Ark. Game & Fish Comm'n v. Gerard

• Decision Date: 18 October 2017
• Docket Number: No. CV–17–59,CV–17–59
• Citation: 530 S.W.3d 887
• Parties: ARKANSAS GAME & FISH COMMISSION and Public Employee Claims Division, Appellant v. Oscar A. GERARD, Jr., Appellee
• Court: Arkansas Court of Appeals

530 S.W.3d 887

ARKANSAS GAME & FISH COMMISSION and Public Employee Claims Division, Appellant

v.Oscar A. GERARD, Jr., Appellee

No. CV–17–59

Court of Appeals of Arkansas, DIVISIONS II, III & IV.

Opinion Delivered: October 18, 2017

Robert H. Montgomery, Public Employee Claims Division, for appellants.

Mark Alan Peoples, PLC, by: Mark Alan Peoples, for appellee.

BART F. VIRDEN, Judge

The Arkansas Game & Fish Commission (AG&F) appeals the Arkansas Workers' Compensation Commission's decision requiring it to pay one hundred percent of the attorneys' fees resulting from additional benefits awarded to Gerard. We reverse.

I. Factual History

Between 2002 and 2013, Oscar Gerard, an employee of AG&F, underwent various medical procedures related to a compensable back injury he sustained while at work. On February 19, 2014, Gerard's treating back surgeon declared that Gerard had attained maximum medical improvement with 16 percent impairment. AG&F accepted liability for the 16 percent impairment rating and a 10 percent wage loss. Two other doctors independently evaluated Gerard, and both opined that his impairment rating was 23 percent to the body as a whole. AG&F accepted the 23 percent impairment rating.

Subsequently Gerard filed a claim in which, among other things, he argued that he was entitled to permanent partial-disability benefits in excess of 10 percent due to the 7 percent increase in his impairment rating, he was entitled to additional temporary total disability benefits, and AG&F should not be entitled to any offset pursuant to Ark. Code Ann. § 11–9–411 (Repl. 2012).

After the hearing on December 22, 2015, the administrative law judge (ALJ) decided partially in Gerard's favor and found that Gerard had established that he is entitled to a 35 percent wage-loss disability award, but that AG&F was allowed to take credit for the previous 10 percent wage loss paid. The ALJ found that AG&F was entitled to the offset provided for in Ark. Code Ann. § 11–9–411 because "it appears to this examiner that Mr. Gerard's Arkansas Public Employment Retirement System (APERS) retirement benefits rate of $2,424.67 to $2,479.79 per month would far exceed his workers' compensation benefit rates of $277.00 or $369.00 per week." The ALJ also found that the attorneys for the parties were entitled to a 25 percent fee on the indemnity benefits awarded to Gerard "one-half of which is to be paid by the claimant and one-half to be paid by the respondents in accordance with Ark. Code Ann. § 11–9–715 [.]"¹ AG&F promptly tendered its half of the of attorneys' fees.

On April 18, 2016, Gerard filed a motion to enforce payment of the attorneys' fees. Gerard explained that his disability retirement compensation exceeded the award of additional benefits, and the offset depleted the "payable benefits" from which the attorneys' fees should be paid. Gerard argued that he effectively never received any compensation, and because Ark. Code Ann. § 11–9–715(a)(2)(B)(i) requires that Gerard's payment of attorneys' fees must come from any benefits he was awarded, AG&F must pay the remaining half of the fees. Gerard stated that

[t]hus, respondent is required to pay the claimant's 1/2 share of the attorney's fee owed and then withhold such an amount from compensation it pays to the claimant, if any. If, as in this case, respondent (because of the offset) ends up paying no compensation to the claimant, then respondent would be entitled to deduct the claimant's ½ share of the fee from any future benefits that may become payable to the claimant.

Essentially Gerard argued that he should not be required to pay his attorneys' fees out of his own pocket when the statute directs that the fees be deducted from the payable benefits.

AG&F responded that this it had made payment of half of the attorneys' fees to the proper entities, and despite the unfortunate offset, Ark. Code Ann. § 11–9–715(a)(2)(B)(i) requires that Gerard be responsible for his half of the attorneys' fees out of his own pocket if necessary. (Add. 40–1)

The ALJ acknowledged that is a case of first impression and that neither the Commission nor the courts had directly addressed which statute had priority over the other. The ALJ explained that "neither Section 411 nor Section 715 is unclear in any relevant way except that both statutes are silent and therefore ambiguous as to which statute applies first to an award of benefits in a controverted claim." The ALJ found that "deduction of the claimant's one-half of the controverted attorneys' fees out of compensation payable to the claimant under Arkansas Code Annotated section 11–9–715(a)(2)(B)(i) precedes any reduction in benefits provided for under Arkansas Code Annotated section 11–9–411(a)(1)." (Add. 48) The ALJ ordered AG&F to pay the claimant's one-half of the fees to the attorney out of the benefits awarded to the claimant. The ALJ based its decision on public policy that enables "an injured worker to obtain the services of an attorney for resolution of a controverted claim." The ALJ also noted that

in a controverted claim such as this where APERS did not assist in the litigation, there could be no money for a third party payer to recover but for the efforts of the claimant's attorney in obtaining the award of benefits. I also note that subordinating the benefits reduction to that of the attorney does not reduce any contractual debt that Mr. Gerard might owe to APERS for double recovery. APERS may still recoup any unpaid portion of its overpayment from Mr. Gerard through any other means of permanent disability benefits[.]

AG&F appealed to the full Commission, and the Commission affirmed and adopted the ALJ's decision. AG&F filed a timely notice of appeal.

On appeal AG&F raises two issues: (1) whether the full Commission erred in its interpretation of Ark. Code Ann. § 11–9–715 by requiring AG&F to pay the full amount of the attorneys' fees from the additional benefits awarded, but not paid, to Gerard; and (2) whether the full Commission erred when it found that the General Assembly intended the attorneys' fees awarded pursuant to Ark. Code Ann. § 11–9–715 to have priority over the offset provided for in Ark. Code Ann. § 11–9–411.

II. Standard of Review and Applicable Law

Typically, this court reviews decisions of the Commission using the substantial-evidence standard of review. J.M.E. v. Valley View Agri Sys., Inc., 2016 Ark. App. 531, at 5, 505 S.W.3d 211, 214. However, the facts here are undisputed, and this court is reviewing the interpretation and application of two statutes. The question of the correct application of a statute is a question of law, which this court decides de novo. In deciding what a statute means, the interpretation of a statute by the agency charged with its execution is highly persuasive and, while not binding on this court, will not be overturned unless it is clearly wrong. Brigman v. City of W. Memphis, 2013 Ark. App. 66, at 2–3, 2013 WL 457909.

Arkansas Code Annotated section 11–9–704(c)(3) requires strict construction of the provisions of the Workers' Compensation Act. Strict construction is narrow construction and requires that nothing be taken as intended that is not clearly expressed. St. Edward Mercy Med. Ctr. v. Howard, 2012 Ark. App. 673, at 4–5, 424 S.W.3d 881, 885. The doctrine of strict construction requires this court to use the plain meaning of the language employed. Id. We construe the statute so that no word is left void, superfluous, or insignificant, and meaning and effect are given to every word in the statute if possible. Hicks v. Bates, 104 Ark. App. 348, 351–52, 292 S.W.3d 850, 854 (2009). When the language of a statute is plain and unambiguous and conveys a clear and definite meaning, there is no need to resort to rules of statutory construction; however, we will not give statutes a literal interpretation if it leads to absurd consequences that are contrary to legislative intent. Id. Our case law requires us to reconcile statutory provisions relating to the same subject to make them sensible, consistent, and harmonious. Id.

Arkansas Code Annotated section 11–9–715(a)(2)(B)(i) requires that

in all other cases whenever the commission finds that a claim has been controverted, in whole or in part, the commission shall direct that fees for legal services be paid to the attorney for the claimant as follows: One-half (1/2) by the employer or carrier in addition to compensation awarded; and one-half (1/2) by the injured employee or dependents of a deceased employee out of compensation payable to them.

Arkansas Code Annotated section 11–9–411(a)(1) deals with the issue of offset:

Any benefits payable to an injured worker under this chapter shall be reduced in an amount equal to, dollar-for-dollar, the amount of benefits the injured worker has previously received for the same medical services or period of disability, whether those benefits were paid under a group health care service plan of whatever form or nature, a group disability policy, a group loss of income policy, a group accident, health, or accident and health policy, a self-insured employee health or welfare benefit plan, or a group hospital or medical service contract.

III. Analysis

A. The Commission's Interpretation of Arkansas Code Annotated Section 11–9–715

Simply put, the plain language of Ark. Code Ann. § 11–9–715 outlines how attorneys' fees are to be paid, and the Commission's decision runs counter to that plain language. The Commission's decision is legal error and must be reversed.

The language of Ark. Code Ann. § 11–9–715(a)(2)(B)(i) clearly sets forth that claimants in controverted workers' compensation cases are responsible for one-half of the attorneys' fees, and those fees are to be paid from the compensation payable to the claimant. In this case, the offset pursuant to Ark. Code Ann. § 11–9–411 eliminates AG&F's obligation to pay any additional benefits to Gerard. AG&F does not owe Gerard anything; and therefore, no deduction of Gerard's one-half portion...