Miranda v. City of Galveston

• Decision Date: 21 July 1954
• Docket Number: No. 1909.,1909.
• Parties: Dolores R. MIRANDA, et al., Libellants, v. CITY OF GALVESTON, Texas, et al., Respondents.
• Court: U.S. District Court — Southern District of Texas

123 F. Supp. 889

Dolores R. MIRANDA, et al., Libellants, v. CITY OF GALVESTON, Texas, et al., Respondents.

No. 1909.

United States District Court S. D. Texas, Galveston Division.

July 21, 1954.

Armstrong, Bedford & Lambdin (Griffith D. Lambdin), and Barker & Barker (Owen D. Barker), Galveston, Tex., and Burris, Benton, Baker & Zwiener (F. F. Benton), Houston, Tex., for libellants.

Williams & Thornton (Bryan F. Williams), Galveston, Tex., for respondent City of Galveston.

Royston & Rayzor (M. L. Cook), Galveston, Tex., for respondent Texas Employers' Ins. Assn.

KENNERLY, Chief Judge.

This is a suit against the City of Galveston, Texas, owner and operator of Elevator B in Galveston, by libellants for damages for bodily injuries, and by the Texas Employers' Insurance Association (for brevity called Texas Employers) for reimbursement for compensation, etc. paid libellants on account of such bodily injuries, under the Longshoremen's and Harbor Workers' Compensation Act, Title 33 U.S.C.A. § 901 et seq. The Decree entered herein on April 14, 1952, in favor of libellants and Texas Employers, was affirmed by the Court of Appeals, 5 Cir., 205 F.2d 468, 470, 471. In the Opinion and the Mandate of the Court of Appeals, this Court is given substantially the following direction:

"The judgment appealed from is therefore affirmed and the cause is remanded with directions to the district judge, to proceed with the motion of Texas Employers to ascertain the amounts due the association under and by the terms of the decree and the settlements made between the City and the libellants, and to render judgment therefor in favor of Texas Employers accordingly. All costs of the appeal are taxed against the City."

This is a hearing in accordance with such direction, and Texas Employers is here, setting forth the amounts paid by it, plus interest, and also claiming attorneys' fees.^* The amount paid by Texas Employers as compensation, etc. is stipulated by all parties to be $51,130.14, which it is agreed shall bear interest at the rate of 6% per annum from February 5, 1953. But libellants, the City, and their Attorneys combat Texas Employers' claim for attorneys' fees.

The facts shown by the Record are substantially as follows:

(a) The City of Galveston was at the time of and before the filing of this suit, and has been since, the owner and operator of Grain Elevator B in that City. On or about August 7, 1949, a cargo of grain from Elevator B was unloaded into Holds 2 and 4 of the Steamship "Lipscomb Lykes." Libellants, Dolores R. Miranda and approximately 140 other persons who were longshoremen, etc. in the employ of the Southern Stevedoring Company, Inc. (for brevity called Stevedoring Company), suffered bodily injuries and became ill while trimming the grain in such Holds of such Steamship. They claimed that such injuries, illness, etc. were caused by "Weevilcide", a noxious and poisonous fumigant placed in said grain by the City.

(b) This suit in admiralty was filed by libellants against the City of Galveston, seeking to recover damages for such bodily injuries. The Texas Employers, as the carrier of Stevedoring Company under such Act, was brought into the suit by libellants,¹ filed appropriate pleadings, and joined with libellants in the prosecution of this suit.

(c) By Stipulation, the question of liability was first heard, and on April 14, 1952, Judgment was entered in favor of libellants against the City of Galveston, fixing its liability to libellants for such sums of money as should thereafter be ascertained and fixed as their damages, etc. Such Judgment also provided for recovery of compensation, etc. by Texas Employers', as shown in the margin.²

(d) The City of Galveston appealed to the Court of Appeals, and pending such appeal, the City, without the consent of Texas Employers', agreed to settle and did settle with libellants, paid them the amount of damages agreed upon, took releases from them, and dismissed its appeal against them. City also agreed in an Indemnity Agreement, dated February 5, 1953, to indemnify and save harmless each libellant and his Attorney against any recovery against him by Texas Employers'.³

(e) Thereupon, Texas Employers' took appropriate action in this Court and in the Court of Appeals, and the case was disposed of in the Court of Appeals, as stated, and with direction, as stated.

1: We have for decision only the question of whether Texas Employers' is entitled to recover attorneys' fees, and if so, the amount thereof.

Citing the cases shown in the margin,⁴ City says in its brief:

"In Federal Courts, in neither actions in Admiralty nor suits at law are attorney's fees, except statutory docket fees, of the prevailing party, taxable as costs against the opposing party, unless expressly allowed by Statute."

This point may be quickly disposed of. There is no contention here that City is liable for attorneys' fees in addition to damages except insofar as it has — if it has — made itself liable by and under the Indemnity Agreement mentioned.

2: In deciding as to Texas Employers' claim for attorneys' fees, the question to be first determined is what were the rights of the parties, and particularly the Texas Employers', under such Judgment. True, there was an appeal by City, a settlement by City with libellants, and the proceedings in the Court of Appeals shown by the Opinion, 205 F.2d 468, but Texas Employers' was not thereby deprived of any right. If it had the right to have and recover attorneys' fees under the Judgment, it still has such right.

As has been pointed out, libellants brought Texas Employers' into this suit, and Texas Employers' joined libellants in the effort to recover damages from City. Each was represented by counsel. Information obtained by each in prior investigations and litigation⁵ was used at the trial. I am sure that it is true that each litigant and his attorney made a faithful and earnest effort to succeed in the litigation and to recover the judgment which they did recover.

Section 933 of the Act⁶ may in part but does not wholly cover this litigation. This suit was not brought by libellants strictly under Section 933(a), (b), (c), (f) and (g). There was no notice to the Deputy Commissioner of libellants' election either to receive compensation from Texas Employers' or to recover damages from City. This suit was not brought by Texas Employers' strictly under Section 933(d), (e) and (f). Although the cause of action against City was vested in libellants for themselves and for the benefit of Texas Employers', this suit was a joint, voluntary and cooperative effort by both libellants and Texas Employers' to recover damages from the City, the question of the allocation or application of the damages so recovered to be determined, if not agreed to, by the Court.

It is perfectly plain that had the case not been settled by libellants and City, but had proceeded to final judgment, that after the amount of damages recoverable against the City had been determined and fixed, this Court would have fixed the amount of recovery of each. That applying the principles of equity, and so far as practicable the provisions of Section 933, this Court would have made allocation or application of such damages. That after ordering first paid the expenses incurred by libellants and Texas Employers', including attorneys' fees for both sets of attorneys, then the Court would have made a fair and equitable adjustment between libellants and Texas Employers', taking into consideration the amount of damages recovered and the amount of compensation paid by Texas Employers'.

It was an equitable adjustment of this kind that was made in The Etna, 3 Cir., 138 F.2d 37. Mitchell, the employee, purporting to move under Section 933, proceeded alone against a third person and recovered damages. He refused to recognize his employer's claim for reimbursement for compensation paid him, and it was held in effect that equity would require him to do so. There is nothing contrary to this view to be found in the two cases which City cites. Jarka Corporation v. Monahan, 1 Cir., 62 F.2d 588 Marlin v. Cardillo, 68 App.D.C., 201, 95 F.2d 112.

But this case was settled. Such settlement was apparently a most advantageous one. Libellants recovered and collected damages sufficient to pay themselves and their attorneys.⁷ In addition, both libellants and City apparently recognized that Texas Employers' was entitled, or might be held entitled, to some part of the damages agreed upon, and City executed the Indemnity Agreement hereinbefore referred to and quoted in part.

Libellants and City concede that Texas Employers' is entitled to have and recover the compensation, medical expenses, etc. actually paid by it, together with interest, but no more. If it recover no more, the libellants will have their apparently liberal damages, out of which their attorneys were apparently fairly paid for their services, but their partner in the suit, Texas Employers', will not fare so well. It will have to pay its attorneys out of the amounts recovered by it to reimburse it for compensation, etc. paid by it, thus sustaining a clear loss. This would be neither in accordance with the letter nor the spirit of Section 933, nor with the principles of equity. This view finds support not only in The Etna, supra, but in Fontana v. Pennsylvania R. Co., D.C.S.D.N.Y., 106 F.Supp. 461. Fontana, the employee, recovered damages from a third person, and the Court held, following the equitable rule laid down in The Etna, that Huron, the employer, was entitled to reimbursement out of such damages for compensation paid Fontana, ahead of expenses, including attorneys' fees incurred by Fontana in collecting such damages. It was also held that it did not matter whether the damages were collected in a suit brought by the employee or the employer.

The view that Texas Employers' is entitled to attorneys' fees is...