Radmila Pavlicek v. Jerabek, Inc., etc.

COURT OF APPEALS OF VIRGINIA

Present: Judges Coleman, Willis and Bray
Argued at Norfolk, Virginia

RADMILA PAVLICEK

v. Record No. 2420-94-1 OPINION BY
JUDGE RICHARD S. BRAY
JERABEK, INC., SEPTEMBER 12, 1995
t/a MONASTERY RESTAURANT, ET AL.

FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION

Karen M. Rye for appellant.

Mary G. Commander (Goldblatt, Lipkin & Cohen, on
brief), for appellee Jerabek, Inc., t/a Monastery
Restaurant.
No brief or argument for appellee Uninsured
Employer's Fund.

Incidental to an award of benefits to Radmila Pavlicek

(claimant) under the Virginia Workers' Compensation Act (Act),

claimant's counsel (counsel) petitioned the Workers' Compensation

Commission (commission) for attorney's fees payable from that

portion of the recovery "which benefits the . . . health care
1
provider[s]," pursuant to Code § 65.2-714. The commission denied

the relief, concluding that it did not relate to a "contested

claim," and claimant appeals. Jerabek, Inc. (employer) urges that

we dismiss the appeal, contending that the health care providers

were indispensable, though excluded, parties. Employer also

concurs in the commission's finding that the underlying claim was

not contested. For the reasons that follow, we reverse the

decision.

1
Although not applicable to these proceedings, Code § 65.2-714
was amended during the 1995 session of the General Assembly.
 The pertinent facts are substantially uncontroverted. On

February 19, 1994, claimant was accidentally injured incidental to

her employment. She subsequently retained counsel to pursue

benefits under the Act, and a claim was lodged with the commission

on March 11, 1994, accompanied by interrogatories and a request for

production directed to employer. Employer received notice of the

filing on March 12, 1994, and immediately retained counsel, Ms.

Mary G. Commander, who "thereafter began [an] investigation into

the facts of the injury, wages, insurance coverage, etc."
On March 30, 1994, the commission noticed employer and

Lumbermen's Mutual Casualty Co. (Lumbermen's), then identified as

employer's "carrier," of the pending claim, together with a request

for related documentation. This correspondence was followed on

April 1, 1994, by an order of the commission directing the

"carrier" to complete and return attached form "Order(s)" reporting

the status of the claim. In response, the commission received the

"Employer's First Report Of Accident" from Ms. Commander on April

14, 1994, accompanied by a letter which expressed her

"understanding that Kemper 2 will be assuming the handling, and

defense, if any, of this claim." On that same date, however,

Kemper notified the commission that it had declined coverage to

employer.

Counsel acknowledged receipt of Ms. Commander's letter to the

commission "regarding [the] insurance coverage issue" and requested

2
Lumbermen's is related to the Kemper National Insurance
Companies.

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immediate clarification due to claimant's "financial hardship." In

later correspondence to Ms. Commander, dated April 22, 1994,

counsel noted that "present information" indicated employer was

"uninsured" and, again, requested a "timely" resolution of this

issue. On April 23, 1994, Ms. Commander answered:
In response to your concern, the Commission has
never been advised that there is coverage so I
assume that they have been treating this (or
should have been, in any event) as a case which
should be handled through the Uninsured Fund.
That has been my assumption throughout. You
may want to confirm this directly.

In the interim, counsel moved the commission, on April 4,

1994, to compel employer's response to the pending discovery.

Thereafter, on April 20, 1994, employer answered claimant's

interrogatories, declaring its intention to assert the defense that

"[c]laimant was a casual worker," not committed to "working on a

regular basis," with a "full-time job elsewhere." 3 Employer also

reported claimant's wage at $12.00 per week, plus tips. These

responses prompted counsel to propound supplemental interrogatories

to employer, "narrowly tailored" to the "casual worker" defense and

wage issues. By letter to counsel dated April 23, 1994, Ms.

Commander then advised that she did "not believe that there is a

defense to the claim" and denied the existence of "any records" of

claimant's wages.

Pursuing the wage issue, counsel noticed employer to take the

depositions of its employee, Anna Jerabek. However, Ms. Commander
3
Employer further noted that "[n]o other defenses are known at
this time."

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moved to quash, arguing that employer had "no idea whatsoever as to

claimant's average weekly wage" and that the scheduled time and

date conflicted with a prior commitment. The commission thereafter

quashed the notice, "for good cause shown," and "encourage[d] the

parties to discuss the issue of the average weekly wage and attempt

to reach an agreement" before again pursuing depositions. When

subsequent settlement negotiations proved unsuccessful, the wage

issue was submitted for determination by the commission.

Following a hearing, the deputy, by opinion dated September 7,

1994, awarded temporary total disability and medical benefits to

claimant, a fee to counsel and imposed a fine upon employer for

failure to maintain the requisite insurance. 4 Counsel thereafter

moved the commission to allow additional attorney's fees from those

monies payable from the award to claimant's health care providers

pursuant to Code § 65.2-714, mailing notice of this claim to the

several providers in accordance with Rule 18 of the Workers'

Compensation Commission Rules. Counsel also submitted to the

commission numerous proposed orders, each of which was agreed to

and endorsed by a named health care provider and allotted a

specific fee to counsel from the award to such provider.

Before the commission acted on counsel's request, Ms.

Commander objected, contending that the underlying claim was not

contested and had not required "the services of an attorney" from

4
At the request of counsel, the award was ordered payable from
the Uninsured Employer's Fund on October 3, 1994. No benefits were
received by claimant from employer, voluntary or otherwise, from
the date of the accident until payment from the uninsured fund.

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"which the health care providers benefited." Counsel disagreed

and, following much correspondence between counsel, Ms. Commander,

and the commission, a deputy determined that the original claim

"was not 'contested'" and "[t]he Commission does not have

jurisdiction to award attorney's fees, pursuant to Code § 65.2-714,

in uncontested cases." On review, the commission concurred and

counsel now appeals to this Court.
THE MOTION TO DISMISS

As a threshold issue, employer urges us to dismiss the appeal

"for failure of the appellant/claimant to join all indispensable

parties." A single health care provider among the many that served

claimant, Sentara Health System, Sentara Norfolk General Hospital

(Sentara), filed a like motion through employer's attorney, Ms.

Commander, despite its earlier endorsement, "Seen and Approved," of

a proposed order submitted to the commission which specifically

awarded attorney's fees to counsel.

Code § 65.2-714(A) provides, in pertinent part, that:

Fees of attorneys and physicians and charges of

hospitals for services, whether employed by

employer, employee or insurance carrier under

this title, shall be subject to the approval

and award of the Commission.

Id. Further,

[i]f a contested claim is held to be
compensable under this title and, after a
hearing on the claim on its merits or after
abandonment of a defense by the employer or
insurance carrier, benefits for medical

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 services are awarded and inure to the benefit
of a third party insurance carrier or health
care provider, the Commission shall award to
the employee's attorney a reasonable fee and
other reasonable pro rata costs as are
appropriate from the sum which benefits the
third party insurance carrier or health care
provider.

Code § 65.2-714(B) (emphasis added).

Rule 18 of the Workers' Compensation Commission Rules

addresses consideration of those attorney's fees authorized by Code

§ 65.2-714.
An attorney's fee shall be awarded from sums
recovered for the benefit of a third-party
insurance carrier or a health care provider
pursuant to § 65.2-714, Code of Virginia, only
upon (1) evidence that such insurance carrier
or health care provider was given reasonable
notice that a motion for an award of such fee
would be made and (2) evidence of the sum due
such carrier or health care provider.

Employer does not dispute this well-established authority of

the commission to control the "fees" and "charges" of both

attorneys and health care providers or the sufficiency of notice

attending counsel's claim in this instance. Rather, employer

contends that the claim, related proceedings, and disposition

necessitated a joinder of the health care providers as parties to

this appeal. Employer reasons that the "health care providers are

the ones from whom a substantial amount of money is sought" and,

therefore, each must be "named . . . appellees" and "provided with

a copy of the Notice of Appeal."

This argument ignores the procedural history of the claim.

Despite notice, the record discloses that no health care provider

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sought party status at any time during the proceedings before the

commission. Providers, including Sentara, appear in the record

before the commission only to concur in the claim, joining in

proposed orders awarding fees to counsel from the funds payable to

each. Sentara's challenge and assertion of a right to party status

is first raised before this Court in a motion to dismiss the

appeal. Employer likewise first argued on appeal that the health

care providers were indispensable parties.
However, the question of party status to a health care

provider in proceedings before the commission incidental to Code

§ 65.2-714 claims is a matter for determination by the commission

in the context of applicable statutes and rules of procedure. See

Dep't of Game and Inland Fisheries v. Joyce, 147 Va. 89, 93-94, 136

S.E. 651, 653 (1927). Moreover, it is well established that this

Court will not entertain issues first raised on appeal. Green v.

Warwick Plumbing & Heating Corp., 5 Va. App. 409, 412-13, 364

S.E.2d 4, 6 (1988) (citing Rule 5A:18). Review of the posture of

employer, Sentara, and the remaining health care providers on the

record before the commission illustrates the wisdom of this rule.

We, therefore, decline to now entertain the procedural complaints

of employer and Sentara and overrule the motions.
THE CLAIM

In denying counsel's prayer for attorney's fees pursuant to

Code § 65.2-714(B), the commission determined that the underlying

claim was not "contested" as contemplated by the statute. It is

well established that "[f]actual findings by the commission that

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are supported by credible evidence are conclusive and binding upon

this Court on appeal." Southern Iron Works, Inc. v. Wallace, 16

Va. App. 131, 134, 428 S.E.2d 32, 34 (1993) (citing Code

§ 65.2-706). However, when the facts are undisputed, as here,

their interpretation becomes a matter of law. Wells v.

Commonwealth, Dep't of Transp., 15 Va. App. 561, 563, 425 S.E.2d

536, 537 (1993). "We are required to construe the law as it is

written" and "'[a]n erroneous construction by those charged with

its administration cannot be permitted to override the clear

mandates of a statute.'" Commonwealth v. May Bros., Inc., 11 Va.

App. 115, 119, 396 S.E.2d 695, 697 (1990) (citation omitted). The

"clear and unambiguous" words of a statute must be accorded "their

plain meaning." Diggs v. Commonwealth, 6 Va. App. 300, 302, 369

S.E.2d 199, 200 (1988).

Here, we find that the words, "contested claim" in Code

§ 65.2-714 simply reflect the legislative requirement that the

"dispute, contention, or litigation," Webster's Ninth New
Collegiate Dictionary 283 (1989) (defining "contest"), combine with

other specified circumstances attending a "claim . . . held . . .

compensable," before attorney's fees "shall [be] award[ed]"

incidental to "benefits for medical services" arising from the

claim which "inure to . . . a third party." Code § 65.2-714(B).

The record reflects considerable dispute and contention from the

inception of the underlying claim and the related litigation is

manifest. Employer immediately retained counsel, expressly

asserted (only to later abandon) a "casual worker" defense,

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mistakenly claimed insurance coverage, and obfuscated evidence of

claimant's earnings. Clearly, confusion and delay attributable to

employer needlessly complicated and protracted the proceedings,

leaving claimant without benefits for months while counsel pursued

clarification, discovery, and negotiation with employer. Finally,

the wage issue remained unresolved and required determination by

the commission.

Under such circumstances, we find that the claim was

contested, as a matter of law, by a recalcitrant employer,

necessitating the assistance of counsel to successfully obtain

benefits both to claimant and the health care providers.

Accordingly, we reverse the decision of the commission and remand

for a determination of reasonable and appropriate attorney's fees

to counsel pursuant to Code § 65.2-714(B).

Reversed and remanded.

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