Vitac Corporation v. Workers' Compensation Appeal Board, [J-4-2004] (PA 7/22/2004)
| Decision Date | 22 July 2004 |
| Docket Number | [J-4-2004]. |
| Parties | VITAC CORPORATION v. WORKERS' COMPENSATION APPEAL BOARD (ROZANC). APPEAL OF: SHEILA ROZANC. |
| Court | Pennsylvania Supreme Court |
This appeal was allowed to determine whether paraprofessional fees may be recovered as a component of an award of attorney's fees under Pennsylvania's Workers' Compensation Act.
Appellant Sheila Rozanc ("Claimant") was employed as a stenocaptioner by Appellee Vitac Corporation ("Employer"). In June of 1998, Claimant sustained a work-related injury and received workers' compensation benefits pursuant to a notice of compensation payable, which described her injury as carpal tunnel syndrome of the right wrist. On September 30, 1998, Employer filed a petition to suspend Claimant's benefits, on the basis that she refused reasonable medical treatment, namely, carpal tunnel release surgery. Employer subsequently amended its suspension petition to request, in the alternative, modification of Claimant's workers' compensation benefits, alleging that Claimant had been offered a modified-duty position. In the interim however, Claimant requested attorney's fees pursuant to Section 440(a) of the Worker's Compensation Act,1 77 P.S. §996(a), asserting that Employer's contest was unreasonable. That provision states:
In any contested case where the insurer has contested liability in whole or in part, including contested cases involving petitions to terminate, reinstate, increase, reduce or otherwise modify compensation awards . . . , the employe . .. in whose favor the matter at issue has been finally determined in whole or in part shall be awarded, in addition to the award for compensation, a reasonable sum for costs incurred for attorney's fee, witnesses, necessary medical examination, and the value of unreimbursed lost time to attend the proceedings: Provided, That cost for attorney fees may be excluded when a reasonable basis for the contest has been established by the employer or the insurer.
By order dated August 26, 1999, the workers' compensation judge ("WCJ") granted the modification petition in part, denied the suspension petition, and awarded Claimant attorney's fees based upon a finding that Employer's contest was unreasonable. With respect to the modification petition, the WCJ found that, as of January 27, 1999, Claimant was entitled to only partial disability benefits due to the availability of a modified-duty position at reduced earnings.2 Concerning the suspension petition — which was based solely upon Claimant's alleged refusal of reasonable medical treatment — the WCJ found that Claimant had been willing to undergo carpal tunnel release surgery, but that Employer and its insurer had effectively precluded such treatment by refusing to pay for the procedure. Thus, the WCJ determined that Employer had acted in bad faith in pursuing suspension of benefits and, accordingly, ordered Employer to pay, inter alia, the entire amount of Claimant's attorney's fees, which totaled $4,200.00. The WCJ denied Claimant's request for reimbursement of paralegal and law clerk fees, however, as Section 440(a) does not specifically provide for the award of such fees.
The Workers' Compensation Appeal Board ("WCAB") affirmed the denial of the suspension petition and the grant in part of the modification petition, but reversed the WCJ's determination that the entire contest was unreasonable, noting that Employer ultimately prevailed in its effort to modify benefits. Thus, the WCAB remanded the matter to the WCJ with instructions to award to Claimant only that portion of the attorney's fees attributable to the defense of the suspension petition. Additionally — and critically for this appeal — the WCAB directed that, pursuant to Section 440(a), Claimant should recover any paralegal and law clerk fees associated with the awardable portion of attorney's fees, observing that "it is to the advantage of all employers in the Commonwealth to reduce attorney's fees by the usage of paralegals or law clerks, whose hourly rate[s] are much lower than that of an attorney." Thus, on remand the WCJ awarded attorney's fees in the amount of $1,134.00, a sum which included $92.00 in law clerk and paralegal fees.3
On appeal, a panel of the Commonwealth Court affirmed the WCJ's order in all respects, except as to the inclusion of paraprofessional fees within the award of the attorney's fee. The court noted that the text of Section 440(a) plainly authorizes the shifting of attorney's fees and other specific costs, but is silent regarding paralegal and law clerk fees. Therefore, applying the principle expressio unius est exclusio alterius, the Commonwealth Court held that the WCAB's award of paralegal and law clerk fees was improper and, accordingly, reduced the fee award to $1,042.00. See Vitac Corp. v. WCAB (Rozanc), 817 A.2d 1205, 1212-13 (Pa. Cmwlth. 2003).
As noted, we granted Claimant's petition for allowance of appeal to address the availability of paraprofessional fees under Section 440(a), an issue of first impression in the Commonwealth.
In support of her position that the Commonwealth Court erred in excluding paralegal and law clerk fees from the term "attorney's fee" as used in Section 440(a), Claimant relies primarily upon Missouri v. Jenkins, 491 U.S. 274, 109 S. Ct. 2463 (1989), in which the United States Supreme Court interpreted a similar fee-shifting provision of the federal Civil Rights Attorney's Fees Awards Act, 42 U.S.C. §1988, to subsume fees charged for the work of paralegals, law clerks, and recent law graduates. The Supreme Court explained:
Clearly, a "reasonable attorney's fee" cannot have been meant to compensate only work performed by members of the bar. Rather, the term must refer to a reasonable fee for the work product of an attorney. Thus, the fee must take into account the work not only of attorneys, but also of secretaries, messengers, librarians, janitors, and others whose labor contributes to the work product for which an attorney bills her client . . .. We thus take as our starting point the self-evident proposition that the "reasonable attorney's fee" provided for by statute should compensate the work of paralegals, as well as that of attorneys.
Jenkins, 491 U.S. at 285, 109 S. Ct. at 2470. Additionally, echoing the reasoning of the WCJ and citing to other federal precedent, Claimant urges that "`the lower rates sought for law clerk services are reasonable and should be compensated as part of attorney's fees because the use of such services is a cost-efficient component of the modern practice of law.'" Brief of Claimant at 10 ().
Employer advances the Commonwealth Court's position that the statute on its face enumerates specific types of costs for which reimbursement is allowed, but makes no mention of fees for the work of paraprofessionals such as paralegals and law clerks. According to Employer, this omission reflects a legislative intent that such fees should not be subject to shifting. Employer thus asserts that a plain-text analysis of the statute leaves little doubt that paraprofessional fees are entirely excluded from the provision under review, and submits that such a construction would be consistent with other cases in which this Court has interpreted the terms of Section 440(a) strictly. As an example, Employer cites to Phillips v. WCAB (Century Steel), 554 Pa. 504, 510-11, 721 A.2d 1091, 1094 (1999), in which this Court determined that Section 440 protects claimants, but not employers, from the costs of frivolous litigation. As for the Supreme Court's Jenkins decision, Employer notes that the dissent in that case was of the opinion that "attorney's fee" customarily indicates the fee charged by an attorney, and to construe it otherwise amounted to "linguistic juggling." Jenkins, 491 U.S. at 296, 109 S. Ct. at 2476 (Rehnquist, C.J., dissenting). Finally, Employer argues that, like any other fee-shifting statute, Section 440(a) abrogates the common law rule that the parties bear their own costs and, as such, must be strictly construed.
As a threshold matter, Employer's effort to exclude paraprofessional fees entirely from the purview of Section 440(a) draws little support from the Jenkins dissent. Indeed, the dissenting opinion fully accepted that such services were properly within the purview of the fee-shifting statute under review, and reasoned only that remuneration for those services should be obtained by including them as a component of attorney office overhead rather than as a separate billing item or category. See Jenkins, 491 U.S. at 296, 109 S. Ct. at 2476 (Rehnquist, C.J., dissenting) ().4
Certainly the position of the Jenkins dissent that remuneration for paraprofessional services should be channeled through overhead is in tension with Claimant's arguments here. Contrary to that dissenting position, however, in common experience segregation of paraprofessional services from overhead in accounting for legal services has emerged as a prevailing custom. Presumably, the practice reflects, among other things, a desire to apportion, as fairly and accurately as possible, charges for such services to the clients on whose behalf the services were...
To continue reading
Request your trial