NY Law Firm’s $52K Fee Request Will be Reconsidered by Board

In a relatively unusual move, the Appellate Division of the Supreme Court of New York (Third Department) vacated its October 8, 2020 decision [reported at 187 A.D.3d 1297, 132 N.Y.S.3d 454 (2020)], in which the court had held the state’s Workers’ Compensation Board had not abused its discretion in awarding counsel fees of $1,000, instead of the $52,000 in fees sought by claimant’s counsel [Matter of Dzielski v New York State Dept. of Corr. & Community Supervision, 2021 N.Y. App. Div. LEXIS 3990 (June 17, 2021)]. Substituting a new opinion, the court indicated the Board’s decision had been based upon the law firm’s apparent failure to file an OC-400.1 fee application with the WCLJ. Upon rehearing, however, the appellate court said the record demonstrated that such an OC-400.1 fee application had been filed with the law firm’s application for Board review (emphasis added). Accordingly, the court remitted the matter back to the Board for further proceedings not inconsistent with its substituted opinion.

Background

Claimant, a corrections officer, established work-related injuries to his right shoulder and left wrist, as well as a consequential right carpel tunnel syndrome injury. Claimant’s physician and the independent medical examiner for the employer’s workers’ compensation carrier offered differing opinions as to claimant’s schedule loss of use (SLU) of the injured areas. Claimant and the carrier were unable to reach a settlement and, therefore, were directed to submit medical deposition transcripts and memoranda.

No OC-400.1 Fee Application Form

The WCLJ ruled that claimant had sustained a 50% SLU of the right arm, a 20% SLU of his right hand, and a 20% SLU of the left hand. In the memorandum of law submitted on behalf of claimant, the law firm representing claimant requested $52,000 in counsel fees.

The WCLJ found that the law firm’s failure to submit an OC-400.1 fee application form—which the WCLJ noted should have been submitted at the time the memorandum was filed—was the equivalent of submitting a defective form. As such, the WCLJ awarded $1,000 in counsel fees pursuant to the maximum fee allowable by regulation without submission of a fee application. The Board affirmed the challenge to the SLU awards, as well as the amount of counsel fees awarded to the law firm. Claimant appealed, with the sole issue upon appeal challenging the propriety of the amount of counsel fees awarded.

First Decision by the Third Department

In the October 2020 decision, the Court had stressed that where, as here, the request for counsel fees exceeded $1,000, counsel was required to submit an accurately completed form OC-400.1 fee application specifying the dates and description of the services rendered on behalf of the claimant, as well as the total hours expended. Given the failure to comply with the regulatory requirements regarding the filing of a fee application request, the Board had not abused its discretion or acted in an arbitrary or capricious manner in awarding counsel fees of $1,000 [For my blog post following the October 8, 2020 decision and opinion, click here].

June 2021 Decision

Without ever referring to its October 8, 2020 decision, the Court said the record indicated that the law firm had enclosed an OC-400.1 fee application with its application for Board review. The Court said that in as much as the Board’s decision indicated that the law firm failed to file such a form, it appeared that the Board was unaware of the enclosed documentation. Accordingly, the Court deemed it appropriate to remit the matter for the Board to determine whether the OC-400.1 fee application filed subsequent to the WCLJ’s decision warranted consideration and modification of the counsel fees awarded.