W.C. No. 4-466-543.Industrial Claim Appeals Office.
September 12, 2006.
FINAL ORDER
The claimant’s former attorney seeks review of an order of Administrative Law Judge Jones (ALJ) dated April 26, 2006 that approved a fee division entered into by the claimant’s attorneys. We affirm.
A hearing was held on the sole issue of disputed attorney fees. Following the hearing, the ALJ entered factual findings that may be summarized as follows. The claimant sustained an injury on June 26, 2000, which was contested by the employer’s insurer. The claimant retained Clark Litten of Franklin D. Azar Associates, who in turn retained Douglas R. Phillips to assist in prosecuting the claim. On May 20, 2005, Litten left the employ of Franklin D. Azar Associates and established his own law practice. The claimant elected to continue to be represented by Litten, and Phillips continued as co-counsel. A hearing was eventually held, following which ALJ Friend issued an order to the respondents to pay benefits in the amount of $72,877.10, which resulted in an attorney fee of $14,202 after costs were deducted. Phillips retained an expert, who opined that the fee should be divided, with 80 to 85 percent paid to Phillips and the remainder paid to Litten. On November 21, 2005, a disbursement statement was prepared paying 80 percent of the fee to Phillips, 10 percent to Litten, and 10 percent to Franklin D. Azar Associates (Azar). The disbursement was approved by Phillips, Litten, and the claimant’s guardian; however, it was not approved by Franklin D. Azar Associates. At the hearing, an attorney from Azar’s office appeared and argued that Azar was entitled to the majority of the fee earned before May 5, 2005.
Based upon her factual findings, the ALJ approved the November 21, 2005 disbursement of the fees. She relied upon the factual finding that the fee allocation was in proportion to the services performed and the “responsibilities assumed” by each attorney.
Azar appealed the ALJ’s order and contends that the fee division is not supported by substantial evidence in the record. Specifically, Azar presents the two-prong argument that the portion allocated to Phillips was excessive and that the portion allocated to Azar was too small. We are not persuaded that the ALJ erred.
Initially, we note that the dispute here is not between Litten and Phillips as co-counsel on the claim, nor is it between the claimant and his attorneys. Hence, no fee agreement, either with the attorneys’ client or respecting a division of fees is being disputed. Rather, the dispute is between Litten and his former employer, and is therefore largely an employment matter controlled by their employment contract. We further note that the fee division approved by the ALJ allocated 10 percent of the fee to Azar. Given the record in this matter, we presume that that allocation was based upon Litten’s obligation to Azar as a former employee rather than upon any work on the claim performed by Azar himself or by one of his attorneys. In this regard, the claimant’s expert witness, Scott Busser, stated in his opinion letter that neither Azar nor his attorney, John Connell, performed any work on the claim and that neither should receive any portion of the fee. Claimant’s Exhibit 3 at 2 (unpaginated). Busser also testified at the hearing that Litten was entitled to a portion of the fee, but that Busser expressed no opinion concerning whether “that’s Mr. Litten individually or Mr. Litten as an employee of Franklin D. Azar. . . .” Tr. at 16.
Azar apparently concedes that the resolution of this dispute is governed, at least in part, by Colorado Rule of Professional Conduct 1.5(d), which states that “a division of a fee between lawyers who are not in the same firm may be made only if: (1) the division is in proportion to the services performed and responsibility assumed by each lawyer. . . .” Colo. RPC 1.5(d). In our view this provision governs the issue of the allocation of the fee between Litten and Phillips. It does not, however, necessarily govern the resolution of the allocation of the fee between Litten and Azar. See Norton Frickey, P.C. v. James B. Turner, P.C., 94 P.3d 1266 (Colo.App. 2004). In this respect we note that the record does not contain an agreement between Azar and Litten controlling the distribution of fees in the event of the latter’s departure from Azar’s firm. In the event such an agreement existed, we presume that it would be enforceable. In the absence of such an agreement, Colo. RPC 1.5(d) at least provides guidance regarding the appropriate division of the fee See also People v. Wilson, 953 P.2d 1292 (Colo. 1998) (agreement that lawyer leaving the firm would pay 100 percent of any fees earned on cases taken from the firm violated Colo. RPC 1.5(d)).
The reasonableness of attorney fees is largely a question of fact. Houdek v. Mobil Oil Corporation, 879 P.2d 417 (Colo.App. 1994). Similarly whether a proposed division of fees is in proportion to the services performed and the responsibility assumed by each lawyer is also a question of fact. Because of the factual nature of these questions, the ALJ’s determination must be upheld if supported by substantial evidence. Section 8-43-301(8), C.R.S. 2006. In applying this standard of review we must defer to the ALJ’s resolution of conflicts in the evidence, her credibility determinations, and the plausible inferences she drew from the evidence. Metro Moving and Storage Co. v. Gussert, 914 P.2d 411 (Colo.App. 1995). Furthermore, the determination of the weight to be accorded expert testimony is a matter within the ALJ’s province as the fact-finder. Rockwell International v. Turnbull, 802 P.2d 1182 (Colo.App. 1990).
The record contains substantial evidence supporting the ALJ’s order. Busser testified as an “attorney handling Workers’ Compensation claims” and was certified as an expert witness on that basis. Tr. at 14-15. He testified that “[t]he claim was going nowhere before Mr. Phillips entered his appearance,” and that it was “to a large extent” because of Phillips’ work that the claim was successful. Tr. at 23-24. Additionally, prior to Phillips’ entry of appearance the respondents were seeking dismissal of the claim “due to lack of prosecution.”
Tr. at 32. Busser stated in his written report that Litten assumed a “supportive role” after Phillips’ was retained, and that prior to that time the case was “floundering” with “no timely resolution in sight.” Busser described Phillips’ work as “lead counsel,” which ultimately led to the successful culmination of the case from the claimant’s point of view. Finally, when asked to distinguish between time spent and “effective” time spent, Litten testified that “95 percent of the effective effort was spent” after Phillips entered the claim. Litten Depo. at 20.
Despite Azar’s arguments, this evidence provides ample support for the ALJ’s conclusion that 80 percent of the fee should properly be paid to Phillips. It was a reasonable inference from the record not only that Phillips performed the great majority of the productive and gainful work on the claim, but also that he assumed greater responsibility for the progress of the client’s case to a successful conclusion. The ALJ could also reasonably infer that, considering similar factors, Litten’s work before and after the termination of his employment with Azar was of approximately equal value to the claim. These inferences support the ALJ’s conclusion that the distribution of fees was reasonable, appropriate, and consistent with Colo. RPC 1.5(d). Accordingly, we are not persuaded to disturb the ALJ’s order.
IT IS THEREFORE ORDERED that the ALJ’s order dated April 26, 2006, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ Curt Kriksciun
____________________________________ Thomas Schrant
Eduardo Lopez c/o Michelle Lopez, Aurora, CO, Michelle Lopez, Westurn Roofing and Supply Inc. Englewood, CO, Pinnacol Assurance, Denver, CO, Douglas R. Phillips, Esq., Denver, CO, (For Claimant).
John Connell, Esq., 14426 E. Evans Ave, Aurora, CO, (For Respondents). W. Clark Litten, Esq., Denver, CO, Liberty Mutual Insurance Company, Englewood, CO.