Madison v. Goodyear Tire and Rubber Co., 54638

• Decision Date: 12 May 1983
• Docket Number: No. 54638,54638
• Parties: Donald V. MADISON, Claimant, v. GOODYEAR TIRE AND RUBBER COMPANY, Respondent, and Travelers Insurance Company, Insurance Carrier.
• Court: Kansas Court of Appeals

Page 663

663 P.2d 663

8 Kan.App.2d 575

Donald V. MADISON, Claimant, v. GOODYEAR TIRE AND RUBBER COMPANY, Respondent and Travelers Insurance Company, Insurance Carrier.

No. 54638.

Court of Appeals of Kansas.

May 12, 1983.

Syllabus by the Court

1. An attorney who is discharged before the occurrence of the contingency provided for in a contingency fee contract may not, generally, recover his compensation on the basis of the contract, but he may recover, in quantum meruit, the reasonable value of the services which he has rendered.

2. The fundamental rule of statutory construction, to which all others are subordinate, is that the purpose and intent of the legislature governs when that intent can be ascertained from the statute.

3. In determining legislative intent, courts are not limited to a mere consideration of the language employed, but may properly look to the historical background of the enactment, the circumstances attending its passage, the purposes to be accomplished, and the effect the statute may have under the various constructions suggested.

4. The court is firmly committed to the rule of liberal construction of the workmen's compensation act in order to award compensation to the worker where it is reasonably possible to do so, and to make legislative intent effective and not to nullify it.

5. When resolving disputes under K.S.A. 44-536(h), the director of workers' compensation has the power and discretion to apportion fees. However, he must exercise such power and discretion in a reasonable and proper manner, considering the particular circumstances of each case.

6. In a case involving an award of attorney fees pursuant to K.S.A. 44-536(h), where a total fee of $2,331 was divided, $400 going to appellant and $1,931 to appellee, the record is examined, and it is held: the director of workers' compensation acted within the scope of his authority in making such apportionment, and there has been no abuse of discretion shown relative thereto; the judgment of the district court affirming the director's award is hereby affirmed.

Frank D. Taff, pro se.

C. Keith Sayler, of Fisher, Patterson, Sayler & Smith, Topeka, for appellee Reginald LaBunker.

Before ABBOTT, P.J., and PARKS and MEYER, JJ.

MEYER, Judge:

The title to this case is confusing in that the only parties who will be affected by the decision herein are appellant Frank D. Taff, an attorney, and appellee Reginald LaBunker, also an attorney. This is because the sole issue herein involves the amount of attorney fees to which each of the aforementioned parties is entitled.

The facts from which this appeal arose are not in dispute.

Donald V. Madison (claimant) was employed by Goodyear Tire and Rubber Company (respondent). He sustained an injury while on the job. On March 5, 1980, claimant first consulted with Frank D. Taff (Taff) concerning his injury. At that time, claimant was already receiving compensation for temporary total disability. Taff subsequently determined that claimant had a valid workers' compensation claim. On March 14, 1980, he and claimant entered into a written employment contract which provided generally for a 25 percent contingency fee arrangement.

Taff's records reflect that prior to entering into the contract, he spent five (5) hours consulting with claimant and researching the case. After that date, he kept no record of time expended on claimant's behalf. Nothing in the record indicates that Taff did anything tangible to advance the claimant's workers' compensation claim between March 14, 1980, and January 1981.

In January 1981, claimant's temporary total disability compensation was terminated. Taff thereupon demanded the immediate reinstatement of same; in addition, he filed an application for hearing. During the months of January and February, 1981, Taff also corresponded with respondent's attorney regarding possible settlement of the claim; these negotiations proved fruitless.

On March 2, 1981, claimant discharged Taff as his attorney. Taff notified the administrative law judge of this fact by letter on March 6, 1981. Taff's letter also informed the administrative law judge that he would continue to assert a claim for 25 percent of any settlement or award that claimant might ultimately obtain. Also on March 2, 1981, claimant retained the services of Reginald LaBunker (LaBunker). This employment, like that of Taff, was pursuant to a written contract specifying a 25 percent contingency fee.

In his prosecution of claimant's case, LaBunker filed an amended application for hearing, as well as an application for preliminary hearing. The latter was held on March 31, 1981; a request for temporary total disability compensation was denied at that hearing. On July 16, 1981, LaBunker conducted the deposition of Dr. Robert R. Payne.

On October 27, 1981, the administrative law judge issued an award for 30 percent loss of use of claimant's right arm, at a rate of $148 per week for 63 weeks--a sum of $9,324. This amount, coupled with temporary total loss of use for 75 weeks at the same rate, made the total award $20,424. Claimant was also awarded $28.24 in medical expenses; additionally future medical treatment, as necessary, and the resultant expenses were also granted without further application. No appeal was taken from this award, and it was statutorily approved by the director of workers' compensation.

On December 4, 1981, Taff corresponded with the director, asserting his claim for 25 percent of the aforementioned award, and requesting a hearing on this claim pursuant to K.S.A. 44-536(h). Such a hearing was conducted on February 12, 1982. On April 5, 1982, the administrative law judge awarded Taff $400 in attorney fees for his representation of claimant. This award was based on eight hours of work at $50 per hour. The balance of the 25 percent of claimant's award was set over to LaBunker. Taff immediately sought review by the director, who sustained the decision of the administrative law judge in all respects. Taff then appealed this decision to the district court; that court also adopted and affirmed the findings and conclusions of the administrative law judge. The instant appeal to this court followed.

The sole issue on appeal is whether the trial court erred in its award, which apportioned the attorney fees in this case between Taff and LaBunker.

Taff avers that the director patently erred in awarding to him only $400 in attorney fees in connection with his representation of claimant. He asserts a right to a full 25 percent of claimant's eventual recovery, based on his contract for employment. He places reliance on the body of law which holds that an attorney's right to recover fees for his services is governed by the contract with his client unless that contract is champertous, unreasonable or otherwise unenforceable; under this body of law, the attorney is not limited to recovery based on quantum meruit. See Grayson v. Pyles, 184 Kan. 116, 118, 334 P.2d 341 (1959). According to Taff's arguments, this general rule has not been altered by adoption of the workmen's compensation act. Therefore, he argues, the director wrongly disregarded the contract between claimant and himself, which called for a contingency fee of 25 percent, and erred in awarding a fee based solely on an hourly sum for time expended.

The workmen's compensation act contains certain prescriptions and proscriptions in regard to attorney fees in cases under that act. To summarize a few of these, all fee arrangements must be pursuant to a written contract; contingency fee arrangements may not exceed 25 percent of the recovery; no fees shall be recoverable with respect to any award for medical expenses (with exceptions); and no fees shall be recoverable in connection with compensation for temporary total disability (with exceptions). See K.S.A. 44-536(a) through (g).

The workmen's compensation act also contains a provision for the resolution of disputes concerning attorney fees. That provision is found at K.S.A. 44-536(h), which provides:

"Any and all disputes regarding attorneys' fees, whether such disputes relate to which of one or more attorneys represents the claimant or claimants or is entitled to the attorneys' fees, or a division of attorneys' fees where the claimant or claimants are or have been represented by more than one attorney, or any other disputes concerning attorney's fees or contracts for attorneys' fees, shall be heard and determined by the director, after reasonable notice to all interested parties and attorneys."

It was under this statute that the trial court approved the apportionment of fees which is the crux of this appeal.

K.S.A. 44-536(h) contains no substantive pronouncements to guide the director in apportioning fees among two or more attorneys who have represented the same claimant. Neither is there a case construing 44-536(h) in a factual setting similar to the one at bar. This case presents, then, what is technically a question of first impression. There are, however, certain rules of law regarding attorney fees in general which would seem analogous to cases involving attorney fees in proceedings under the workmen's compensation act.

In 7A C.J.S., Attorney and Client § 289, p. 536, it is stated that an attorney is generally entitled to the reasonable value of his services actually rendered when his employment relation with his client is prematurely terminated. In the same section, the rule is more specifically applied to situations where a contingency fee arrangement is involved.

"An attorney who is discharged before the occurrence of the contingency provided for in a contingency fee contract may not, generally, recover his compensation on the basis of the contract, but he may recover, in quantum meruit, the reasonable value of the services which he has...