Kindred v. City of Omaha Employees' Retirement System, S-95-787

• Court: Supreme Court of Nebraska
• Writing for the Court: WHITE; STEPHAN; McCORMACK; WHITE, C.J., and GERRARD
• Citation: 564 N.W.2d 592,252 Neb. 658
• Parties: Allen KINDRED, Appellant, v. CITY OF OMAHA EMPLOYEES' RETIREMENT SYSTEM, Appellee.
• Docket Number: No. S-95-787,S-95-787
• Decision Date: 20 June 1997

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564 N.W.2d 592 252 Neb. 658 Allen KINDRED, Appellant,
v.
CITY OF OMAHA EMPLOYEES' RETIREMENT SYSTEM, Appellee. No. S-95-787. Supreme Court of Nebraska. June 20, 1997.

Page 593

Syllabus by the Court

1. Judgments: Appeal and Error. When reviewing a question of law, an appellate court reaches a conclusion independent of the lower court's ruling.

2. Attorney Fees: Contracts. The common fund doctrine is an exception to the general rule that the right of an attorney to be compensated for his services depends upon an express or implied contract of engagement.

3. Attorney Fees: Equity. An attorney who renders services in recovering or preserving a fund in which a number of persons are interested may in equity be allowed his compensation out of the whole fund only where his services are rendered on behalf of, and are a benefit to, the common fund.

4. Attorney Fees. The common fund doctrine presupposes the existence of a fund.

5. Attorney Fees. A common fund must be an immediate fund from which attorney fees may be awarded at trial.

6. Attorney Fees. In the absence of a fund within the control of the court, an attorney is not entitled to recover fees under the common fund doctrine merely because his

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actions conferred a benefit on members of a class.

Thomas F. Dowd, of Dowd & Dowd, Omaha, for appellant.

Kent N. Whinnery, Deputy Omaha City Attorney, and Jo A. Cavel, Omaha, for appellee.

WHITE, C.J., and CAPORALE, WRIGHT, CONNOLLY, GERRARD, STEPHAN, and McCORMACK, JJ.

STEPHAN, Justice.

Allen Kindred brought this action against City of Omaha Employees' Retirement System (Retirement System) for reimbursement of attorney fees which he paid in connection with his workers' compensation action against the city of Omaha (City), his former employer. Pursuant to a city ordinance, the monthly disability benefits which Kindred receives from Retirement System are reduced by the amount of his workers' compensation benefits. Kindred alleged that since he paid his attorney one-third of the workers' compensation benefits pursuant to a contingent fee agreement, he was entitled to recover these fees [252 Neb. 659] from Retirement System under the common fund doctrine. Following a bench trial, the district court for Douglas County concluded that the common fund doctrine was inapplicable and entered judgment in favor of Retirement System. We affirm that judgment.

FACTS

On September 17, 1991, Kindred sustained a work-related injury to his back in the course of his employment with the City. Shortly thereafter, Kindred began receiving temporary total disability and medical benefits from the City.

After completing a "work hardening" program, Kindred began working part time in a temporary job with the City in August 1992. By October of that year, Kindred was working 6 hours a day in another temporary position with the City. At that time, the City discontinued his workers' compensation benefits.

Kindred was not represented by an attorney with respect to his workers' compensation claim until November 11, 1992, when he retained counsel and entered into a contingent fee agreement which required him to pay his attorney one-third of all workers' compensation benefits received after that date.

On January 21, 1993, the City authorized permanent partial disability payments to Kindred retroactive to October 24, 1992. On January 27, 1993, Kindred submitted an application to Retirement System for a service-connected disability retirement due to his 1991 back injury. On February 17, 1993, Retirement System's board of trustees granted Kindred a $1,219.92-per-month disability retirement pension, effective February 18, pursuant to Omaha Mun.Code, ch. 22, § 22-35 (1989). Section 22-35 states, in relevant part:

Any member of the system who has at least five (5) years of service credit and has sustained and/or shall sustain injuries or sickness, which immediately or after a lapse of time permanently unfit such member for active duty, shall receive a monthly disability pension as long as he or she remains unfit for active duty or until he or she reaches age sixty-five (65), whichever event occurs first. Such monthly disability pension in combination with workers' compensation and social security shall not exceed sixty (60) per [252 Neb. 660] cent of such member's base compensation for the last full month prior to disability.

The parties agree that the language of § 22-35 allows Retirement System to offset 100 percent of Kindred's workers' compensation award against a retirement pension.

On July 20, 1993, Kindred filed a petition in the Nebraska Workers' Compensation Court, seeking permanent disability and vocational rehabilitation benefits for the September 17, 1991, injury.

Following a trial, the Workers' Compensation Court entered an award on March 14, 1994, in which it found that Kindred was not permanently and totally disabled, but that he had suffered a decrease in earning power and was, therefore, entitled to (1) weekly benefits

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of $159.35 per week for 2512/7 weeks for a 50 percent loss of earning power, (2) $265 per week for 485/7 weeks for temporary total disability, and (3) participation in an approved vocation rehabilitation plan at Metropolitan Community College. The Workers' Compensation Court did not award attorney fees.

On May 18, 1994, Kindred's attorney appeared before Retirement System's board of trustees and requested that one-third of the amount of workers' compensation benefits which were applied as an offset against Kindred's disability retirement pension be returned to Kindred to reimburse him for the attorney fees he incurred in the workers' compensation case. The board of trustees agreed to reimburse Kindred for attorney fees and costs with respect to some of his permanent partial disability benefits in the total amount of $5,991, but denied Kindred's claim for reimbursement of other attorney fees.

On July 11, 1994, Kindred commenced this action in the district court for Douglas County, contending that Retirement System had benefited from offsetting 100 percent of Kindred's workers' compensation benefits against his service-connected disability pension entitlement and should, therefore, be required, under the common fund doctrine, to reimburse Kindred in the full amount of attorney fees which Kindred paid with respect to those benefits. After a bench trial on March 21, 1995, the district court entered judgment for Retirement System on June 23. The court concluded that the attorney's efforts...