Walsh v. Woods

Opinion

RACANELLI, P. J.

Plaintiff and respondent, Thomas Walsh, while employed by Yellow Cab Company, was involved in an automobile accident resulting in the institution of a third party negligence complaint against defendant, Richard Woods. Thereafter, appellant, Highlands Insurance Company, the compensation insurance carrier for Yellow Cab Company, filed a complaint in intervention seeking reimbursement of compensation benefits paid to respondent which at the time of trial amounted to approximately $30,000. Following entry of judgment upon a jury verdict in favor of respondent and appellant intervener in the amount of $20,453, respondent moved for an award of attorney fees contending that his attorney was “solely responsible” for the ultimate recovery. Intervener resisted the motion contending that its own separately retained counsel had “actively participated” in prosecuting the litigation, thus foreclosing apportionment of attorney fees. The trial court granted respondent’s motion awarding costs in the sum of $2,292 and attorney fees in the sum of $7,264 (40 percent of the net recovery) which sums were to be deducted prior to the intervener’s lien on its express finding that the judgment was “solely the result of plaintiff’s attorney’s expenditures and efforts.” Intervener now appeals.

The issue presented is whether the award of attorney fees and costs reducing intervener’s recovery for benefits paid constituted a proper apportionment.

Discussion

Under the relevant provisions of the Labor Code (to which all section references apply unless otherwise indicated) a judgment for damages obtained by the injured employee in a third party action is subject to the priority payment of reasonable litigation expenses and reasonable attorney fees (§ 3856; cf. § 3860 to the same effect relating to releases or settlements). However, where the action is prosecuted both by the employee and the employer and they are represented by separate attorneys, the reasonable attorney fees to be paid must be based “solely upon the service rendered in each instance by the attorney in effecting recovery for the benefit of the party represented.” (§ 3856, subd. (c).) (See

[767]

generally