Underwater Construction, Inc. v. Shirley

884 P.2d 156, 1994 Alas. LEXIS 105
CourtAlaska Supreme Court
DecidedNovember 4, 1994
DocketS-5247, S-5248
StatusPublished
Cited by11 cases

This text of 884 P.2d 156 (Underwater Construction, Inc. v. Shirley) is published on Counsel Stack Legal Research, covering Alaska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Underwater Construction, Inc. v. Shirley, 884 P.2d 156, 1994 Alas. LEXIS 105 (Ala. 1994).

Opinions

OPINION

COMPTON, Justice.

Underwater Construction, Inc. appeals an award of attorney’s fees pursuant to section 145(a) of the Alaska Workers’ Compensation Act (Act), AS 23.30.005-270, claiming that the award was improper since it never “controverted” payment of compensation. We affirm the award with slight modification.

■ William W. Shirley cross-appeals the denial of his request for a determination that he is entitled to an order awarding him permanent partial disability payments pursuant to section 110(c) of the Act. We reverse the denial.

I. FACTUAL AND PROCEDURAL BACKGROUND

William W. Shirley was severely injured while working for Underwater Construction, Inc. (Underwater Construction) on August 4, 1989. On August 23,1989, Underwater Construction’s insurance carrier, Industrial Indemnity Company of Alaska (collectively, Industrial Indemnity), began paying Shirley temporary total disability (TTD) payments of [158]*158$449.37 per week. Although Shirley received extensive medical treatment, specialists concluded that he would not be competitively employed then or in the future.

On August 21, 1990, Dr. Shawn Hadley, a rehabilitative specialist, performed a permanent partial impairment (PPI) rating and concluded that Shirley had an impairment rating of 54% of the whole man. Industrial Indemnity indicated that the rating “may be premature,” and sought to clarify impairment status through consultation with another head injury expert, Katherine Mateer, Ph.D. Industrial Indemnity continued to pay Shirley $449.37 per week in TTD benefits.

Shirley contacted an attorney and filed an application for permanent total disability (PTD) benefits. Industrial Indemnity filed an answer on a form provided by the Alaska Workers’ Compensation Board (Board) in which it disputed Shirley’s PTD claim: “Carrier is awaiting clarification from record review to determine P & T status. Until such time TTD is on-going.” Industrial Indemnity also “reserve[d] the right to raise further defenses after discovery.” In response to Shirley’s claim for attorney’s fees, Industrial Indemnity stated: “No benefits have been controverted. All benefits due and owing under the Alaska Workers’ Compensation Act have been accepted and paid.” In support of this, Industrial Indemnity noted that since the TTD and PTD rates are the same, its decision had no effect on the amount of Shirley’s compensation benefits.

In January 1991 Industrial Indemnity received a report from Dr. Mateer which stated that “Mr. Shirley is permanently and totally disabled as a result of the August 4, 1989 injury.” On this basis, Industrial Indemnity converted Shirley’s status from TTD to PTD, effective January 24, 1991.

In March 1991 the Board held a hearing on Shirley’s claim. The Board found that Shirley had been permanently totally disabled after August 21,1990. Based on this finding, the Board held that Industrial Indemnity had “controverted in fact Employee’s entitlement to PTD benefits.” Accordingly, the Board required Industrial Indemnity to pay statutory minimum attorney’s fees on all disability payments made after August 21. The Board also denied Shirley’s request for “an award of PTD benefits until further board order,” noting that Industrial Indemnity would be warranted in changing Shirley’s status if his condition were to improve in the future.

Industrial Indemnity appealed the attorney’s fee ruling to the superior court, Alaska RApp.P. 601; AS 22.10.020, arguing that it had not “controverted” the payment of disability benefits. The superior court affirmed the Board’s order. Industrial Indemnity appeals that ruling. Shirley cross-appeals, claiming that the Board erred in denying his claim “for an award of permanent total disability benefits.” Alaska R.App.P. 202(a); AS 22.05.010(c).

II. DISCUSSION

A. AWARD OF ATTORNEY’S FEES UNDER AS 23.30.145(a).

The central question before this court is whether the Board had the authority under section 145(a) of the Act to award statutory attorney’s fees. Because this determination requires statutory interpretation involving no administrative expertise, the substitution-of-judgment standard is appropriate. Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co., 746 P.2d 896, 903 (Alaska 1987). We give no deference to the intermediate appellate decisions of the superior court. Id.

Alaska Statute 23.30.145(a) provides in part:

When the board advises that a claim has been controverted, in whole or in part, the board may direct that the fees for legal services be paid by the employer or carrier in addition to compensation awarded; the fees may be allowed only on the amount of compensation controverted and awarded....

The parties dispute the effect of Industrial Indemnity’s delay in changing Shirley’s status from TTD to PTD. Industrial Indemnity argues that it never controverted any amount of compensation owed to Shirley and therefore the Board did not have authority to grant attorney’s fees. It notes that it has paid Shirley $449.37 in weekly TTD benefits [159]*159since his injury — the same amount for which he would be eligible if granted PTD status.

Shirley responds that Industrial Indemnity controverted his claim by “never unqualifiedly accept[ing] Shirley’s claim for permanent total disability compensation.” Because Industrial Indemnity satisfied the controversion requirement, the award of attorney’s fees was appropriate.

We agree. Shirley’s physician, Dr. Had-ley, indicated in her July and August 1990 reports that Shirley was medically stable and that he would not be able to pursue gainful employment. Given these conclusions, Shirley was entitled to have his status changed at that time from TTD to PTD.1 Accordingly, Industrial Indemnity’s refusal to change Shirley’s status constituted a controversion of Shirley’s claim “in whole or in part” under AS 23.30.145(a).

Nonetheless, section 145(a) limits the Board’s authority to award attorney’s fees to “the amount of compensation controverted and awarded.” AS 23.130.145(a); see Bignell v. Wise Mechanical Contractors, 651 P.2d 1163, 1169 (Alaska 1982) (“The statute unambiguously restricts the award of attorney’s fees to amounts which are controverted.”); J.B. Warrack Co. v. Roan, 418 P.2d 986, 990 (Alaska 1966) (holding that where although carrier did not controvert amount of employee’s claim, no attorney’s fees could be awarded). Industrial Indemnity argues that because the payment amount under TTD was exactly the same as it would have been under PTD, no “amount of compensation” was controverted.

We disagree. Industrial Indemnity controverted the permanent status of Shirley’s disability, thus affecting the total amount he could collect during his lifetime. As the superior court noted, “[t]he distinction between TTD and PTD can be very important to an employee since TTD payments end with medical stability while PTD benefits do not.” Shirley claimed $449.37 per week PTD. Regardless of TTD benefits being paid, Industrial Indemnity’s action paid zero dollars PTD.

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Underwater Construction, Inc. v. Shirley
884 P.2d 156 (Alaska Supreme Court, 1994)

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Bluebook (online)
884 P.2d 156, 1994 Alas. LEXIS 105, Counsel Stack Legal Research, https://law.counselstack.com/opinion/underwater-construction-inc-v-shirley-alaska-1994.