Liquidation Division of the Board of Insurance v. Kronzer

744 S.W.2d 146, 1987 Tex. App. LEXIS 8527, 1987 WL 121
CourtCourt of Appeals of Texas
DecidedOctober 15, 1987
DocketNo. B14-87-077-CV
StatusPublished
Cited by2 cases

This text of 744 S.W.2d 146 (Liquidation Division of the Board of Insurance v. Kronzer) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Liquidation Division of the Board of Insurance v. Kronzer, 744 S.W.2d 146, 1987 Tex. App. LEXIS 8527, 1987 WL 121 (Tex. Ct. App. 1987).

Opinion

OPINION

ELLIS, Justice.

Appellant United General Insurance Co. (United), a worker’s compensation carrier and intervenor below, appeals through its Receiver from a judgment in which it failed to recover attorney’s fees pursuant to Tex.Rev.Civ.Stat.Ann. art. 8307 § 6a (Vernon Supp.1987). That statute governs award of attorney’s fees out of an insurance carrier’s subrogated interest in a claimant’s recovery against third party defendants. In two points of error United argues that the lower court abused its discretion by awarding attorney’s fees solely to appellee Kron-zer without apportioning a share to United. We affirm the judgment of the trial court.

Kronzer represented Marvin A. Zocher, one of two seriously injured workers who pursued consolidated claims against third party defendants following an oil well accident. United, the workers’ compensation carrier, intervened to recover benefits it paid both claimants pending outcome of the third party actions. Zocher settled his third party case for $750,000.00. United and Kronzer were before the court solely to determine attorney’s fees out of United’s subrogated interest, or $56,735.04, the total benefits it paid claimant Zocher. The trial court ordered the maximum permissible under the statute, one-third of United’s subro-gated interest, to be awarded Kronzer as attorney’s fees after determining that United’s recovering its paid benefits was due entirely to Kronzer’s work.

The Texas Workers’ Compensation Act provides for award of attorney’s fees when an association obtains a subrogated recovery from a third party. Tex.Rev.Civ.Stat. Ann. art. 8307, § 6a (Vernon Supp.1987). Section 6a reads in pertinent part:

(a) ... However, when the claimant is represented by an attorney, and the association’s interest is not actively represented by an attorney, the association shall pay such fee to the claimant’s attorney not to exceed one-third (½) of said subrogation recovery or as may have been agreed upon between the claimant’s attorney and the association or in the absence of such agreement the court shall allow a reasonable attorney’s fee to the claimant’s attorney for recovery of the association’s interest which in no case shall exceed thirty-three and one-third per cent (33⅛%) payable out of the association’s part of the recovery.
‡ ⅜ ⅜ ⅜ * ⅜
(b) If the association obtains an attorney to actively represent its interest and if the attorney actively participates in obtaining a recovery, the court shall award and apportion an attorney’s fee allowable out of the association’s subrogation recovery between such attorneys taking into account the benefit accruing to the association as a result of each attorney’s service, the aggregate of such fees not to exceed thirty-three and one third per cent (33½%) of the subrogated inter-est_ (emphasis added).

We hold that because United and claimant Zocher each employed counsel to represent its respective interest in the third party case, and because the court based its decision on the benefit accruing to United, subsection (b) of Tex.Rev.Civ.Stat.Ann. art. 8307 § 6a determines United’s and Kronzer’s rights to the disputed fee award.

In its first point of error United argues that it actively represented its own interest and actively participated in obtaining the third party recovery, substantially complied with Kronzer’s requests and offered more help, but was frustrated by Kronzer’s failures to request help. United urges that its participation in addition to this court’s decision in University of Texas System v. Melchor, 696 S.W.2d 406 (Tex.App.—Houston [14th Dist.] 1985, no writ), required the trial court to apportion it a share of the attorney’s fee recovery. We conclude that United has raised, at least in part, a chai-[148]*148lenge to the sufficiency of the evidence to support the trial court’s finding that Kronzer’s work alone resulted in the favorable settlement which inured to United’s benefit. See Tex.R.App.P. 74(p); Pool v. Ford Motor Co., 715 S.W.2d 629 (Tex.1986).

As a preliminary matter, United misinterprets this court’s holding in Mel-chor in which we reluctantly found no abuse of discretion in a trial court’s apportioning a carrier’s attorney only 15% of the amount allocated to the claimant’s attorney. We recently clarified our holding in Melchor and found no abuse of discretion in a trial court’s awarding attorney’s fees entirely to a claimant’s attorney in Vanguard Insurance Co. v. Humphrey, 729 S.W.2d 344 (Tex.App.—Houston [14th Dist.] 1987, writ ref’d n.r.e.). In Humphrey we stated that Melchor does not require a trial court to apportion a fee award but merely suggests the factors governing apportionment where apportionment is proper. Second, with respect to article 8307 § 6a(b), active participation or representation will not necessarily require apportionment. Subsection (b) appears to require a court to award and apportion attorney’s fees between the carrier’s and claimant’s attorneys when the carrier’s attorney is “active”. However, according to the statute, a threshold test will be the court’s assessment of the respective contributions of each attorney in relation to the total benefit accruing to the insurance carrier. Humphrey, 729 S.W.2d at 347; Melchor 696 S.W.2d at 407-08; Hartford Insurance Co. v. Branton & Mendelsohn, Inc., 670 S.W.2d 699, 704 (Tex.App.—San Antonio 1984, no writ). That assessment requires a case-by-case determination, to which the abuse of discretion standard applies. Humphrey, 729 S.W.2d at 347-48; Melchor 696 S.W.2d at 407-09.

When the lower court made its threshold assessment of each attorney’s relative contribution it determined that United’s benefit, recovery of its lien for payments made, was due entirely to Kron-zer’s efforts. We cannot say that the trial court abused its discretion in making this determination. The $750,000.00 recovery satisfied United’s $56,735.04 lien for paid benefits in full. Full satisfaction of the carrier’s lien has been recognized as a valid criteria for a court’s awarding attorney’s fees to a claimant’s attorney only. See, e.g., Branton & Mendelsohn, Inc., 670 S.W.2d at 704 (finding no abuse of discretion). Moreover, the record before us sufficiently supports the conclusion that the settlement was due to Kronzer alone. He testified to extensive correspondence, interoffice legal memoranda, numerous interrogatories and requests for admissions, twenty-six pleadings and about six hundred pages of deposition testimony. We conclude that the trial court relied on correct principles in finding that Kronzer’s efforts alone resulted in the successful settlement; consequently we find no abuse of discretion. Furthermore, sufficient evidence supports the court’s decision. Humphrey, 729 S.W.2d at 347-48; Branton & Mendelsohn, 670 S.W.2d at 702.

While we might have decided the case differently and given more effect to United’s counsel’s participation, which included inter alia,

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744 S.W.2d 146, 1987 Tex. App. LEXIS 8527, 1987 WL 121, Counsel Stack Legal Research, https://law.counselstack.com/opinion/liquidation-division-of-the-board-of-insurance-v-kronzer-texapp-1987.