D&D Services v. Cavitt

          Petition for Review from the Alaska Workers' Compensation Appeals Commission No. 17-017

          Stacey C. Stone, Holmes Weddle & Barcott, P.C., Anchorage, for Appellants. Keenan Powell, Anchorage, for Appellee.

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

          OPINION

          WINFREE, JUSTICE.

         I. INTRODUCTION

         An employer disputes liability for attorney's fees the Alaska Workers' Compensation Appeals Commission awarded an employee, contending that the employee was not a successful party in the appeal and that the amount awarded was unreasonable. Because the Commission's underlying decision on the merits included a remand on one issue, we asked the parties to provide supplemental briefing on the question whether the attorney's fees order was final for purposes of appeal. We hold that such orders are not final for purposes of appeal, but we treat the putative appeal as a petition for review, grant review, and affirm the Commission's attorney's fees award.

         II. FACTS AND PROCEEDINGS

         Kiel Cavitt fractured his right elbow while working as an auto shop glazier for D&D Services in August 2015. He later received compensation for a permanent partial impairment. Cavitt was unable to continue working as a glazier, and he subsequently went to work as a pizza delivery driver.

         Cavitt fell on his outstretched right hand in February 2017, and a medical scan the following month showed damage to the hardware inserted to repair the elbow injury. Cavitt's doctor said Cavitt was totally disabled from working from March 10 through April 15.

         In March Cavitt filed a written workers' compensation claim against D&D Services seeking temporary total disability (TTD), a compensation rate adjustment, and attorney's fees. D&D Services initially denied liability and filed a notice of controversion. In early April Cavitt filed another written claim, including medical costs, transportation costs, penalty, unfair or frivolous controversion, and interest, in addition to TTD and attorney's fees. He also sought an order that D&D Services was responsible for paying future TTD. In late April D&D Services' doctor said that Cavitt needed a second surgery and that the work injury with D&D Services was the substantial cause of his disability and need for medical care. D&D Services then paid Cavitt TTD, but it did not pay penalty or interest.

         The Alaska Workers' Compensation Board largely denied Cavitt's claim following an August 2017 hearing. The Board decided the controversion was in good faith, declined to impose a penalty, and denied the compensation rate adjustment. The Board agreed Cavitt was owed interest; additionally, it ordered D&D Services to pay Cavitt TTD "until such time as he becomes medically stable." The Board awarded Cavitt only $500 in attorney's fees for his success on these two issues: the order requiring D&D Services to pay TTD and the interest award. The balance of the attorney's fees award was for work done before the employer effectively withdrew its controversion by voluntarily paying TTD.

         Cavitt appealed to the Commission, which for the most part affirmed the Board's decision. The Commission decided, however, that the Board had not awarded Cavitt sufficient attorney's fees. Discussing the difference between Board-ordered compensation and voluntary employer payments, the Commission observed precedent in Underwater Construction, Inc. v. Shirley^[1] requiring that when the Board orders an employer to pay compensation, the employer cannot simply file a notice of controversion and stop paying benefits; the employer must seek modification of the award. The Commission determined the Board had undervalued both the overall services the attorney provided and the importance of the TTD order, observing that D&D Services "strongly resisted" that order.^[2] The Commission decided that "additional attorney fees are owed to Mr. Cavitt's counsel" for prevailing on this issue, and it remanded to the Board "for a determination of the time involved by Mr. Cavitt's counsel on this issue among other benefits obtained for Mr. Cavitt."

         Cavitt then requested attorney's fees in the Commission, seeking costs and nearly $12, 000 in attorney's fees as a successful party in the appeal. D&D Services opposed the motion, contending that Cavitt "lost his appeal on every significant issue except for the remand back to the Board on the attorney's fee issue" but conceded the Commission should award Cavitt some fees.

         The Commission awarded Cavitt $6, 000 in attorney's fees, deciding he had won a significant issue on appeal and was entitled to reasonable attorney's fees. The Commission defined "reasonable... as equitable for the work performed and the results obtained" and found that $6, 000 was reasonable.

         D&D Services appealed the attorney's fees order to us. Because the Commission remanded the case in part to the Board, and because we held in Huit v. Ashwater Burns, Inc.^[3] that the finality rule of City & Borough of Juneau v. Thibodeau^[4] applies to Commission decisions, ^[5] the attorney's fees award in this case was not clearly appealable as a matter of right. In Municipality of Anchorage v. Anderson, a workers' compensation decision pre-dating the Commission's creation, we decided that a superior court's attorney's fees award was not final for appeal purposes when the court's remand to the Board meant the underlying court order was not final.^[6] We asked the parties in this case to brief questions related to the finality of Commission attorney's fees orders.

         III. STANDARD OF REVIEW

         "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."^[7] "We review the amount of fees awarded for abuse of discretion."^[8] "We interpret 'our civil [and appellate] rules de novo, adopting the rule of law which is most persuasive in light of precedent, policy, and reason.' "^[9]

         IV. DISCUSSION

         A. A Commission Attorney's Fees Award In A Case Remanding An Issue To The Board Is Not Appealable As A Matter Of Right.

         The parties take the position that the Commission's attorney's fees award was final and appealable as a matter of right because it meets the tests for finality under administrative law precedent. We do not disagree with the parties that this attorney's fees decision is consistent with administrative ...