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Warnke-Green v. Pro-West Contractors, LLC

Supreme Court of Alaska

April 26, 2019

BRYCE WARNKE-GREEN, Petitioner,
v.
PRO-WEST CONTRACTORS, LLC and LIBERTY NORTHWEST INSURANCE COMPANY, Respondents.

          Alaska Workers' Compensation Appeals Commission No. 16-014

         Petition for Review from the Alaska Workers' Compensation Appeals Commission.

          Eric Croft, The Croft Law Office, LLC, Anchorage, for Petitioner.

          Constance E. Livsey, Barlow Anderson, LLC, Anchorage, for Respondents.

          Before: Bolger, Chief Justice, Winfree, Stowers, Maassen, and Carney, Justices.

          OPINION

          MAASSEN, JUSTICE.

         I. INTRODUCTION

         The Alaska Workers' Compensation Board denied a worker's request that his employer pay for a van modified to accommodate his work-related disability. On appeal, the Alaska Workers' Compensation Appeals Commission decided that a modifiable van was a compensable medical benefit. The worker moved for attorney's fees. The Commission reduced the attorney's hourly rate, deducted a few time entries, and awarded him less than half of what was requested. The worker asked the Commission to reconsider its award, but it declined to do so because of its view that the Alaska Workers' Compensation Act (the Act) allows it to reconsider only the final decision on the merits of an appeal.

         We granted the worker's petition for review. We hold that the Commission has the necessarily incidental authority to reconsider its non-final decisions. We also reverse the Commission's award of attorney's fees and remand for an award that is fully compensable and reasonable.

         II. FACTS AND PROCEEDINGS

         Bryce Warnke-Green was rendered tetraplegic by a work-related accident in 2014 in Nome, his hometown. He was treated in Seattle at Harborview Medical Center and remained in that area while continuing to receive medical care.

         To get to his medical appointments, Warnke-Green used a cabulance - which he described as a taxicab for wheelchair users - or, when medically necessary, an ambulance. He testified that the cabulance was not entirely reliable, which caused him to miss some appointments. In late 2015 Warnke-Green's father asked the employer, Pro-West Contractors, LLC, to provide Warnke-Green with a modified van. Pro-West had earlier disputed that Warnke-Green's choice of a long-term transportation option would "be compensable under [his] claim," but the parties discussed settling the van issue. Pro-West sent a draft settlement agreement to Warnke-Green providing for Pro-West's "one time only purchase" of a modified van in exchange for his waiver of "all further entitlement to . . . transportation reimbursement" other than for medical emergencies.

         Warnke-Green did not sign the agreement; instead, he obtained an attorney and filed a workers' compensation claim for a "new modified van." Pro-West answered the claim, "d[id] not admit any portion" of it, and raised as an affirmative defense that Warnke-Green had agreed to a settlement but refused to sign it.[1] Warnke-Green later sent a revised settlement agreement to Pro-West that preserved his future entitlement to transportation reimbursements, but Pro-West did not agree to it.

         The Board held a hearing on the "modified van" claim in April 2016. The competing draft settlement agreements were included in the record without objection, though both parties acknowledged that their inclusion was "odd" and "rather unusual."

         In his prehearing memorandum, Warnke-Green cited cases from other states holding that modifying an existing vehicle or acquiring a van with modifications was compensable as a medical benefit. At the hearing he asked for a modified van - his attorney said that "[i]t [did]n't have to be a new one"-with an offset of $500 to $ 1, 000 representing the value of an old Chevrolet Suburban he had in Nome.

         Pro-West, in its prehearing memorandum, identified the "majority view" based on out-of-state cases: "that the employer/insurer generally must pay for the special equipment required to outfit a vehicle" but not "the purchase price of the vehicle itself." According to Pro-West, other states had adopted "the 'Crouch rule' or 'Crouch formula, '" under which the employer is responsible for "the cost of any special equipment or adaptations to a vehicle or van, plus the cost difference between that vehicle and an ordinary non-adapted vehicle such as the type the employee would otherwise have owned." (Emphasis omitted.) Pro-West contended that the Board had already adopted the Crouch rule and had applied it "consistently since 1981." Pro-West also discussed cases from three jurisdictions that rejected similar claims entirely, based on their statutes. At the hearing Pro-West argued that if it was required to provide a van, it should owe only the difference in price between "a standard American car or pickup and a van that's modified," explicitly denying that the offset should be only the value of Warnke-Green's old Suburban.

         The Board denied Warnke-Green's claim in its entirety. The Board decided that under the Act a modified van was not a medical benefit - specifically that it was neither an "apparatus" nor a "prosthetic device."[2] The Board also decided in the alternative that if a van was a medical benefit, the facts of the case did not require the employer to purchase one because Warnke-Green needed a car for personal, not medical, reasons. The Board decided that Warnke-Green was not entitled to a modified van as a transportation benefit either. It dismissed the precedential value of earlier decisions requiring employers to purchase modified vans for employees with similar catastrophic injuries, reasoning that those cases lacked "any legal authority or factual findings to support their results." It declined to follow the Crouch rule - by which the employer pays for modifications plus the difference in cost between the modifiable vehicle and an ordinary, unadapted vehicle - because the cases that adopted the rule "were based on the premise an automobile was a compensable apparatus or device under the applicable state's workers' compensation statute."

         Warnke-Green appealed to the Commission. The Commission, while agreeing with the Board that a modified van was not a "prosthetic device," decided that it was an "apparatus" included within the Act's definition of "medical benefits." It therefore held Pro-West responsible for "any increased cost associated with the purchase of a modifiable motor vehicle and any necessary modifications which will enable Mr. Warnke-Green to use the motor vehicle." The Commission anticipated an offset, noting its belief that the parties had agreed that Warnke-Green would contribute the value of his "inoperable Suburban van." The Commission remanded the case to the Board for further proceedings consistent with its decision.

         Warnke-Green then moved for over $30, 000 in attorney's fees as the successful party in the Commission appeal, [3] including with his motion an itemized affidavit. The requested hourly rates for attorneys were $400 an hour for Eric Croft and $300 an hour for Selena Hopkins-Kendall; the rate for paralegal time was $ 170 an hour.

         Pro-West did not question the requested hourly rates or any individual time entries. It did oppose the motion, however, on grounds that Warnke-Green was not "a successful party" because "[h]e did not prevail on his November 27, 201 [5] claim seeking 'a new modified van.'" Pro-West argued that it was the successful party in the Commission appeal; it quoted part of the Commission's decision to the effect that Pro-West had only "asked him to contribute the value of his Suburban which Mr. Warnke-Green estimates to be between $500 and $1, 000." Pro-West further contended that the Commission's decision validated the position Pro-West had held consistently both before and after Warnke-Green filed his claim. It maintained that Warnke-Green "gained nothing from the entirety of this litigation."

         The Commission, in considering the attorney's fees motion, first reduced the total requested. It decided without explanation that $350 an hour was "a reasonable hourly rate for an attorney practicing in the area of workers' compensation with [Croft's] experience and expertise" and reduced his hourly rate accordingly. It deducted 2.4 hours from Croft's total hours: a tenth of an hour for what the Commission thought was a duplicate billing for an email and 2.3 hours for paralegal supervision, which according to the Commission should have been included in overhead.[4]

         The Commission then considered whether Warnke-Green "actually prevailed on a significant issue on appeal." The Commission agreed with Pro-West that Warnke-Green, having been awarded a modified van minus the value of his Suburban, "obtained only what had been offered prior to the filing of his claim," which the Commission said was "considerably less than what Mr. Warnke-Green sought." The Commission cut in half the "adjusted fees" and awarded attorney's fees of $13, 956.00.

         Warnke-Green asked the Commission to reconsider its decision, arguing that (1) Pro-West's litigation position was not what the Commission seemed to think it was; (2) the Commission's decision gave Warnke-Green more than Pro-West had offered in settlement; and (3) the fee reductions were not justified. The Commission denied reconsideration, however, reasoning that it was allowed to "only reconsider a, final decision on the merits of an appeal." (Emphasis in original.)

         Warnke-Green filed a petition for review, which we granted as to these three issues:

(1) Does the Commission have authority to reconsider orders that are not final decisions? If so, what is the source of the authority and what limits, if any, are there on this authority?
(2) Did the Commission err in considering the parties' underlying litigation before the Board, including any settlement offers, in determining the amount of attorney's fees to be awarded for the appeal before the Commission?
(3) Did the Commission abuse its discretion by awarding the employee less than his full reasonable attorney's fees after he prevailed in his appeal before the Commission?

         III. STANDARDS OF REVIEW

         Whether the Commission has the authority to reconsider orders other than final decisions on the merits is a question of law to which we apply our independent judgment.[5] We interpret a statute "according to reason, practicality, and common sense, considering the meaning of the statute's language, its legislative history, and its purpose."[6]

         We use our independent judgment to interpret the attorney's fees provisions of the Workers' Compensation Act.[7] While we may consider an agency's interpretation of a statute "within [the agency's] area of jurisdiction[] . . . particularly when the agency's interpretation is longstanding, "[8] there is no indication that the Commission, in its award of attorney's fees in this case, was applying a longstanding interpretation of the statute.[9]

         We review the amount of fees awarded for abuse of discretion.[10] To the extent the Commission's decision is based on findings of fact, we consider whether the findings are "supported by substantial evidence in light of the whole record."[11]"Substantial evidence is 'such relevant evidence as a reasonable mind might accept as adequate to suDDort a conclusion.' "[12]

         IV. DISCUSSION

         A. The Commission's Authority To Reconsider Its Decisions Is Not Limited To ...


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