Simpson v. Texas Employers Ins. Ass'n, 17571

• Decision Date: 17 January 1975
• Docket Number: No. 17571,17571
• Citation: Simpson v. Texas Employers Ins. Ass'n, 519 S.W.2d 209 (Tex. Ct. App. 1975)
• Parties: Beverly J. Olive SIMPSON, Appellant, v. TEXAS EMPLOYERS INSURANCE ASSOCIATION, Appellee.
• Court: Texas Civil Court of Appeals

Page 209

519 S.W.2d 209

Beverly J. Olive SIMPSON, Appellant, v.TEXAS EMPLOYERS INSURANCE ASSOCIATION, Appellee.

No. 17571.

Court of Civil Appeals of Texas Fort Worth.

Jan. 17, 1975.

Rehearing Denied Feb. 28, 1975.

Mullinax, Wells, Mauzy & Baab, Inc., Dallas, and McGuire, Levy & Collins and John E. Collins, Irving, for appellant.

Tom R. Coffield, Jr., and Strasburger, Price, Kelton, Martin & Unis and Royal H. Brin, Jr., Dallas, for appellee.

OPINION

MASSEY, Chief Justice.

On or about April 15, 1970David Eugene Olive died as result of injuries sustained during the course of his employment.His injuries, allegedly, were the result of negligent tort chargeable to a third person.The circumstances of his fatal accident gave rise to a claim for compensation against Texas Employers' Insurance Association as the Workmen's Compensation insurance company liable therefor by the widow of the deceased, Beverly J. Olive(now Simpson), and his minor son David Wayne Olive.

By settlement there was disposition of the insurance claim by payments made by the Texas Employers' Insurance Association.

Thereafter Beverly J. Olive, individually and as next-friend for her son David Wayne Olive, brought suit at common law to establish liability and damages against the third person.

Promptly thereafter, by its attorney Fred Leach, Texas Employers' filed its Petition in Intervention presenting claim for its entitlement to $22,310.24 as the subrogated amount under the Texas Workmen's Compensation Act, plus expenses and reasonable costs of enforcing its claim, all contingent upon plaintiffs' success in effecting recovery by judgment or settlement of the basic tort suit.

Understandable, and according to the practice of all attorneys in such type of case, discussion ensued between the attorneys for plaintiffs and for Texas Employers.An objective was to accomplish for the former the maintaining of complete control of the plaintiffs' case, that it might be tried without the jury's knowledge and consideration that any part of the recovery which might be effected would be the entitlement of an insurance company; and an objective for the latter was assurance of security of the amount to which it was subrogated without necessity of additional expense and time in trial and to escape necessity of establishing by evidence the exact amount of its subrogation rights, elimination of any possible issue upon amounts, etc.Ordinarily both sides profit from an accomplishment of their objectives.

Early in 1973 these two attorneys reduced to writing an instrument upon which they had agreed, in which they stipulated that $22,310.24 was the correct amount to which Texas Employers' was subrogated.Continuing, by the same writing, they furthermore stipulated 'in the event Plaintiff does recover of the Defendants(the third-party tort feasor) any sum of money in the captioned cause, then in that event, Texas Employers' Insurance Association, by reason of its intervention herein, shall be entitled to judgment in the amount of $22,310.24 out of the first monies so recovered by the Plaintiff.Texas Employers' Insurance Association hereby waives any and all attorney's fees against the said Plaintiffs provided that it is not necessary for Texas Employers' Insurance Association to actively participate in the trial of the above styled and numbered cause.'

September 10, 1973the plaintiffs' suit against the third person was called for trial.A jury was selected on that day.By the time on the following day for the introduction of evidence, plaintiffs' attorneys had agreed upon a settlement of the third-party suit.It might be well to mention that by September 10, 1973the trial court had appointed an Ad litem guardian and attorney to represent the interest of David Wayne Olive, for whom Beverly J. Olive(now become Mrs. Simpson) had initially brought suit as next friend.

Of all the foregoing, save the accomplishment of the agreement to settle, on September 11, 1973, the attorney for Texas Employers' was antecedently informed.Additionally, on September 10, 1973 there was interchange of telephone conversations between the attorneys, primarily to determine the percentage of discount of the subrogated interest of Texas Employers' might be obtained in order to promote a possible settlement with the third-party defendant.During the course of at least one such conversation the insurance company attorney was informed that he should come to the courthouse 'and represent the Association's interest, which I declined to do because of the stipulation in the file.'Such attorney was also advised 'that the Judge had read the amendments to the Compensation law which had an effective date of September 1, 1973 and had said that he thought that they were procedural and that he would honor a motion for attorneys' fees.'The attorney's position thereon was that he had a stipulation in the file that provided for full recoupment, and furthermore precluded his attendance upon trial.The insurance company never contracted to discount its subrogated amount.

Thereafter in the trial court where the common law damage suit pended the settlement was agreed upon, and a judgment was approved and entered by the court incorporating a provision that $22,310.24 out of the settlement paid (which Texas Employers claimed by subrogation), be deposited in the registry of the court pending disposition of the dispute arisen.Dispute concerning propriety of the payment of the entire $22,310.24 to the insurance company had come to the court's attention by motion filed in behalf of these who were--or had been--the plaintiffs' attorneys for an allowance therefrom of some amount as an attorneys' fee.By their motion these attorneys claimed entitlement to be paid a fee for their active representation of Texas Employers' interest as necessarily incident to representation of their clients' suit.Of this they predicated such right and entitlement upon the amendment which became effective September 1, 1973 of Vernon'sAnn.Tex.Civ.St. Art. 8307, Sec. 6a, 'Recovery from third person; subrogation; compromise.'(In Pocket Parts as 'Recovery from third person; subrogation; attorney's fees.')

Subsequently a hearing was held upon the issues made by the motion aforestated, with the parties adversary actually those who had been the attorneys for Beverly J. Olive Simpson and her son David Wayne Olive as opposed to Texas Employers' Insurance Association.After a lengthy hearing the court rendered a judgment order which denied any attorney's fee out of the subrogated amount of $22,310.24, and awarded such amount,...