Darbonne v. Canal Refining Co.

614 So. 2d 159, 1993 La. App. LEXIS 436, 1993 WL 25560
CourtLouisiana Court of Appeal
DecidedFebruary 3, 1993
DocketNo. 92-8
StatusPublished
Cited by1 cases

This text of 614 So. 2d 159 (Darbonne v. Canal Refining Co.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Darbonne v. Canal Refining Co., 614 So. 2d 159, 1993 La. App. LEXIS 436, 1993 WL 25560 (La. Ct. App. 1993).

Opinion

GUIDRY, Judge.

The issue presented for review in this appeal is whether the trial court correctly apportioned liability for plaintiffs’ attorney fees and litigation expenses between plaintiffs and intervenors, Jobbers Oil Transport Company (hereafter JOTCO) and its worker’s compensation insurer, United States Fire Insurance Company (hereafter US Fire). We find that the trial court misapplied the formula for allocation of fees and expenses enunciated in Moody v. Arabie, 498 So.2d 1081 (La.1986). Accordingly, we amend the judgment and, in all other respects, affirm.

FACTS AND PROCEDURAL HISTORY

Plaintiff, Elias Darbonne, Jr., was injured in a work related accident on October 27, 1987, while employed as a truck driver by JOTCO. The accident occurred on the premises of Canal Refining Company (hereafter Canal) when Darbonne, while loading diesel fuel into his tank truck, slipped and fell in an accumulation of fuel on the surface of the loading area. The accident was unwitnessed and unreported. As a result of the fall, Darbonne’s back was injured and he underwent a laminectomy, forami-notomy, and discectomy at the L5-S1 level on December 31, 1987. After the injury, Darbonne began receiving weekly worker’s compensation benefits and medical expenses.

On April 5, 1988, plaintiff and his wife, Brenda Darbonne, sued Canal seeking damages for his injuries and her loss of consortium. Canal and its liability insurer, United States Fidelity and Guaranty Company (hereafter USF & G) then filed a third party demand against JOTCO and its liability insurer, Bituminous Casualty Corporation, seeking indemnity and/or contribution. On November 28, 1988, JOTCO and US Fire intervened in the suit to recover weekly compensation benefits and medical expenses paid to or on behalf of Darbonne.1 Plaintiffs, by supplemental and amending petition, added USF & G as a party defendant to their original demand.

Prior to trial on the merits, plaintiffs settled their claim against Canal and USF & G for $250,000. The compromise agreement, which was not made a part of the appellate record, was not approved by the intervenor. By judgment rendered on March 30, 1990, the third party demand of Canal and USF & G against JOTCO and Bituminous Casualty Corporation was also dismissed because of compromise.

Due to a disagreement between plaintiffs and intervenor concerning their relative responsibilities for attorney fees and costs associated with the prosecution of this case, Canal and USF & G paid plaintiff only $178,000 and deposited the remaining $72,000 into the registry of the court. At the time of the deposit, the $72,000 was slightly greater than intervenor’s lien against the proceeds for weekly compensation benefits and medical expenses paid. Thus, the only issue presented to the trial court was the relative proportionate share of attorney fees and costs, commonly known as Moody fees, to be assessed against plaintiffs and intervenor.

[161]*161In its written reasons for ruling rendered January 3, 1991, the trial court determined that US Fire had previously paid $76,682.20 in weekly compensation and medical expenses and that the discounted present value of intervenor’s most probable future exposure, 10-year Supplemental Earnings Benefits (SEB), was $89,776.29. The trial judge then divided the sum of these two amounts, $166,458.49, by the plaintiffs total recovery from the third-party tortfea-sor, Canal, $250,000, to obtain the interve-nor’s proportionate interest in the recovery, 67%. Next, the court determined that the one-third contingency fee negotiated between plaintiff and his attorney was reasonable and calculated US Fire’s share of attorney fees as follows:

Total Recovery from $250,000.00 Canal & USF & G
— Total Intervenors’ Li- —166,458.49 ability/Recovery
Plaintiff’s Net Recovery 83,541.51
* Contingency fee percentage 33.33%
Total Attorney fee due plaintiff’s attorney 27,847.17
* Intervenor's Proportionate Interest 67%
Intervenor’s Liability $ 18,657.60 for Attorney fees

The trial court denied intervenor’s claim for a credit for legal work performed by its attorney because it found that “non-dupli-cative work of the intervenor did not significantly affect the outcome”. It then awarded plaintiffs’ 67% of their litigation expenses, $6,591.22, for a total of $4,416.12 to be paid by US Fire as costs to plaintiffs. Finally, the court awarded intervenor legal interest on the net sum due [$76,682.20 — ($18,657.60 and 4,416.12) = $53,508.48] from date of intervenor’s judicial demand until paid. Judgment in accordance with these reasons was rendered and signed on September 4, 1991.

Plaintiffs appealed and specified that the trial court committed error in calculating the fee and expenses due the plaintiffs; in computing the value of future benefits based on SEB rather than total and permanent disability benefits; and, in awarding intervenor legal interest on the money due it. Intervenor also appealed, asserting that the trial court erred in denying its claim for a credit for legal work performed on its behalf which materially contributed to the settlement.

ATTORNEY FEES

Neither plaintiffs nor intervenor question the accuracy of the amounts for weekly compensation and medical expenses, past ($76,682.20) and future ($89,776.29), used by the trial court in its calculation. Plaintiffs do argue that intervenor’s future expected liability should be based on permanent total disability status, discussed infra. However, they do agree that, if Elias Dar-bonne is found to be entitled to only SEB, then the $89,776.29 figure for future liability is correct.

For the reasons which follow, we determine that the trial court erred in calculating intervenor’s proportionate liability for attorney fees by basing the fee on plaintiffs’ net recovery instead of their total recovery from the third party tortfea-sor, Canal, and its insurer, USF & G. It also erred in failing to grant intervenor a credit for non-duplicative legal work performed by intervenor’s attorney which significantly affected the outcome of the case.

Moody v. Arabie, supra, which was reaffirmed by the Louisiana Supreme Court in Taylor v. Production Services, Inc., 600 So.2d 63 (La.1992), clearly dictates that the intervenor’s proportionate share be based on plaintiff’s total recovery. In so holding, the Taylor court, at pp. 66-67, reasoned as follows:

... In Moody, this court held that the plaintiff and the intervenor compensation insurer were co-owners of the right to recover damages from the third party, and that the co-owners were obligated to bear their proportion of the reasonable and necessary litigation expenses, including attorney’s fees, according to their interests in the recovery. The interve-nor’s proportionate share is determined by the ratio that the intervenor’s recov[162]*162ery, including the present value of the credit for future compensation payments, bears to the total recovery from the tort-feasor. The intervenor’s share of the recovery costs is deducted from the inter-venor’s share of recovery to arrive at the net amount to be reimbursed to the inter-venor from the judgment proceeds, with the balance to be paid to the plaintiff.
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Bluebook (online)
614 So. 2d 159, 1993 La. App. LEXIS 436, 1993 WL 25560, Counsel Stack Legal Research, https://law.counselstack.com/opinion/darbonne-v-canal-refining-co-lactapp-1993.