University of Texas System v. Melchor

696 S.W.2d 406, 27 Educ. L. Rep. 998, 1985 Tex. App. LEXIS 11699
CourtCourt of Appeals of Texas
DecidedJune 13, 1985
DocketA14-83-859-CV
StatusPublished
Cited by12 cases

This text of 696 S.W.2d 406 (University of Texas System v. Melchor) 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
University of Texas System v. Melchor, 696 S.W.2d 406, 27 Educ. L. Rep. 998, 1985 Tex. App. LEXIS 11699 (Tex. Ct. App. 1985).

Opinion

OPINION

DRAUGHN, Justice.

This case involves the apportionment of attorneys’ fees in a suit to recover a subro-gated workers’ compensation claim. Ap-pellee Susie Melchor (“the claimant") suffered injuries on her job and initiated a *407 workers’ compensation claim against her employer, the University of Texas System (“UT”). UT settled this claim for $19,927. Subsequently, the claimant received a $50,-000 settlement from a third party defendant, out of which UT recovered 100% of its subrogated workers’ compensation payment of $19,927. In its sole point of error, UT alleges the trial court abused its discretion in granting the claimant’s attorney $5000 and UT’s attorney only $742.33 for their respective efforts in the suit against the third party defendant. We affirm the trial court’s judgment regarding the apportionment of attorneys’ fees.

The Texas Workers’ Compensation Act provides for an award of attorneys’ fees when an association obtains a subrogated recovery from a third party. TEX.REV. CIV.STAT.ANN. art. 8307, § 6a (Vernon Supp.1985). 1 The pertinent part of § 6a reads as follows:

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 (⅛) 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.
******
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 interest....

The preceding language implies three possible situations:

(1) the claimant’s attorney represents both the claimant and the association because the association has no attorney;
(2) the association hires an attorney who does not actively represent its interest; or
(3) the association hires an attorney who actively represents its interests and participates in obtaining a recovery.

Hartford Insurance Co. v. Branton & Mendelsohn, Inc., 670 S.W.2d 699, 701 (Tex.App.—San Antonio 1984, no writ).

An examination of the record in the present case reveals (1) that the claimant’s attorney, Mr. Leonard Cruse, was primarily responsible for the recovery of the subro-gated amount, and (2) that UT’s attorney, the Texas Attorney General’s office, also actively participated in the lawsuit, although to a much lesser extent. Therefore, this case falls into the third situation listed above and requires an apportionment of attorneys’ fees between the two attorneys out of UT’s subrogated recovery.

Several cases have addressed the issue of apportioning fees under art. 8307, § 6a: Hartford Insurance, 670 S.W.2d at 699; Houston General Insurance Co. v. Metcalf, 642 S.W.2d 79 (Tex.App.—Tyler 1982, writ ref’d n.r.e.); Union Carbide Corp. v. Burton, 618 S.W.2d 410 (Tex.Civ. App.—Houston [14th Dist.] 1981, writ ref’d n.r.e.); International Insurance Co. v. Burnett and Adhers, Assoc., 601 S.W.2d 199 (Tex.Civ.App.—El Paso 1980, writ ref’d n.r.e.); Insurance Company of North America v. Stuebing, 594 S.W.2d 565 (Tex.Civ.App.—Port Worth 1980, writ ref’d n.r.e.); Lee v. Westchester Fire Insurance Co., 534 S.W.2d 392 (Tex.Civ.App.—Amarillo 1976, no writ). These cases re *408 veal that a proper apportionment turns upon the facts of the individual situation, requiring an assessment of the contributions of each attorney towards recovery of the subrogation amount.

In the present case, Mr. Cruse established a theory of liability where liability initially was uncertain. He also propounded interrogatories, attended several depositions, defended a motion for summary judgment, incurred $2,697.92 in expenses, and assumed the primary responsibility for negotiating the settlement with the third party. On the other hand, UT’s attorney issued correspondence, discussed the case by telephone with various UT employees, filed a plea of intervention, reviewed UT files, responded to Mr. Cruse’s requests for information, and reviewed pleadings and other documents generated by Mr. Cruse. A comparison of the respective roles of the two attorneys shows that- Mr. Cruse was primarily responsible for .recovery of the subrogation amount. The UT attorney, while clearly active, functioned in a supportive, ancillary capacity.

UT asserts that the claimant’s attorney should receive nothing because of the deterioration of his working relationship with the UT System toward the end of the case. In fact, UT claims that it received no benefit from Mr. Cruse’s efforts because at times he appeared to behave in a manner adverse to UT’s interests. While the record contains evidence of friction between Mr. Cruse and UT or its attorney during the lawsuit, the contention that UT received no benefit from Mr. Cruse’s work is without merit. There is ample evidence that Mr. Cruse ultimately procured the sub-rogation recovery from the third party. Furthermore, it is unlikely that UT would have recovered anything solely upon the work of the assistant attorney general handling the case, since the record indicates that the Attorney General’s office operated only in a supportive role.

Alternatively, UT asserts that the evidence is insufficient to support the amount of fees Mr. Cruse received, because the court did not require him to list the number of hours he spent on the case or to state the value of his time. The case of Insurance Company of North America, 594 S.W.2d at 565, supports UT’s position. The Fort Worth Court of Appeals in that case reversed and remanded because the claimant’s attorney failed to present proof of the value of his time. Thus, the Fort Worth Court places the determination of attorneys’ fees under art. 8307, § 6a, on an hour-times-rate basis.

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Bluebook (online)
696 S.W.2d 406, 27 Educ. L. Rep. 998, 1985 Tex. App. LEXIS 11699, Counsel Stack Legal Research, https://law.counselstack.com/opinion/university-of-texas-system-v-melchor-texapp-1985.