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ST. JOHN v. GERING PUBLIC SCHOOLS

Cite as 302 Neb. 269

Edward St. John, appellee, James L. Zimmer

appellant, and Brenda L. Bart

Monte L. Neilan, appellees, v. 

Public Schools and NAS

Compensation Pool, its worker

compensation carrier, appell

___ N.W.2d ___

Filed February 15, 2019. No. S-17-898.

1. Workers’ Compensation: Appeal and Error. Pursuant to Neb. Rev. 

Stat. § 48-185 (Cum. Supp. 2018), an appellate court may modify, 

reverse, or set aside a Workers’ Compensation Court decision only when 

(1) the compensation court acted without or in excess of its powers; (2) 

the judgment, order, or award was procured by fraud; (3) there is not 

sufficient competent evidence in the record to warrant the making of the 

order, judgment, or award; or (4) the findings of fact by the compensation court do not support the order or award.

2. ____: ____. Determinations by a trial judge of the Workers’ 

Compensation Court will not be disturbed on appeal unless they are 

contrary to law or depend on findings of fact which are clearly wrong in 

light of the evidence.

3. Contracts: Attorney Fees. While a lawyer with a valid fee agreement is 

entitled to recover what a fee agreement allows to the extent that amount 

is reasonable, a lawyer is not entitled to recover more than a fee agreement allows.

4. Contracts: Intent. A court should avoid interpreting contract provisions 

in a manner that leads to unreasonable or absurd results that are obviously inconsistent with the parties’ intent.

Petition for further review from the Court of Appeals, 

Moore, Chief Judge, and Pirtle and Arterburn, Judges,

appeal thereto from the Workers’ Compensation Court: John R

Nebraska Supreme Court Online Library

www.nebraska.gov/apps-courts-epub/

04/12/2019 12:07 AM CDT
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Hoffert, Judge. Judgment of Court of Appeals reversed, and

cause remanded with directions.

James L. Zimmerman, of Zimmerman Law Firm, P.C., 

L.L.O., pro se.

Monte L. Neilan, pro se.

Brenda L. Bartels, of Hanes & Bartels, L.L.C., pro se.

Heavican, C.J., Miller-Lerman, Cassel, Stac

Papik, and Freudenberg,

Papik, J

During the course of his workers’ compensation action 

against Gering Public Schools, Edward St. John switched 

lawyers. St. John eventually settled his claim, but a dispute 

remained as to how much St. John owed his lawyers. The 

Workers’ Compensation Court held a hearing regarding the 

attorney fee issue. After the hearing, the compensation court 

entered an order directing that the lawyers that St. John discharged, Brenda L. Bartels and Monte L. Neilan, receive 

$82,500 and that the lawyer who represented St. John through 

the settlement, James L. Zimmerman, receive $82,500. The 

compensation court evaluated the attorneys’ representation of 

St. John and found that one set of attorneys did not contribute 

more to the end result than the other. The compensation court 

did not analyze the attorneys’ entitlement to fees under their 

written fee agreements with St. John. Zimmerman appealed, 

and the Nebraska Court of Appeals affirmed.

We granted Zimmerman’s petition for further review. We 

find that because Bartels and Neilan were entitled to less than 

the amount awarded by the Workers’ Compensation Court 

under the terms of their fee agreement with St. John, the 

order splitting the fee evenly was erroneous. Accordingly, we 

reverse, and remand with directions.
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ST. JOHN v. GERING PUBLIC SCHOOLS

Cite as 302 Neb. 269

I. BACKGROUND

1. St. John’s Worker

Compensation A

After suffering an injury in the course of his employment, 

St. John retained Zimmerman in March 2013 by signing a contingent fee agreement. Under the terms of that agreement, St. 

John agreed to pay to Zimmerman one-third of any amounts 

collected after suit.

St. John later moved to Colorado. Apparently desiring a 

Colorado lawyer, St. John discharged Zimmerman and retained 

Bartels, a Nebraska-licensed attorney based in Colorado. 

Bartels, in turn, hired Neilan to assist her with St. John’s claim.

In January 2014, St. John executed a single contingent fee 

agreement with the respective law firms of Bartels and Neilan. 

Like his agreement with Zimmerman, St. John agreed to pay 

Bartels and Neilan one-third of any amounts recovered from 

Gering Public Schools. Paragraph 8 of the agreement, however, 

also included the following language:

Should CLIENT choose to discharge ATTORNEYS

prior to final settlement or judgment, CLIENT agrees to 

pay ATTORNEYS a fee equal to [one-third] of the “gross 

amount recovered”, OR on an hourly basis of $175.00 per 

hour for his/her time and, in addition, $75 per hour for 

paralegal time from the date of this Agreement to the date 

of discharge, or the above percentage of ATTORNEYS’

fee from any settlement offer made prior to discharge, 

whichever is greater.

(Emphasis in original.)

Bartels and Neilan thereafter filed a workers’ compensation claim against Gering Public Schools on St. John’s behalf. 

They continued to represent him until later in 2014, when St. 

John became dissatisfied with their representation and discharged them and again retained Zimmerman. At that time, 

St. John re-signed his original contingent fee agreement with 

Zimmerman. In December 2014, Zimmerman entered his 
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appearance and Bartels and Neilan filed a notice of attorney’s 

lien in the workers’ compensation case.

Over 2 years later, the parties to the workers’ compensation 

claim, with St. John now represented by Zimmerman, filed an 

application for approval of a final lump-sum settlement. The 

parties asked that the compensation court approve a settlement 

whereby St. John’s claim would be settled for $500,000, with 

$335,000 being paid to St. John and the remaining $165,000 

being held in trust for subsequent distribution to his attorneys. The application provided that Bartels and Neilan and 

Zimmerman all agreed that the $165,000 satisfied any attorney 

liens in the case.

In an order, the compensation court approved the lump-sum 

settlement. The court noted the existence of the dispute involving claimed attorney liens and ordered that any of the attorneys claiming entitlement to attorney fees could petition the 

court for a hearing to address distribution of the funds placed 

in trust. Zimmerman filed a motion, requesting that the court 

determine the amount necessary to satisfy the attorney lien of 

Bartels and Neilan.

2. Workers’ Compensation Cour

Resolution of Fee Dis

The compensation court convened a hearing on the dispute 

regarding the fees due to attorneys. The court heard testimony 

and received various exhibits. St. John and his ex-wife generally testified that they were dissatisfied with the services of 

Bartels and Neilan. The exhibits included the fee agreement 

between St. John and Zimmerman and the fee agreement 

between St. John and Bartels and Neilan, along with documentary evidence of legal services provided.

The compensation court entered an order dividing the 

$165,000 equally between Zimmerman, on the one hand, 

and Bartels and Neilan on the other. The compensation court 

explained that the factors for determining the reasonableness of 

attorney fees set forth in Neb. Ct. R. of Prof. Cond. § 3-501.5 
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guided its analysis. In applying those factors, the compensation court found that both Bartels and Neilan and Zimmerman 

“played a role of importance” in representing St. John and 

that it could not conclude that either Bartels and Neilan or 

Zimmerman contributed more than the other.

3. Court of Appeal

Zimmerman appealed. In his appeal, Zimmerman argued 

that the compensation court erred by admitting an affidavit of 

an expert witness offered by Bartels and Neilan and by ordering that Bartels and Neilan and Zimmerman each receive the 

same fee. Zimmerman argued that the compensation court’s 

order splitting the fees evenly was erroneous, because the 

court should have relied on the provision in the written fee 

agreement with Bartels and Neilan regarding payment due 

when the attorneys are discharged prior to final settlement 

or judgment.

The Court of Appeals affirmed. In its memorandum opinion, 

the Court of Appeals did not analyze the provision in the written fee agreement between St. John and Bartels and Neilan 

regarding payment due upon an early discharge. It did state 

that Bartels and Neilan’s “contingent fee contract . . . provided 

a basis for determining Bartels and Neilan’s fee in the event of 

their discharge prior to conclusion of the case,” that “[t]here 

was sufficient evidence in the record for the compensation 

court to make a determination as to the reasonableness of that 

fee,” and that the compensation court’s findings as to what was 

a reasonable fee were not clearly erroneous. St. John v. Gering 

Public Schools, No. A-17-898, 2018 WL 1831068 at *7 (Neb. 

App. Apr. 17, 2018) (selected for posting to court website). We 

granted Zimmerman’s petition for further review.

II. ASSIGNMENTS OF ERROR

Zimmerman assigns error to the Court of Appeals’ determination that Bartels and Neilan and Zimmerman should 

each receive $82,500 for their representation of St. John. 
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Zimmerman also claims that the Court of Appeals erred when 

it rejected his assignment of error regarding the admission of 

the expert witness affidavit. We find no error in the Court of 

Appeals’ admission of the affidavit and see no need to further 

comment on the issue. Our analysis is thus limited to the compensation court’s ultimate disposition of the fee dispute.

III. STANDARD OF REVIEW

[1,2] Pursuant to Neb. Rev. Stat. § 48-185 (Cum. Supp. 

2018), an appellate court may modify, reverse, or set aside 

a Workers’ Compensation Court decision only when (1) the 

compensation court acted without or in excess of its powers; 

(2) the judgment, order, or award was procured by fraud; (3) 

there is not sufficient competent evidence in the record to 

warrant the making of the order, judgment, or award; or (4) 

the findings of fact by the compensation court do not support 

the order or award. Gimple v. Student Transp. of America, 

300 Neb. 708, 915 N.W.2d 606 (2018). Determinations by a 

trial judge of the Workers’ Compensation Court will not be 

disturbed on appeal unless they are contrary to law or depend 

on findings of fact which are clearly wrong in light of the 

evidence. Id.

IV. ANALYSIS

1. Jurisdiction of Workers’ Compens

 Court to Decide Fee Dis

We begin with the question of whether the Workers’ 

Compensation Court had the authority to resolve the fee dispute. As we often say, the Workers’ Compensation Court is 

“a tribunal of limited and special jurisdiction and has only 

such authority as has been conferred on it by statute.” In re 

Estate of Evertson, 295 Neb. 301, 311, 889 N.W.2d 73, 81 

(2016). Given the limits on the compensation court’s authority, 

one might reasonably question whether it has the authority to 

resolve competing attorneys’ claims to fees after the approval 

of a lump-sum settlement, as the compensation court did in 
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this case. In fact, at one point, the Court of Appeals concluded 

that the compensation court lacked jurisdiction to resolve such 

a dispute. See Wells v. Goodyear Tire & Rubber Co., 14 Neb. 

App. 384, 707 N.W.2d 438 (2005), disapproved in part, Foster 

v. BryanLGH Med. Ctr. East, 272 Neb. 918, 725 N.W.2d 

839 (2007).

We settled any question as to whether the Workers’ 

Compensation Court has jurisdiction to resolve such a dispute 

in Foster, supra. In Foster, much like this case, a workers’ 

compensation plaintiff discharged her attorney in the middle of 

the case. After the plaintiff, represented by a new attorney, was 

awarded benefits from her employer, the discharged attorney 

filed a motion to establish the amount of his attorney’s lien. 

The Court of Appeals, citing Wells, supra, held that the compensation court lacked jurisdiction to resolve the discharged 

attorney’s motion.

On further review, we reversed. We explained that Neb. Rev. 

Stat. § 48-108 (Reissue 2010) provides the compensation court 

with authority to determine “fees payable to an attorney for the 

services rendered while representing the claimant before the 

Workers’ Compensation Court” and that the authority extended 

to fees claimed by attorneys who are discharged prior to the 

conclusion of the case. Foster, 272 Neb. at 922, 725 N.W.2d 

at 844. We observed that the compensation court is “the most 

sensible venue for such determinations,” given its familiarity 

with the efforts of each attorney involved in the dispute. Id. 

at 923, 725 N.W.2d at 844. We also recognized that under the 

circumstances in Foster, “as in most instances, the fee dispute 

with former counsel is inextricably related to the issue of 

fees for the claimant’s current counsel.” 272 Neb. at 922, 725 

N.W.2d at 844.

Under Foster, the Workers’ Compensation Court had authority to resolve the competing attorney liens asserted in this 

case. See, also, Stueve v. Valmont Indus., 277 Neb. 292, 297, 

761 N.W.2d 544, 549 (2009) (“[i]n Foster, we stated that 

the Workers’ Compensation Court was an appropriate forum 
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for determining fees payable to a claimant’s current or prior 

attorney for services that the attorney rendered while representing the claimant before the court”). We thus proceed to 

consider Zimmerman’s claim that the compensation court erred 

in doing so.

2. Merits of Fee Disp

Zimmerman’s primary contention on appeal is that the compensation court erred by focusing solely on the respective 

contributions of the attorneys under the factors set out in 

the Nebraska Rules of Professional Conduct for determining 

whether a fee is unreasonable. Zimmerman contends that to 

determine the attorneys’ entitlement to fees, the compensation 

court was required to begin with the terms of the respective fee 

agreements with St. John. Specifically, Zimmerman urges that 

Bartels and Neilan’s recovery must be limited to that allowed 

by the terms of the provision in their fee agreement addressing 

the amount they were to receive if St. John discharged them 

before the case was over. In order to address this argument, 

we begin by setting forth the general principles that govern an 

action by an attorney to recover a fee.

(a) General Principles Regarding 

Actions for Attorney Fees

As we have previously observed, attorney fee agreements 

are different from ordinary commercial contracts. See, e.g., 

Hauptman, O’Brien v. Turco, 273 Neb. 924, 735 N.W.2d 368 

(2007). The difference arises from the fact that an attorney 

may not recover for services rendered if those services are 

rendered in contradiction to the requirements of professional 

responsibility. Id. Because of that principle and because professional responsibility rules prohibit a lawyer from charging 

or collecting an unreasonable fee, in an action to recover a 

fee, an attorney can recover only a reasonable fee, as determined by “‘the extent and value of the lawyer’s services.’” 

Id. at 931, 735 N.W.2d at 374. The burden is on the lawyer to 
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introduce evidence as to the extent and value of the services 

provided. Id. We have said that the eight factors listed in 

§ 3-501.5 of the professional conduct rules are to be considered as guides in determining the reasonableness of a fee. See 

Stueve, supra.

But while the reasonable value of an attorney’s services is 

relevant in an action to recover attorney fees, it is not the only 

relevant factor. In an action to recover a fee, a lawyer has the 

burden of proving not only the extent and value of the services 

provided, but also “‘the existence and terms of any fee contract.’” Hauptman, O’Brien, 273 Neb. at 931, 735 N.W.2d at 

374. This is because when an attorney and a client enter into a 

valid fee agreement, the attorney is not automatically entitled 

to the reasonable value of the services provided. The attorney’s 

recovery is limited by the terms of the fee agreement.

[3] As the U.S. Court of Appeals for the Seventh Circuit has 

helpfully explained the issue, a lawyer working under a valid 

fee agreement does not have a quantum meruit cause of action 

for whatever the reasonable value of the services provided happened to be; rather, the quantum meruit principle functions as a 

“ceiling on contractual recovery.” Maksym v. Loesch, 937 F.2d 

1237, 1247 (7th Cir. 1991). See, also, McNamee, Lochner, Titus 

& Williams v. Higher Educ., 50 F.3d 120 (2d Cir. 1995) (holding that attorney was not entitled to quantum meruit recovery 

when contract addressed compensation); Hamilton v. Ford 

Motor Co., 636 F.2d 745, 748 (D.C. Cir. 1980) (“[i]t is elementary that an attorney may not seek compensation from the 

client in addition to that provided in the contract between the 

attorney and the client”). Put another way, while a lawyer with 

a valid fee agreement is entitled to recover from a client what 

a fee agreement allows to the extent that amount is reasonable, 

a lawyer is not entitled to recover from a client more than a fee 

agreement allows. Having set forth the principles governing an 

attorney’s claim to an unpaid fee, we proceed to consider how 

those principles should be applied in this case.
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(b) Application of Principles 

in This Case

As explained above, where an attorney and client have a 

valid fee agreement, the terms of that agreement are essential 

to determining the amount to which the attorney is entitled. In 

this case, however, even though the fee agreements with both 

sets of lawyers were received at the hearing, the compensation court did not analyze them. Rather, it focused solely on 

the respective value of the services provided by the lawyers. 

Bartels and Neilan contend the compensation court was correct to do so because of an agreement between the parties and 

because this approach was consistent with our precedent. As 

explained below, we disagree with both arguments.

First, Bartels and Neilan argue that the parties effectively 

stipulated to trying the fee dispute on the basis of the value 

of the attorney’s respective contributions alone in the application for approval of the lump-sum settlement. That application stated that “[i]t is also agreed to by all necessary parties 

and attorneys that the amount of $165,000.00, however later 

distributed, satisfies any attorney liens owed by [St. John].” 

We do not believe that this language demonstrates an agreement to withdraw the fee agreements from the compensation 

court’s consideration. By its terms, the parties agreed only 

that $165,000, however distributed, would satisfy St. John’s 

obligations to his attorneys. We understand this language to 

merely set an upper limit of the amount St. John was required 

to pay the attorneys.

Neither was the compensation court’s decision to limit its 

consideration to the reasonable value of the services provided justified by Baker v. Zikas, 176 Neb. 290, 125 N.W.2d 

715 (1964), and Stueve v. Valmont Indus., 277 Neb. 292, 761 

N.W.2d 544 (2009), as Bartels and Neilan contend. In those 

cases, attorneys who were working under a contingent fee 

agreement, which agreement did not address what the attorneys were to receive if discharged prior to recovery, were discharged prior to recovery. In those circumstances, we allowed 
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the attorney to recover based on the reasonable value of the 

services provided, on the grounds that the original contingent 

fee contract was no longer in effect following the client’s termination of the lawyer’s services.

Unlike the fee agreements in Baker and Stueve, Bartels and 

Neilan’s fee agreement explicitly addressed what they were 

entitled to be paid in the event of an early discharge. In this 

respect, this case is more like another case decided by the 

Court of Appeals, Byrne v. Hauptman, O’Brien, 9 Neb. App. 

77, 608 N.W.2d 208 (2000). In that case, like this one, an attorney’s contingent fee agreement explicitly provided a method 

for calculating the fee owed in the event the attorney was 

discharged before the end of the case. The Court of Appeals 

distinguished the fee agreement from the one at issue in Baker

and held that the attorney could recover the amount allowed by 

the contract, subject to the attorney’s burden to show that the 

amount was reasonable.

We believe the Court of Appeals’ opinion in Byrne correctly applied the principles governing actions for recovery 

of attorney fees in circumstances such as this. Accordingly, 

to determine the amount to which the attorneys are entitled, 

we must first determine the amount the attorneys are allowed 

under their fee agreements and then determine if that amount is 

reasonable. We proceed to that analysis below, beginning with 

Bartels and Neilan.

(c) Bartels and Neilan’s Recovery

As mentioned above, paragraph 8 of Bartels and Neilan’s 

fee agreement governs the amount they are entitled to receive 

from St. John because they were discharged prior to final 

settlement or judgment. That provision directs that Bartels 

and Neilan receive the highest of three potential amounts: (1) 

“[one-third] of the ‘gross amount recovered,’” (2) a recovery 

based on the hours they expended at specified rates, or (3) a 

percentage of any settlement offer made prior to discharge. 

Bartels and Neilan concede that there was no settlement 
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offer made prior to discharge, and thus that provision is 

inapplicable.

Bartels and Neilan contend that under the terms of the 

fee agreement, they are entitled to receive one-third of the 

$500,000 lump-sum settlement, subject to some minor adjustments for costs. Although they do not specifically tie this argument to the language of paragraph 8 of their fee agreement, we 

presume that they are contending that they are entitled to this 

amount because $500,000 is the “gross amount recovered.” 

This argument, however, rests on the premise that for purposes 

of paragraph 8, “gross amount recovered” refers to the amount 

ultimately recovered at the conclusion of the case. For reasons 

explained below, we reject that premise.

Bartels and Neilan’s fee agreement defines “gross amount 

recovered” to include “the amount recovered before any subtraction of expenses and disbursements [and] specially awarded 

attorneys’ fees and costs awarded to CLIENT.” (Emphasis 

in original.) But it does not specifically indicate whether the 

“gross amount recovered” referred to in paragraph 8 is the 

amount eventually recovered at the end of the case or the 

amount recovered as of the attorney’s discharge. The fact that 

“gross amount recovered” appears in a provision concerning 

early discharge, however, suggests that in that context, it refers 

to the amount recovered as of the discharge.

[4] Furthermore, it strikes us as unreasonable and highly 

unlikely that a client would agree to pay a lawyer one-third of 

his or her recovery if the lawyer represented the client through 

the entirety of the case but also agree to pay a lawyer the same 

percentage of the total amount recovered if that lawyer is discharged and another lawyer ultimately secures the recovery 

for the client. On the other hand, it would be quite reasonable 

for a contractual provision regarding payment to a discharged 

attorney to allow the attorney to recover a percentage of any 

amounts already recovered on behalf of the client through 

partial settlement as of the date of discharge. A court should 

avoid interpreting contract provisions in a manner that leads to 
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unreasonable or absurd results that are obviously inconsistent 

with the parties’ intent. Timberlake v. Douglas County, 291 

Neb. 387, 865 N.W.2d 788 (2015). With that principle in mind, 

we find that, the “gross amount recovered” in paragraph 8 of 

Bartels and Neilan’s fee agreement refers to the amount recovered as of the attorney’s discharge.

Having interpreted paragraph 8 of the Bartels and Neilan 

contingent fee agreement, we find that Bartels and Neilan are 

entitled to a fee based on the hourly calculation set forth in 

the paragraph. Bartels and Neilan make no argument that they 

are entitled to a fee based on amounts recovered prior to their 

discharge; their arguments are exclusively focused on a right 

to recovery arising out of the $500,000 lump-sum settlement. 

That settlement, however, was agreed to well after their discharge. And, as noted above, they concede there was no settlement offer prior to discharge.

Evidence in the record does show that Bartels documented 

79.9 hours of work, Neilan documented 81 hours of work, and 

paralegals working under their direction recorded 25.6 hours of 

work. Applying those hours to the rates set forth in the agreement, we find that Bartels and Neilan were entitled to receive 

$30,077.50 under the terms of their agreement with St. John. 

Given the hourly rates and their representation of St. John in 

the context of this case, we also find this amount to be a reasonable fee. In addition, Bartels and Neilan claim a right to be 

reimbursed for $2,500 paid in costs on behalf of St. John, and 

there appears to be no dispute on this issue. Accordingly, we 

find that Bartels and Neilan were entitled to receive $32,577.50 

to satisfy their lien.

(d) Zimmerman’s Recovery

This leaves the calculation of Zimmerman’s fee. We apply 

the same analysis to his claim, and so we must begin with his 

contingent fee agreement. Zimmerman’s contingent fee agreement entitled him to one-third of any lump-sum settlement. In 

this case, that amounts to $166,666.67. As mentioned above, 
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however, the attorneys agreed that St. John would have to pay 

no more than $165,000 to satisfy the attorneys’ liens. Given 

that agreement and our finding that Bartels and Neilan are 

entitled to receive $32,577.50, the most Zimmerman is entitled 

to receive is $132,422.50.

In addition, we find this figure to be a reasonable fee. As the 

compensation court observed, “the ultimate settlement figure 

secured by . . . Zimmerman for [St. John] did exceed the settlement value provided by attorney Neilan to [St. John] several 

years prior. In so doing, attorney Zimmerman obviously persuaded the defendants that a significant permanent disability 

had befallen . . . St. John.” Under these circumstances, we find 

$132,422.50 to be a reasonable fee.

V. CONCLUSION

As explained above, we find that Bartels and Neilan were 

entitled to receive $32,577.50 and Zimmerman was entitled 

to receive $132,422.50. Accordingly, we reverse the judgment 

of the Court of Appeals and remand the cause with directions 

to reverse the order of the Workers’ Compensation Court and 

remand the cause to that court with directions to enter judgment in conformity with this opinion.

Reversed and remanded with direct