Carter v. Wooley, 46027

• Decision Date: 16 April 1974
• Docket Number: No. 46027,46027
• Citation: 1974 OK 45,521 P.2d 793
• Parties: Jack CARTER, Appellant, v. Roy D. WOOLEY, Appellee.
• Court: Oklahoma Supreme Court

Page 793

521 P.2d 793

Jack CARTER, Appellant, v. Roy D. WOOLEY, Appellee.

No. 46027.

Supreme Court of Oklahoma.

April 16, 1974.

Berry & Berry by Howard K. Berry, Jr., Oklahoma City, for appellant.

Ben A. Goff of Rhodes, Hieronymus, Holloway & Wilson, Oklahoma City, for Royal Indemn. Co.

BARNES, Justice:

The question here is whether the trial court erred in denying Appellant's motion relating to the payment, by his employer's workmen's compensation insurance carrier, Royal-Globe Insurance Company, or Royal Indemnity Company, of an attorney's fee to his attorney. Appellant and his attorney, or law firm, will hereinafter be referred to as 'plaintiff' and 'B', respectively, while the insurance company and its attorney, or law firm, will be referred to as 'Royal' and 'G', respectively.

In this appeal, the Court of Appeals reversed the trial court's order of denial of said attorney's fee, with instructions to grant plaintiff's motion and 'such other relief as will effectuate this opinion.' Principally, because that opinion authorizies relief which plaintiff did not seek, and to which he was not entitled, we have granted Royal's petition for certiorari.

The present controversy emerged from the situation hereinafter described. Plaintiff, while in the course of his employment as an insurance adjuster for a company we will refer to as 'Motors', suffered injuries when the company's auto, he was driving, collided at an Oklahoma City street intersection with an auto driven by the Appellee, Wooley, and also occupied by Wooley's wife, Rhoda, in October, 1970.

Thereafter, plaintiff, represented by B, instituted two tort actions to recover damages for his injuries in the collision. One action was against Rhoda Wooley. The other one was this one, instituted in April, 1971, against Mr. Wooley, hereinafter referred to as 'defendant'. On plaintiff's petition in this action, B endorsed: 'Attorney's Lien Claimed.'

During the pendency of the present action, plaintiff also filed a claim in the State Industrial Court against his employer, Motors, and its aforementioned insurance carrier, Royal. When his and defendant's depositions were thereafter taken in December, 1971, plaintiff was receiving workmen's compensation benefits from Royal and continued thereafter to do so until Royal had paid such benefits in the total sum of $5,755.66.

Although the record before us does not reveal it, Royal's brief represents, without contradiction, that the trial court was apprised that on February 25, 1972, G wrote B the following letter:

'This will confirm our telephone conversation of February 23, 1972, in whcih I advise that the Royal Indemnity Company, insurance carrier for Motors Insurance Corporation, had retained our firm to protect their subrogation interest. They also agreed that it would be best if the insurance carrier did not intervene in this action.

'It is my understanding that you agree to protect my client's claim in the event of suit or trial and verdict. Since we do have an interest in the outcome of the litigation, it probably would be advisable to enter my name as one of the attorneys of record for the plaintiff in the case.

'Our subrogation interest at this time is as follows: Total medical payments, $2,944.16 and total temporary compensation to date of $2,352.00. If we can be of any assistance to you in the successful outcome of this case, we would be happy to do so. Thank you.'

It is further represented, without contradiction, that thereafter plaintiff, with the consent and approval of Royal and its attorney, G, entered into an agreement with defendant and his wife, Rhoda, to dismiss this case and the one pending against Rhoda in consideration of the payment to them of the sum of $17,000.00. According to the agreed facts, defendant's insurance carrier, Allstate, thereafter issued its check in that amount payable to plaintiff, B, and Royal. The check was delivered to B in payment of the settlement money; and a 'DISMISSAL WITH PREJUDICE' dated April 9, 1972, was drafted and signed by both plaintiff and B for filing in this case.

Before the check was endorsed or cashed, and after the present controversy arose over whether $5,755.66 of the check's proceeds was to be paid Royal in discharge of its subrogation right, without deduction of an attorney's fee for his attorney, B, plaintiff filed in the case the following pleading:

'MOTION TO DETERMINE ATTORNEY FEE AND FORECLOSE ATTORNEY LIEN

'Comes now the plaintiff and moves the Court to fix a reasonable attorney fee for his attorneys of record and foreclose an attorney lien for the reason that the case has been settled for $17,000.00 and approximately $5,500.00 of that amount is to be paid to the plaintiff's Workmen's Compensation Insurance carrier who has a subrogation interest, pursuant to statute, and which has been collected through the efforts and diligence of the plaintiff's attorney, for which they should be compensated.

'Plaintiff's counsel asserted an attorney lien on the petition and presently possess the $17,000 secured by their efforts and therefore have a possession and retaining attorney lien.'

After the matter was submitted to the trial court on briefs, without introduction of evidence, the court denied the motion in an order containing the following:

'* * * the Court finds that there existed no contractual relationship . . . between plaintiff's counsel and Royal-Globe Insurance, nor does the Court find that plaintiff's counsel performed any extraordinary service on Royal-Globe's behalf. To the contrary, the Court finds that Royal-Globe simply benefitted from the services that plaintiff's counsel necessarily performed in securing recovery for plaintiff.

* * *'

Thereafter, plaintiff's motion for a new trial was overruled and he lodged the present appeal.

Whether a plaintiff's attorney may be entitled to a fee from a workmen's compensation insurance carrier for his services referable to the satisfaction of the carrier's subrogation right arising out of its payment to his client of compensation benefits in a situation like this is a question of first impression in this jurisdiction.

Plaintiff contends, inter alia, that in this case, with its approved settlement in a manner beneficial to Royal (as well as to him), his attorney, B, actually represented Royal, as well as him, even though, in accord with its agreement with B (referred to in the hereinbefore quoted letter), Royal never became a formal or nominal party to the action. He says that, under the circumstances of this case, there was an attorney-client relationship between his attorney, B, and Royal, by implied contract, even though there is no claim that there was ever any express contract between them.

Royal differs with plaintiff in its interpretation of the aforementioned letter, arguing that its contents constitute no more than an 'inquiry or clarification', instead of a promise, and cannot be used as the basis for any implied contractual relationship of client and attorney between it and B. For its not being required to share the legal expenses of obtaining the settlement, Royal quotes from Larson, The Law of Workmen's Compensation, Vol. 2, Fees, Expenses and Interest, § 74.32, p. 210, and from Commercial Union Insurance v. Scott, 116 Ga.App. 633, 158 S.E.2d 259, for the proposition that litigants who have not contracted for an attorney's services cannot generally be held liable for his fee, though they may have directly or indirectly benefited therefrom. Under its fourth and last proposition, Royal points to certain services its counsel G, contributed in bringing plaintiff's cause of action against the Wooleys to a successful conclusion, and it argues that, in such a situation, it would be wrong and inequitable to imply a contract for it to pay B an attorney's fee (in addition to paying its own attorney, G), citing Cary v. Phoenix Ins. Co., 83 Conn. 690, 78 A. 426, Pontiac Mut. County Fire & Lighting Ins. Co. v. Sheibley, 279 Ill. 118, 116 N.E. 644, and Washington Fire & Marine Ins. Co. v. Hammett, 237 Ark. 954, 377 S.W.2d 811.

Insofar as it contains any language pertinent to the issue before us, our statute, 85 O.S.1971, § 44, still reads as it did when it was first enacted in 1915. Referring to one who, like plaintiff, is entitled to workmen's compensation benefits from his employer, as well as having a tort claim against a third party, not in the same employ, said statute has always read:

'* * * If he (the injured employee) elects to take compensation under this Act, the cause of action against such other (the third party) shall be assigned to the insurance carrier liable for the payment of such compensation, and if he elects to proceed against such other person or insurance carrier, as the case may be, shall contribute only The deficiency, if any, between the amount of the Recovery against such other person actually collected, and the compensation provided or estimated by this...