Fryar v. Johnsen

Decision Date25 October 1979
Docket NumberNo. 12288,12288
Citation601 P.2d 718,1979 NMSC 80,93 N.M. 485
PartiesDanny L. FRYAR, d/b/a Fryar Logging, Petitioner, v. Fred JOHNSEN, Respondent.
CourtNew Mexico Supreme Court
OPINION

EASLEY, Justice.

The trial court awarded workmen's compensation to Fred Johnsen, plus $11,435.75 for attorney fees. The Court of Appeals affirmed and awarded an additional $3,000 as attorney fees, for a total of $14,435.75 for Johnsen's attorneys. We affirm in part and reverse in part.

The employer, Fryar, raises two questions: first, whether the testimony of Johnsen's expert medical witness lacks foundation because the causal connection between the accident and Johnsen's disability was not established. Second, whether the trial court and the Court of Appeals, respectively, abused their discretion by awarding excessive attorney fees.

Causal Connection

Johnsen claimed compensation for a back injury which occurred on January 14, 1977. He received a medical release and went back to work. He received a second injury on May 17 or 18, 1977.

Johnsen's expert witness testified that there was a medical probability that his disability was caused by his first injury of January 14, 1977. There was no opposing medical testimony. Fryar relies on the case of Niederstadt v. Ancho Rico Consolidated Mines, 88 N.M. 48, 536 P.2d 1104 (Ct.App.1975). The Court of Appeals found that case to be distinguishable. We agree.

In Niederstadt, the suit was for a second accident; medical evidence indicated that the plaintiff's injury preexisted this second accident. In the present case, the suit is on the first accident. Johnsen offered medical testimony at the trial that the accident of January 14, 1977 was causally related to his disability. There was no medical testimony offered that Johnsen's condition preexisted the Accident sued on, as in Niederstadt. There is some indication in the record that Johnsen's accident in May merely aggravated the condition which resulted from the January accident.

Apparently, the medical expert in this case was not aware of Johnsen's later injury. Since there was no contradicting medical testimony and no evidence of a preexisting injury, the Court of Appeals correctly distinguished Neiderstadt and held that the expert testimony was sufficient to support a finding of causal connection.

Attorney Fees

There are two highly important and conflicting public policies which should be considered when a review court examines the appropriateness of an award of attorney fees.

If attorneys are denied fees for work prosecuted on behalf of an injured workman, there would be a Chilling effect upon the ability of an injured party to obtain adequate representation. Through their insurance companies, employers regularly obtain exceptional and well-qualified counsel to defend them in such cases. It is imperative that courts foster and protect the ability of an injured workman to obtain counsel of his choice. We must avoid a policy or a practice which would discourage representation or the taking of appeals where counsel feels that an injured workman has been aggrieved at the trial court level. We must also preserve the right of an injured workman to have representation where the employer has appealed. (Emphasis added.)

Herndon v. Albuquerque Public Schools, 92 N.M. 287, 288, 587 P.2d 434, 435 (1978). When a successful claimant is not awarded attorney fees or when the fees awarded are too low, the above policy tends to be frustrated.

On the other hand, it is obvious that the total of all attorney fees paid in workmen's compensation cases are ultimately reflected in higher insurance premiums and later in the cost of goods and services to the general public. Excessive fees that are not justified by reference to services rendered the workman constitute a burden on the system, on other citizens and are against public policy. We must juxtapose the policy demanding preservation of the workman's right to adequate representation with the rights of other citizens to avoid unreasonable increases in the prices they pay for goods and services because of excessive fees paid to lawyers.

Section 52-1-54(D), N.M.S.A.1978 requires that the trial court take into consideration the amount of any offer by the employer both before the workman's attorney was employed and after the attorney was employed but before court proceedings were commenced, as well as any offer in writing made thirty days or more prior to the trial. The statute also requires that the court consider the present value of the award made. In addition to the requirements in the statute, our courts have considered the following factors:

1. the relative success of the workman in the court proceedings: Ortega v. New Mexico State Highway Department, 77 N.M. 185, 420 P.2d 771 (1966); Waymire v. Signal Oil Field Service, Inc., 77 N.M. 297, 422 P.2d 34 (1966); Reed v. Fish Engineering Corp., 76 N.M. 760, 418 P.2d 537 (1966); Gearhart v. Eidson Metal Products, 92 N.M. 763, 595 P.2d 401 (Ct.App.1979); Gallegos v. Duke City Lumber Co., Inc., 87 N.M. 404, 534 P.2d 1116 (Ct.App.1975); Salazar v. Kaiser Steel Corp., 85 N.M. 254, 511 P.2d 580 (Ct.App.1973); Brannon v. Well Units, Inc., 82 N.M. 253, 479 P.2d 533 (Ct.App.1970);

2. the extent to which the issues were contested: Waymire, supra; Reed, supra; Gearhart, supra; Gallegos, supra; Adams v. Loffland Bros. Drilling Co., 82 N.M. 72, 475 P.2d 466 (Ct.App.1970);

3. the complexity of the issues: Ortega, supra; Lamont v. New Mexico Military Institute, 92 N.M. 804, 595 P.2d 774 (Ct.App.1979); Marez v. Kerr-McGee, 93 N.M. 9, 595 P.2d 1204 (Ct.App.1978);

4. the ability, standing, skill and experience of the attorney: Elsea v. Broome Furniture Co., 47 N.M. 356, 143 P.2d 572 (1943);

5. the rise in the cost of living: Shillinglaw v. Owen Shillinglaw Fuel Company, 70 N.M. 65, 370 P.2d 502 (1962); and

6. the time and effort expended by the attorney in the particular case: Turrieta v. Creamland Quality Chekd Dairies, Inc., 77 N.M. 192, 420 P.2d 776 (1966); Ortega, supra; Waymire, supra; Reed, supra; Lamont, supra; Gearhart, supra; Marez, supra; Martinez v. Fluor Utah, Inc., 90 N.M. 782, 568 P.2d 618 (Ct.App.1977); Gallegos, supra; Trujillo v. Tanuz, 85 N.M. 35, 508 P.2d 1332 (Ct.App.1973); Brannon, supra; Adams, supra. However, the Court of Appeals has also held that the time spent and the effort expended by the attorney, while relevant, is not always dispositive of the amount of attorney fees to be awarded. Lamont, supra; Marez, supra; Gallegos, supra ; and See Maes v. John C. Cornell, Inc., 86 N.M. 393, 524 P.2d 1009 (Ct.App.1974). We agree.

Rule 2-106 of the Code of Professional Responsibility, although not specifically on point, gives some guidance as to the factors to be considered by a lawyer in determining the reasonableness of a fee. These include:

(1) the time and labor required, the novelty and difficulty of the questions involved and the skill requisite to perform the legal service properly;

(3) the fee customarily charged in the locality for similar legal services;

(4) the amount involved and the results obtained;

(5) the time limitations imposed by the client or by the circumstances;

(7) the experience, reputation and ability of the lawyer or lawyers performing the services;

These guidelines are applicable here.

The present case involves a single cause of action stated on one page of the complaint; an answer that denied disability, causation, notice, and the fact of the accident; two sets of requests for admissions; an answer to one set of requests for admissions; a motion to deem the other set admitted; no depositions; no interrogatories; and no requested findings and conclusions. The trial took less than a full day. It involved the testimony of eight witnesses, only one of which was an expert witness, who testified for the employee. The transcript of proceedings is only 200 pages. At the time of trial the value of the award was $53,306.86, exclusive of medical and other incidental expenses. This evidence in the record does not support an award of $11,000 for attorney fees. There was a notice of hearing on a motion for attorney fees. There is no record of the hearing. Neither party requested findings of fact and conclusions of law on the propriety of the award of attorney fees. There is not even a faint hint as to the motivation of the judge in granting such an amount for attorney fees. Our trial court needs more definitive guidelines to determine the amount to award for attorney fees in workmen's compensation cases. We...

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