UPDATE:  Court of Appeals affirms Workers’ Comp Board’s dismissal of appeal.

Ashlock v. Commonwealth of Kentucky, Claim No. 201096674 (Ky. WCB 2013) (slip opinion):  For an attorney to be successful in a motion to reopen to contest an attorney fee, he must first be a party.

This is a decision of the Kentucky Workers’ Compensation Board (WCB). Claimant Sipes (Sipes) sustained an injury to her right shoulder on February 4, 2010 while participating in Aikido training in the course of her employment as a Youth Worker II. She subsequently underwent surgery.  On February 28, 2011, Sipes hired Attorney Ashlock (Ashlock) to represent her in her workers’ compensation claim. Ashlock subsequently placed the third party administrator (TPA) for the employer on notice of his representation.  While the fee agreement between Ashlock and Sipes contained a provision for an attorney’s lien, the evidence did not establish that the TPA was aware of the lien. Sipes became dissatisfied with Ashlock’s representation and eventually discharged him in May of 2011.  Several months later, the TPA, unaware of Ashlock’s termination, forwarded a settlement offer to him. Sipes advised the TPA she was no longer represented by Ashlock and that the TPA could deal directly with her for settlement. At no time did Ashlock advise Sipes or the TPA he wished to assert a lien.

Sipes eventually settled her claim directly with the TPA, and the settlement agreement was approved in August of 2011. Ashlock wrote Sipes on three separate occasions in 2012 inquiring as to the status of her claim. On July 27, 2012, he filed a motion to reopen the claim, alleging fraud and mistake in the entry of the Form 110 Settlement Agreement relying on  KRS 342.125(a).  Ashlock also sought sanctions against the TPA and the employer for improperly settling the claim.  Additionally, Ashlock filed a motion for attorney fees, requesting a fee of $6,161.35 based upon twenty hours of work representing Sipes, and later amended the motion to request $7,521.32.  However, Ashlock did not move to be joined as a party to the action. The matter was transferred to an ALJ for further adjudication.  After the taking of proof, the ALJ awarded Ashlock a fee, but reduced the fee to $3,000, based on an hourly rate of $150, reasoning that the hourly rate alleged in Ashlock’s motion for attorney fee was too high. Ashlock appealed that award.

On appeal, the WCB found the motion to reopen invalid, vacated the ALJ’s award of attorney fees and dismissed the appeal holding that Ashlock did not have standing as he failed to move to have himself joined as a party to the claim.  He, therefore, received nothing.

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