ATTORNEY FOR APPELLANT: ATTORNEYS FOR AMICUS CURIAE:
JAMES E. AYERS STEPHEN CARTER
Wernle, Ristine & Ayers Attorney General of Indiana
Crawfordsville, Indiana Indianapolis, Indiana
DAVID L. STEINER
Deputy Attorney General
G. TERRENCE CORIDEN
Workers Compensation Board of Indiana
COURT OF APPEALS OF INDIANA
WERNLE, RISTINE & AYERS, )
vs. ) No. 93A02-0012-EX-819
JANICE YUND and THE KROGER COMPANY, )
APPEAL FROM THE WORKER'S COMPENSATION BOARD OF INDIANA
Application No. C-144302
November 16, 2001
OPINION - FOR PUBLICATION
STATEMENT OF THE CASE
James E. Ayers petitioned the Workers Compensation Board (the Board) for $1,700.00 in
attorneys fees and $2,336.63 in expenses arising from his representation of Janice Yund
in her workers compensation claim. A Single Hearing Member awarded Ayers $1,200.00
in attorneys fees but awarded nothing for expenses. Ayers petitioned the full
Board, which affirmed the Single Hearing Members decision. On appeal, Ayers presents
three issues for our review, which we consolidate and restate as whether the
Board has the sole authority to determine the amount paid an attorney for
a physicians services and litigation expenses notwithstanding an employees contractual obligation to reimburse
FACTS AND PROCEDURAL HISTORY
Yund, an employee of The Kroger Company (Kroger), sustained a work-related injury in
1995, and she retained Ayers to represent her in a claim under the
Workers Compensation Act (the Act). Ayers hired Dr. Franklin Nash to examine
Yund and to testify at her hearing before the Board. Ayers did
not provide Krogers counsel with any report prepared by Dr. Nash, and the
Board restricted Dr. Nashs testimony at the hearing to challenges to the permanent
impairment ratings assigned by physicians hired by Kroger. Dr. Nash submitted his
fees to Ayers. Under her written contract with Ayers, Yund agreed to
pay all cost[s] of investigation and preparation, including charges for medical . .
. examinations, . . . consultations and testimony from expert witnesses. In
addition, the contract provided that [i]f no recovery is made, or if the
amount of any recovery is not sufficient to reimburse Attorney, Client is nevertheless
still liable for out-of-pocket expenses incurred by Attorney regardless of whether or not
a fee is received. Dr. Nash charged $986.00 for his examination of
Yund and $500.00 for his testimony at her hearing.
Following the hearing, and after Kroger had offered Yund a settlement of $8,500.00,
Yund advised Ayers that she was terminating their attorney-client relationship. Yund, pro
se, then settled her claim with Kroger for $8,500.00. The Board approved
the settlement agreement, and Ayers submitted a Petition for Attorneys Fees and Costs,
seeking 20% of the settlement
($1,700.00) plus $2,336.63 in expenses, of which $1,486.00
were Dr. Nashs fees. A single hearing member awarded Ayers a total
of $1,200.00 in attorneys fees and specifically ordered that Yund was not to
pay Dr. Nashs expenses.
The order said nothing about other costs.
Ayers petitioned the full Board, which affirmed the single hearing members decision.
This appeal followed.
DISCUSSION AND DECISION
We review the decision of the Board, not to reweigh the evidence or
judge the credibility of witnesses, but only to determine whether substantial evidence, together
with any reasonable inferences that flow from such evidence, support the Boards findings
and conclusions. Walker v. State, 694 N.E.2d 258, 266 (Ind. 1998).
Where the question before this court, however, is primarily a legal question, we
do not grant the same degree of deference to the Boards decision, for
law is the province of the judiciary and our constitutional system empowers the
courts to draw legal conclusions. Id. Moreover, in performing a legal
analysis and in interpreting the provisions of the Workers Compensation Act, we construe
the Act and resolve doubts in the application of its terms in favor
of the employee so as to effectuate the Acts humanitarian purpose to provide
injured workers with an expeditious and adequate remedy. Id.
Ayers contends that the Boards statutory authority to determine fees of attorneys and
physicians does not include authority to determine expert witness fees or other litigation
The Board has filed an amicus curiae brief and responds that
it acted within its authority when it ordered that Yund was not to
pay Dr. Nashs expenses.
The Board has the sole authority and discretion to award attorneys fees.
See 631 Ind. Admin Code 1-1-24; Ind. Code § 22-3-1-3. Contingent fee
agreements in workers compensation actions, such as the agreement between Ayers and Yund,
are subject to the provisions of the Rules of Professional Conduct, which clearly
distinguish between attorneys fees and litigation expenses. See Ind. Professional Conduct Rule
1.5(c); In the Matter of Anonymous, 657 N.E.2d 394, 395 (Ind. 1995).
But, neither the Act nor the Indiana Administrative Code address a claimants liability
to reimburse her attorney for litigation expenses. See 631 IAC 1-1-24.
The Board also has the sole authority and discretion to approve a physicians
claims for services provided to an employee-claimant. Indiana Code Section 22-3-4-12 provides
that physicians fees shall be subject to the approval of [the Board].
And Indiana Code Section 22-3-3-5 provides, in relevant part, that:
The employee . . . [does] not have liability to a health care
provider for payment for services obtained under IC 22-3-3-4[
]. . . .
All claims by a health care provider for payment for services are against
the employer and the employers insurance carrier, if any, and must be made
with the board under IC 22-3-2 through IC 22-3-6.
(Emphasis added). Whether a physicians fee for expert testimony falls under these
statutes is an issue of first impression.
We have previously addressed the scope of the Boards authority under Indiana Code
Section 22-3-3-5. In St. Mary Med. Ctr. v. Baker, 611 N.E.2d 135,
137 (Ind. Ct. App. 1993), trans. denied., the hospital filed a complaint against
an employee-claimant, Baker, seeking to recover unpaid medical expenses for an employment-related injury.
The workers compensation carrier had paid a portion of the total charges
billed but disputed the validity of certain other charges. Id. at 136.
We affirmed the trial courts dismissal of the complaint for lack of
jurisdiction, noting that the Board has exclusive primary jurisdiction to decide issues under
the Act. Id. at 137. Citing Indiana Code Section 22-3-3-5, we
determined that St. Marys claim for payment above that voluntarily provided by the
employers insurer should have been addressed to the workers compensation board. Id.
The statute makes clear, then, that when a health care provider seeks
to recover payment for services rendered to an employee-claimant, the matter is exclusively
within the Boards authority.
Here, we are concerned with Ayers attempt to recover payment for Dr. Nashs
services from Yund. At issue is whether the Act controls Yunds liability
for fees arising from Dr. Nashs examination and testimony, which Ayers characterizes as
litigation expenses or expenses of investigation and preparation. Ayers contends that the
Boards authority to approve payment for a physicians services is limited to medical
services provided by an attending physician.
We find nothing in the Act to support Ayers contention that, concerning the
Boards authority to approve physicians fees, a distinction should be made between a
physicians charge for medical services and that for providing expert testimony. Indeed,
our legislature has expressly precluded any such distinction with the broad language it
employed in Indiana Code Sections 22-3-3-5 and 22-3-4-12. Neither the phrase claims
by a health care provider, nor the term services is qualified, as Ayers
contends. Given the plain meaning of these statutory provisions,See footnote coupled with our
duty to construe the Act in favor of the employee, we conclude that
the Board has the sole authority to determine a claimants liability for physicians
fees, regardless of whether those fees are characterized as litigation expenses, and regardless
of whether the attorney-client contract purports to hold the employee liable for such
fees. Accordingly, we determine that the Board had authority to order that
Yund be relieved of any liability for Dr. Nashs fees.See footnote
The question remains, however, whether the Board has the sole authority to determine
an employees liability for litigation expenses, which, under the Act, cannot include physicians
fees. We note that, on its face, the Boards $1,200.00 attorney fee
award, coupled with the order that Yund shall not pay Dr. Nashs fees,
appears to shift all of the litigation expenses to Ayers. But the
Boards order does not purport to prohibit Ayers from claiming reimbursement from Yund
for litigation expenses, as provided in their contract. Except for the authority
to approve or disapprove physicians fees, the Board does not have authority under
the Act to determine the claimants contractual liability to reimburse her attorney for
ordinary and necessary out-of-pocket litigation expenses. In other words, while an attorney
may petition the Board for such expenses, the Boards authority does not supersede
the terms of an attorney-client contract. Accordingly, the reimbursement provisions in the
contract between Ayers and Yund control with respect to litigation expenses and survive
termination of their attorney-client relationship. Insofar as these expenses are concerned, the
Act does not impair the respective rights and responsibilities of the parties under
the contract, which are an ordinary civil matter.
SHARPNACK, C.J., and RILEY, J., concur.
Footnote: Ayers does not appeal the amount awarded him for attorneys fees.
Footnote: 631 Indiana Administrative Code 1-1-24 includes a schedule of attorneys fees
and provides that an attorney should receive 20% on awards up to $10,000.00.
The Board may, however, award more or less than that amount in
Footnote: At the hearing, Dr. Nash testified that his professional license had
previously been suspended and that the Medical Licensing Board found that he had
previously engaged in conduct constituting fraud and material deception in the course of
his professional services. At the time he examined Yund, however, his license
had been reinstated.
Footnote: We note that Ayers argument on appeal is limited to whether
the Board had statutory authority to deny payment of Dr. Nashs fees, and
not whether the Board abused its discretion in denying payment.
Footnote: Kroger and Yund did not file appellees briefs.
Footnote: Indiana Code Section 22-3-3-4 provides in part that, subject to the
approval of the Board, an employer is liable for an employees medical treatment
sought prior to an adjudication of permanent impairment; during the period of temporary
total disability; and after an employees injury has been adjudicated on the basis
of permanent partial impairment and within the statutory period for review. In
addition, subject to the approval of the Board, an employer is liable for
medical treatment provided to an employee by a physician other than that provided
by the employer . . . during the period of the employees temporary
Ayers cites the former version of Indiana Code Section 22-3-4-12 for
this proposition. However, in 1997, the legislature revised that section and deleted
the sentence on which Ayers relies. The statute used to read, in
relevant part: The industrial board may withhold the approval of the fees
of the attending physician in any case until he shall file a report
with the industrial board on the form prescribed by such board. (Emphasis
[W]hen a statute is clear and unambiguous on its face, this
court need not, and indeed may not, interpret the statute. Instead we
must hold the statute to its clear and plain meaning. Miller v.
Walker, 642 N.E.2d 1000, 1001-02 (Ind. Ct. App. 1994) (citations omitted), affd, 655
N.E.2d 47 (Ind. 1995). Indeed, Ayers does not ask this court to
interpret these statutes.
Ayers also contends that the Boards decision forces him to violate
Rule of Professional Conduct 1.8(e), which prohibits financial assistance to a client in
connection with pending or contemplated litigation. We cannot agree. Many attorney-client
relationships based upon contingent fee agreements, especially in the personal injury arena, require
the attorney to pay expert witness fees in advance of a settlement or
verdict despite the possibility of an unfavorable award. In many cases, despite
a clients contractual agreement to reimburse the attorney for such expenses, the client
may simply not have the funds available to pay and the attorney is
forced to absorb the loss. Such is the case here, and we
find no violation of the Rules of Professional Conduct.
Footnote: Although the record is not entirely clear, it appears the Board
questioned the value of Dr. Nashs services or the reasonableness of his charges.
Ayers maintains that Dr. Nashs testimony was valuable in undermining the bases
for the impairment ratings assigned to Yund. Ayers points out that Krogers
settlement offer more than doubled after Ayers had employed Dr. Nash. But
when Dr. Nash testified at Yunds hearing, the Board precluded any testimony by
him regarding his examination of Yund because Ayers had not provided Kroger with
a statement in writing of the conditions evidenced by such examination as required
by Indiana Code Section 22-3-3-6(d).