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Rusch v. Southeast Alaska Regional Health Consortium

Supreme Court of Alaska

December 6, 2019

SANDRA J. RUSCH, Appellant,
v.
SOUTHEAST ALASKA REGIONAL HEALTH CONSORTIUM and ALASKA NATIONAL INSURANCE COMPANY, Appellees. BRENDA DOCKTER, Appellant,
v.
SOUTHEAST ALASKA REGIONAL HEALTH CONSORTIUM and ALASKA NATIONAL INSURANCE COMPANY, Appellees.

          Appeals from the Alaska Workers' Compensation Appeals Commission Nos. 17-001, 17-002.

          J. John Franich, Franich Law Office, LLC, Fairbanks, for Appellants.

          Michael A. Budzinski, Meshke Paddock & Budzinski, Anchorage, for Appellees.

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

          OPINION

          STOWERS, JUSTICE.

         I. INTRODUCTION

         An attorney began representing two injured workers after both encountered difficulties representing themselves in their workers' compensation claims against the same employer. Both claimants then successfully resolved their claims through mediation, with both receiving substantial settlements. The parties were unable to resolve the question of their attorney's fees, so the Alaska Workers' Compensation Board held hearings on that issue. The Board limited the witnesses at the hearings and ultimately awarded significantly reduced attorney's fees in both claims. The Alaska Workers' Compensation Appeals Commission affirmed the Board's decisions. Because the Commission incorrectly interpreted our case law about attorney's fees, because the Board denied the claimants the opportunity to present witnesses, and because the amount of attorney's fees awarded to both claimants was manifestly unreasonable, we reverse in part the Commission's decisions and remand for further proceedings.

         II. FACTS AND PROCEEDINGS

         A. Factual Summary Of Each Case Through Settlement

         1. Rusch v. Southeast Alaska Regional Health Consortium

         In June 2012 Sandra Rusch injured her back while working for Southeast Alaska Regional Health Consortium (SEARHC) at its clinic in Klawock. Her healthcare providers imposed various lifting restrictions while she received treatment. SEARHC filed a controversion in October 2012 claiming it had no evidence to support time loss from work. Rusch had fusion surgery on her lumbar spine in January 2013. Medical records show that doctors disagreed about the degree of "incorporation" of the fusion. After the surgery Rusch's healthcare providers continued restrictions on lifting.

         In January 2013 SEARHC paid Rusch temporary partial disability (TPD) from June through December 2012 and began to pay temporary total disability (TTD) as of early January. At about the same time SEARHC sent a form notice to the Reemployment Benefits Section of the Board informing it that Rusch had "been totally unable to return to [her] employment at the time of injury for 45 consecutive days as a result of the injury," beginning on June 24, 2012.[1] Its insurance adjuster handwrote that Rusch had received TPD from June 2012 until mid-December 2012 and had begun to receive TTD in early January 2013. The only communication in the record from the Board about reemployment benefits is a brief email to Rusch asking her to call if she had questions.

         Rusch was laid off from her job, purportedly due to a reduction in force, in April 2013. Rusch had been disciplined the previous month for an incident she said was related to "not lifting up to 50 pounds" as her job description required. Rusch's surgeon had released her to "light duty as tolerated" effective March 1, 2013. The position she previously held was advertised the month after her layoff and included the ability to lift 70 pounds as a job requirement.

         In 2014 SEARHC offered Rusch "$15, 000.00 in medical benefits to help defray the cost of additional care other than fusion revision, if medically necessary within the first year following Board approval" of a settlement; in exchange Rusch would give up all other compensation. The proposed agreement made clear that Rusch's future medical benefits would be "restricted," specifically providing that SEARHC would "be responsible for medical and related transportation benefits relating only to fusion revision, if medically necessary within one year from the date of [Board] approval or rejection of this Agreement." Rusch initially agreed, but she did not sign SEARHC s proposed settlement document. SEARHC s attorney, Theresa Hennemann, informed Rusch in May 2015 that her settlement authority had lapsed and that the workers' compensation insurance carrier would be closing its file related to her claim.

         Attorney David Graham of Sitka entered an appearance and filed a written claim on Rusch's behalf in June 2015, seeking a number of compensation benefits including TTD, permanent partial impairment (PPI), medical costs, and reemployment benefits, and also claiming unfair or frivolous controversion. SEARHC filed an answer and a controversion in late July denying that any further compensation was owed. In October SEARHC offered to settle all claims for a total of $15, 000, with $10, 000 for future medical benefits and $5, 000 for attorney's fees. Rusch did not accept the offer.

         The case was contentious, with a number of discovery disputes. The parties later resolved all claims except attorney's fees through mediation. The settlement agreement preserved Rusch's claim for attorney's fees and costs and required SEARHC to pay $ 1, 000 to one medical provider and an additional $ 100, 000 to Rusch. The Board approved the settlement in early August 2016.

         2. Dockter v. Southeast Alaska Regional Health Consortium

         In February 2014 Brenda Dockter injured her left knee while working for SEARHC in Sitka. After physical therapy and medication did not resolve her pain complaints, she had arthroscopic knee surgery, which improved her symptoms but did not resolve them entirely. All doctors who examined her, including SEARHC s orthopedic physicians, said she would at some point need further knee surgery as a result of the work injury.

         In June 2015, based on its doctor's opinion, SEARHC controverted physical therapy and two medications. Dockter's treating orthopedic physician recommended in October 2015 that she undergo a partial knee replacement. The surgeon's office asked SEARHC to preauthorize the surgery; through its attorney, Hennemann, SEARHC informed the doctor it was "not in a position to preauthorize surgery at this time" [emphasis in original] because in its view Dockter's pain complaints did "not appear to be supported by objective medical evidence." If SEARHC sought an opinion from one of its orthopedic physicians about the partial knee replacement, it did not submit that opinion to the Board.

         After Dockter sought clarification, Hennemann reiterated SEARHC s refusal to preauthorize the surgery, informing Dockter that she could "make [her] own arrangements." As an alternative SEARHC offered to settle the claim on the following terms: SEARHC would pay medical expenses for the partial knee replacement and follow-up care (excluding physical therapy) and a lump sum of $21, 024 (representing TTD, PPI, and a sum for physical therapy); in exchange Dockter would waive all future workers' compensation benefits except for follow-up care related to the partial knee replacement occurring within eight months of the Board's approval of the settlement.

         Dockter filed a written claim seeking unspecified medical benefits in August 2015, and the Board held its first prehearing conference on the claim the following month. At this prehearing conference, SEARHC indicated it had "accepted compensability for medical . . . costs relating to [Dockter's] left knee" with limited exceptions unrelated to the partial knee replacement. A second prehearing conference was held in late November "to review the status of [Dockter's] injuries/treatment and claims." Dockter explained she had requested preauthorization for her knee surgery, and SEARHC told the prehearing conference officer that "no controversion [was] in place regarding the knee injury/treatment." According to the prehearing conference summary, "[w]hen asked why [SEARHC] will not pre-authorize the surgery, [SEARHC] stated that 'they were not saying that the surgery was not medically necessary, just that there is not yet any objective evidence to support the surgery.'" The prehearing conference officer, after quoting AS 23.30.095(a), [2] thought one issue - whether Dockter was "entitled to an order" requiring SEARHC to pay for the surgery - was "ripe for a hearing" and set another prehearing conference to schedule this hearing.

         Hennemann wrote to the Board shortly afterward, taking the position that SEARHC was "simply choosing to exercise [its] statutory right" to "take up to 30 days to consider whether payment or denial should issue after" the doctor billed it for the surgery. SEARHC objected to a prehearing conference on scheduling because Dockter had not filed an affidavit of readiness for hearing.

         On December 8 Graham entered an appearance for Dockter and filed another written claim on her behalf. The parties agreed they were not yet ready for a hearing. After obtaining discovery from SEARHC, Graham wrote a demand letter to Hennemann in early February 2016; there he summarized the medical evidence supporting the surgeon's recommendation and informed her that because SEARHC refused to preauthorize the surgery, the doctor would not perform the surgery without prepayment, which Dockter could not afford. Graham told Hennemann that he would "request further assistance from the Board" if SEARHC did not clearly communicate to the surgeon that it would preauthorize the surgery by a certain date.

         Hennemann responded that SEARHC "would not stand in the way of a hearing on what she called an "advisory ruling[]" from the Board about the compensability of the surgery and suggested as an alternative that Dockter "find a different physician who would not require payment before surgery"; she indicated she would "encourage" her clients to "consider" a request for a change in physicians if Dockter found such a surgeon.

         On February 9 Dockter filed an affidavit of readiness for hearing, a request for an emergency conference, and a request for "an immediate hearing" on the "prospective determination of [the] compensability" of the knee surgery. On February 18 SEARHC told the Board it agreed the knee surgery "would be compensable and payable under the Act," making a hearing on that issue unnecessary. It later insisted, however, that it had not preauthorized the surgery. Dockter had the surgery in March 2016.

         The parties mediated the remaining disputes and reached agreement on all issues except attorney's fees. The Board approved the settlement in August 2016. Under its terms, Dockter agreed to release SEARHC from further claims (except attorney's fees and costs) in exchange for an additional $122, 500.

         B. Procedure In Both Cases Following Mediation

         Billing records from both attorneys suggest they remained in contact with the mediator about the attorney's fees disputes after settlement. Hennemann's July 2016 billing records included entries related to a "memo to mediator" about fee issues as well as communications with the mediator and both her clients about fee issues. Hennemann submitted her billing records only through July 2016, so the record does not reveal whether she communicated further with the mediator in August. Graham submitted to the mediator a document he called a "mediation brief that addressed specific concerns raised by SEARHC as well as the mediator's responses to them. No mediation occurred, however, and the mediator wrote to the attorneys in September acknowledging their request for a hearing on attorney's fees, "which the parties were unable to resolve through mediation."

         The Board scheduled two hearings on the same day to resolve the attorney's fees disputes in both cases. The lead-up to the hearings was contentious. The prehearing conference summaries set an October 19 deadline for submission of witness lists but also allotted time for argument equal to the total time scheduled for hearing. Hennemann wrote to the Board on October 14 because Graham intended to call witnesses at the hearings and she thought this was "inconsistent with the discussions and agreements for proceeding." Graham responded that on October 7 he had spoken with a Board employee who told him he "would not need to request amendment or clarification of the prehearing conference summary in order to" present witnesses at the hearing. The issue was not addressed until the hearing.

         Graham submitted an affidavit of fees for each case, seeking an hourly fee of $425. He sought payment for 277.55 hours in Rusch's case and 180 hours in Dockter's case. The witness list in each case included Graham, three other attorneys, and the claimant in that case. The proposed attorney witnesses either practiced workers' compensation law in Alaska or were familiar with Graham's legal experience.

         The Board held both hearings on October 25, 2016. The Board decided to "go through some preliminary issues" in both cases at once, then proceed separately with argument related to each case individually. Both claimants attended telephonically (and later testified) during the joint proceeding. SEARHC objected to all of the witnesses except Graham, although it complained that allowing Graham to testify would give the claimants a "time advantage" because the parties had an equal amount of argument time. It argued that testimony from the other witnesses (including the claimants) was irrelevant or unnecessary because the information the witnesses might provide was available in the Board's "system" or because SEARHC was willing to stipulate to certain facts, such as the difficulties injured workers face in finding attorneys to represent them, "particularly in the Juneau venue and the Fairbanks venue." SEARHC took the position that what it called "enhanced fees" were only allowed "based upon an attorney's experience in the field of workers' compensation." Graham argued that all factors in the Alaska Rules of Professional Conduct[3] as well as workers' compensation law were relevant to the reasonableness of the requested fees, making the attorney witnesses' testimony directly relevant. He contended that the claimants should be allowed to testify because factors relevant to an attorney's fees award included "issues relating to the client."

         The Board permitted both claimants to testify, but decided none of the attorneys, including Graham, could do so. The Board said that "case law" (which it did not identify) directed the Board to consider only experience in workers' compensation law when evaluating an attorney's fees request. The Board decided Graham had "been afforded the opportunity to provide information in his brief and declined to "provid[e] extra time for testimony." The Board decided the testimony of other witnesses was either irrelevant, repetitious, or both. The Board told the parties it would gather information from its system about the hourly rates received by workers' compensation attorneys and Graham's experience in workers' compensation cases to use in deciding the case.

         Graham asked the Board to clarify how he could present evidence about his experience because "[a]rgument is not evidence." He pointed out that the only evidence in the record was his fee affidavit, which did not contain information about his experience. The hearing officer said it was "difficult to distinguish between a legal argument and testimony" from Graham and indicated the Board had "the record of ICERS, "[4] which she characterized as "our workers' compensation system." She saw no need to provide Graham with a copy or a printout of the information the Board would use because decisions and orders were "in the public sphere"; she told Graham that he could ask for reconsideration of the Board's decision if "there's something that's incorrect or misstated or something that [he] felt wasn't considered that should have been." Graham offered to submit a declaration he had prepared that summarized his experience and discussed the contingent nature of both personal injury and workers' compensation proceedings. SEARHC did not object, although it was concerned that it would not "have means of questioning or challenging it." The declaration was admitted as evidence.

         The declaration briefly outlined Graham's experience, showing he had more than 35 years experience practicing law in multiple states. Most of his work was in "representing personal injury and workers' compensation claimants on a contingent fee basis," and he estimated he had "formally represented hundreds of personal injury clients and dozens of worker[s'] compensation clients," including about 12 in Alaska. But he estimated he had "personally reviewed the status and the legal and factual issues of more than 500 Alaska workers' compensation claimants" in over 20 years of practicing in Alaska; had provided to many claimants "a number of hours" of time, mostly pro bono; and had "been very selective in entering [an] appearance" in workers' compensation cases, in part due to "the difficulties presented for earning a fee." Graham elaborated in his argument to the Board - which we treat as a proffer of the testimony he would have provided about his experience had he been permitted to testify-asserting that he had also practiced in "federal jurisdictions" and had "handled workers' compensation cases in Colorado, in New Mexico, and... in the federal system, in .. . Federal Longshore[] & Harbor Workers' Compensation Act cases." He said he had primarily represented personal injury claimants and drew parallels between the skills needed in personal injury and workers' compensation cases.

         Both Dockter and Rusch testified about the difficulties they encountered while representing themselves, expressed satisfaction with Graham's representation and the settlement of their cases, and recounted some of the work Graham did for them. The Board first heard argument in Rusch's case, with the primary points of contention being the complexity of the case[5] and the issues Rusch prevailed on. The parties' arguments in Dockter's case centered on the extent to which Dockter obtained any benefit from her attorney's efforts, with SEARHC taking the position that she had gotten no real gain from the settlement. SEARHC expressed concern about Graham's billing methods, including his use of quarter-hour time increments.

         Graham had anticipated testifying at the hearing about the time he spent following the initial fee affidavit, as the Board's regulation provides, [6] but Hennemann told the hearing officer that "under the rules" Graham's "updated fee affidavits [were] due ... at the hearing," and the hearing chair apparently agreed. No one identified the source of this "rule." The Board left the record open so that Graham could submit a supplemental fee affidavit for the time related to the hearing and SEARHC could submit detailed objections to Graham's affidavits of fees because SEARHC had not had the opportunity to review the affidavits before filing its hearing briefs owing to deadlines set at the prehearing conference. The Board allowed the claimants to file seven-page responses to the objections, making the responses due by November 11.

         SEARHC filed lengthy objections in both cases - a 21-page list of objections with 23 exhibits and an affidavit in Dockter's case and a 31-page list of objections with 32 exhibits and an affidavit in Rusch's case - and asked the Board to reduce both the hourly fee requested and the total hours. The claimants filed responses on November 14, the first business day following Veteran's Day, a state holiday. SEARHC objected that the responses were filed late and should be stricken. The Board rejected this argument.

         The Board decided that Graham would be awarded an hourly rate of $300 an hour in both cases based on the Board's evaluation of the information it had gathered about the workers' compensation cases in which Graham had entered an appearance. The Board used information from ICERS, Westlaw, and the "Division's Legal Database" to compile a table that listed select attorneys, their years of workers' compensation experience, the number of clients each had represented, and the hourly rates they had been awarded. The Board reduced the number of hours Graham billed in both cases in part because of his "billing methods," such as billing in quarter-hour increments and using block billing.[7] The Board also reduced the hours billed because in its view Graham had spent too much time on some tasks; it additionally reduced his hourly rate based on the Board's assessment of his inexperience. The Board faulted Graham for failing to explain some entries, such as why he had traveled to Klawock to consult in person with Rusch, what issue he discussed with her in a phone call, and which medical records he reviewed on certain dates.

         The Board disallowed time for certain tasks because in its view the claimants were not successful on claims related to those tasks. The Board did not articulate the basis for its decisions about which issues the claimants prevailed on in their settlements. The Board did not allow any time in either claim for the mediation brief on attorney's fees because the Board deemed the document "unnecessary."

         The Board decided that some tasks Graham had billed were actually paralegal tasks, even though Graham argued in written materials that he had been unable to find a part-time paralegal and did not employ one. The Board awarded Graham $ 130 an hour for these tasks. Ultimately the Board reduced Graham's hours in Rusch's case from 292.05 to 131.30 at the rate of $300, for a total attorney's fees award of $39, 390. The Board awarded an additional .95 hour at a paralegal rate of $130 an hour. In Dockter's case, the Board allowed 114.85 hours of attorney time-reduced from 194.5 hours - at $300 an hour and 2.45 hours of time as a paralegal cost at $ 130 an hour. The Board indicated it was awarding fees under AS 23.30.145(b) in both cases, although it also discussed subsection (a) in Rusch's case.[8]

         The claimants appealed to the Commission. After a joint oral argument, the Commission affirmed both Board decisions in separate decisions. The Commission declined to consider whether the Board had violated the claimants' due process rights by prohibiting them from calling witnesses because that issue was beyond its jurisdiction. The Commission decided the presumption of compensability did not apply to the question whether requested fees were reasonable and also determined the Board had not abused its discretion by not allowing the claimants to call the attorney witnesses. According to the Commission, "the testimony of the proposed witnesses would not have provided the Board with any information not already within its knowledge."

         The Commission's legal discussion on the merits of the fees awarded in both cases focused on AS 23.30.145(a); it decided the amount of fees awarded was not manifestly unreasonable. The Commission did not address the claimants' arguments that because they settled their claims, the Board could not determine the issues they prevailed on and that whatever factual findings the Board made about issues they lost were not supported by substantial evidence. The Commission decided that substantial evidence in the record supported the Board's findings, writing that "[t]here is no area of the Act in which the Board has had more opportunity to investigate and decide an issue of fact than that concerning attorney['s] fees." In the Commission's view, the Board properly decided Graham's requested hourly rate was "not justified" when compared to "more experienced attorneys," and it belittled his work in both cases. The Commission did nothing to disturb the Board's decisions, affirming the decisions related to Graham's billing methods. The claimants appeal.

         III. STANDARD OF REVIEW

         "In an appeal from the Alaska Workers' Compensation Appeals Commission, we review the Commission's decision."[9] "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."[10] "We . . . apply our independent judgment to questions of constitutional law."[11] "We independently review the Commission's conclusion that substantial evidence in the record supports the Board's factual findings by independently reviewing the record and the Board's findings."[12] We also review the Commission's legal conclusions about the Board's exercise of discretion by "independently assess[ing] the Board's rulings."[13] The Board's "award of attorney's fees should be upheld unless it is 'manifestly unreasonable.' "[14]

         IV. DISCUSSION

         We recently discussed the trade-off that underlies the workers' compensation system-"the grand bargain"-in which employees relinquish the right to sue for tort damages in exchange for limited but certain benefits and employers pay limited benefits without regard to fault.[15] One of the benefits retained by injured workers is the employer's payment of a worker's attorney's fees when the employer controverts or otherwise resists timely payment of compensation to which the worker is entitled.[16]Because the Alaska Workers' Compensation Act restricts the type of fee arrangement between claimants and their attorneys, [17] we have consistently construed the attorney's fees provisions of the Act as requiring fees awards to be adequate to ensure that competent counsel are available to represent injured workers.[18] We have rejected attempts to tie the hourly fees paid claimants' counsel to the hourly fees for defense counsel.[19] We have also weighed in some cases claimants' attorneys having received only partial fees "that may be dramatically lower than if the attorneys were compensated on an hourly basis" to justify higher fees for them than for defense counsel.[20] We have observed that the objective of ensuring that competent counsel are available to represent injured workers "would not be furthered by a system in which claimants' counsel could receive nothing more than an hourly fee when they win while receiving nothing at all when they lose."[21]

         We have also recognized the importance to claimants of adequate representation, noting that "[w]ithout counsel, a litigant's chance of success on a workers' compensation claim may be decreased."[22] In the cases at bar the Commission itself acknowledged the importance of representation, writing in both decisions that the Board "is well aware of the fact that represented claimants frequently are more successful than unrepresented claimants before the Board, primarily because attorneys are skilled in collecting and presenting the kind of evidence necessary to succeed in a workers' compensation case." As we explain in more detail below, the decisions on appeal to us contain multiple errors and awarded an amount of attorney's fees to both claimants that was manifestly unreasonable.

         A. The Framework For Board-Awarded Attorney's Fees

         Alaska Statute 23.30.145(a) and (b) authorize the Board to award attorney's fees to an injured worker. We have observed that the subsections, while "construed separately, ... are not mutually exclusive."[23] "[I]n a controverted case, the claimant is entitled to a percentage fee under subsection (a) but may seek reasonable fees under subsection (b)."[24] SEARHC controverted benefits in both cases, but it did not controvert all requested benefits in Dockter's case, as it did in Rusch's.

         The claimants in both cases sought fees under Alaska Statute 23.30.145(b), which requires the Board to award a claimant "the costs in the proceedings, including reasonable attorney['s] fees ... in addition to the compensation or medical and related benefits ordered" when an employer resists payment of compensation. SEARHC s Board hearing briefs cited AS 23.30.145(a), which has a provision about minimum fee awards;[25] SEARHC also discussed awards of reasonable fees in addition to the minimum fees.

         The Board and the Commission cited different statutory subsections in their analyses, but neither party raised this as an issue before us. The Board's regulations employ the same standards to fees requested under AS 23.30.145(b) and requests for fees in excess of the statutory minimum under AS 23.30.145(a).[26]

         We have consistently construed AS 23.30.145 "in its entirety as reflecting the legislature's intent that attorneys in compensation proceedings should be reasonably compensated for services rendered to a compensation claimant."[27] Given our recognition that reasonable fees can be awarded in addition to statutory minimum fees under subsection (a), we see no reason to distinguish between the subsections in setting out the factors the Board needs to consider in awarding reasonable attorney's fees.

         When setting the reasonable attorney's fees in these cases, the Board made findings related to two distinct questions: an hourly rate for Graham's services and the number of hours it determined were reasonable for specific tasks. The amount of reasonable fees was the product of multiplying these numbers. The method used here is not the same method the Board used in cases we have reviewed in the past. For example, in Circle De Lumber Co. v. Humphrey, the Board increased the statutory minimum fees by a percentage, awarding the claimant "attorney's fees of thirty-five percent of the award."[28] On the other hand, in Bailey v. Litwin Corp. the Board first calculated a reasonable fee and then adjusted that fee using several factors.[29] The Board's regulation sets out factors the Board must consider in awarding fees but does not say how those factors are to be applied to a request for fees.[30] Neither party discussed whether the method used here is a standard method the Board currently uses to determine fees, nor did either party dispute that this was an appropriate method, so we do not discuss the issue further. We now turn to the issues presented on appeal.

         B. The Commission Erred In Affirming The Board's Analysis About The Issues On Which The Claimants Prevailed.

         Attorney's fees in workers' compensation cases are awarded to successful claimants, [31] and the parties here disputed which issues the claimants prevailed on. In both cases SEARHC argued that the claimants were not successful on certain claims and issues and thus should not be awarded attorney's fees for related work. The Board found that Dockter "prevailed on the primary dispute," the partial knee replacement, but said Dockter had not succeeded on a compensation rate adjustment claim. It did not otherwise discuss her success, even though her written claim sought other relief. The Board decided Rusch was entitled to fees "for services provided on medical benefits, TTD and reemployment benefits" but that she did not prevail on the following issues: "interference with selection of physician, improper influence of physician's medical opinion, unemployment benefits, excessive change of physician, and the ethics of attorney fee negotiation in mediation." It did not offer a rationale for its decisions about success, nor did it explore how the non-monetary issues might have impacted Rusch's success on her monetary claims.

         The claimants argue on appeal that because their cases ended in settlements, they should be awarded attorney's fees for all of their claims unless the issue bargained away "lacked merit or was without legal or factual basis." They rely on Singh v. State Farm Mutual Automobile Insurance Co., where we adopted from federal law a test to determine prevailing party status in civil rights litigation in state court.[32] SEARHC s response is that the claimants did not articulate a standard for "awarding fees in a settlement context."

         We have not been faced with the question how to determine a workers' compensation claimant's success for purposes of awarding attorney's fees when other claims were settled. In a contested case, the Board resolves more than just monetary claims; it may decide procedural or evidentiary issues that can impact the ultimate outcome of the claim. For example, if the Board finds that a party changed physicians too many times, the Board cannot consider the opinions of those doctors.[33] The Board can also sanction a party for disobeying its discovery orders.[34] Excessive changes of physician and discovery disputes were at issue here, and while the cases settled before the issues were fully developed and decided, the Board decreased some of Graham's fees for work on these issues. Rusch additionally alleged that the insurer made multiple misrepresentations and engaged in unfair claim settlement practices as well as interfering with her medical care; these allegations were connected to her claim for unfair or frivolous controversion. Rusch acknowledged in her mediation brief that these were not "claim[s], per se" with an easily identified value, but she argued that were she to prevail on these issues, her chances of success on her monetary claims would "substantially increase."

         We agree with the claimants that the Board should use an analysis similar to the one we adopted in Singh to evaluate a claimant's success on an issue in a workers' compensation settlement. Singh, like this case, involved a fee-shifting statute that allowed reasonable attorney's fees to be awarded to a prevailing party, and like this case, the underlying litigation was resolved through a settlement.[35] The parties disputed whether the plaintiff had prevailed in the underlying suit, with the defendants implicitly contending that "a settling litigant should not become eligible for... attorney's fees by merely reciting an otherwise frivolous . . . civil rights claim in his complaint."[36] To resolve this issue, we adopted a test from the Fifth Circuit that "places the burden on the party opposing attorney's fees to show lack of merit."[37]

         Before the Board SEARHC discounted the claimants' success and the connection between their attorney's efforts and the settlement amounts. Because workers' compensation attorney's fees awards are in some ways analogous to other fee-shifting statutory schemes, we adopt the test from Singh for purposes of evaluating whether a claimant was successful in a settlement.[38] Thus, in a workers' compensation settlement where the parties dispute the issues on which a claimant prevailed for purposes of attorney's fees, the employer "who contends that [its] conduct was a wholly gratuitous response to a [claim] that lacked colorable merit, must demonstrate the worthlessness of the . . . claim[] and explain why [it] nonetheless voluntarily gave the [claimant] the requested relief."[39]

         Here SEARHC asserted that "Dockter fail[ed] in her insistence for preauthorization" of the partial knee replacement and gained no more in TTD than it had offered in 2015. And in Rusch's case SEARHC claimed that the litigation "involved an honest dispute regarding two doctor bills totaling about $500" and that "most of the issues raised during [Graham's] representation completely lacked a factual basis and did not result in any gain through settlement." On remand SEARHC will have the burden of showing why it settled both claims in excess of $100, 000 if they were so lacking in merit.

         We emphasize that the underlying, non-monetary issues, such as the ethics issue and what the Board called "unemployment benefits," should be analyzed in the same manner. The Board decided the claimants had not succeeded on what it called "the ethics of attorney fee negotiation in mediation" and disallowed any time on that issue. The Commission said, "Neither the Board nor the settlement agreement addressed this issue, so it was not an issue for which fees could be awarded." SEARHC's mediation brief in Dockter's case indicated that Graham told Hennemann he wanted "to negotiate all of Ms. Dockter's claim but for fees first and when all preliminary issues are addressed, then negotiate the issue of fees" and that she informed him that this procedure was "not acceptable to [her] clients." The attorney's fees dispute was separated from negotiation of other claims, so it is hard to understand the agencies' decisions that the claimants did not succeed on that issue.

         Both the Commission and the Board faulted Graham for research related to SEARHC's termination of Rusch's employment, [40] but she argued that her eligibility for TTD, and consequently her potential entitlement to reemployment benefits, was related to the loss of her job[41] (which she alleged was due to her continued lifting restrictions) and her receipt of unemployment. Rusch offered in her amended claim to repay all unemployment benefits she had received so that she could receive TTD.[42] Because reemployment eligibility is tied to the employee's inability to return to her employment at the time of injury, [43] Rusch's termination and the reasons for it were not wholly unrelated to her reemployment claim. SEARHC s stated reasons for terminating Rusch's employment was one basis for her assertion that SEARHC had committed an unfair claim settlement practice; she argued that the misrepresentation affected her TTD and reemployment eligibility. The Board should also consider the discovery issues that it did not have to resolve because of the settlement, such as SEARHC s redaction of documents and its failure to file all medical reports, and the impact of these issues on the amount of fees.

         C. Experience In Alaska Workers' Compensation Is Not The Only Factor Relevant To An Attorney's Hourly Rate.

         We turn now to the question of assessing a reasonable fee. A main point of contention in these cases was Graham's hourly rate. He requested $425 an hour and told the Board that it had approved an hourly rate of $350 in other workers' compensation cases he had settled. Graham's proposed rate was based on his 35 years of experience in personal injury and workers' compensation, including brief service work he had done in cases where he did not enter an appearance, as well as the fees he was able to earn in other litigation in Southeast Alaska. The claimants presented argument and proposed findings to the Board on factors set out in Wise Mechanical Contractors v. Bignell;[44] of those factors, the claimants contended that only the nature and length of the professional relationship with the client was not relevant. SEARHC maintained that Graham should be awarded no more than $275 an hour because in its view Graham had "limited experience in Alaska Workers' Compensation matters"; it ...


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