.   When we interpret a statute, we consider the meaning of the statutory language, 

the legislative history, and the purpose of the statute, and we adopt "the rule of law that 
is most persuasive in light of precedent, reason, and policy."8 

                There is little legislative history about AS 23.30.008(d), but what there is 

suggests that the legislature intended Commission attorney's fees awards to follow the 

        6       AS 23.30.008(d) also limits the award of attorney's fees against an injured 

worker to cases in which the Commission finds that the worker's position on appeal was 
frivolous, unreasonable, or taken in bad faith. 

        7       See Shehata, 225 P.3d at 1119 (discussing when appeal is frivolous). 

        8       L.D.G., Inc. v. Brown, 211 P.3d 1110, 1133 (Alaska 2009) (citing Enders 

v. Parker, 66 P.3d 11, 13-14 (Alaska 2003)). 

                                                  -7-                                             6551

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same rules as appellate attorney's fees awards in the courts.              One section-by-section 

analysis of the legislation creating the Commission stated:              "The [C]ommission shall 

award attorney['s] fees to successful appellants, but, as currently is the rule, attorney['s] 

fees   may    not   be  awarded     against   an  employee     unless   the  appeal    was   frivolous, 
unreasonable   or   taken   in   bad   faith."9  The   Commission   itself   has   noted   that   "AS 

23.30.008(d) is modeled on Alaska Rule of Appellate Procedure 508(g)(2)."10 

                Looking at AS 23.30.008(d), we first read the legislature's use of the phrase 

"[i]n an appeal" to signal that the Commission's fee award is independent of success in 

the underlying claim.  Unlike AS 23.30.145(a) or .145(b), AS 23.30.008(d) does not tie 

a fee award to success on a claim - it instructs the Commission to award fees in the 


130 at   7   (Mar.   3,   2005). This   language,   or   very   similar   language,   was   repeated   in 
subsequent analyses.        See  STATE   OF  ALASKA, DEP'T   OF  LAW, SECTION   BY  SECTION 
ANALYSIS OF CSSB 130(FIN) am at 8 (Apr. 15, 2005); 2005 INFORMAL OP. ATT'Y GEN. 
                At   that  time   Appellate    Rule    508(g)(2)    provided    for  awards    of  "full 
reasonable attorney's fees . . . to a successful claimant" in appeals from the Board. 
Appellate Rule 508(g)(1), like AS 23.30.008(d), limited the award of attorney's fees 
against an injured worker to cases in which the court found the worker's position on 
appeal was frivolous, unreasonable, or taken in bad faith.  Appellate Rule 508(g)(1)-(2) 

        10      Municipality of Anchorage v. Syren, AWCAC Dec. No. 015 at 2 (Aug. 3, 

2007); Doyon Drilling Inc. v. Whitaker, AWCAC Dec. No. 008 at 2 n.3 (Apr. 14, 2006). 
Appellate Rule 508(g) was amended in 2008 to provide for attorney's fees awards in 
appeals from the Commission rather than the Board.              The standard for awards was not 
changed.   Alaska Supreme Court Order No. 1671 (May 5, 2008). 

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appeal.11   This is consistent with our application of Appellate Rule 508(g)(2).12 

                We then note that the legislature's language in AS 23.30.008(d) - that fees 

be "fully compensatory and reasonable" - is language we have used to distinguish 

workers'   compensation   attorney's   fees   awards   from   other   types   of   attorney's   fees 
awards.13    We have identified the policy reason behind awards of "fully compensatory 

and reasonable" fees as the need for "competent counsel [to] be available to furnish legal 
services to injured workers."14         Application of this policy to Commission appeals is 

consistent with our application of the policy to Appellate Rule 508(g)(2).15 

                Finally, as to "successful party," we note that Appellate Rule 508(g)(2), the 

model   for   AS   23.30.008(d),   provides:       "In   an   [appeal   from   the   Commission],   full 

reasonable attorney's fees will be awarded to a successful claimant." We have construed 

"successful claimant" as "a workers' compensation claimant who is the prevailing party 
on    a  significant   issue  on   appeal."16     We    now   conclude     that  we   should    interpret 

        11      Compare       AS    23.30.008(d)      (providing     attorney's    fees  for   appellate 

proceedings), with AS 23.30.145(a)-(b) (providing attorney's fees for administrative 

        12      See cases cited at note 16, below (applying Appellate Rule 508(g)). 

        13       Wise Mech. Contractors v. Bignell, 718 P.2d 971, 972-73 (Alaska 1986) 

(citing  Wien Air Alaska v. Arant, 592 P.2d 352, 365-66 (Alaska 1979), overruled on 
other grounds by Fairbanks N. Star Borough Sch. Dist. v. Crider, 736 P.2d 770, 775 
(Alaska 1987)). 

        14      Id. at 973. 

        15      See cases cited at note 16, below (applying Appellate Rule 508(g)). 

        16      Kim v. Alyeska Seafoods, Inc., Case No. S-12754, Order dated July 1, 2009 

(holding "successful claimant" is one who prevails on significant issue on appeal and 
appellant   who   was   prevailing   party   on   only   issue   on   appeal   was   "entitled   to   full 

                                                   -9-                                               6551 

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"successful party" in AS 23.30.008(d) the same way we interpret "successful claimant" 

in Appellate Rule 508(g)(2).  As a policy matter, the term "successful" should have the 

same   meaning   in   both   AS   23.30.008(d)   and   Appellate   Rule   508(g)   -   both   govern 

attorney's fees in workers' compensation appeals, and the same policy considerations 

apply to fee awards for appellate work in both forums.              Accordingly, we hold that a 

claimant is a successful party in an appeal to the Commission when the claimant prevails 

on a significant issue in the appeal. 

                2.     Application to this case 

                This case presents our first opportunity to review a factual finding by the 

Commission.       The   Commission   is   authorized   to   accept   evidence   on   specific   topics, 
including   applications   for   attorney's   fees   and  costs.17  Alaska   Statute   23.30.129(b) 

provides in part, "[t]he [C]ommission's findings of fact may be reversed on appeal if not 

supported by substantial evidence in light of the whole record."  "Substantial evidence 

is 'in light of the record as a whole, . . . such relevant evidence as a reasonable mind 
might accept as adequate to support a conclusion.' "18 

        16      (...continued) 

reasonable attorney's fees incurred in the appeal").  See also Shehata v. Salvation Army, 
Case No. S-12940, Order dated April 26, 2010 (holding appellant who "prevailed on 
significant issues on appeal" was "successful claimant"); Thurston v. Guys With Tools, 
Ltd., Case No. S-12939, Order dated Jan. 27, 2010 (holding "successful claimant" is "the 
prevailing party on a significant issue before the court" and petitioner was prevailing 
party).   We used similar language in discussing whether the claimant in Municipality of 
Anchorage v. Anderson had been successful in his superior court appeal, noting that "it 
appear[ed] plausible, as both the board and the superior court found, that Anderson's 
counsel had prevailed on an important issue and had provided a benefit to him."  37 P.3d 
420, 421 n.7 (Alaska 2001). 

        17      AS 23.30.128(c). 

        18      Rockney v. Boslough Constr. Co., 115 P.3d 1240, 1242 (Alaska 2005) 


                                                -10-                                             6551 

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                In denying Lewis-Walunga attorney's fees, the Commission found that "the 

essential element of the relief [Lewis-Walunga] requested on appeal was a remand with 
instructions" to award full reasonable attorney's fees.19   Lewis-Walunga contests this 

finding, arguing that the Commission was mistaken factually because she was not asking 

the Commission to award her a specific amount of fees but was asking the Commission 

to remand the case to the Board "for a reasoned decision." According to Lewis-Walunga, 

the Commission "committed 'clear error' in its factual ruling that the claimant had not 

asked for a reversal and remand" because she "obtained the actual result she requested." 

                The     Municipality     responds     that   substantial    evidence    supports     the 

Commission's finding because in Lewis-Walunga's opening brief, she wrote: 

                [I]t is respectfully requested that the Commission reverse the 
                attorney[']s fees decision of the Board and remand the matter 
                back     to  [the]   Board    with   instructions    to   award    "full 
                reasonable      attorney[']s    fees",   in   accordance     with    AS 
                23.30.145(b) and 8 AAC 45.180(d)(2), without resorting to a 
                comparison of requested fees versus benefits awarded. 

According to the Municipality, the Commission "specifically rejected the arguments 

[Lewis-Walunga] raised in support of [her] request on appeal."                  In her reply Lewis- 

Walunga quotes a different part of her Commission brief, countering that she asked the 

Commission in the alternative to either remand for further findings or order the Board to 

        18      (...continued) 

(quoting Cheeks v. Wismer & Becker, 742 P.2d 239, 244 n.6 (Alaska 1987)). 

        19      The Commission did not explain what it meant by an "essential element" 

of the requested relief. An essential element usually refers to one of the basic contentions 
a party must prove in order to prevail. See also Greenwood v. State, 237 P.3d 1018, 1022 
(Alaska 2010) (listing "three essential elements" of a necessity defense);               Lockhart v. 
Draper, 209 P.3d 1025, 1028 (Alaska 2009) (noting that "actual damages are not an 
essential   element   of   a   fraudulent   conveyance   action").    Cf. Diaz   v.   State,   Dep't   of 
Corrections, 239 P.3d 723, 727 (Alaska 2010) (setting out essential elements of claims 
under 42 U.S.C.  1983). 

                                                 -11-                                            6551

----------------------- Page 12-----------------------

award fees that had been reasonably incurred in the case. 

                Our review of the entire record leads us to conclude that the Commission's 

finding is not supported by substantial evidence. In her opening brief to the Commission 

Lewis-Walunga asked for the following relief: a remand to the Board "with instructions 

not to reduce Attorney Soule's attorney[']s fees under AS 23.30.145(b) based on the size 

of the benefits awarded to his client" but to award "such amount of attorney[']s fees that 

the Board finds were reasonably incurred in the representation of the employee in this 

case" or "alternatively, to make sufficient findings of fact and legal analysis so as to 

adequately explain the Board's decision." 

                In her reply brief before the Commission Lewis-Walunga claimed that the 

Board's   "terse   explanation"   for   its   decision   made   it   unclear   whether   the   Board   had 

adopted the Municipality's argument that the Board should apply "a Rule 68 analysis." 

She also argued that the Board had not made adequate findings and said, "[o]nly by way 

of reasoned findings, can the Commission expect to be able to conduct adequate reviews 

of [a]ttorney[']s [f]ees [a]wards by the Board in this case or any other."                 In the final 

paragraph of her reply brief Lewis-Walunga requested a remand "for the purpose of 

obtaining a reasoned decision that is not simply based on a comparison of the amount of 

the award and the amount of Appellant's attorney[']s fees." 

                At oral argument before the Commission Lewis-Walunga emphasized that 

a remedy she sought was a remand to clarify the Board's decision.                 She identified "the 

problem[s] in this case" as the Municipality's use of a Rule 68 argument and the lack of 

Board findings.     She asked the Commission to instruct the Board not to use a Rule 68- 

type   of   analysis   when   awarding   attorney's  fees.    She   also   challenged   the   findings' 

adequacy, saying "I defy trying to figure out how you get a 30 percent award out of this 

without some findings."        Although the Commission's decision did not make note of it, 

at   oral   argument   the   Municipality   abandoned   its   argument   for   applying   a   Rule   68 

                                                  -12-                                            6551

----------------------- Page 13-----------------------

analysis when awarding fees.20 

               Because the Commission granted the very relief Lewis-Walunga requested, 

she prevailed on a significant issue in the Commission appeal.             It was error for the 

Commission to find otherwise and to not award Lewis-Walunga her full reasonable 

attorney's fees for work done before the Commission. 


               For the foregoing reasons, we REVERSE the Commission's decision not 

to   award   Lewis-Walunga   attorney's   fees   and   REMAND   to   the   Commission   for   an 

appropriate attorney's fees award. 

       20      We note that neither the workers' compensation statutes nor the Board's 

regulations authorize the Board to consider settlement offers when awarding attorney's 
fees.  See AS 23.30.145(a)-(b); 8 AAC 45.180 (2004). 

                                              -13-                                           6551 
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