Crawley v. Schick
| Decision Date | 27 August 1973 |
| Docket Number | No. 2,Docket Nos. 13616,13597,2 |
| Citation | 48 Mich.App. 728,211 N.W.2d 217 |
| Parties | Karen CRAWLEY, Administratrix of the Estate of Raymond Crawley, Deceased, Plaintiff-Appellant, and Liberty Mutual Insurance Company, Intervenor Plaintiff-Appellee, v. J. L. SCHICK and Mary Schick, Defendants-Appellees. Karen CRAWLEY, Administratrix of the Estate of Raymond Crawley, Deceased, Plaintiff-Appellee, and Liberty Mutual Insurance Company, Intervenor Plaintiff-Appellant, v. J. L. SCHICK and Mary Schick, Defendants-Appellees |
| Court | Court of Appeal of Michigan — District of US |
Duane S. Van Benschoten, van Benschoten & van Benschoten, Saginaw, for Crawley.
Jack Neal, Flint, for Liberty Mutual.
Webster Cook, Smith v. Brooker, Saginaw, for Schick.
Before FITZGERALD, P.J., and T. M. BURNS and ADAMS,* JJ.
On August 28, 1969, Raymond Crawley was killed in a traffic accident while driving an auto during the course of his employment. The other vehicle involved in the mishap was driven by the defendant Mary Schick with the consent of the owner, J. L. Schick.
Subsequently Karen Crawley, as administratrix of her husband's estate, brought a wrongful death action against the Schicks on January 20, 1970, seeking $210,000 in damages. While a trial on the merits was in progress, the parties agreed to settle the suit for $55,000. A consent judgment to this effect was entered on August 23, 1971. The following day Liberty Mutual Insurance Company 1 moved to intervene and apportion the settlement and reasonable costs of recovery in order to recoup the amount of workmen's compensation benefits it had paid to the decedent's survivors prior to the date of recovery. See M.C.L.A. § 418.827(5), (6); M.S.A. § 17.237(827)(5), (6).
The defendants satisfied the judgment. On January 20, 1972, the circuit court ordered the plaintiff to reimburse Liberty Mutual $7,830 for workmen's compensation benefits paid prior to the date of the settlement. The expenses of recovery totaled $26,477.08, and were itemized by the court as follows:
Probate fees $ 5,800.00
Reasonable attorney fees 18,333.33
Investigation fees 489.75
Third Party action costs 1,854.00
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Total $26,477.08
When apportioning these expenses, the lower court found Liberty Mutual's interest at the time of recovery to be $40,790 or 74 percent of the $55,000 settlement. The $40,000 figure was calculated by including as part of Liberty Mutual's interest 500 weeks of future workmen's compensation payable at $80 per week to the decedent's survivors. See M.C.L.A. § 418.321; M.S.A. § 17.237(321). Liberty Mutual's share of the expenses of recovery was, therefore, deemed to be $19,593.04, I.e. 74 percent of $26,477.08.
In an effort to reduce the expenses of recovery it must share pro rata with the plaintiff, Liberty Mutual brings the instant appeal and asserts that an expense item of $2,500 included in the probate fees as an extraordinary administration fee was not properly includable as an expense of recovery and that the contingent fee of plaintiff's attorney should have been based on the amount actually recovered for the plaintiff, exclusive of the amount reimbursed to the workmen's compensation carrier. Liberty Mutual also disputes the apportionment of the reasonable costs of recovery. We will discuss and decide these questions Seriatim.
Karen Crawley, as administratrix of her deceased husband's estate, sought $4,582.48 in extraordinary administration fees. After a hearing on the matter, the circuit court modified the figure to $2,500 and included it as an expense of recovery noting that Mrs. Crawley went beyond the ordinary tasks of an administratrix and that the additional work benefited both the estate and the workmen's compensation carrier.
Liberty Mutual, the intervening plaintiff and workmen's compensation carrier, contends that extraordinary administration fees are not properly includable as an expense of recovery under M.C.L.A. § 418.827(6); M.S.A. § 17.237(827)(6). We disagree.
Where, as here, the estate of a deceased employee who was covered by workmen's compensation brings suit and recovers damages against the party causing the fatal injuries and the workmen's compensation carrier is thereby reimbursed the amount of compensation benefits it had paid to the decedent's survivors, the propriety of allowing extraordinary fees for the administration of the estate as a reasonable expense of recovery has never been decided in this state. Cases from other jurisdictions which interpret statutes essentially dissimilar from ours are of little value in resolving the question. Therefore we must turn to the language of the statute in question for guidance.
There is no room for judicial interpretation or construction where the language contained in a statute is plain and unambiguous. Dussia v. Monroe Co. Emp. Ret. Sys., 386 Mich. 244, 191 N.W.2d 307 (1971).
The pertinent part of M.C.L.A. § 418.827(6); M.S.A. § 17.237(827)(6) provides:
'Expenses of recovery shall be the reasonable expenditures, including attorney fees, incurred in effecting recovery.'
The language of the statute is clear. The words used are common. We find nothing vague or obscure in the phrase 'Expenses of recovery shall be the reasonable expenditures * * * in effecting recovery'. It is patent that the statute contemplates something other than attorney fees as expenses of recovery. Inasmuch as the workmen's compensation carrier benefited from the administratrix's additional work which went beyond the ordinary duties of an administratrix, we cannot perceive of any reason to exclude these extraordinary administration fees from the reasonable expenditures incurred in effecting recovery.
We hold, therefore, that where the administrator or administratrix performs tasks which go beyond the ordinary duties of administering an estate and which in addition benefit the workmen's compensation carrier, the reasonable fees reflecting such work are includable as an expense of recovery under M.C.L.A. § 418.827(6); M.S.A. § 17.237(827)(6).
Without admitting that extraordinary administration fees are includable as an expense of recovery, Liberty Mutual contends that in any event the $2,500 extraordinary fee awarded by the circuit court was not justified. Again we cannot agree.
Findings of fact made by the lower court will not be disturbed on appeal unless clearly erroneous. GCR 1963, 517.1.
As previously recounted a hearing was held on the question of Mrs. Crawley's claim for extraordinary administration fees. At the conclusion of the hearing and after considering the testimony presented, the circuit court found that a portion of Mrs. Crawley's efforts on behalf of the estate were over and above those normally done by the fiduciary of an estate and that these efforts on the part of Mrs. Crawley benefited the workmen's compensation carrier.
A review of the record reveals that Mrs. Crawley, apart from executing documents and performing other common administrative duties, advanced the case against the defendants by conducting numerous interviews with her husband's employer and acquaintances, obtaining the services of a mechanic to examine the vehicle her husband was driving at the time of the accident, and appearing at various circuit court proceedings.
In view of the foregoing actions taken by Mrs. Crawley on behalf of the estate, we cannot say that the circuit court's finding with respect to the allowance of $2,500 in extraordinary administration fees was clearly erroneous. Therefore we decline to disturb the circuit court's determination.
The circuit court assessed plaintiff's reasonable attorney fees at $18,333.33. This figure represents one-third of the gross amount awarded to the plaintiff.
Liberty Mutual, citing Modeen v. Consumers Power Co., 384 Mich. 354, 184 N.W.2d 197 (1971), argues that it was improper to assess attorney fees based upon plaintiff's gross recovery since that fee should have been based on the net recovery, in this case, $55,000 minus the reimbursement to the insurance carrier can out-of-pocket expenses. We find Modeen inapposite for this proposition.
In Modeen, an injured employee who suffered a compensable injury during the course of his employment brought suit under the Workmen's Compensation Act against the allegedly negligent third party. The claim was eventually settled for $75,000. After reimbursing the workmen's compensation carrier, the employee was left with a balance of $63,549.92. The attorney fee was $16,678.09 and was based on the $63,000 balance.
Although the attorney fee was based on the net as opposed to the gross recovery, nothing in Modeen either approves or disapproves of this procedure in fixing attorney fees. The opinion recited various figures from the original apportionment order simply as background for the question facing the court of whether after an initial apportionment by the circuit court, the Workmen's Compensation Appeal Board had jurisdiction to reapportion the costs of recovery. There was no holding with respect to the proper method for computing attorney fees in a third-party action brought under the Workmen's Compensation Act.
The other cases cited by Liberty Mutual are not on point and only serve to indicate that the courts will closely scrutinize attorney fees. See for example Hoffman v Burkhammer, 373 Mich. 187, 196, 128 N.W.2d 503, 507 (1964).
In considering the question of whether the attorney fees in a third-party negligence action brought under the Workmen's Compensation Act should be based on the plaintiff employee's gross or net recovery, we note from common experience that it is not unusual for an attorney in a negligence action to base his fee upon the gross recovery.
As stated earlier, plaintiff's attorney through his professional...
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