Case ID: so2d_523/html/0447-01.html
Source: Caselaw Access Project
Author: {"author": "INGRAM, Judge. HOLMES, Judge", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

INSURANCE COMPANY OF NORTH AMERICA v. Almon Lee PHILLIPS.
    Civ. 6142.
    Court of Civil Appeals of Alabama.
    March 9, 1988.
    Rehearing Denied April 14, 1988.
    Larry W. Harper of Porterfield, Scholl, Bainbridge, Mims & Harper, Birmingham, for appellant.
    M. Clay Alspaugh of Hogan, Smith, Als-paugh, Samples & Pratt, Birmingham, for appellee.
   INGRAM, Judge.

This appeal concerns the interpretation and application of Ala.Code 1975, § 25-5-ll(e), part of the Alabama workmen’s compensation law, which is as follows:

“(e) In any settlement made under this section with a third party by the employee or, in the case of his death, by his dependents, the employer shall be liable for that part of the attorney’s fees incurred in the settlement with the third party, either with or without a civil action, in the same proportion that the amount of the reduction in the employer’s liability to pay compensation bears to the total recovery had from such third party.”

The trial court held that, pursuant to the above statute, the employee was entitled to a pro rata share of attorney fees and expenses from Insurance Company of North America (INA). INA appeals.

The employee was injured while on the job and began receiving workmen’s compensation benefits from the employer’s insurance carrier, INA. The employee subsequently filed a lawsuit and ultimately obtained a third party recovery in the amount of $49,040.00 as damages. Thereafter, INA filed a motion to intervene in order to protect its right of reimbursement for benefits previously paid to the employee.

The parties stipulated as to the amount of attorney fees, and there is no dispute that the pro rata amount of such attorney fee to be paid by INA is $7,061.76. The issue in contention here is whether the reimbursement claim of INA is also subject to a pro rata share of expenses incurred by the employee during litigation against the third party.

INA contends that, since § 25-5-ll(e) does not specifically mention “expenses,” INA does not have to pay a pro rata share of the expenses incurred by the employee’s attorney in prosecuting the third party claim.

In construing the language of statutes to determine legislative intent, our Supreme Court has stated: “Words used in the statute must be given their natural, plain, ordinary, and commonly understood meaning.” Alabama Farm Bureau Mut. Cas. Ins. Co. v. City of Hartselle, 460 So.2d 1219, 1223 (Ala.1984).

Section 25-5-11(d), Code 1975 (1986 Repl. Vol.), provides that when the employer brings a claim for damages against a third party, the attorney’s fees and reasonable expenses incurred in such action will be recoverable. For whatever reason, the phrase “reasonable expenses” is not contained in § 25 — 5—11(e), Code 1975 (1986 Repl.Vol.), although attorney’s fees are recoverable in any settlement. Settlement has been held to mean with or without trial and judicial determination. Baggett v. Webb, 46 Ala.App. 666, 248 So.2d 275 (Civ.App.1971).

We are uncertain why the legislature chose to benefit the employer and not the employee in the area of expenses required to effectuate a settlement. However, our research has failed to reveal any workmen’s compensation case which holds that “expenses” are part and parcel of attorney’s fees. We likewise find that our application of the overall beneficial purpose of the workmen’s compensation act fails to provide sufficient support for us to judicially incorporate a word of clear meaning which does not appear in this section of the statute. Therefore, we have no alternative but to reverse the trial court.

This case is due to be reversed and the cause remanded with instructions to enter an order not inconsistent with this opinion.

REVERSED AND REMANDED.

BRADLEY, P.J., concurs.

HOLMES, J., dissents.

HOLMES, Judge

(dissenting).

I respectfully dissent from the well-stated opinion authored by my distinguished colleague.

It is true that § 25-5-ll(e) provides for “attorney’s fees”; whereas, § 25 — 5—11(d) provides for “costs, attorney’s fees and reasonable expenses.” I am of the opinion, however, that such a wording in the statute does not compel us to treat employees and employers differently regarding the recovery of the expenses of litigation in cases such as the instant case.

Instead, I would note the applicability to this situation of the rule of statutory construction which states that we must consider the entire statute and not an isolated part, giving effect to every clause in light of the subject matter and purpose of the enactment. Sparks v. West Point Manufacturing Co., 274 Ala. 102, 145 So.2d 816 (1962).

The courts of this state have long held it well settled that the Workmen’s Compensation Act “should be liberally construed in furtherance of the humanitarian purposes leading to its enactment.” City of Foley v. Terry, 278 Ala. 30, 175 So.2d 461 (1965). More recently, we have stated the following:

“[I]n reviewing the issues on appeal, an appellate court must keep in mind the principle that the Workmen’s Compensation Act should be given a liberal construction to accomplish its beneficent purposes, and all reasonable doubts must be resolved in favor of the employee. American Tennis Courts, Inc. v. Hinton, 378 So.2d 235 (Ala.Civ.App.), cert. denied, 378 So.2d 239 (Ala.1979).”

Ala-Miss Enterprises, Inc. v. Beasley, 446 So.2d 644, 645 (Ala.Civ.App.1984).

We have also held that “[a]ll reasonable doubts regarding a provision of the Workmen’s Compensation Act should be resolved in favor of the employee.” Hilyard Drilling Co. v. Janes, 462 So.2d 942, 943 (Ala.Civ.App.1985).

We have held that § 25-5-11 was enacted to ease the burden of expense to an employee in bringing a third-party action. Fitch v. Insurance Company of North America, 408 So.2d 1017 (Ala.Civ.App.1981). To read § 25-5-11 in its entirety so as to treat employees and employers differently with respect to the recovery of litigation expenses in third-party actions seems to me to thwart not only the overall beneficent purpose of the Workmen’s Compensation Act but also the specific purpose of § 25-5-11 to ease the burden of expense to an employee in bringing a third-party action.

In short, I agree with the reasoning of the trial court in concluding that it would be

“inconsistent to the overall purpose of the Workmen’s Compensation Act to construe the subject statute as allowing the employer, or its compensation insurance carrier, in the event it brings a third-party action, to retain reasonable expenses of the litigation and offset the same against the employee’s compensation, and yet, on the other hand, when the employee brings the third-party action, not to allow the employee to retain those reasonable expenses.” (Emphasis in original.)

Therefore, in view of the rule of statutory construction as noted, when considered together with the trial court’s rationale based on the purpose of the Act as stated, I would affirm the trial court’s conclusion that INA was responsible for a pro rata share of the employee’s expenses.