THOMAS A. PHILLIPS, 
Employee, 
Applicant,
v. 
C & A DISTRIBUTORS,
Employer,
Defendant.

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DECISION AND ORDER
AWCB Case No. 199728640
AWCB Decision No. 99-0222 
Filed with AWCB Fairbanks, Alaska
on November 3, 1999

We heard the employee's claim for additional penalties, interest, and attorney fees, against this employer in Fairbanks, Alaska on October 14, 1999. Attorney Nelson Traverso represented the employee. Attorney Warren Taylor represented the employer. We held the record open to receive calculations from the parties concerning interest by October 28, 1999. We closed the record when we next met, October 28, 1999.

1. Is the employee due additional penalties from the employer under AS 23.30.155(e)?

2. Is the employee due interest from the employer under 8 AAC 45.142?

3. Is the employee due additional reasonable attorney fees from the employer under AS 23.30.145(b)?

The employee developed left arm ulnar nerve entrapment in January 1997, while working as a warehouseman for the uninsured employer, a pull-tab and bingo supply distributor. We discussed the history of this case and the relevant evidence in the Case History and Summary of the Evidence section of our April 14, 1999 decision and order on this case. We here incorporate that discussion by reference.

In our first decision on this case, AWCB Decision 98-0278 (November 3, 1998), we found the employee entitled to $8,100.00 in PPI benefits under AS 23.30.190, based on a rating of six percent impairment by Jeremy Becker, M.D. We found the employee entitled to medical benefits under AS 23.30.095(a) for his medical care to the date of the hearing, and for reasonable and necessary continuing medical benefits as the course of recovery requires, including ulnar release and transposition surgery, as well as temporary total disability (TTD) benefits for work-time-loss necessary for recovery from the ulnar surgery.

We additionally ordered the employer to pay the employee a 25 percent penalty under AS 23.30.155(e), an amount totaling $2,025.00, on all PPI benefits, as well as a 25 percent penalty on all medical benefits that had been unpaid over seven days since due. We found the employee entitled to interest under 8 AAC 45.142 on all PPI benefits, and on all late or unpaid medical benefits, from the date those benefits were due. We awarded the employee attorney fees and legal costs under AS 23.30.145(b).

The employer filed a Petition for Reconsideration on November 16, 1998, contending he had never received notice that $8,100.00 in PPI benefits was due to the employee until our decision. In our decision on reconsideration under AS 44.62.540, AWCB Decision 98-0286 (November 18, 1998), we noted AS23.30.190 specifically provides a mechanism for employers and insurers to get notice of the whole-person, percentage, permanent partial impairment rating under the AMA Guides. We found the employer received notice of the employee's PPI rating, but failed to pay. Consequently, we reaffirmed our decision and order of November 3, 1998, and reaffirmed our award of penalties.

On December 29, 1998 the employee filed a Motion for Supplemental Order for Declaration of Default, alleging the employer failed to pay the penalties we awarded in our November 3, 1998 decision and order. In the Motion, the employee also claimed a 25 percent penalty under AS 23.30.155(f) for the employer's failure to timely pay, as ordered, and $519.00 in interest.

We issued a Supplementary Order Declaring Default and Default Order on April 15, 1999, AWCB Decision No. 99-0080. Under AS 23.30.170 we declared the employer in default of our order to pay $2025.00 in penalties.

In our Supplementary Order Declaring Default and Default Order, we noted that a supplementary order of default provides a discrete avenue of redress to the Superior Court under as 23.30.170. Because the employee's attempt to secure a supplemental default order raised issues of additional penalties and attorney fees, we retained jurisdiction to resolve these issues in a separate decision and order. In AWCB Decision No. 99-0082 (April 16, 1999), we awarded the employee $506.25 in additional penalties, interest, and attorney fees under AS 23.30.145(b).

The record reflects that no proposed compromise and release (C&R) agreement under AS 23.30.012 has been filed concerning the employee's claims. The employer has not filed any Controversion Notices concerning the employee's claims. Neither party filed a request for modification, under AS 23.30.130, or an appeal, under AS 23.30.125, concerning any of our decision and orders on this case.

On December 18, 1999 the employee underwent the ulnar nerve surgery. On December 18, 1998, the employee completed a Workers’ Compensation Claim for TTD benefits for the work-time lost as a result of the surgery, medical benefits, attorney fees, and any penalties or interest which might be due. The records reflect the claim was filed on December 21, 1998, and served on the employer on December 22, 1998. On December 30, 1998, the employee submitted his medical bills from the surgery, for payment by the employer.

The employer initially resisted paying the claimed benefits. During negotiations for the settlement of the employee’s claim, the employer paid the employee’s attorney a check for the claimed TTD benefits and medical benefits on January 27, 1999. The settlement negotiations broke down and the employee’s attorney placed this money in a trust account. On July 1, 1999, the employee filed an Affidavit of Readiness for Hearing for the claimed penalties, interest, and attorney fees for the late-paid TTD and medical benefits.

We heard the employee’s claims on October 14, 1999. The employee argued the employer refused to timely pay the TTD benefits and medical benefits we awarded in our November 8, 1998 decision. He argued he is due a 25 percent penalty on the late-paid TTD and medical benefits under AS 23.30.155(e). He claimed a $496.97 penalty for late-paid TTD benefits, and a $980.14 penalty for late-paid medical benefits. He argued the employee is due interest and attorney fees. He submitted an affidavit of itemized attorney fees, detailing $1,025.00 of work at a rate of $140.00 per hour.

The employer argued the payment of the benefits was delayed because the parties were negotiating an agreement, settling all of the employee's claims. The employer paid the amounts due. He argued the employee's itemized attorney fees are excessive, specifically criticizing the time claimed for telephone calls and for preparing a failed Compromise and Release agreement.

The employee requested us to keep the record open to receive a calculation of potential interest due, prepared by a financial services firm. The employer agreed to this, provided it has a right to respond. We agreed to keep the record open until October 28, 1999. The employee filed calculations, claiming $108.73. The employer did not dispute the calculated amount.

I. PENALTIES

AS 23.30.155(e) provides, in part:

In our first decision on this case, AWCB Decision 98-0278 (November 3, 1998), we found the employee entitled to medical benefits for his ulnar nerve surgery, and any associated TTD benefits. The parties did not appeal any of our decisions under AS 23.30.125, and they are final.

Under AS 23.30.155(b) the TTD benefits claimed by the employee for the surgery in this case were due 14 days after the employee filed his Workers’ Compensation Claim and it was served on the employer on December 22, 1998. The medical benefits claimed by the employee for the surgery were due 14 days after the employee served the medical bills on the employer on December 30, 1998. A 25 percent penalty would be due under AS 23.30.155(e) if the employer fails to pay the TTD or medical benefits within seven days after they become due. Childs v. Copper Valley Electrical Association 860 P.2d 1184, 1191 (Alaska 1993).

We find the TTD benefits were due 14 days after the employer received notice, that is, they were due on January 5, 1999. We find the medical benefits were due 14 days after the employer received notice, that is, they were due on January 13, 1999. We find the employer has failed to controvert the employee's entitlement to those benefits, and has failed to pay the benefits within the time limits of the statute.

We can excuse the late payment only if the employer specifically shows us the payment was not made for reasons beyond the employer's control. See also Fahlsing v. Arctic North Services, Inc., AWCB Decision No. 94-0072 (March 29, 1994). We have no evidence of any circumstance rendering the employer unable to meet his legal responsibilities. We find the employer has failed to timely pay the TTD benefits and medical benefits within seven days after they were due. We find a penalty of $496.97 was due for late-paid TTD benefits under AS 23.30.155(e) on January 12, 1999. We find a penalty of $980.14 was due for late-paid medical benefits under AS 23.30.155(e) on January 20, 1999.

II. INTEREST

8 AAC 45.142 provides:

Our regulation at 8 AAC 45.142 requires the payment of interest at a statutory rate of 10.5% per annum, as provided at AS 45.45.010, from the date at which each installment of compensation, including medical compensation, is due. See also, Land & Marine Rental Co. v. Rawls, 686 P.2d 1187 (Alaska 1984); Harp v. Arco Alaska, Inc., 831 P.2d 352 (Alaska 1994); Childs v. Copper Valley Electrical Association 860 P.2d at 1191. The employee is entitled to interest from the employer on any outstanding penalties, medical benefits, or other benefits from the date on which those benefits were due. See Williamee v. Derrick Enterprises, AWCB Decision No. 98-0078 (March 27, 1998). Based on the stipulated calculations submitted by the parties, we find the interest due totals $108.73.

III. ATTORNEY FEES

AS 23.30.145(b) provides:

8 AAC 45.180 provides, in part:

(d)(1) An request for a fee under AS 23.30.145(b)

must be verified by an affidavit itemizing the

hours expended....

We find the payment of the penalties and interest claimed by the employee, was resisted by the action of the employer. Wien Air Alaska v. Arant, 592 P.2d 352 (Alaska 1979). The employee seeks an award of attorney's fee under subsection 145(b) for the benefits obtained. We found the employer liable for the claimed penalty and interest. Consequently, we can award fees and costs under subsection 145(b). Alaska Interstate v. Houston, 586 P.2d 618, 620 (Alaska 1978).

Subsection 145(b) requires the award of attorney's fee to be reasonable. We have examined the record of this case, and the employee's written and oral itemization of fees and costs. In Gertlar v. H & H Contractors, Inc., AWCB Decision No. 97-0105 (May 12, 1997), we found fees in excess of those claimed by the employee per hour to be a reasonable fee for a well-experienced workers' compensation attorney, considering his competence and expertise. In we our April 16, 1999 decision and order, we recognized the appropriateness of an hourly fee of $140.00 to reflect the level of competence provided by this attorney.

Now, having considered the nature, length, and complexity of the services performed; the tenacious resistance of the employer, as well as the amount of benefits resulting from the services obtained, we find the time spent and the fees claimed are reasonable for the successful prosecution of this claim. Thompson v. Alyeska Pipeline Service Co., AWCB Decision No. 98-0315 (December 14, 1998). We will award the $1,025.00 in fees requested by the employee.

1. The employer shall pay the employee a 25 percent penalty under AS 23.30.155(f), an amount totaling $1,477.11.

2. The employer shall pay the employee interest under 8 AAC 45.142 on all late or unpaid penalties, medical benefits, or other benefits from the date those benefits were due, an amount totaling $108.73.

3. The employer shall pay the employee $1,025.00 in reasonable attorney fees under AS 23.30.145(b) and 8 AAC 45.180.

Dated at Fairbanks, Alaska this 3rd day of November, 1999.

ALASKA WORKERS' COMPENSATION BOARD

/s/ William Walters
William Walters, Designated Chairman

/s/ Dorothy Bradshaw
Dorothy Bradshaw, Member

If compensation is payable under terms of this decision, it is due on the date of issue. A penalty of 25 percent will accrue if not paid within 14 days of the due date, unless an interlocutory order staying payment is obtained in Superior Court.

This compensation order is a final decision. It becomes effective when filed in the office of the Board unless proceedings to appeal it are instituted. Proceedings to appeal must be instituted in Superior Court within 30 days of the filing of this decision and be brought by a party in interest against the Board and all other parties to the proceedings before the Board, as provided in the Rules of Appellate Procedure of the State of Alaska.

A party may ask the Board to reconsider this decision by filing a petition for reconsideration under AS 44.62.540 and in accordance with 8 AAC 45.050. The petition requesting reconsideration must be filed with the Board within 15 days after delivery or mailing of this decision.

Within one year after the rejection of a claim or within one year after the last payment of benefits under AS 23.30.180, 23.30.185, 23.30.190, 23.30.200 or 23.30.215 a party may ask the Board to modify this decision under AS 23.30.130 by filing a petition in accordance with 8 AAC 45.150 and 8 AAC 45.050.

I hereby certify that the foregoing is a full, true and correct copy of the Final Decision and Order in the matter of Thomas A. Phillips / applicant; v. Kent Setzer, dba, C&A Distributors (uninsured), employer / defendant; Case No.199728640; dated and filed in the office of the Alaska Workers' Compensation Board in Fairbanks, Alaska, this 3rd day of November, 1999.

Lora J. Eddy, Clerk

SNO