Texas Employers Insurance Association v. Motley

491 S.W.2d 395, 16 Tex. Sup. Ct. J. 197, 1973 Tex. LEXIS 252
CourtTexas Supreme Court
DecidedJanuary 31, 1973
DocketB-3554
StatusPublished
Cited by52 cases

This text of 491 S.W.2d 395 (Texas Employers Insurance Association v. Motley) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Texas Employers Insurance Association v. Motley, 491 S.W.2d 395, 16 Tex. Sup. Ct. J. 197, 1973 Tex. LEXIS 252 (Tex. 1973).

Opinions

GREENHILL, Chief Justice.

The main question in this workmen’s compensation case is the power of the trial court to order the insurance company to pay the attorney’s fees of the workman in a lump sum when the compensation to the injured employee, under the jury’s verdict, is to be paid in weekly installments. This [396]*396is the first time that this question has been presented to this court. The court of civil appeals affirmed the judgment of the trial court which directed the lump sum payment of attorney’s fees, and we agree with that holding. 483 S.W.2d 709. The second question deals with the acceleration of the weekly payments to the workman. Our holding is that since no jury issue was requested as to a need for an acceleration of payments, the issue was waived. We therefore reverse the judgments of both courts below which accelerated the payments and remand the cause to the district court for the entry of judgment in accordance with this opinion.

The injured employee, O. H. Motley, suffered a general injury and was awarded compensation for total and permanent disability. There is no complaint of that. The jury found that it would not result in a manifest hardship if Motley’s compensation were payable in weekly installments. There is no complaint as to that either. And Motley has no complaint as to action of the trial court as to the payment of his attorney. The complaint of the insurance company is that the trial court, exercising his discretion, directed the payment of Motley’s attorney’s fees by the insurance company in a lump sum. Its contention is that the attorney’s fee must be taken each week from the sums recovered by Motley, and that the trial court, under the statutes, had no power to direct otherwise. Our decision turns on statutory construction, and the question is as to the power of the trial court.

The statutes make different provisions for recoveries before the Industrial Accident Board and for recoveries obtained by a judgment in court.1 When the compensation is based on an award of the Board and is in weekly installments, the statute provides that the Board “shall fix . the proportion of each installment to be paid [to the attorney] on account of said legal services.” Section 7c of Article 8306. The statute thus spells out that when the workman is to receive his compensation in installments as a result of an order of the Board, so is his lawyer.

One reason for this is that when there is no death claim and when recovery is based on an award of the Board for a general injury, the total amount that the insurance company is to pay in installments may not be definitely ascertainable at the time of the award. The Board retains the right to modify the award. Moreover, if the employee dies before he receives all of the compensation awarded him in weekly payments, the cases say that the liability of the insurance company ceases; i. e., the unmatured portions of the claim are extinguished by his death. Texas Employers Ins. Assn. v. Phillips, 130 Tex. 182, 107 S. W.2d 991 (1937). Since this is so, the portion recoverable by the attorney may not be ascertainable with certainty at the time of the Board’s award. Hence a lump sum recovery to the attorney would present problems.

On the other hand, if the compensation is based upon a judgment in court, which judgment has either become final or is affirmed, the amount awarded by the court does survive the workman’s death and is not subject to modification or reduction. Bailey v. Travelers Insurance Co., 383 S.W.2d 562 (Tex. 1964). The attorney’s fees, therefore, may be fixed or approved with certainty by the trial court in the light of the amount which will be recovered by the workman or those claiming under him.

As pointed out, there is a restriction as to what the Board can do in awarding attorney’s fees which was not placed by the Legislature in its authorization of the court to act. The Board, in these circumstances, can only approve the amount of weekly payments to the attorney. The [397]*397statute, Section 7d, authorizes the court to “fix and allow” such fees without the restriction as to such periodic installments.

It is true that in context, Section 7d begins by speaking to the legality of a contingent fee contract between the workman and his attorney, not to exceed 25% of the amount recovered by the workman. But this court has construed the rest of that Section to give the court independent discretion as to the fixing of attorney’s fees. This court has held that the amount of the attorney’s fees to be allowed in compensation cases is a matter for the trial court to determine without the aid of a jury, and the amount of the recovery is within its discretion. Texas Employers Ins. Assn. v. Hatton, 152 Tex. 199, 255 S.W.2d 848 (1953) ; Brooks v. Texas Employers Ins. Assn., 358 S.W.2d 412, Tex.Civ.App.I962, writ ref., n. r. e.

Since the Legislature has not restricted the trial court in the handling of attorney’s fees as it did the Industrial Accident Board, we hold that the trial court had the power and the discretion to order a lump sum payment by the insurance company of the attorney’s fees.

There are, to us, other reasons to support this view. When the workmen’s compensation act was passed, the weekly payments were to be in lieu of wages which the workman could not earn because of his incapacity. There was, as we understand it, a feeling that it might not be wise to give the laborer, unskilled in money management, a large sum of money in a lump sum. It might be best for him, and his family, if the money were paid to him weekly, — as he had been receiving his wages. Provision was made, however, in Section 15 of Article 8306, for payment to the workman in a lump sum if to do otherwise would result in manifest hardship. We interpret the “manifest hardship” as used in Section 15 to mean manifest hardship to the workman, not his attorney.

On the other hand, the Legislature has not deemed it necessary to protect the attorney from the receipt of a lump sum where the matter can be passed upon by a trial court. Indeed the attorney may have incurred substantial expense in the preparation of the case for trial; and the need for his payment of such expenses is now.

In discussing lump sum payments of attorney’s fees, Larson in his work on Workmen's Compensation says,

“One of the most troublesome difficulties in compensating the claimant’s attorney is that, under the normal practice of paying income benefits in weekly installments, the payment of the attorney’s fees from week to week out of these installments means that the attorney gets paid in driblets over a long period, with a disproportionate amount of bother for everyone.” (Volume 3, § 83.13, page 354.-54).

If the attorney’s fees could only be paid in installments out of the weekly compensation to the workman, the attorney might be facing a dilemma. It might be best for the workman to receive the payments in installments; and it would be the duty of the attorney to argue for the best interest of his client for payments in installments.

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491 S.W.2d 395, 16 Tex. Sup. Ct. J. 197, 1973 Tex. LEXIS 252, Counsel Stack Legal Research, https://law.counselstack.com/opinion/texas-employers-insurance-association-v-motley-tex-1973.