Horsey v. STONE & WEBSTER ENG. CORPORATION

• Decision Date: 16 May 1958
• Docket Number: Civ. A. No. 554.
• Citation: 162 F. Supp. 649
• Parties: Frank HORSEY and Employers Mutual Liability Insurance Company, Plaintiffs, v. STONE & WEBSTER ENGINEERING CORPORATION and C. E. Miles, Jr., Defendants.
• Court: U.S. District Court — Western District of Michigan

162 F. Supp. 649

Frank HORSEY and Employers Mutual Liability Insurance Company, Plaintiffs, v. STONE & WEBSTER ENGINEERING CORPORATION and C. E. Miles, Jr., Defendants.

Civ. A. No. 554.

United States District Court W. D. Michigan, N. D.

May 16, 1958.

DeFant & Lynch, Negaunee, Mich., Humphrey & Humphrey, Ironwood, Mich., for plaintiffs.

Wheaton L. Strom, Escanaba, Mich., for defendants.

KENT, District Judge.

Plaintiff, Frank Horsey, commenced an action against Stone & Webster Engineering Corporation, for damages for injuries received as a result of the alleged negligence of the defendant, its agents, or employees. A consent judgment was entered in the amount of $20,000, and by stipulation of counsel there was reserved to this court a decision as to the application of the provisions of the Michigan Statute, being § 17.189 M.S.A., Comp.Laws Supp. 1956, § 413.15, relative to the liability of the respective parties for the attorney fees and expenses of plaintiff's counsel. No issue is raised as to the value of the services or as to the propriety of the expenses. Plaintiff's counsel had expenses in the amount of $440.19, and had an agreement with the plaintiff that the fees of counsel would be 33 1/3 % of the gross recovery.

It is the theory and claim of the attorneys for the plaintiff that the compensation insurance carrier of plaintiff's employer is liable for a proportionate share of the attorney fees and expenses of the plaintiff under the terms of the statute above referred to. The section of the statute in question provides as follows:

"Where the injury for which compensation is payable under this act was caused under circumstances creating a legal liability in some person other than a natural person in the same employ or the employer to pay damages in respect thereof, the acceptance of compensation benefits or the taking of proceedings to enforce compensation payments shall not act as an election of remedies, but such injured employee or his dependents or their personal representative may also proceed to enforce the liability of such third party for damages in accordance with the provisions of this section. If the injured employee or his dependents or personal representative does not commence such action within 1 year after the occurrence of the personal injury, then the employer or its compensation insurance carrier may, within the period of time for the commencement of actions prescribed by statute, enforce the liability of such other person in the name of that person. Not less than 30 days before the commencement of suit by any party under this section, such party shall notify, by registered mail at their last known address, the workmen's compensation commission, the injured employee, or in the event of his death, his known dependents, or personal representative or his known next of kin, his employer and the workmen's compensation insurance carrier. Any party in interest shall have a right to join in said suit.

"Prior to the entry of judgment, either the employer or his insurance carrier or the employee or his personal representative may settle their claims as their interest shall appear and may execute releases therefor.

"Such settlement and release by the employee shall not be a bar to action by the employer or its compensation insurance carrier to proceed against said third party for any interest or claim it might have.

"In the event the injured employee or his dependents or personal representative shall settle their claim for injury or death, or commence proceeding thereon against the third party before the payment of workmen's compensation, such recovery or commencement of proceedings shall not act as an election of remedies and any moneys so recovered shall be applied as herein provided.

"In an action to enforce the liability of third party, the plaintiff may recover any amount which the employee or his dependents or personal representative would be entitled to recover in an action in tort. Any recovery against the third party for damages resulting from personal injuries or death only, after deducting expenses of recovery, shall first reimburse the employer or its workmen's compensation insurance carrier for any amounts paid or payable under the workmen's compensation act to date of recovery, and the balance shall forthwith be paid to the employee or his dependents or personal representative and shall be treated as an advance payment by the employer on account of any future payment of compensation benefits.

"Expenses of recovery shall be the reasonable expenditures, including attorney fees, incurred in effecting such recovery. Attorney fees, unless otherwise agreed upon, shall be divided among the attorneys for the plaintiff as directed by the court. The expenses of recovery above mentioned shall be apportioned by the court between the parties as their interests appear at the time of said recovery.

"Compensation benefits referred to in this section shall in each instance include but not be limited to all expenses incurred under section 4 and 8 of part 2 of this act, being sections 412.4 and 412.8 of the Compiled Laws of 1948."

It is the theory of the Employers Mutual Liability Insurance Company, the compensation carrier for plaintiff's employer which paid compensation benefits to the plaintiff, that the attorney fees and expenses should be deducted from the gross recovery, that the insurer should thereafter be reimbursed in full in the amount of $4,326.59, for benefits paid to and for the plaintiff under the terms of the Workmen's Compensation Law, and that any balance should be payable to the plaintiff. The insurer relies upon Foster v. Buckner, 6 Cir., 203 F.2d 527, but an examination of that decision will make it obvious that the question of apportionment of expenses and attorney fees was not before that court and was not decided by that court. Other cases cited by the parties, Travelers Insurance Company v. Lumber Mutual Casualty Ins. Co., 20 N.J.Super. 265, 89 A.2d 717; Voris v. Gulf-Tide Stevedores, 5 Cir., 211 F.2d 549, certiorari denied 348 U.S. 823, 75 S.Ct. 37, 99 L.Ed. 649; Ocean S. S. Co. of Savannah, v. Lumbermens Mutual Casualty Co., 2 Cir., 125 F.2d 925; Calhoun v. West End Brewing Co., 269 App.Div. 398, 56 N.Y.S.2d 105; In re Estate of Shields, 320 Ill.App. 522, 51 N.E.2d 816, are not applicable since they interpret statutes which are in different language than that used by the Michigan Legislature. This is primarily a matter for the interpretation of the statute of the State of Michigan and for a determination of the intention of the Michigan Legislature.

As was said in Roberts Tobacco Co. v. Michigan Department of Revenue, 322 Mich. 519, 530, 34 N.W.2d 54, 59:

"The question presented relates to the proper interpretation of the clause of Act 122, Public Acts 1941 above quoted. The basic rule covering the matter is to ascertain and give effect to the legislative intent. City of Grand Rapids v. Crocker, 219 Mich, 178, 189 N.W. 221; Boyer-Campbell Co. v. Fry, 271 Mich. 282, 260 N.W. 165, 98 A.L.R. 827; Gardner-White Co. v. State Board of Tax Administration, 296 Mich. 225, 295 N.W. 624. This requires that the clause in question shall be read in connection with other pertinent provisions of the act and that a meaning shall be given thereto consistent with the general purpose sought to be accomplished."

This entire matter of interpretation of statutes to determine the intention of the legislature is covered in 21 Michigan Law and Practice Encyclopedia, Statutes, § 82, p. 82 et seq.:

"The primary and fundamental rule of statutory construction is that it

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