Harnish Group, Inc. v. Moore
| Decision Date | 15 June 2007 |
| Docket Number | No. S-12238.,S-12238. |
| Citation | 160 P.3d 146 |
| Parties | HARNISH GROUP, INC., d/b/a NC Machinery Company; and Alaska National Insurance Company, Appellants, v. Jerry D. MOORE, Appellee. |
| Court | Alaska Supreme Court |
Richard L. Wagg, Russell, Tesche, Wagg, Cooper & Gabbert, Anchorage, for Appellants.
No appearance by Appellee.
Before: FABE, Chief Justice, MATTHEWS, EASTAUGH, BRYNER, and CARPENETI, Justices.
After injuring his back at work, Jerry Moore received workers' compensation benefits and participated in a reemployment plan. When that plan did not work out, another was developed. His employer, NC Machinery Company, changed his benefits to permanent total disability benefits on January 23, 2004 but five days later signed the second reemployment plan. On January 27, 2004, an attorney entered an appearance for Moore; a short while later, the attorney filed a workers' compensation claim on Moore's behalf. In response to this claim, NC Machinery admitted that it was liable for permanent total disability benefits but denied that it should have to pay attorney's fees, asserting that it had not controverted the claim. The Alaska Workers' Compensation Board awarded statutory minimum attorney's fees under AS 23.30.145(a) after finding that NC Machinery had controverted in fact Moore's claim. NC Machinery appealed to the superior court, which affirmed the Board's ruling. NC Machinery appeals the Board's determination that it controverted Moore's claim. Because NC Machinery did not controvert Moore's claim, we reverse the award of statutory minimum attorney's fees under AS 23.30.145(a). But we remand for an award of reasonable attorney's fees under AS 23.30.145(b) because the Board's findings that NC Machinery resisted payment of benefits and that Moore's attorney played a significant role in his receipt of benefits are supported by substantial evidence.
Jerry Moore hurt his back moving a sixty-pound battery while working for NC Machinery Company in Fairbanks. NC Machinery promptly began to pay temporary total disability (TTD) benefits to Moore. Almost a year after the injury, Moore's treating physician, Dr. George Vrablik, notified NC Machinery that Moore would be unable to return to his usual work. Shortly thereafter, both Moore and Alaska National Insurance Company, NC Machinery's workers' compensation insurer, asked that Moore be evaluated for reemployment benefits.1 On September 16, 2002, the Reemployment Benefits Administrator (RBA) found Moore eligible for reemployment benefits. After an evaluation by his chosen rehabilitation specialist, Moore selected the vocational goal of parts salesperson. On December 23, 2002, Moore was involved in a car accident that reinjured his back and left him medically unstable. Because of the car accident, Moore's reemployment plan was suspended to give him time to recover from his new injuries.
On February 13, 2003, Moore signed a fee agreement with Robert Beconovich to represent him in his workers' compensation case. Moore and his wife decided to retain counsel in the workers' compensation case because they were concerned after the motor vehicle accident that "things were going to be getting real complicated and that we needed representation." On February 14, 2003, the Moores sent a letter to NC Machinery, telling it that Beconovich was now handling the workers' compensation case. The Moores continued to have direct contact with NC Machinery and the rehabilitation specialists.
On April 9, 2003, Moore was involved in a second car accident, which he said caused further exacerbation of his back injuries. Dr. Vrablik did not think that Moore had suffered any permanent injury from the April 9 motor vehicle accident. On May 9, 2003, Dr. Vrablik reviewed and approved a job analysis, releasing Moore to work three hours a day, five days a week; the job was a trial work placement in hardware or sporting goods sales. Moore began his trial work as a salesperson in sporting goods on May 19 2003; his new employer provided him with a padded stool to use when he needed to get off his feet. After three days at the trial work placement, Moore indicated that he was in too much pain to continue.
In the meantime, NC Machinery arranged for an employer's independent medical examination (IME) of Moore. On May 14, 2003, Dr. Shawn Hadley, a specialist in physical medicine and rehabilitation, examined Moore and reviewed his medical records and reports. Dr. Hadley expressed the opinion that Moore's employment with NC Machinery was a substantial factor in Moore's back-related complaints and chronic pain problems, and she recommended that Dr. Paul Craig, a neuropsychologist, evaluate Moore as part of the IME. Dr. Craig evaluated Moore on September 3, 2003. His testing showed that Moore had borderline intellectual functioning and a learning disorder. Dr. Craig recommended that any training for Moore be "by seeing and doing" and stated that "[o]n-the-job training would be critical for his success."
On July 22, 2003, Dr. Vrablik determined that Moore was medically stable as of June 24, 2003, and rated him as having a thirteen percent whole person impairment. NC Machinery changed Moore's TTD benefits to permanent partial impairment (PPI) benefits effective June 25, 2003. Moore continued to work with his rehabilitation counselors; they wrote to the RBA in August 2003, informing him that they needed an assessment of Moore's functional capacities before they could develop a new reemployment plan. NC Machinery reclassified Moore's PPI benefits as "41K" benefits after Moore had used up his PPI benefits.2
Dr. Vrablik arranged for Moore to have a physical capacities evaluation on October 8-9, 2003 in Fairbanks as part of the vocational rehabilitation efforts. The physical capacities evaluation showed limitations in all areas, and the evaluator concluded that Moore was not able to work full time or at a sedentary job.
After Moore was found eligible for Social Security disability benefits, he told the rehabilitation specialists that he felt unable to continue in reemployment efforts because he did not believe that he could be retrained or employed. At some point, however, the reemployment process began again, with Moore's participation. Moore was tested at Sylvan Learning Center in December 2003 to assess his educational level. Moore's vocational counselors developed a reemployment plan to train Moore as a check cashier, which was a more sedentary job than the sales job he had previously attempted. To prepare him for this work, Moore first needed to attend six months of basic adult education classes. On January 15, 2004, Dr. Vrablik approved Moore's participation in the classes. The rehabilitation specialists sent the reemployment plan to Moore and NC Machinery for signature. On January 27 Moore told the rehabilitation specialists that he wanted to review the plan with his attorney before he signed it. The next day, NC Machinery signed the reemployment plan.
On January 27, 2004, Beconovich filed his entry of appearance with the Board. On January 30, 2004, NC Machinery filed a compensation report showing that it had reclassified the reemployment (41K) benefits as permanent total disability (PTD) benefits. It sent Moore his first PTD check on January 23, 2004. Moore received this check, labeled "PTD," for an increased amount of money on January 27, 2004.
Beconovich later filed a workers' compensation claim on Moore's behalf. NC Machinery received the claim on February 4; it was filed with the Board on February 10, 2004. The claim sought PTD benefits from July 2, 2001 (the date of injury), as well as interest, attorney's fees, and costs. In its answer to the claim, NC Machinery admitted liability for PTD benefits from June 25, 2003 (the date of medical stability) "through continuing" but denied the claims for attorney's fees and interest. As an affirmative defense, NC Machinery alleged that Moore's disability benefits NC Machinery served its answer on Moore on February 10 and filed the answer with the Board on February 17.
On February 4, 2004, Dr. Hadley again examined Moore to complete her IME. She offered the opinion that Moore's PPI rating should be only five percent of the whole person, noted "validity issues" with the physical capacities evaluation done in October 2003, and recommended that another one be performed in Anchorage if reemployment options remained an issue. She saw no reason that Moore could not be employed full time.
On February 12, after receiving NC Machinery's answer admitting liability for PTD benefits, Beconovich wrote to the rehabilitation specialists who worked with Moore, asking them to close Moore's reemployment case. They promptly wrote the RBA, telling him that they were ending their work on Moore's reemployment benefits.
The Board held a hearing solely on the issue of attorney's fees on August 26, 2004.3 The only two witness were Ryan LeVeque, the claims adjuster for Alaska National, and Lorrie Moore, Moore's wife. The focus of Moore's request for fees was that the second reemployment plan was unreasonable and the employer's pursuit of it demonstrated its resistance to paying PTD benefits. LeVeque testified that he had told Moore's vocational rehabilitation counselors on January 21, 2004 that he would be reclassifying Moore's benefits as PTD. He stated that he had given notice to the Moores of the conversion to PTD benefits by means of the January 30 compensation report. He testified that he did not recognize the Moores' letter informing him of Beconovich's representation as adequate to establish that Beconovich was in fact their attorney. He also indicated that before receiving the workers' compensation claim on February 4, 2004, no one had...
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