Lienholder in Comp. Claim May (or May not) be Entitled to Recover Fees from Employer
Lienholder in Comp. Claim May (or May not) be Entitled to Recover Fees from Employer
Grierson V. Marine Terminals Corporation, 2015 DOLBRB LEXIS 93 (BRB May 19, 2015)
Hunt v. Director, OWCP, 999 F.2d 419 (9th Cir. 1993) Distinguished
Claims may be inextricably linked
Stipulation to lien is cut off
By: Andrew Lifsey
The claimant sustained a head injury while working for the employer which controverted compensability and also argued that it was not the responsible employer under the Act. The employee’s union welfare plan paid medical and disability benefits and then intervened in the administrative proceeding to enforce its lien under 33 U.S.C. Sec. 917.After having found that the claim was compensable, the intervener then filed an application for its attorneys’ fees to be assessed against and paid by the employer. The employer objected asserting among other things that the intervener lacked standing under the Act. The ALJ held for the plan and assessed $17,425 in attorney’s fees against the employer which then appealed to the BRB.The BRB first reviewed the Ninth Circuit precedent established in Hunt v. Director, OWCP, 999 F.2d 419 (9th Cir. 1993; see 10 Loy. Mar. L.J. 367 for further discussion on this) which held that medical providers (a physician and physical therapist) who intervened for reimbursement of their services had standing as “parties in interest” (33 U.S.C. Sec. 907(d)(3)) and could recover their attorneys’ fees from the employer.But, though the plan is an insurance provider and not a medical provider, it may be a “person seeking benefits” under 33 U.S.C. Sec. 928(a) and collect fees from the employer. Here the plan pursued its lien under 33 U.S.C. Sec. 917 which does not allow for a direct award of attorney’s fees because under this section of the Act, the legal relationship is between the plan and the claimant who is responsible to reimburse the intervener. Hence, a Section 17 lienholder is not “a person seeking benefits,” and the employer cannot be held liable for its attorney’s fees.Nonetheless, because the employer contested compensability of the main demand by the employee, the plan’s efforts to establish the employer’s liability for the claimant’s medical benefits “were inextricably intertwined with its efforts to show the compensability of the claim.” It offered its own evidence of compensability and thus maximized the potential for reimbursement. As the time spent pursuing compensability could not be separated from the time spent pursuing the lien under Section 17, the employer is liable for the attorney’s fees of the plan. But, after the employer stipulated to the lien, it is no longer liable for the plan’s fees.
