Galfand v. Equitable Life Assurance Society of the United States

61 Pa. D. & C.2d 407, 1973 Pa. Dist. & Cnty. Dec. LEXIS 439
CourtPennsylvania Court of Common Pleas, Philadelphia County
DecidedJanuary 23, 1973
Docketno. 1247
StatusPublished

This text of 61 Pa. D. & C.2d 407 (Galfand v. Equitable Life Assurance Society of the United States) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Philadelphia County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Galfand v. Equitable Life Assurance Society of the United States, 61 Pa. D. & C.2d 407, 1973 Pa. Dist. & Cnty. Dec. LEXIS 439 (Pa. Super. Ct. 1973).

Opinion

FORER, J.,

— There is no dispute as to the facts in this case. Plaintiffs, a law partnership, represented John V. Bartolone in a Workmen’s Compensation claim against United States Steel Corporation which resulted in a decision in favor of plaintiff’s client.

During the period covered by the Workmen’s Compensation claim, Bartolone had received accident and sickness benefits from defendant in the amount of $1,404.64. Such payments were due only if the injuries proved to be noncompensable under workmen’s compensation. United States Steel reimbursed defendant, Equitable Life Assurance Society of the United States, for the $1,404.64 which it had paid Bartolone.

Plaintiffs also represented Leonard G. Fordham in a similar successful claim, in the amount of $1,237.50. This sum was also reimbursed by United States Steel to defendant. In 1970, plaintiffs entered into a stipulation with United States Steel and Fordham in which it was acknowledged that defendant had a hen in the amount of $1,237.50 for payments under the group sickness and accident plan to Fordham.

Plaintiffs now seek compensation for legal services from defendant, since their efforts resulted in defendant’s recovering a total of $2,642.14. It is agreed that [409]*409a fee of one-third of the amount of the reimbursement is the fair value of the services rendered.

Defendant claims that no such fee is legally payable for the following reasons:

1. The act does not authorize payment of counsel fees by the subrogated employer or insurer.

2. Plaintiff never made a request to the Workmen’s Compensation Board for a claim for legal services rendered to defendant.

3. Defendant never requested plaintiff to perform services on its behalf.

The Workmen’s Compensation Act by its terms neither prohibits nor specifically requires payment of counsel fees by the subrogee. At the outset, it should be noted that subrogation is an equitable doctrine: Meehan v. Philadelphia, 184 Pa. Superior Ct. 659 (1957).

Restatement, Restitution (1937), section 105(2), states:

“A person who through legal proceedings procures . . . property in which he and another have an interest may be entitled to reasonable compensation for his services and restitution of his expenses in obtaining or preserving the property.”

The Pennsylvania Superior Court held that when a person sues to enforce a claim from which another (the subrogee) is benefited, the one benefited must contribute proportionally toward the expense. In the cited case an injured policeman sued a negligent third party. The City of Philadelphia which had paid the policeman’s wages during the period of his incapacity had a subrogation claim but resisted paying a proportionate share of the counsel fee. The court declared, citing Harris’s Appeal, 323 Pa. 124 (1936), “ ‘If a prin[410]*410ciple in law or equity can be found to sustain an award of reasonable counsel fee and costs to the owner’s attorney, who litigated the compensation dispute and whose services helped produce the fund, it ought to be applied’ Furia v. Philadelphia, 180 Pa. Superior Ct. 50 (1955).

Prior to the 1959 amendment, counsel fees were chargeable to the subrogee under general principles of law.

The Pennsylvania Workmen’s Compensation Act was adopted in 1915. It has been amended many times. The section on subrogation, Act of February 28, 1956, P. L. (1955) 1120, as amended, 77 PS §671, now reads as follows:

“Where the compensable injury is caused in whole or in part by the act or omission of a third party,, the employer shall be subrogated to the right of the employe, his personal representative, his estate or his dependents, against such third party to the extent of the compensation payable under this article by the employer; reasonable attorney’s fees and other proper disbursements incurred in obtaining a recovery or in effecting a compromise settlement shall be prorated between the employer and employe, his personal representative, his estate or his dependents. The employer shall pay that proportion of the attorney’s fees and other proper disbursements that the amount of compensation paid or payable at the time of recovery or settlement bears to the total recovery or settlement. Any recovery against such third person in excess of the compensation theretofore paid by the employer shall be paid forthwith to the employe, his personal representative, his estate or his dependents, and shall be treated as an advance payment by the employer on account of any future installments of compensation.

[411]*411“Where an employe has received payments for the disability or medical expense resulting from an injury in the course of his employment paid by the employer or an insurance company on the basis that the injury and disability were not compensable under this act in the event of an agreement or award for that injury the employer or who made the payments shall be subrogated out of the agreement or award to the amount so paid, if the right to subrogation is agreed to by the parties or is established at the time of hearing before the referee or the board.”

The amendment of May 29, 1951, P. L. 507, sec. 319, added the second paragraph. The amendment of 1951 reads exactly like the present law, Amendment September 30, 1961, P. L. 1762, sec. 2. In 1959, the Act of December 28, 1959, P. L. 2034, was amended to include the following:

“Where an employe has received payments for the disability or medical expense resulting from an injury by accident in the course of his employment, paid by the employer, [or] an insurance company, hospital, medical, osteopathic or dental service corporation, employe or fraternal, welfare or benefit association, on the basis that the injury and disability were not compensable under this act, in the event of an agreement or award for that injury, the employer, [or] insurance company, [who] hospital, medical, osteopathic or dental service corporation, employe or fraternal, welfare or benefit association, which made [the] any payments, shall be subrogated out of the agreement or award to the amount so paid without deduction for attorney’s fees or otherwise, if the right to subrogation is agreed to by the parties or is established at the time of hearing before the referee or the board.” (Italics supplied.)

[412]*412The amendment of 1961 deleted, inter alia, that portion prohibiting the deduction of .attorney’s fees from the amount paid to the subrogee.

Defendant argues that since the amendment of 1961 does not specifically authorize deduction of counsel fees, such payment is prohibited.

The Statutory Construction Act of May 28, 1937, P. L. 1019, art. IV, sec. 51, 46 PS §551, provides that in ascertaining the intent of the legislature, the “former law” may be considered. A change of language in a statute is indicative of a change of legislative intent: Panik v. Didra, 370 Pa. 488 (1952); Vince v. Allegheny Pittsburgh Coal Co., 153 Pa. Superior Ct. 333 (1943). Clearly the deletion of the prohibition against counsel fees is indicative of an intent to permit such fees.

The case of Richter v. United States, 296 F.2d 509 (C.A. 3, 1961), cited by defendant is inapplicable because plaintiff attorney there sought to recover fees from the Federal government.

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Related

Furia v. Philadelphia
118 A.2d 236 (Superior Court of Pennsylvania, 1955)
Panik v. Didra
88 A.2d 730 (Supreme Court of Pennsylvania, 1952)
Meehan v. Philadelphia
136 A.2d 178 (Superior Court of Pennsylvania, 1957)
Harris's Appeal
186 A. 92 (Supreme Court of Pennsylvania, 1936)
Vince v. Allegheny Pittsburgh Coal Co.
33 A.2d 788 (Superior Court of Pennsylvania, 1943)

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Bluebook (online)
61 Pa. D. & C.2d 407, 1973 Pa. Dist. & Cnty. Dec. LEXIS 439, Counsel Stack Legal Research, https://law.counselstack.com/opinion/galfand-v-equitable-life-assurance-society-of-the-united-states-pactcomplphilad-1973.