Eldridge v. Truck Insurance Exchange

DRAPER, P. J.

Plaintiff, a taxicab driver acting in the course of his employment, was injured when the cab collided with a car negligently driven. He brought this action against Regan, the negligent driver. Plaintiff received workmen’s compensation benefits from Truck Insurance Exchange, his employer’s compensation carrier, which filed its complaint in intervention, alleging Regan’s negligence and plaintiff’s injuries and asserting its lien for compensation benefits paid and to be paid. By the time this action came to trial, more than $16,000 had been paid in workmen’s compensation. Regan’s liability insurance was limited to $10,000. Plaintiff’s attorney had determined that a personal judgment against Regan would be without value. By stipulation of all parties, judgment was entered against Regan for $10,000. Plaintiff’s attorney requested allowance of his fee from this amount. Over objection by the intervener, the court allowed a fee of $3,000, to be paid from proceeds of the judgment before any payment to intervener upon its lien. Intervener appeals.

Priority of attorney’s fees over the lien for compensation is governed in detail by statute (Lab. Code, §§ 3856-3861), and our function is to apply the code provisions.

If the action against a third party tortfeasor is prosecuted by the employee alone, a reasonable attorney’s fee based upon “the services rendered by the employee’s attorney in effecting recovery both for the benefit of the employee and the employer” is allowed, and shall be first paid from the judgment. The carrier's lien is to be satisfied only after such payment. (Lab. Code, § 3856, subd. (b); and see

Branscum

v.

State Comp. Ins.

Fund, 232 Cal.App.2d 352 [42 Cal.Rptr. 682]). Like provision is made for allowance and priority of

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fees of the employer’s attorney if the action is prosecuted by the employer alone (Lab. Code, § 3856, subd. (a)).

A wholly different procedure is prescribed ‘‘ if the action is prosecuted both by the employee and the employer, in a single action or in consolidated actions.” In such case, if employee and employer “are represented by separate attorneys” fees of each are to be allowed and given priority, but the fees are to be “based solely upon the service rendered in each instance by the attorney in effecting recovery for the benefit of the party represented.” (Lab. Code, § 3856, subd. (e).) There is a clear distinction between services rendered by counsel for either employer or employee, proceeding alone but necessarily benefiting both, and those rendered by separate attorneys representing employee and employer in asserting the related claims of their clients in a single or consolidated action. That this distinction is fully intended is emphasized by similar treatment when the result is obtained by settlement, rather than judgment (Lab. Code, § 3860, subds. (c), (d) and (e)).