Untimely Attorney Fee Application Mandates Return of Attorney Fees

On April 24, 2011, claimant suffered an injury while in the course and scope of his employment with Ash Timber Company. The claimant retained an attorney to pursue a worker’s compensation claim. His counsel advised that he enter into a $55,000.00 settlement agreement in exchange for a full and final settlement of the indemnity portion of the worker’s compensation claim. The settlement did not include any claims for compensable medical treatment related to the employment accident.

On January 9, 2015, the claimant received correspondence from his attorney outlining the proposed disbursement of funds received from the cash settlement. In the correspondence, the attorney listed “statutory attorney fee (20% of $202,187.48) = $40,437.49.” The document did not specifically explain how the attorney reached those amounts. At issue before the Louisiana First Circuit Court of Appeal was whether the attorney followed statutory procedure in withholding his fee from claimant’s settlement, and if so, whether the amount of the fee was appropriate under the law.

Louisiana Revised Statutes 23:1143(B)(1) provides “an attorney may withhold, as proposed attorney’s fees, a sum not to exceed 20% of all the amounts recovered in his trust account . . . pending approval of such fees by the worker’s compensation judge.” Section (B)(2) of that statute further provides that “an application for approval of fees shall be filed by the attorney within thirty (30) days after the payment of the final weekly benefit, settlement of the claim, or payment of the judgement, whichever occurs later. Otherwise the funds shall be returned to the claimant.”

Here, the settlement of the indemnity portion of the claimant’s worker’s compensation claim was approved on October 15, 2014, but the attorney did not file the motion to determine attorney’s fees until January 16, 2015, which is well past the 30-day period set forth in La. Rev. Stat. 23:1143(B)(2). The court held that the WCJ correctly found the attorney’s fees must be returned to the claimant, reasoning that the WCJ followed both the clear and unambiguous language of La. Rev. Stat. 23:1143, which specifically states that failing to file an attorney fee application within the 30-day period requires the funds to be returned to the claimant. While the attorney argued that he did not intentionally violate the statute, the court concluded that nothing in the statute addressed whether the attorney’s actions had to be intentional or unintentional.

Tellis v. Ash Timber Co., No. 15-1052 (La. App. 3 Cir. 4/27/16).