FABE, Chief Justice.
The Alaska Workers' Compensation Board fined an uninsured employer a substantial amount because the employer had since 2005 operated for a significant period of time without carrying statutorily required workers' compensation insurance. This was not the employer's first failure to carry the required insurance. On appeal, the Alaska Workers' Compensation Appeals Commission affirmed part of the Board's decision, but it reversed the Board on the amount of the fine and remanded the case to the Board for further proceedings. The employer then asked the Commission for an award of attorney's fees as a successful party on appeal. The State, Division of Workers' Compensation, which had initiated the Board proceedings, opposed the award on the basis that it, too, had been successful on a significant issue. The Commission awarded the employer full fees of approximately $50,000. The Division petitioned for review of the fee award, and we granted review. Because the Commission failed to consider the Division's partial success in the appeal, we reverse the Commission's decision and remand for further proceedings.
Todd Christianson is the sole owner of several businesses, including the three involved in this proceeding: Titan Enterprises, LLC; Titan Topsoil, Inc.; and CCO Enterprises, LLC.
Alaska Statute 23.30.075(a) requires an employer to either buy workers' compensation insurance or provide proof that it is capable of self-insurance for workers' compensation claims. Failure to maintain workers' compensation insurance may subject an employer to criminal penalties.
The Division began proceedings against Titan in 2008 for failing to carry workers' compensation insurance and failing to provide proof of workers' compensation liability coverage. Titan came to the Division's attention when "a routine records check" showed that Christianson's companies' insurance policies had been cancelled in March 2006, "for nonpayment of premium." The records also showed Titan had not obtained a new policy until October 2007; that policy was cancelled in early January 2008. Christianson paid out of pocket for an uncovered injury to a worker in 2006. The Division investigated Titan at that time but closed its file without requesting a Board hearing.
The Board held two hearings on the Division's petition. Neither party was represented by counsel before the Board: Christianson represented himself and his companies, and Christine Christensen, an investigator, represented the Division. The parties presented conflicting evidence about the length of Titan's lapses in coverage and the reasons for them. They also disputed the extent to which Christianson observed corporate formalities and kept the corporations separate. The Division contended that a number of aggravating factors in its regulation applied to the case.
The Board found that Titan was an uninsured employer for 563 calendar days after 2005. The Board looked at Titan's history of workers' compensation coverage problems and Christianson's appearance before the Board in 2002 for failing to insure when he was doing business as another corporation. The Board found that Christianson's businesses had been involved in 13 injuries, including "a leg amputation, upper and lower extremity injuries, and back injuries." The Board also noted the uninsured injury in 2006. Using data from the Employment Security Division, the Board found Christianson had "utilized 6,399 uninsured employee workdays after November 7, 2005" and had "purchased a single workers' compensation insurance policy for several different business entities." It summarized facts related to the use and purchase of CCO, an employee leasing company, including the fact that CCO's only client was Titan. The Board pierced the corporate veil and found Christianson
Noting that Christianson had previously been before the Board for failing to have insurance, the Board found that he had a "blatant disregard for the law" and had "gamed the workers' compensation system in attempts to avoid paying fully for coverage." The Board acknowledged that its regulation about uninsured employers did not apply because the regulation became effective only after the coverage lapses, but the Board nonetheless used the factors as a guide in assessing a penalty. The Board decided that had the regulation applied, Titan's conduct would have justified nine aggravating factors and no mitigating factors,
Titan appealed to the Commission, appealing both the size of the fine and the Board's decision to pierce the corporate veil. Titan also argued that the Board violated Titan's due process rights by "refusing to allow [it] additional time to hire representative legal counsel prior to the Board hearing." The Division responded that the fine was not excessive given the facts of the case and that piercing the corporate veil was appropriate in the case.
The Commission affirmed the Board's decision to pierce the corporate veil and hold Christianson liable individually. But the Commission decided that the Board had abused its discretion when setting the penalty, calling the fine "a shocking amount." The Commission reversed part of the basis for the Board's fine, including its finding on the time periods when Christianson's businesses were uncovered, and remanded to the Board for additional findings about the liability of Christianson's various corporate entities. According to the Commission, the Division "conceded that two of the aggravating factors" were not supported by the evidence, and Christianson conceded "at least initially" that five of the aggravating factors were supported by the evidence. The Commission also remanded for the Board to "hear evidence on any disputed aggravating factors."
Titan then requested attorney's fees as the successful party on appeal, contending that under Lewis-Walunga v. Municipality of Anchorage
The Division responded that both parties were partially successful in the appeal, since it had won the veil-piercing issue, and asserted that no fee award was warranted. The Division argued in the alternative that Commission precedent required the Commission to reduce the amount of fees from the full amount because Titan had not won all issues on appeal. Finally, it maintained that full fees should not be awarded to Titan because "the public policy concern of securing competent counsel for injured workers" was "not implicated in this case."
The Commission decided that Titan qualified for an award of fees. Before setting out its legal analysis, the Commission "point[ed] out ... that Christianson's conduct entailed deliberate wrongdoing." It first stated that neither the statute nor the Commission's regulations "discriminate between claimants and other parties to an appeal, as far as eligibility for attorney fee awards is concerned." It then decided that Christianson should be considered a "successful party" under Lewis-Walunga because he had "prevailed on at least two issues that were significant." The Commission wrote that it took "a dim view of
The Division petitioned for review, which we granted on two questions: (1) whether a successful party who is not a workers' compensation claimant should be awarded attorney's fees under AS 23.30.008(d) and (2) how attorney's fees should be awarded under AS 23.30.008(d) consistent with our holding in Lewis-Walunga if more than one party prevails on a significant issue in the appeal.
We apply our independent judgment to questions of law that do not involve agency expertise.
Alaska Statute 23.30.008(d) provides in part, "[i]n an appeal, the commission shall award a successful party reasonable costs and, if the party is represented by an attorney, attorney fees that the commission determines to be fully compensatory and reasonable." Subsection (d) shields injured workers from having to pay fees unless their appeal is frivolous, unreasonable, or brought in bad faith.
We apply a sliding-scale approach to statutory interpretation: We consider the plain meaning of the statutory language, but we also look at the legislative history because "legislative history can sometimes alter a statute's literal terms."
As we observed in Lewis-Walunga, there is very little legislative history about AS 23.30.008(d), and what little there is suggests an intent for the Commission to award attorney's fees in a manner similar to appellate attorney's fee awards in the courts.
The Division asks us to construe the statute to prohibit awards of full fees in cases like this one, where the Board has fined an employer for failing to insure, because such fee awards contravene the statute's purpose of protecting injured workers and do not accomplish the goal of ensuring that competent counsel are available to injured workers. The Division also contends that the legislature likely did not consider a situation like this one when it wrote subsection .008(d). Titan responds by emphasizing the statutory language.
We do not rewrite statutes even when the legislative history suggests that the legislature may have made a mistake in drafting,
Although we have previously interpreted AS 23.30.008(d), we have not had occasion to consider how fees should be awarded under this statute when two non-claimants both enjoy partial success before the Commission. In Lewis-Walunga, a claimant succeeded on the sole issue presented on appeal to the Commission, the Board's award of attorney's fees.
Similarly, in Humphrey v. Lowe's Home Improvement Warehouse, Inc. we reversed the Commission's denial of attorney's fees to a claimant who had partial success on appeal.
But AS 23.30.008(d) has no corresponding shield for non-claimants who lose a significant issue in a Commission appeal. As a result, even though one non-claimant can get an attorney's fee award in an appeal when it litigates against another non-claimant, there is no reason to disregard the success of the other non-claimant in the event that both non-claimants are successful on a significant issue. In this case, there is no dispute that the Division was successful on the veil-piercing issue.
If two non-claimants both succeed on significant issues in an appeal, the Commission must weigh the success of both parties when it considers a motion for attorney's fees. The Commission may take one of two approaches in evaluating this type of fee request. The Commission may decide that neither party can truly be deemed a successful party, just as a trial court in applying Alaska Civil Rule 82 does not abuse its discretion when it decides that neither party can be characterized as the prevailing party.
Treating non-claimants differently from claimants follows from the language of AS
We REVERSE the Commission's decision that Titan was the successful party on appeal and REMAND to the Commission for further proceedings consistent with this opinion.
MAASSEN, Justice, not participating.