Court Holds Award of Reasonable Fees Should Adequately Compensate for Representation Provided, Including Alternative Theories

The Minnesota Supreme Court recognized that an award of reasonable fees should adequately compensate the employee’s attorney for the representation provided, recognizing the attorney’s obligation to be appropriately prepared to address alternative theories.

Hufnagel filed a workers’ compensation claim in 2015 for work-related aggravations to a low-back condition that resulted from an admitted work-related injury in 2009. At all relevant times, Hufnagel worked at the same job, performing the same duties, at the same physical location. But between the 2009 injury and the later aggravations sustained in 2014 and 2015, Hufnagel’s employer and its insurer changed.

The compensation judge concluded Hufnagel’s 2009 work-related injury was a substantial contributing factor to the later aggravations, but held the new employer liable for benefits for the 2014 and 2015 injuries. Relating to Hufnagel’s claim for fees under Minn. Stat. § 176.191, subd. 1, the compensation judge concluded the dispute presented by Hufnagel’s 2015 Claim Petition was only whether the 2009 injury “continued to be a substantial contributing factor” to Hufnagel’s later aggravations, and was not a dispute between employers. Because there was no award of benefits specifically for the 2009 injury, the compensation judge concluded the employee’s counsel was not entitled to attorney fees for time spent establishing the 2009 injury.

The Workers’ Compensation Court of Appeals reversed, holding the compensation judge failed to fully consider the extent to which each employer sought to shift liability to the other employer, concluding the attorney had not been adequately compensated for the time spent providing effective representation to Hufnagel. The WCCA noted it was inappropriate for the compensation judge to treat the time spent on the 2009 injury as unreasonable because “[a]ttorneys are obligated to fully and thoroughly prepare for [a] hearing. This preparation will, without the aid of hindsight, include various theories of the case, some of which may be unsuccessful. Such a result does not make the time spent unreasonable.”

The Minnesota Supreme Court affirmed, holding the efforts by each employer to shift responsibility to the other employer greatly increased the burden on Hufnagel’s counsel to provide effective representation. As a result, Hufnagel was entitled to receive reasonable attorney fees under the statute.

The court further noted attorneys are expected to carefully and thoroughly prepare to represent their clients. This process requires considering, preparing for, and responding to alternative arguments that might win or lose a case for the client. The court noted attorneys should be compensated for the preparation required to thoroughly represent their clients and not just for time spent developing the argument that is ultimately successful.

Please click here to download a copy of the Court’s decision.

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