Carrier Liability to Pay/SIBS Archives

This appeal arises pursuant to the Texas Workers’ Compensation Act, TEX. LAB. CODE ANN. § 401.001 et seq. (1989 Act). A contested case hearing (CCH) was held on February 22, 2005. The hearing officer determined that respondent 1 (claimant) is entitled to supplemental income benefits (SIBs) for the 10th quarter but is not entitled to SIBs for the 11th quarter.

On June 1, 2005, another hearing officer (hearing officer 2) issued a Texas Workers’ Compensation Commission (Commission) Order for Attorney’s Fees (Order) covering services for the period from January 20 through May 9, 2005, approving 20.55 hours for attorney A1, and .55 hours for attorney A2 at $150.00 an hour totaling $3,165.00 plus 1.35 hours of legal assistant time at $50.00 an hour for $67.50, and a total approved fee as requested, of $3,232.50. The Order provides that the fee is to be paid pursuant to Section 408.147(c) and Tex. W.C. Comm’n, 28 TEX. ADMIN. CODE § 152.1(f) (Rule 152.1(f)). The appellant (carrier) appeals the Order, contending that the Order “does not reflect a separation of fees for the 10th and 11th quarters” and that since the claimant only prevailed on one quarter “the carrier is going to issue payment in the amount of $1,616.25” which constitutes half of the ordered amount. The appeal file does not contain a response from either respondent 2 (attorney) or the claimant.

DECISION

Reversed and remanded.

It does not appear that a justification text or log text was submitted in connection with the Order. Section 408.147(c) and Rule 152.1(f) provide essentially that a carrier is liable for reasonable and necessary attorney’s fees incurred by the employee as a result of a carrier’s dispute of SIBs entitlement when the employee prevails. Those fees are paid by the carrier only when it disputes SIBs and loses. Texas Workers’ Compensation Commission Appeal No. 970879 decided June 25, 1997, and cases cited in that case.

The Order approves attorney’s fees for services performed from January 20 through May 9, 2005. It approves “Actions” entitled performed legal research, drafting letters, telephone conferences, “Receive/Review Documents,” prepare for proceedings, and attending proceedings and travel time to attend proceedings. There is no information from which the Appeals Panel can determine the quarter with which each item dealt. The attorney requested, and the Order approved, $3,232.50 in total fees. The carrier does not appeal the reasonableness of the fees.

Section 408.147(c) reads:

(c)If an insurance carrier disputes a commission determination that an employee is entitled to supplemental income benefits [SIBs] or the amount of [SIBs] due and the employee prevails on any disputed issue, the insurance carrier is liable for reasonable and necessary attorney’s fees incurred by the employee as a result of the insurance carrier’s dispute and for [SIBs] accrued but not paid and interest on that amount, according to Section 408.064. Attorney’s fees awarded under this subsection are not subject to Sections 408.221(b), (f), and (i).

Rule 152.1(f) reads:

(f)An attorney for an employee who prevails when a carrier contests a Commission determination of eligibility for [SIBs] shall be eligible to receive a reasonable and necessary attorney’s fee, including expenses. This fee is payable by the carrier, not out of the employee’s benefits and the fee shall not be limited to a maximum of 25% of the employee’s recovery. All provisions of these rules, except § 152.4 of this title (relating to Guidelines for Legal Services Provided to Claimant’s and Carriers), apply.

The carrier appears to concede that it would be liable for attorney’s fees for services performed for the 10th quarter where the claimant prevailed but not for the 11th quarter where the carrier prevailed. Consequently, the carrier took a practical approach and simply halved the attorney’s fees in the Order to cover attorney’s fees for the 10th quarter.

As previously indicated, we are not able to determine from the record before us which of the attorney’s fees are attributable for services performed for the 10th quarter and which for services performed for the 11th quarter. In Appeal No. 970879, supra, the Appeals Panel stated:

We encourage the adjudication of multiple disputed quarters of SIBS by consolidating issues into one CCH, where appropriate, and it is permissible for an attorney to complete one fee application for multiple quarters of SIBS. However, when the adjudication of the disputed SIBS quarter . . . results in entitlement to one or more quarters previously disputed by the carrier and nonentitlement to one or more quarters, the hearing officer entering the order for attorney’s fees must allocate the fees amongst the different quarters.

See also Texas Workers’ Compensation Commission Order No. 97020, decided June 16, 1997.

Accordingly, we reverse the Order and remand for a CCH at which the parties may present evidence as to which fees are allocable to which quarter so that the hearing officer may approve fees allocable to the 10th quarter only.

Pending resolution of the remand, a final decision has not been made in this case. However, since reversal and remand necessitate the issuance of a new decision and order by the hearing officer, a party who wishes to appeal from such new decision must file a request for review not later than 15 days after the date on which such new decision is received from the Commission’s Division of Hearings, pursuant to Section 410.202 which was amended June 17, 2001, to exclude Saturdays and Sundays and holidays listed in Section 662.003 of the Texas Government Code in the computation of the 15-day appeal and response periods. See Texas Workers’ Compensation Commission Appeal No. 92642, decided January 20, 1993.

The true corporate name of the insurance carrier is ROYAL INDEMNITY COMPANY and the name and address of its registered agent for service of process is

CORPORATION SERVICES COMPANY

701 BRAZOS, SUITE 1050

AUSTIN, TEXAS 78701.

Thomas A. Knapp

CONCUR:

Robert W. Potts
Appeals Judge

Margaret L. Turner
Appeals Judge

This appeal arises pursuant to the Texas Workers' Compensation Act, TEX. LAB. CODE ANN. § 401.001 et seq. (1989 Act). A contested case hearing (CCH) was held on June 25, 2004. The hearing officer decided that she did not have jurisdiction to render a decision and order regarding an appeal of the supplemental income benefits (SIBs) attorney’s fees ordered by a hearing officer on April 28, 2004, after the February 20, 2004, benefit CCH. The appellant (carrier) appealed, arguing that no evidence was submitted regarding attorney’s fees prior to the June 25, 2004, CCH, and argues the cover letter accompanying the approved attorney’s fee application contradicts the hearing officer’s decision. The respondent (claimant’s attorney) responded, arguing that the hearing officer properly applied Tex. W.C. Comm’n, 28 TEX. ADMIN. CODE § 152.3 (Rule 152.3) and that the carrier failed to timely request review of the hearing officer’s order on attorney’s fees.

DECISION

Affirmed.

The evidence reflects that a CCH was held on February 20, 2004, and a hearing officer determined that the claimant is entitled to SIBs for the first, second, third, and fourth quarters. Following that CCH by order dated April 28, 2004, attorney’s fees in the amount of $11,728.28 were approved by the hearing officer that presided at the February 20, 2004, CCH. The carrier then requested a CCH (which was held June 25, 2004) regarding its dispute of the attorney’s fees order. The carrier now appeals, following the hearing officer’s determination that she lacked jurisdiction to render a decision and order regarding the dispute of attorney’s fees.

Rule 152.3 governs the process for disputing an award of attorney’s fees. Rule 152.3(d) provides, in part, that “[e]xcept as provided in subsection (e) of this section, an attorney, claimant, or carrier who contests the fee fixed and approved by the [Texas Workers’ Compensation Commission (Commission)] shall request a benefit [CCH].” Rule 152.3(e) provides that “[a]n attorney, claimant, or carrier, who contests the fee ordered by a hearing officer after a benefit [CCH] shall request review by the appeals panel pursuant to the provisions of [Rule] 143.3 of this title (relating to Requesting the Appeals Panel to review the Decision of the Hearing Officer).” The carrier contends that the hearing officer incorrectly interpreted Rule 152.3(e) stating that prior to the June 25, 2004, CCH no evidence was submitted to the hearing officer regarding attorney’s fees. We addressed a similar argument in Texas Workers’ Compensation Commission Appeal No. 952120, decided January 29, 1996, and held that the rule does not require that an evidentiary hearing on the matter of attorney’s fees have actually been held at the CCH on the merits before subsection (e) applies. See also Texas Workers’ Compensation Commission Appeal No. 972388, decided December 18, 1997 (where an award of attorney’s fees, which was issued by a hearing officer after a CCH, was determined to have become final because it was not timely appealed to the Appeals Panel); Texas Workers’ Compensation Commission Appeal No. 992416, decided December 9, 1999 (where an order awarding attorney’s fees was signed by a different hearing officer than the one who had presided at a prior CCH regarding SIBs and the order was appealed directly to the Appeals Panel, albeit not in a timely manner). Where, as here, the Order was issued by a hearing officer following a CCH, Rule 152.3(e) applies and, as such, in order to dispute the Order awarding attorney’s fees, the carrier was required to file an appeal with the Appeals Panel, in the manner prescribed in Rule 143.3.

The carrier contends that the cover letter accompanying the approved attorney’s fees application contradicts the hearing officer’s decision. The carrier's attorney has cited no authority for its contention that the Commission is bound by instructions on a form as opposed to duly promulgated administrative rules. We have before declined to vary the duly promulgated rules of the Commission concerning appeals of attorney's fees orders by informal procedures outside the rules. See Texas Workers' Compensation Commission Appeal No. 981435, decided August 3, 1998.

Under Rule 143.3(a)(3), the carrier was required to file a dispute of attorney’s fees not later than the 15th day after receipt of the hearing officer’s Order. The proper way to appeal the order was not to request a CCH but to file a timely request for review, which was not done in this case. Thus, the hearing officer properly determined that she did not have jurisdiction over the disputed attorney’s fees. Having failed to timely file a request for review of the hearing officer’s Order, the carrier is liable for attorney’s fees in the amount of $11,728.28 pursuant to that Order.

We affirm the decision and order of the hearing officer.

The true corporate name of the insurance carrier is TEXAS PROPERTY & CASUALTY INSURANCE GUARANTY ASSOCIATION for United Pacific Insurance Company, an impaired carrier and the name and address of its registered agent for service of process is

MARVIN KELLY, EXECUTIVE DIRECTOR

9120 BURNET ROAD

AUSTIN, TEXAS 78758.

Margaret L. Turner

CONCUR:

Thomas A. Knapp
Appeals Judge

Edward Vilano
Appeals Judge

This appeal arises pursuant to the Texas Workers' Compensation Act, TEX. LAB. CODE ANN. § 401.001 et seq. (1989 Act). A contested case hearing (CCH) was held on June 16, 2004. The hearing officer determined that she did not have jurisdiction to hear the attorney fee dispute. The appellant (carrier herein) files a request for review in which it argues that the hearing officer erred in finding that she lacked jurisdiction. The carrier argues that in the alternative the Appeals Panel should render a decision that the claimant timely invoked the jurisdiction of the Appeals Panel and set aside the attorney’s fee order under review in this case. Finally, the carrier complains that a new hearing should be held because it objected to the hearing being held telephonically. There is no response from the respondent (claimant herein) in the appeal file.

DECISION

We lack jurisdiction over the matter in dispute as the Commision’s Order for Attorney’s Fees has already become final.

On March 26, 2004, a hearing was held as to whether the claimant was entitled to supplemental income benefits for the third quarter. This hearing was held before the same hearing officer who conducted the CCH in the present case. On April 12, 2004, the hearing officer issued a Commission Order for Attorney’s Fees, granting the attorney’s fees in the amount of $2550.00. The carrier disputed that these fees were reasonable and necessary and requested a CCH. On May 6, 2004, the carrier also filed a request for review requesting the Commission’s Order for Attorney’s Fees be set aside. Commission records indicate that this request for review was docketed as Texas Workers’ Compensation Commission Appeal No. 040916 and that the Appeals Panel never ruled upon the request instead sending out a letter stating that the Order had become final pursuant to Section 410.204.

Since the Commission’s Order for Attorney’s Fees has become final, the Commission has no jurisdiction to take further action on the Order.

The true corporate name of the insurance carrier is ZURICH AMERICAN INSURANCE COMPANY and the name and address of its registered agent for service of process is

LEO F. MALO

12222 MERIT DRIVE, SUITE 700

DALLAS, TEXAS 75251-2237.

Gary L. Kilgore
Appeals Judge

CONCUR:

Elaine M. Chaney
Appeals Judge

Veronica L. Ruberto
Appeals Judge

This appeal arises pursuant to the Texas Workers' Compensation Act, TEX. LAB. CODE ANN. § 401.001 et seq. (1989 Act). A contested case hearing was held on April 27, 2004. With respect to the issue before him, the hearing officer determined that attorney’s fees in the amount of $1,340.00 were reasonable and necessary and that the benefits were to be paid by the appellant (carrier) pursuant to Section 408.147(c). In its appeal, the carrier argues that the hearing officer erred in ordering the carrier to pay benefits under Section 408.147(c), arguing instead that the fees are payable out of respondent 2’s (claimant) benefits. The appeal file does not contain a response from respondent 1, an attorney in the firm that represented the claimant. In addition, the claimant did not appear at the hearing or file a response to the appeal. The carrier did not appeal the determination that the total approved fee of $1,340.00 was reasonable and necessary and that determination has, therefore, become final in accordance with Section 410.169.

DECISION

Reversed and a new decision rendered that the attorney’s fees are to be paid from the claimant’s benefits and that the carrier is not liable for fees in accordance with Section 408.147(c).

Section 408.147(c) provides:

If an insurance carrier disputes a [Texas Workers' Compensation] Commission (Commission)] determination that an employee is entitled to supplemental income benefits [SIBs] or the amount of [SIBs] due and the employee prevails on any disputed issue, the insurance carrier is liable for reasonable and necessary attorney's fees incurred by the employee as a result of the insurance carrier's dispute and for [SIBs] accrued but not paid and interest on that amount, according to Section 408.064.

The carrier argues that it is not liable for attorney’s fees in this case because the Commission did not determine that the claimant is entitled to second quarter SIBs. Rather, the carrier agreed to pay SIBs voluntarily after it received a report from a required medical examination that the claimant agreed to attend at a benefit review conference, which resolved the carrier’s dispute of the 15% impairment rating that had been assigned to the claimant. The carrier’s argument is well taken. The common thread in our cases that have required the carrier to pay fees pursuant to Section 408.147(c) is that the Commission determined that the claimant was entitled to the SIBs being sought, either at a hearing or by approving an agreement between the parties to pay those benefits. That is, in order for the carrier to be liable for attorney’s fees in a SIBs case under Section 408.147(c), there must be a Commission determination at some level of the dispute resolution process that the claimant is indeed entitled to the benefits sought. We have determined that that requirement is established by the statutory language. In this instance, there was no determination made by the Commission at any level of the dispute resolution process that the claimant was entitled to second quarter SIBs. As a result, the carrier’s obligation to pay attorney’s fees pursuant to Section 408.147(c) was never triggered. The claimant’s attorney and the hearing officer advanced policy arguments of why the carrier should be required to pay fees in this circumstance. While those arguments are certainly persuasive, this case simply does not fall within the framework of when the Commission can order the carrier to pay attorney’s fees in SIBs cases. As such, neither the hearing officer nor the Appeals Panel has the authority to order the carrier to pay attorney’s fees under 408.147(c). Rather, the approved fees must be paid out of the claimant’s benefits.

The hearing officer’s determination that the carrier is liable for $1,340.00 in attorney’s fees pursuant to Section 408.147(c) is reversed and a new decision rendered that those fees are to be paid out of the claimant’s benefits.

The true corporate name of the insurance carrier is TEXAS MUTUAL INSURANCE COMPANY and the name and address of its registered agent for service of process is

RUSSELL R. OLIVER, PRESIDENT

221 WEST 6^TH STREET

AUSTIN, TEXAS 78701.

Elaine M. Chaney
Appeals Judge

CONCUR:

Chris Cowan
Appeals Judge

Thomas A. Knapp
Appeals Judge

This appeal is brought pursuant to the Texas Workers' Compensation Act, TEX. LAB. CODE ANN. § 401.001 et seq. (1989 Act). A contested case hearing (CCH) was held on May 11, 2001. The hearing officer resolved the sole disputed issue by determining that the respondent (claimant's attorney) was entitled to $5862.50 in attorney fees. The appellant (carrier) filed a request for review asserting that the hearing officer erred in awarding attorney's fees to the claimant's attorney for services performed before the carrier disputed the claimant's entitlement to supplemental income benefits (SIBs). The claimant's attorney urges affirmance of the hearing officer's determination that the claimant's attorney is entitled to $5,862.50 in attorney's fees as reasonable and necessary fees for services performed.

DECISION

Reversed and rendered.

At the CCH, the parties stipulated that the carrier disputed the claimant's entitlement to SIBs on January 12, 2000, and that the claimed attorney fees were reasonable, necessary, and performed, except for one hour of services which related to a subsequent quarter. By stipulating to these essential facts, the parties left the hearing officer with the task of applying the law to the facts. The fees at issue here related to the second SIBs quarter, with the carrier becoming liable for some amount of attorney's fees when the claimant prevailed in the dispute over second quarter SIBs. Section 408.147(c). The carrier took the position that attorney's fees may only be awarded for services performed after the carrier disputes the SIBs quarter in question. The claimant's attorney argued that all reasonable and necessary attorney's fees incurred should be paid by the carrier. The statutory provision at issue is Section 408.147(c). It provides that:

If an insurance carrier disputes a [Texas Workers' Compensation] commission determination that an employee is entitled to supplemental income benefits or the amount of supplemental income benefits due and the employee prevails on any disputed issue, the insurance carrier is liable for reasonable and necessary attorney's fees incurred by the employee as a result of the insurance carrier's dispute and for supplemental income benefits accrued but not paid and interest on that amount, according to Section 408.064. (Emphasis added)

The Appeals Panel has previously held that Athe clear language of Section 408.147(c) . . . designate[s] the carrier's dispute as the action at which point the carrier then becomes liable for any resulting (and necessarily subsequent) attorney's services and fees. Texas Workers' Compensation Commission Appeal No. 990990, decided June 23, 1999 (unpublished). Texas Workers' Compensation Commission Appeal No. 950534, decided May 19, 1995 (unpublished), cited by the claimant's attorney, is not applicable to the facts of this case as it involves a disputed issue concerning whether the insurance carrier was liable for attorney's fees only after the Commission ordered payment of SIBs. In the case at the bar, the issue is payment of attorney fees prior to the date that the insurance carrier disputes the SIBs claim, and not the date the Commission orders payment of SIBs.

We reverse the hearing officer's determinations and render a new decision that for the quarter in question, 24.25 hours of attorney time and 4.25 hours of paralegal time were reasonable, necessary, and performed; that attorney's fees are approved in the amount of $3,850.00; and that the carrier is liable for $3850.00 in attorney's fees incurred by the claimant as a result of the carrier's dispute.

Michael B. McShane

CONCUR:

Thomas A. Knapp
Appeals Judge

Robert W. Potts
Appeals Judge

This appeal arises pursuant to the Texas Workers’ Compensation Act, TEX. LAB. CODE ANN. § 401.001 et seq. (1989 Act). A contested case hearing (CCH) was held on May 11, 2000. The issues at the CCH were whether the attorney fee orders approved by the Texas Workers’ Compensation Commission (Commission) on May 10, 11, and 16, 2000, were excessive and, if so, the amount of attorney’s fees that should be awarded for the dates of service set forth in the attorney fee applications submitted by Ms. T.

The hearing officer determined that the fees awarded on the subject attorney’s fee orders were excessive and ordered the payment of a lesser amount of fees. The appellant/cross-respondent, Ms. T, appealed the hearing officer’s decision, asserting that all of the time claimed and fees requested were reasonable and necessary and should have been awarded, and requested that we reverse and render an order in her favor for all attorney’s fees requested. The respondent/cross-appellant (carrier) appealed, asserting that the hearing officer’s decision was unsupported by the evidence and requesting that we reverse and render an order for a more reasonable fee.

DECISION

Affirmed.

Ms. T, attorney for the claimant, filed multiple fee requests for representing the claimant in disputes concerning the first and third quarter of supplemental income benefits. The Commission had determined that the claimant was entitled to the first quarter, a determination that the carrier disputed. The carrier then paid the second quarter, but disputed the third. The claimant ultimately prevailed on the first and third quarters, the fee requests were filed and partially approved, and the attorney fee orders were disputed. After a hearing during which evidence was presented on the fee requests, the hearing officer determined that Ms. T was entitled to most of the fees requested, but not all. Both Ms. T and the carrier appealed the hearing officer’s decision.

The standard of review in attorney's fees cases is abuse of discretion. Texas Workers' Compensation Commission Appeal No. 92375, decided September 14, 1992. To obtain a reversal based upon an abuse of discretion, some showing must be made that the determination is arbitrary or without any basis in the record, that is, whether the hearing officer acted without reference to any guiding rules or principles. Morrow v. H.E.B., 714 S.W.2d 297 (Tex. 1986). Under Section 410.165(a), the hearing officer is the sole judge of the weight and credibility of the evidence. She may believe none, part, or all of the testimony of any witness. Texas Workers' Compensation Commission Appeal No. 93426, decided July 5, 1993. Although another finder of fact could certainly have found differently, the record does not indicate that the hearing officer acted without reference to any guiding rule or principles and we do not find that she abused her discretion. We affirm the decision and order of the hearing officer.

Kenneth A. Huchton
Appeals Judge

CONCUR:

Gary L. Kilgore
Appeals Judge

Thomas A. Knapp
Appeals Judge

This appeal arises pursuant to the Texas Workers' Compensation Act, TEX. LAB. CODE ANN. § 401.001 et seq. (1989 Act). A contested case hearing (CCH) was held on April 12, 1999. The issue at the CCH was:

Is the Carrier liable for Supplemental Income Benefit Attorney fees for the whole quarter or only to [sic] those fees incurred by Claimant after the actual date of the dispute by the Carrier of a quarter or quarters?

The hearing officer determined that the carrier is not liable for attorney's fees in the amount of $990.00 under the first three orders and is liable for attorney's fees of $240.00 under the fourth order (because he determined that the carrier did not timely request a CCH on that order). The appellant (attorney) appeals, contending that the law does not distinguish attorney's fees which are part of a disputed quarter by whether they were before or after the time of dispute by the carrier. The attorney also urges that the decision of the hearing officer has the effect of encouraging carriers to delay as long as possible in disputing supplemental income benefits (SIBS) and would further discourage legal representation of claimants. The attorney urges that the position of the carrier, if accepted, would create a divided attorney's fee application and a more complicated approach to filing for and receiving fees. The attorney asks that the Appeals Panel reverse the decision of the hearing officer and order that the attorney's fees be paid under Section 408.147(c) and that the Appeals Panel also determine whether the attorney's fees incurred in handling this dispute of attorney's fees would be payable as SIBS attorney's fees or as regular attorney's fees. The carrier responds that the carrier should pay for attorney's fees generated by the claimant's attorney on behalf of the claimant after the date of its dispute of the quarters at issue. The carrier does not appeal the hearing officer's determination that its request for a CCH was untimely as to one order. The file contains no separate response from the claimant.

DECISION

We affirm.

We review attorney's fees cases under an abuse of discretion standard. Texas Workers' Compensation Commission Appeal No. 951196, decided August 28, 1995. The Appeals Panel has in some cases considered attorney's fees disputes regarding SIBS on a quarter by quarter basis. See, e.g., Texas Workers' Compensation Commission Appeal No. 961981, decided November 18, 1996, in which we stated:

We believe that Section 408.147(c) is applicable whenever a carrier disputes entitlement to SIBS and the Commission [Texas Workers' Compensation Commission] (the hearing officer) determines that the employee should prevail on the entitlement to SIBS; the carrier will be liable for reasonable and necessary attorney fees for any quarter where carrier had disputed that entitlement and claimant has prevailed [emphasis added].

We have also required allocation of fees in some cases involving several quarters. For example, in Texas Workers' Compensation Commission Order No. 97020, issued June 16, 1997, we stated:

A carrier is liable for payment of the attorney's fees under Section 408.147(c) and Rule 152.1(f) [Tex. W.C. Comm'n, 28 TEX. ADMIN. CODE § 152.1(f)] only for the portion of those fees attributable to the SIBS quarters to which it disputed the claimant's entitlement and on which he later prevailed. We encourage the adjudication of multiple disputed quarters of SIBS by consolidating issues into one CCH, where appropriate . . . . However, when the adjudication of the disputed SIBS quarters . . . results in entitlement to one or more quarters previously disputed by the carrier and nonentitlement to one or more quarters, the hearing officer entering the order for attorney's fees must allocate the fees amongst the different quarters [emphasis added].

But, c.f., Texas Workers' Compensation Commission Appeal No. 970010, decided January 14, 1997, in which we remanded "for the hearing officer to determine the amount of the attorney's fees that were incurred by the claimant as the result of the carrier's dispute of the claimant's entitlement to SIBS." The attorney's argument that, by agreeing with the argument of the carrier, we would be making a confusing system even more complicated is well taken and in view of allocations both between and within quarters, may even be understated.

Two treatises on Texas workers' compensation law discuss this provision in general terms. The first discussion is in 1 JOHN T. MONTFORD, ET AL., A GUIDE TO TEXAS WORKERS' COMP REFORM ' 4.28(l) (1991) where the author states:

Under an important new provision, if the carrier disputes a Commission determination of the employee's entitlement to or amount of [SIBS] and the employee prevails on the disputed issue, the carrier is liable for reasonable and necessary attorney's fees incurred by the employee in resolving the dispute. The attorney's fees are an additional award [emphasis added].

The provision is also discussed in 1 JOHN C. KILPATRICK, TEXAS WORKERS' COMPENSATION LAW ' 33.11[4] (1998), where that author states:

A carrier may dispute an employee's entitlement to [SIBS] or their amount. [Citation omitted.] If the carrier disputes a commission determination in favor of the employee on either of these issues and the employee prevails on either issue, the employee's attorney is entitled to recover attorney's fees from the carrier for representation in the dispute. [Citing Section 408.147(c) and Rule 152.1(f).] These fees are paid wholly by the carrier and are not deducted from the claimant's recovery. [Citing the same section and rule.] [Emphasis added.]

However, we are nevertheless confronted with the plain language of the 1989 Act which provides in Section 408.147(c) that the carrier is liable for attorney's fees "incurred by the employee as a result of the insurance carrier's dispute." Almost identical language is found in Rule 130.108(d)(2). Rule 152.1(f) provides that:

An attorney for an employee who prevails when a carrier contests a commission determination of eligibility for [SIBS] shall be eligible to receive a reasonable and necessary attorney's fee, including expenses. This fee is payable by the carrier, not out of the employee's benefits . . . .

We have found only one case where this issue has been squarely presented to the Appeals Panel. In Texas Workers' Compensation Commission Appeal No. 972431, decided January 5, 1998 (Unpublished), we stated:

After the attorney made a statement that the self-insured is liable for all attorney's fees, the hearing officer asked him how the self-insured could be liable for attorney's fees before it disputed the entitlement to SIBS. The attorney responded that since the self-insured permitted entitlement to the first three quarters of SIBS to be litigated in one CCH and the claimant prevailed on SIBS for the second and third quarter, the self-insured is liable for all attorney's fees. The self-insured said that it paid the attorney's fees for the BRC [benefit review conference] at which SIBS for the first and second quarter were considered and the CCH at which entitlement to SIBS for the first three quarters was litigated. Clearly the self-insured is not liable for services provided before it first disputed entitlement to SIBS on August 12, 1996. [Emphasis added.]

The services of the attorney prior to the carrier's dispute of SIBS entitlement would have been performed even if the carrier had not then disputed the claimant's entitlement to SIBS. While the arguments of the attorney are cogent and persuasive as to the resulting problems, we cannot ignore the clear language of Section 408.147(c) and Rule 130.108(d)(2), which clearly designate the carrier's dispute as the action at which point the carrier then becomes liable for any resulting (and necessarily subsequent) attorney's services and fees. Nonetheless, it is important to note that an untimely contest of SIBS entitlement results in the waiver of the right to contest.

Since the carrier does not appeal the hearing officer's determination that its appeal of one of the orders was untimely, we will not address that issue. We also note that the attorney attempted unsuccessfully to add an issue at the CCH as to the recovery of fees for time spent on this CCH on attorney's fees. We find no abuse of discretion by the hearing officer in declining to add this issue, and we refer the attorney to Texas Workers' Compensation Commission Appeal No. 93389, decided July 1, 1993.

Finding no abuse of discretion by the hearing officer and finding his decision correct as to the interpretation of Section 408.147(c), we affirm.

Stark O. Sanders, Jr.
Chief Appeals Judge

CONCUR:

Alan C. Ernst
Appeals Judge

Tommy W. Lueders
Appeals Judge

This appeal arises pursuant to the Texas Workers’ Compensation Act, TEX. LAB. CODE ANN. § 401.001 et seq. (1989 Act). A contested case hearing (CCH) was held on May 7, 1997, (hearing officer 1). On May 8, 1997, with regard to the issues at the CCH, she determined that (claimant) is entitled to supplemental income benefits (SIBS) for the first quarter and that the respondent (carrier) is liable for payment of the appellant's (attorney) attorney's fees. On May 23, 1997, hearing officer 1 entered a Commission Order for Attorney's Fee s, ordering the carrier to pay the attorney's fees and expenses of $600.00 "pursuant to [Section] 408.147(c) and [Texas Workers' Compensation] Commission Rule 152.1(f) [Tex. W.C. Comm'n, 28 TEX. ADMIN. CODE § 152.1(f)]." On June 24, 1997 (hearing officer 2) entered a Commission Order for Attorney's Fees, ordering the carrier to pay the attorney's fees and expenses of $596.26 pursuant to the same section and rule. The carrier paid the attorney $600.00 and $596.26 according to the May 23 and June 24, 1997, orders, respectively.

The carrier appealed from hearing officer 1's May 8, 1997, decision. It did not appeal the claimant's eligibility to SIBS for the first quarter but did appeal the attorney's fees issue. We considered the carrier's appeal and reversed and ordered a hearing on attorney's fees, directing hearing officer 1 to determine whether the carrier disputed a Commission determination that the claimant is entitled to SIBS. Texas Workers' Compensation Commission Order No. 97024, decided July 11, 1997. In her September 15, 1997, decision and order, hearing officer 1 found that the Commission initially determined the claimant was not eligible for SIBS for the first quarter and that the carrier was not liable for the attorney's fees.

The issue remaining after hearing officer 1's September 15, 1997, order was whether the carrier is entitled to reimbursement of attorney's fees paid to the attorney pursuant to the May 23 and June 24, 1997, orders. A CCH was held on December 17, 1997, with (hearing officer 3) presiding as hearing officer. On December 17, 1997, with regard to the issue at the CCH, she determined that the attorney shall reimburse the carrier $600.00 for attorney's fees it paid according to hearing officer 2's May 23, 1997, order and $596.26 for attorney's fees it paid according to hearing officer 3's June 24, 1997, order. The attorney appeals hearing officer 3's decision and order, seeks its reversal and argues that it is in error and manifestly unjust. The carrier responds and seeks an affirmance of hearing officer 3's decision.

DECISION

We affirm.

Hearing officer 3 fairly summarizes the facts in the decision and we adopt her rendition of the facts. We discuss only those facts necessary to our decision. In the above-referenced proceedings, the Commission initially determined that the claimant was not eligible for SIBS for the first quarter and the claimant prevailed on the issue of his eligibility to SIBS for the first quarter at a subsequent CCH. In this situation, the carrier should not have been liable for attorney's fees. A carrier is only liable for attorney's fees, and attorney's fees are not deducted from an employee's income benefits, when it disputes a Commission determination of an employee's eligibility to SIBS and then the employee prevails on the eligibility issue at a subsequent proceeding. Section 408.147(c); Rule 152.1(f). When a carrier pays an employee's SIBS for a quarter without dispute or when there has not been a Commission determination of the employee's eligibility to SIBS and the employee prevails on the eligibility issue at a subsequent proceeding, his attorney's fees are deducted from his income benefits. Section 408.221(b); Rule 152.1(c).

The situation in the claim under review developed due to erroneous Commission orders on attorney's fees. There is no dispute that hearing officer 1's May 23, 1997, order and hearing officer 2's June 24, 1997, order should have specified payment pursuant to Section 408.221(b) and Rule 152.1(c), rather than Section 408.147(c) and Rule 152.1(f). The carrier paid the attorney per the wording of the orders and was later able to show they were issued in error. An attorney only has a lien on an employee's unpaid income benefits due and does not have a lien on income benefits already paid to an employee. Rule 152.1(c). In the case under review, the carrier appealed from the orders. However, it paid the attorney pursuant to the orders because they were binding upon it pending their appeal. Rule 152.3(f).

"If an attorney has been paid more than authorized by the final order of the commission, the commission shall order that the excessive amount be reimbursed." Rule 152.3(g). Hearing officer 1's September 15, 1997, decision and order is a final order of the Commission. Section 410.169; Rule 142.16(f). There is no dispute the carrier paid $1,196.26 more than that order authorized. Hearing officer 3 determined that the carrier, therefore, paid $1,196.26 in excess of the Commission's final order and that the attorney shall reimburse it accordingly.

The attorney argues that the hearing officer erred in determining the attorney's fees paid per the May 23 and June 24, 1997, orders were "in excess of" a final Commission order. He maintains that there is no dispute over the reasonableness and necessity of his fees or whether they permissibly exceed the attorney's fees guidelines and, therefore, they cannot be excessive. We disagree. Hearing officer 3's determination that the "excessive" amount of attorney's fees reimbursed to the carrier has nothing to do with whether those fees were reasonable, necessary or within the guidelines. The attorney also argues that being ordered to reimburse the carrier when he has no lien against the income benefits already paid to the claimant is manifestly unjust. However, we do not review attorney's fees cases to determine whether the outcome is unjust to the attorney. We review them under an abuse of discretion standard. Texas Workers’ Compensation Commission Appeal No. 950259, decided April 4, 1995. Hearing officer 3 applied the 1989 Act and Commission Rules regarding attorney's fees to the undisputed facts. Despite the Commission's erroneous orders causing the need for reimbursement, we conclude that hearing officer 3 did not abuse her discretion in ordering the attorney to reimburse the carrier $1,196.26. See Texas Workers' Compensation Commission Appeal No. 972693, decided February 2, 1998.

Hearing officer 3 did not commit error or abuse her discretion and, therefore, we affirm.

Christopher L. Rhodes
Appeals Judge

CONCUR:

Philip F. O'Neill
Appeals Judge

Judy L. Stephens
Appeals Judge