W.C. Nos. 4-100-970 4-197-919Industrial Claim Appeals Office.
January 2, 1996
FINAL ORDER
The claimant has appealed the decision of Administrative Law Judge Gandy (ALJ) insofar as it determined that she is liable for attorney fees to her former attorney. We affirm.
The claimant entered into a written contingent fee agreement (agreement) with her former attorney, Peter Morgan, for representation in her workers’ compensation claim. It is undisputed that the claimant terminated the services of Mr. Morgan prior to the time that she was awarded any benefits which would give rise to the contingent fees contemplated by the agreement. The issue on appeal is whether the language of the agreement is sufficient to permit an alternative basis for an award of attorney fees.
In pertinent part, the agreement provides that “if the client discharges Mr. Morgan without just cause, Mr. Morgan will be entitled to compensation for the reasonable value of his services.” The ALJ determined that the claimant did not have just cause for terminating Mr. Morgan’s services. The ALJ further determined that the agreement “substantially complies” with § 8-43-403(2), C.R.S. (1995 Cum. Supp.), which governs attorney fees in workers’ compensation cases, and the applicable rules of the Colorado Supreme Court. Accordingly, the ALJ ordered the claimant to pay a specified amount of attorney fees, which was determined to be reasonable, on the theory of quantum meruit.
On appeal, the claimant asserts that the agreement does not comply with § 8-43-403(2) because the agreement does not set forth the “criteria upon which the attorney bases his hourly or set fee and the circumstances in which any modifications or adjustments to such fee will be made . . . .” Therefore, the claimant argues that the attorney cannot enforce the agreement, as provided in § 8-43-403(2). We disagree.
Section 8-43-403(2) provides:
Any attorney who represents any party in a workers’ compensation case shall provide the party with a written fee agreement which sets forth in full, the attorney’s specific fee arrangement, including the criteria upon which the attorney bases his hourly or set fee and the circumstances in which any modifications or adjustments to such fee will be made, and specifying whether the client will be charged for the attorney’s expenses or advances made by attorney on behalf of the party, including without limitation costs of copying, research, telephone calls, postage, and any other expenses incident to the litigation which the attorney may be ethically bound to undertake on behalf of the party pursuant to law or pursuant to any court rule including the code of professional responsibility as adopted by the supreme court of Colorado. Contingency fee agreements shall be in conformity with all applicable provisions of the said code or of rules of the supreme court, and in addition, such agreements shall set forth the provisions of this section in easy to understand language in at least ten-point boldface type. No such fee agreement may be enforced against any party unless it complies with the requirements of this section and is signed by both parties. Any attempt by an attorney who intentionally does not comply with this section and who seeks to enforce a fee agreement which does not comply with the requirements of this section shall be presumed to be a violation of the code of professional responsibility as adopted by the supreme court of Colorado. (Emphasis added).
As we understand the first emphasized portion of the statute, it applies to agreements where an hourly fee or a set amount is charged. Where, as here, there is an agreement for a “contingent fee,” the statute provides that the agreement must comply with applicable provisions of “the code of professional responsibility as adopted by the supreme court of Colorado” or the “rules of the supreme court.”
The claimant does not contend that the agreement here is inconsistent with any specific provision of the “code of professional responsibility.” Moreover, we agree with the ALJ that the agreement substantially complies with the rules of the Supreme Court. See Rule , Rules Governing Contingent Fees (no contingent fee agreement shall be enforceable by the involved attorney unless there has been substantial compliance with all of the provisions of this rule).
Rule 5(d) of the Rules Governing Contingent Fees requires that a contingent fee agreement disclose the contingency upon which the client is liable to pay compensation other than from amounts collected by the attorney. The “contingency” for an alternative basis for payment of attorney fees was disclosed in the agreement here, i.e., discharge of Mr. Morgan without just cause. Contrary to the claimant’s contention, there is not a further requirement that the agreement specify the hourly rate to be charged or the criteria on which the hourly rate is based, if the conditions for the contingency are met. As we stated above, we believe that the claimant’s reliance on § 8-43-403(2) in this respect is misplaced. However, even if there is a requirement to specify the alternative basis for payment, we believe that the agreement here complies with that requirement by stating that the attorney would be entitled to the “reasonable value” of his services. Section 8-43-303(1), C.R.S. (1995 Cum. Supp.), permits an ALJ to determine the reasonable value of such services based on various factors and this procedure was followed here. Therefore, we perceive no error in the award. Cf. Elliott v. Joyce, 889 P.2d 43
(Colo. 1994).
We have considered the claimant’s remaining arguments, but are not persuaded that the award of attorney fees is erroneous.
IT IS THEREFORE ORDERED that the ALJ’s order issued May 25, 1995, as corrected on June 12, 1995, is affirmed.
INDUSTRIAL CLAIM APPEAL PANEL
___________________________________ Dona Halsey
___________________________________ Bill Whitacre
NOTICE
This Order is final unless an action to modify or vacate the Order iscommenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver,Colorado 80203, by filing a petition to review with the court, withservice of a copy of the petition upon the Industrial Claim Appeals Officeand all other parties, within twenty (20) days after the date the Orderwas mailed, pursuant to §§ 8-43-301(10) and 307, C.R.S. (1995 Cum.Supp.).
Copies of this decision were mailed January 2, 1996 to the following parties:
Mary L. Gaitan, P.O. Box 114, Greeley, CO 80631
Mary L. Gaitan, 1720 2nd St., Greeley, CO 80631
Monfort, Inc., 1422 North 11th Ave., P.O. Box G, Greeley, CO 80632
Monfort, Inc., Risk Mgmt. Dept., P.O. Box G, Greeley, CO 80632
Peter E. Morgan, Esq., 155 S. Madison, Ste. 330, Denver, CO 80209
Kim Dale Starr, Esq., 2629 Redwing Rd., Ste. 330, Ft. Collins, CO 80526 (For the Respondent)
Amado L. Cruz, Esq., 6000 E. Evans Ave., Ste. 1-428, Denver, CO 80222 (For the Claimant)
By: ______________________