Insurance Co. of North America v. Stuebing, 18241
| Decision Date | 31 January 1980 |
| Docket Number | No. 18241,18241 |
| Citation | 594 S.W.2d 565 |
| Parties | INSURANCE COMPANY OF NORTH AMERICA, Appellant, v. Joseph C. STUEBING et ux., and Cantey, Hanger, Gooch, Munn & Collins, Appellees. |
| Court | Texas Court of Appeals |
The instant controversy involves a dispute of an injured worker and her attorneys against the Insurance Company of North America ("INA"), insurer under the Texas Workers' Compensation Act, over attorney's fees to be paid by INA to the worker's attorney. INA had paid medical, hospital, and weekly compensation benefits to and for the benefit of Mrs. Joseph C. Steubing, the injured employee of INA's insured, and eventually settled her compensation claim (except for the INA exposure to liability in the event of future hospital and medical expense). Afterward INA joined with Mrs. Steubing's attorneys, Cantey, Hanger, Gooch, Munn & Collins, to seek a recovery of Mrs. Steubing's common law damages from a third party tort-feasor. Of these INA was subrogated to the extent of $34,096.21 (out of the money damages which might be recovered either by settlement or judgment of and from the tort-feasor).
The suit against the tort-feasor was settled by agreement of all parties plus approval by the court, save for the portion of the judgment which recited and decreed that INA's liability to Mrs. Steubing's attorneys as a reasonable attorney's fee was $5,500.00. Therefrom INA appealed.
We reverse and remand because of the insufficiency of evidence.
INA has briefed 18 points of error. However, the contentions presented amount to the representation that by the evidence there should have been no award of attorney's fees in any amount against INA, and, alternatively, that the amount awarded was excessive by insufficiency of the evidence and under the circumstances shown. The judgment, save and except upon INA's obligation to pay attorney's fees, and if so obligated upon the amount to be paid, is not made the object of complaint on appeal and for our purpose is treated as final.
Under the Texas Workers' Compensation Act, Tex.Rev.Civ.Stat.Ann. art. 8307, § 6a, "Recovery from third person; subrogation; attorney's fees", by amendment effective September 1, 1973, adopted the provision giving rise to the controversy in this case. The material provision therein reads as follows:
"If the association obtains an attorney to actively represent its interest and if the attorney actively participates in obtaining a recovery (under its subrogation rights as against a third party deemed responsible in damages because of the injury to the employee), the court shall award and apportion an attorney's fee allowable out of the association's subrogation recovery between such attorneys taking into account the benefit accruing to the association as a result of each attorney's service, the aggregate of such fees not to exceed thirty-three and one-third per cent (331/3%) of the subrogated interest."
The foregoing amendment grew out of practices common to that field of litigation having relation to recovery from a third party the common law damages for which the third party was or might be liable to one who had been an employee under the Workers' Compensation Act when injured. In such a case a portion of the employee's claim would have become the insurance carrier's through the subrogation effective by force of law. Somewhat common in such cases, particularly when the carrier deemed the employee's attorney wholly competent to proceed, had been the carrier's employment of its own attorney to intervene in the third party suit and then do little more than merely stand ready to see that if the employee recovered anything the carrier should have reimbursement and recoupment out of the amount recovered. (The employee's entitlement could only be the excess above that to belong to the carrier.)
One result was that often the carrier obtained a "free ride" insofar as the employee's expense of preparation for and trial of the suit was concerned. The employee's attorney often failed to be fairly compensated for actual work performed for in most cases his...
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