Vanguard Insurance Co. v. Humphrey

729 S.W.2d 344, 1987 Tex. App. LEXIS 6706
CourtCourt of Appeals of Texas
DecidedMarch 19, 1987
DocketC14-86-519-CV
StatusPublished
Cited by9 cases

This text of 729 S.W.2d 344 (Vanguard Insurance Co. v. Humphrey) 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
Vanguard Insurance Co. v. Humphrey, 729 S.W.2d 344, 1987 Tex. App. LEXIS 6706 (Tex. Ct. App. 1987).

Opinion

OPINION

SEARS, Justice.

This is an appeal from a judgment in which appellant, intervenor in a negligence and product liability suit brought by appel-lees (plaintiffs below), was ordered to pay appellees $45,402.00 in attorney’s fees. Appellant contends that the trial court *346 erred in its calculation of appellant’s subro-gated interest, in its award to appellant of settlement proceeds and in its award of attorney’s fees. We find no error and affirm.

Howard M. Humphrey, Sr., died from injuries sustained while operating a tractor for his employer. The tractor was manufactured and sold by Massey-Ferguson, Inc., against whom appellees brought a negligence and product liability suit. Appellant provided workers’ compensation insurance for Mr. Humphrey’s employer and filed a Petition in Intervention to become subrogated to the rights of appellees for the benefits paid to Mrs. Humphrey under workers’ compensation insurance.

Appellees settled with Massey-Ferguson before trial for $400,000.00 and trial to the court proceeded on appellant’s subrogation claim. The trial court found that appellant had paid $39,564.00 in past compensation benefits to Mrs. Humphrey, that appellant was relieved of paying $96,642.00 in future benefits by virtue of the settlement between appellees and Massey-Ferguson, and that the total amount of appellant’s subro-gated interest was $136,206.00. The trial court then awarded appellees’ attorney 33⅛% of the total subrogated interest, or $45,402.00, and ordered it to be paid by appellant. Finally, the trial court ordered appellees to reimburse appellant $39,564.00 from the settlement proceeds for the past benefits already paid to Mrs. Humphrey.

In its first two points of error, appellant contends the trial court erred in including future widow benefits in its calculation of appellant’s subrogated interest and in awarding attorney’s fees based on this total amount.

Subrogation recovery and attorney’s fees in workers’ compensation cases are governed by Tex.Rev.Civ.Stat.Ann. art. 8307, § 6a (Vernon Supp.1987), which provides for the award and apportionment of attorney’s fees allowable out of the carrier’s subrogation recovery, taking into account the benefit accruing to the carrier as a result of each attorney’s service. Appellant argues that the statute speaks only to past paid benefits and expenses since it is worded in the past tense. Further, as there is no statutory or case law authority for the carrier to seek recovery from a third party for the relief from benefits to be paid in the future, the total subrogated interest of the carrier should not include any calculation of relief from future benefits.

While appellant’s statutory interpretation might be persuasive, a recent appellate decision dealt with this exact issue and held contrary to appellant’s position. In Ischy v. Twin City Fire Insurance Co., 718 S.W.2d 885 (Tex.App.—Austin 1986, writ ref’d n.r.e.), the court held that a workers’ compensation carrier’s release from future liability for death benefits constitutes a “subrogation recovery” thereby creating an obligation for payment of attorney’s fees. See also Chambers v. Texas Employers Insurance Assoc., 693 S.W.2d 648 (Tex.App.—Dallas 1985, writ ref’d n.r. e.), in which the court held that, for the purpose of awarding attorney’s fees, the “benefit accruing” to the carrier includes the amount paid and the relief from liability for future payments.

We therefore hold that the “benefit accruing” in Tex.Rev.Civ.Stat.Ann. art. 8307, § 6a (Vernon Supp.1987), is the sum total of all past benefits paid and the relief from liability of any and all future benefits that would have been due and payable but for the recovery and settlement of claims against a third party tortfeasor. The first two points of error are overruled.

In its third point of error appellant asserts the trial court erred in its award of attorney’s fees. It contends future benefits, upon which part of the fees was awarded, are not supported by the evidence, are speculative, and do not consider the remarriage contingency.

Mr. James Orr, a claims supervisor with an insurance managing agent, testified that, based on a certified copy of the Life Tables of the Vital Statistics of the United States, Mrs. Humphrey’s life expectancy was 17.7 years. Further, based on this life expectancy, the insurance carrier would have owed her $96,642.00 in future death *347 benefits; therefore, appellees’ attorney had saved the insurance company $96,642.00 by bringing this suit and obtaining a settlement. There was no objection to this testimony nor were the Life Tables offered into evidence.

Appellant contends that appellees failed in their burden of proving the value of future benefits as a matter of law because the remarriage contingency was not addressed and the Widow’s Pension Table was not used to calculate the future benefits. A review of case authority shows that, while some states have provided for the use of remarriage tables to calculate the probability that a widow or widower will remarry, our legislature has provided no such specific guidelines. See Twin City Fire Insurance Co. v. Cortez, 576 S.W.2d 786, 790 (Tex.1978). See also Walden v. Royal Globe Insurance Co., 577 S.W.2d 296, 301 (Tex.Civ.App.—Beaumont 1978, writ ref’d n.r.e.), in which the court stated that “[T]he propensity or the likelihood of a widow remarrying is not, in our opinion, subject to such actuarial proof.” While the Widow’s Pension Table has been accepted as a means of calculating future death benefits, see, e.g., Stott v. Texas Employers Insurance Assoc., 645 S.W.2d 778, 779 (Tex.1983), appellant does not cite, nor do we find, case or statutory authority mandating its use. Accordingly, appellant’s third point of error is overruled.

In its fourth point of error appellant contends the trial court erred in ordering appellant to pay appellees’ attorney’s fees because, as a matter of law, the payment must come from the settlement proceeds. Appellant relies on the first part of article 8307, § 6a(a), which states that “[T]he amount of such recovery shall first pay costs and attorney’s fees and then reimburse the association, and if there be any excess it shall be paid to the beneficiaries ...” Appellant ignores, however, further language in § 6a(a) stating: “[W]hen 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 (¾⅛) of said subrogation recovery ... payable out of the association’s part of the recovery.” We hold the trial court properly ordered appellant to pay attorney’s fees. Point of error four is overruled.

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Bluebook (online)
729 S.W.2d 344, 1987 Tex. App. LEXIS 6706, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vanguard-insurance-co-v-humphrey-texapp-1987.