Sit back, dear reader, and listen to the story of the case of Sandra Malvesti v. Round Valley Unified School District.  The issues of the case in chief aren’t nearly as important as what followed, when applicant’s counsel hungrily pursued the attorney’s fee.

The case had previously settled by way of stipulation, with future medical treatment included, but when applicant claimed a (quelle surprise!) new and further disability, the case eventually resolved by way of compromise and release.  Applicant’s lawyer requested a fee of 12% of the new settlement amount ($14,202.00).

Stick with me folks, here’s where it gets interesting.

The workers’ compensation Judge initially refused to approve the compromise and release, reducing applicant’s attorney’s fee because the future medical treatment was already acquired with the prior stipulations, for which applicant’s counsel already received a fee.  The WCJ was also concerned with some of the terms of the method of payment, including an annuity company.

The applicant’s attorney then produced a letter signed by applicant, begging the WCJ to approve the settlement so that applicant would not lose her house – she really needed the money!  In the letter, applicant made clear that she had no objection to the attorney fee, and just wanted the matter settled and paid.

The WCJ approved the settlement with the reduced fee, and applicant’s counsel promptly petitioned the Workers’ Compensation Appeals Board for reconsideration.  In reviewing the case, and please keep the above video in mind, the WCAB noted a letter from applicant (and not applicant’s attorney) which “accuses [applicant’s attorney] of engaging in what may be unprofessional conduct to obtain her consent to his fee request.  In substance, applicant is alleging that [her attorney] used both his claimed financial situation and that of applicant to coerce her to consent to his fee request as a condition of getting timely action on the [C&R].”

And what is the reference to applicant’s counsel’s own financial situation?  The applicant wrote that her attorney “personally asked me to sign an additional letter during this phone call stating he had not paid his house payment for 5 months, could not pay his staff and could not afford groceries for his family, … I was afraid if I did not sign the letter I would once again be put on the ‘back burner’ and my case would still be ongoing.”  (Pack your bags, boys!  We’re going on a guilt trip!)

The WCAB ordered the matter returned to the WCJ to determine if the applicant’s story holds water.  If it does, then questions of the ethical practice of law need to be explored.  If, however, it doesn’t, then applicant’s attorney is to receive the full fee, including a portion of the Medicare Set Aside, as held in the case of Robert Viale v. Lockheed Martin Corporation.  (It looks like applicants’ attorneys can expect a slice of the MSA pie as well).

As always, WCDefenseCA has declined to name names, but if your humble blogger was in this attorney’s shoes, he would drop this issue immediately and forfeit the seven thousand.  Every lawyer wants to be known by all, but not for this, one way or another.