Baggett v. Webb

• Decision Date: 03 March 1971
• Docket Number: 6 Div. 41
• Citation: 46 Ala.App. 666,248 So.2d 275
• Parties: J. B. BAGGETT d/b/a Baggett's 82 Truck Stop and United States Fidelity and Guaranty Company v. Barbara Ann Barger WEBB, et al.
• Court: Alabama Court of Civil Appeals

Page 275

248 So.2d 275

46 Ala.App. 666

J. B. BAGGETT d/b/a Baggett's 82 Truck Stop and United States Fidelity and Guaranty Company v. Barbara Ann Barger WEBB, et al.

6 Div. 41.

Court of Civil Appeals of Alabama.

March 3, 1971.

Rehearing Denied March 24, 1971.

Rosen, Wright, Selden & Harwood, Tuscaloosa, for appellants.

Skidmore, Skidmore, Crownover & Mountain, Tuscaloosa, for appellees.

WRIGHT, Judge.

Marvin T. Barger, deceased, was an employee of appellant, J. B. Baggett, d/b/a Baggett's 82 Truck Stop, and was subject to the provisions of the Alabama Workmen's Compensation Act. Appellant, United States Fidelity and Guaranty Company, was Baggett's insurance carrier.

On May 21, 1965, the deceased Barger was injured in the course of his employment with Baggett and died from his injuries on May 23, 1965. He was survived by his wife and minor son, appellees here.

After the death of the employee Barger, USF&G voluntarily, without request or agreement, made some payments of compensation to the wife of the deceased. Part of these payments were subsequently returned on August 11, 1965, with a letter from appellees attorney. The letter advised that the attorney was representing the dependents of the deceased employee and that they were proceeding against Alabama Thermogas Corporation as a third-party tort-feasor rather than claiming Workmen's Compensation benefits; that compensation payments were to cease to Mrs. Barger, but in the event third-party recovery was less than compensation benefits, a claim would be presented for any residual amount.

Suit was filed by appellees against West Alabama Thermogas Company, Inc., and trial thereon commenced June 6, 1966. On June 8, 1966, a settlement was negotiated and judgment thereon was entered in favor of appellees and against Alabama Thermogas for $16,000 and costs of court.

After the recovery from the third-party, appellees made demand upon appellant's for contribution on their attorney's fees incurred in recovery under the provisions of Title 26, Section 312, Code of Alabama 1940, as amended in 1961. Upon refusal of such fees, appellees brought suit in the court below.

The complaint claimed of appellants 'that certain amount due them as reimbursement for attorney's fees under Title 26, Section 312, Code of Alabama 1940 (Recomp. 1958), a portion of the aforesaid Workmen's Compensation Law of Alabama, as amended.'

There followed averments of dependency and employment out of which the accidental death of the deceased occurred. There were further averments as to the third party action and recovery. We set out the last paragraph of the complaint:

'Plaintiffs aver that by their aforementioned 'third party liability' action, which action was initiated and conducted at their own expense, they have absolved defendants from their legal liability to pay weekly compensation benefits to plaintiffs as would otherwise have been required of them, and that for such action on the part of plaintiffs, defendants are liable to plaintiffs for a pro rata portion of plaintiffs' attorney's fees incurred in prosecuting the aforesaid 'third party liability' action. Plaintiffs allege that prior to the commencement of this action they have demanded that defendants make such payments and that defendants have failed and refused to do so, wherefore this suit.'

Demurrer to the complaint was overruled and pleas were in short by consent. The matter was submitted on stipulation except for testimony as to the reasonableness of a one-third attorney's fee for appellees attorney's services in the third-party recovery.

The trial court rendered a lengthy finding of fact and judgment thereon for appellees in the amount of $2640.00, with a credit allowed for $131.50 previously paid appellees as compensation. The finding of fact was as to compensation coverage, and that had suit or claim been filed against appellants, compensation due appellees would have been $8,000.00. The judgment was as follows:

'JUDGMENT OF THE COURT:

'Premised upon the above finding of fact by the court, it is the Order, Judgment or Decree of the court, that defendants through the action of plaintiffs in prosecuting third party litigation, have been saved the sum of $8,000.00 in Workmen's Compensation benefits that they would otherwise owed plaintiffs' and pursuant to Title 26, Section 312, Code of Alabama, 1940 (Recomp. 1958) that plaintiffs are entitled to recover of defendants partial reimbursement of their costs involved in prosecuting third party litigation.

'IT IS THEREFORE ORDERED, ADJUDGED AND DECREED BY THE COURT, that the plaintiffs have and recover of defendants the sum of 33 1/3 of the amount actually saved defendants by said third party litigation, or the precise sum of $2,640.00. The court finds that defendants have paid to plaintiffs the sum of $131.50 which should be properly credited against this judgment, and it is therefore the Order, Judgment and Decree of the court, that plaintiffs have and recover of defendants the sum of $2,508.50 for which let execution issue.

'IT IS FURTHER ORDERED, that defendants pay the costs of this proceeding. Rendered, Ordered, Adjudged and Decreed this 11th day of September, 1969.

'Henry H. Mize

Circuit Judge'

From the judgment this appeal was taken.

There were eighteen assignments of error. Assignments 2 and 4 were expressly waived in brief. We will consider the remainder by assigned number.

Assignments 1 and 3 allege error in the overruling of appellants respective demurrers, which were identical as to grounds assigned.

The first argued grounds of demurrer are 5 and 6. In effect, they charge that the complaint fails to allege facts which show a right of recovery under the statute. This charge refers to the terminology of the last sentence of Title 26, Section 312 of the Alabama Code as amended in 1961. This is the portion of Section 312 which authorizes the recovery sought by appellees. It appears as follows:

'In any settlement made under this section with a negligent third party by the employee, or in case of his death, by his dependents, the employer shall be liable for that part of the attorney's fees incurred in the settlement with the third party, either with or without suit, in the same proportion that the amount of the reduction in the employer's liability to pay compensation bears to the total recovery had from such third party.'

(We suggest to the reader that this quotation be carefully studied. We will refer to it again in this opinion.)

Appellees' suit is, without question, based upon the right of action presented by this portion of Section 312.

It is the contention of appellants that the complaint must contain averment and at trial be supported by proof, that the attorney's fees sought were 'incurred' in a 'settlement.'

In appellees' complaint it is alleged that a suit was filed against a third party as described in Section 312; that such suit resulted in a judgment which had been paid; that the amount of the judgment was in excess of compensation which would have been due from appellants had appellees elected to recover same in lieu of maintaining the action against the third party; that by their action, initiated and conducted at their own expense, appellees had absolved appellants from their legal liability to pay compensation benefits and appellants are therefore liable to appellees for a pro rata portion of appellees attorney's fees incurred in prosecuting the third-party action for which demand was made and refused. (We have substituted above and hereafter refer to plaintiffs as appellees and defendants as appellants.)

It is the argument of appellants that rules of statutory construction require the term 'settlement' be considered to mean 'without adjudication.' In other words, if there is a suit carried to trial and final judgment there is no 'settlement' and thus no right to recover attorney's fees.

We can find no legislative history of the amendment to Section 312 of 1961, which added the sentence involved, and concede that it could have been better drafted, but we cannot accept such construction.

We must consider the entire statute and not an isolated part, giving to every clause effect in light of the subject matter and purpose of enactment. Sparks v. West Point Mfg. Co., 274 Ala. 102, 145 So.2d 816. It was stated in Bell v. Pritchard, 273 Ala. 289, 139 So.2d 596, that 'courts are not controlled by literal meaning or language of a statute but by its spirit and intention.'

Section 312 of Title 26 as enacted prior to the 1961 amendment provided for recovery by the employer of the insurance carrier of attorney's fees, incurred by them in an action for damages against a third party for injuries to an employee for which Workmen's Compensation was paid or payable, if the damages recovered exceeded compensation due. Such attorney's fees, together with expenses, were to be deducted from the amount recovered exceeding compensation, before disbursement to the employee, or in case of his death, to his dependents or estate.

It is clear that at least one of the purposes of the addition of the 1961 amendment was to grant to the employee or his dependents some relief from the expense of their bringing the third-party action and thus saving the employer or his carrier from paying some or all of the due compensation, or if compensation had been paid, recovery of some or all of it.

It would be patently unfair and unjust to allow recovery of attorney's fees from the employer if a third-party claim or suit was settled with a nominal effort by the employee or his dependents, but disallow recovery of more substantial fees incurred by prolonged and difficult action by trial and judicial determination.

We cannot conceive of such legislative intent in passage of the amendment involved. In construing a statute of questionable meaning, we must not only consider the language used, but also the reason and necessity for the act, together with the object sought to...