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Arkansas Game & Fish Commission and Public Employee Claims Division v. Gerard

Court of Appeals of Arkansas, Divisions II, III, IV

October 18, 2017

ARKANSAS GAME & FISH COMMISSION AND PUBLIC EMPLOYEE CLAIMS DIVISION APPELLANT
v.
OSCAR A. GERARD, JR. APPELLEE

         APPEAL FROM THE ARKANSAS WORKERS' COMPENSATION COMMISSION [NO. F205923]

          Robert H. Montgomery, Public Employee Claims Division, for appellants.

          Mark Alan Peoples, PLC, by: Mark Alan Peoples, for appellee.

          BART F. VIRDEN, JUDGE.

         The Arkansas Game & Fish Commission (AG&F) appeals the Arkansas Workers' Compensation Commission's decision requiring it to pay one hundred percent of the attorneys' fees resulting from additional benefits awarded to Gerard. We reverse.

         I. Factual History

         Between 2002 and 2013, Oscar Gerard, an employee of AG&F, underwent various medical procedures related to a compensable back injury he sustained while at work. On February 19, 2014, Gerard's treating back surgeon declared that Gerard had attained maximum medical improvement with 16 percent impairment. AG&F accepted liability for the 16 percent impairment rating and a 10 percent wage loss. Two other doctors independently evaluated Gerard, and both opined that his impairment rating was 23 percent to the body as a whole. AG&F accepted the 23 percent impairment rating.

         Subsequently Gerard filed a claim in which, among other things, he argued that he was entitled to permanent partial-disability benefits in excess of 10 percent due to the 7 percent increase in his impairment rating, he was entitled to additional temporary total disability benefits, and AG&F should not be entitled to any offset pursuant to Ark. Code Ann. § 11-9-411 (Repl. 2012).

         After the hearing on December 22, 2015, the administrative law judge (ALJ) decided partially in Gerard's favor and found that Gerard had established that he is entitled to a 35 percent wage-loss disability award, but that AG&F was allowed to take credit for the previous 10 percent wage loss paid. The ALJ found that AG&F was entitled to the offset provided for in Ark. Code Ann. § 11-9-411 because "it appears to this examiner that Mr. Gerard's Arkansas Public Employment Retirement System (APERS) retirement benefits rate of $2, 424.67 to $2, 479.79 per month would far exceed his workers' compensation benefit rates of $277.00 or $369.00 per week." The ALJ also found that the attorneys for the parties were entitled to a 25percent fee on the indemnity benefits awarded to Gerard "one-half of which is to be paid by the claimant and one-half to be paid by the respondents in accordance with Ark. Code Ann. § 11-9-715[.]"[1] AG&F promptly tendered its half of the of attorneys' fees.

         On April 18, 2016, Gerard filed a motion to enforce payment of the attorneys' fees. Gerard explained that his disability retirement compensation exceeded the award of additional benefits, and the offset depleted the "payable benefits" from which the attorneys' fees should be paid. Gerard argued that he effectively never received any compensation, and because Ark. Code Ann. § 11-9-715(a)(2)(B)(i) requires that Gerard's payment of attorneys' fees must come from any benefits he was awarded, AG&F must pay the remaining half of the fees. Gerard stated that

[t]hus, respondent is required to pay the claimant's 1/2 share of the attorney's fee owed and then withhold such an amount from compensation it pays to the claimant, if any. If, as in this case, respondent (because of the offset) ends up paying no compensation to the claimant, then respondent would be entitled to deduct the claimant's ½ share of the fee from any future benefits that may become payable to the claimant.

         Essentially Gerard argued that he should not be required to pay his attorneys' fees out of his own pocket when the statute directs that the fees be deducted from the payable benefits.

         AG&F responded that this it had made payment of half of the attorneys' fees to the proper entities, and despite the unfortunate offset, Ark. Code Ann. § 11-9-715(a)(2)(B)(i) requires that Gerard be responsible for his half of the attorneys' fees out of his own pocket if necessary. (Add. 40-1)

         The ALJ acknowledged that is a case of first impression and that neither the Commission nor the courts had directly addressed which statute had priority over the other. The ALJ explained that "neither Section 411 nor Section 715 is unclear in any relevant way except that both statutes are silent and therefore ambiguous as to which statute applies first to an award of benefits in a controverted claim." The ALJ found that "deduction of the claimant's one-half of the controverted attorneys' fees out of compensation payable to the claimant under Arkansas Code Annotated section 11-9-715(a)(2)(B)(i) precedes any reduction in benefits provided for under Arkansas Code Annotated section 11-9-411(a)(1)." (Add. 48) The ALJ ordered AG&F to pay the claimant's one-half of the fees to the attorney out of the benefits awarded to ...


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