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FLORES v. KEENER

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Court of Appeals of Georgia.

FLORES v. KEENER.

No. A10A0583.

Decided: February 10, 2010

Lawrence L. Bennett, Jr., for appellant. Akin & Tate, S. Lester Tate III, Cartersville; Morgan & Morgan, David H. Moskowitz, Atlanta; Harriss & Hartman, Joseph T. Leman, for appellee.

In Martin Garcia's claim for workers' compensation benefits, Garcia was represented first by Russell Keener and then by Jorge Flores. After Garcia and his employer reached a settlement, Flores filed a motion seeking the entire amount allotted in the settlement for attorney fees. After a hearing, an administrative law judge largely rejected Flores' motion and ruled that Flores should receive only 1.2 percent of the attorney fee allotment while Keener should receive the remaining 98.8 percent. On appeal to the Board's Appellate Division, the Appellate Division vacated the ALJ's decision and ruled that Flores was entitled to 30 percent of the total attorney fees while Keener was entitled to 70 percent. On appeal to the Superior Court of Bartow County, the superior court vacated the Appellate Division's ruling, based on its conclusion that the Appellate Division failed to apply the correct legal standard, and remanded. We granted Flores' application for a discretionary appeal. Flores contends, inter alia, that the legal standard which the superior court instructed the Appellate Division to apply is incorrect. For the reasons explained below, we reverse the superior court's ruling and reinstate the Appellate Division's award.

In an appeal from an order of a superior court reviewing an award of the Appellate Division of the State Board of Workers' Compensation,

this Court examines the record to see if there is competent evidence to support the award and construes the evidence in a light most favorable to the prevailing party․ Further, it is axiomatic that the findings of the State Board of Workers' Compensation, when supported by any evidence, are conclusive and binding, and that neither the superior court nor this [C]ourt has any authority to substitute itself as a fact finding body in lieu of the [B]oard.

(Citations and punctuation omitted.) Keystone Automotive v. Hall, 292 Ga.App. 645, 647-648(1), 665 S.E.2d 392 (2008).1 “The question of whether the [superior] court applied the correct legal standard in evaluating the evidence, however, is one of law, which we review de novo.” (Citation and punctuation omitted.) Id. at 647(1), 665 S.E.2d 392.

The record shows the following undisputed facts. Garcia was catastrophically injured on January 22, 2005, and hired Keener on October 14, 2005 to represent him in his workers' compensation claim. In the contingent fee contract, Garcia agreed to pay Keener 25 percent “of any recovery” or, in the event Garcia dismissed Keener, a fee “based upon time devoted to [Garcia's] case at [a] reasonabl[e] hourly rate” or 25 percent “of any offers which have been made by any adversary or collateral party, whichever is greater.” After 20 months of litigation that included two mediations, a rehabilitation conference, and creation of a life care plan, Garcia's employer offered to settle his claim for a lump sum payment of $650,000 (plus the amount required to be set aside for Medicare2 ). Garcia rejected the offer and, on June 14, 2007, dismissed Keener. Keener filed a lien for his legal fee in the amount of $162,500 (25 percent of the settlement offer of $650,000), plus accrued expenses.

The same day that Garcia dismissed Keener, he hired Flores. In the contingent fee contract, Garcia agreed to pay Flores 25 percent “of any monetary recovery payable to me under the Workers' Compensation Act, whether already accrued or to be accrued in the future.” Eight days after hiring Flores, Garcia accepted his employer's modified settlement offer of $657,500 (plus the Medicare set aside). The parties stipulated, “The correct amount for attorney[ ] fees is 25 [percent] of the settlement amount, or $162,875.00. The parties hereby agree for this attorney fee to be held in escrow until the attorney fee lien is resolved.”

In Flores' motion that triggered the hearing on the distribution of the attorney fees, Flores asked that the Board deny Keener's lien. The ALJ determined that Keener's contingent fee contract was valid under the Workers' Compensation Act and that a 25 percent fee was reasonable under the circumstances. The ALJ noted that Keener represented Garcia for 20 months and obtained a settlement offer of $650,000 while Flores represented Garcia for eight days and was able to increase the offer by only $7,500. The ALJ determined that a reasonable apportionment of the total fee of $162,875 was 98.8 percent for Keener and 1.2 percent for Flores. Accordingly, the ALJ directed Garcia's employer to pay Keener $160,920.50 and to pay Flores $1,954.50.

After weighing the evidence in the trial record and assessing the credibility of the witnesses who testified before the ALJ, the Appellate Division found that the ALJ's determination of the relative values of the attorneys' services was not supported by a preponderance of competent and credible evidence in the record. Based on the entire record, including Keener's testimony regarding his hourly rate of $225 per hour and the amount of work expended on Garcia's case, the Appellate Division determined that the value of Keener's services was $114,012.50, which represents 70 percent of the allotted attorney fees. Based on the fact that Flores achieved the settlement of $657,500 despite representing Garcia for only eight days, the Appellate Division determined that the value of his services was $48,862.50, which represents 30 percent of the allotted attorney fees. Subsequently, the superior court determined that the Appellate Division “applied a narrow one-sided view of the standard of quantum meruit” and disregarded certain precedents. The superior court vacated the Appellate Division's judgment and remanded with direction that the Appellate Division “apply the correct law.”

Under the Act, the attorney fee a workers' compensation claimant will pay his or her attorney(s), if more than $100, is always subject to the approval of the Board. OCGA § 34-9-108(a).3 In addition, the Board shall not approve any fee in excess of 25 percent of the claimant's award or settlement. Id.4 As we have noted, OCGA § 34-9-108(a) provides for awards of attorney fees that are “reasonable” in light of evidence of the value of the services rendered but does not otherwise dictate the manner in which the amount of an award of attorney fees is determined. Copelan v. Burrell, 174 Ga.App. 63, 65(2), 329 S.E.2d 174 (1985). The Board is vested with the discretion to determine whether the amount of fees claimed by an attorney under an engagement contract is reasonable in light of evidence of the value of services rendered in the particular case. Id. In most cases, the Board considers the amount due under the terms of an express contract between an attorney and a workers' compensation claimant to provide prima facie proof of the value of the services rendered. Atlas Automotive v. Wilson, 225 Ga.App. 631, 635(3), 484 S.E.2d 669 (1997).5

Under the standard of review to be employed by the Appellate Division, it is authorized to weigh the evidence in the trial record and to assess the credibility of the witnesses who testified before the ALJ.6 Under that standard, the Appellate Division is authorized to substitute its own findings for those of the ALJ and enter an award thereon, if it finds that the ALJ's findings of fact are not supported by a preponderance of the credible evidence.7 In this case, after the Appellate Division found that the ALJ's determination of the relative values of the attorneys' services8 did not meet the Act's evidentiary standards, it was authorized to substitute its own valuation.

The contingent fee contracts provided prima facie proof that $162,500 (25 percent of the offer Garcia's employer made before Garcia dismissed Keener) would be a reasonable fee for Keener and that $162,875 (25 percent of the final settlement) would be a reasonable fee for Flores.9 Because the Board was limited to distributing a total of $162,875 in fees, the Board was required to exercise its discretion to determine the relative value of the attorneys' services to Garcia.10 The record shows that the Appellate Division considered evidence regarding Keener's typical hourly rate, the amount of time he spent pursuing Garcia's claim, and the result of his efforts, as well as the amount of time Flores spent pursuing Garcia's claim, and the result of his efforts. We conclude that the superior court erred in ruling that the Appellate Division committed a legal error in the manner in which it exercised its discretion in distributing the allotted legal fees between Garcia's attorneys. Because Flores failed in the first-tier review before the superior court to show any basis under OCGA § 34-9-105(c) for vacating the Appellate Division's decision, we reverse the superior court's ruling and reinstate the Appellate Division's award.11

Judgment reversed.

ELLINGTON, Judge.

ANDREWS, P.J., and DOYLE, J., concur.

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