### NUM BER 13-09- 0012 6-CV 

## COURT OF A PP EA LS T H I R T E E N T H D I S T R I C T O F T E X AS C O R P U S C H R IS T I - 

## EDI NBURG
JOR GE D EL GA DO, A pp ellan t,
v . TEXAS M UNICI PA L LEA GUE INT ERG OVER NM ENTA L RISK POO L, A pp ellee.
On ap pe al f rom th e C ou nty C ou rt atL aw N o. 1 of C amero n Co un ty , T exas . 

## ME MOR A ND UM OP IN ION B efo re J u st ic es R o d rig u ez , G arza , a n d V el a M em o ra n d u m Op in io n b y J u st ic e Ga rza This ca se arose from a dis p u te o ver the appor

ti onment o f third- par

ty tor tfeasor settle me nt proce eds b etween a n i njured emp loyee’s w orkers’ comp ensa tion insu rance carrier and his trial atto rney. App ellant , Jorge Delg ado , app eals th e trial court’s sum ma ry judgme nt pa rtially

in fa v or of

app elle e , T e x as Municipa l League Inte rg overnme nta l Ri sk Pool ( “TM LIR P” ). By

one is sue, D elg ado c ontends thatthe tr ial co urt abu sed it s d is creti onIt is u n d is p u te d th a t w h e n D e lg a d o w a s h it b y C a b in ’s v e h ic le , h e w a s a c tin g w ith in th e s c o p e o fh is 1 e m p l o y m e n t.

D el gado al l eges on a ppeal t hat T M LI R P: ( 1) i nsi st ed t hat i t had t he r i ght t o col l ect t he e nt i r e am ount 2 p a id b y H S C M I ; ( 2 ) r e f u s e d to n e g o tia te a n y r e d u c tio n o fits s u b r o g a tio n in te r e s t; a n d ( 3 ) d id n o t a c tiv e ly p a rti c i p a te i n th e s e ttl e m e n t n e g o ti a ti o n s b e tw e e n D e l g a d o a n d H S C M I. 2 by fail ing to aw ard him his ac tual co sts i ncur re d i n prosec uti ng the cas e from t he s ettl ement proceed s o btai ned from a thi rd -p arty tor tfeasor

. By

one cross -i ss ue, TM LIR P as ser ts that Del g ado’ s t ri al attor ney i s not enti tl ed to any

fees or co sts and that thi s a ppeal i s fr iv olo us an d an a tt em ptt o c ol l ec t an u nc on s c i on ab l e fee

. W e affi r m. I. B A CKGRO UND On March 15 , 200 8, Delgado , an em ployee of the Cit y of

Sout h Pad re Island ’s pol ic e depar

tment, w as ri din g hi s p oli ce motorcy cl e w hen he w as str uck by a v ehi cl e dr iv en by Ju li a Lee Cab in. As a resul t of his inj ur ies , Del g ado underw ent surg er y and cont inu es 1 to recei v e medi cal treatment. The Ci ty of South Padre Is lan d prov ide s w or kers’ co mpensat ion co verage to i ts
em ployees throu gh TMLIRP. As the city ’s w orkers ’ c o m p e nsat ion insu rance carrier, TMLIR P pai d D elg ado’ s medi cal bi ll s a nd ind emnity benefit s a nd as ser

ted a su brog ati on claim to the pro ceed s obta ined byDelg ado in his suit against Cabin. Cabin’s insu rance com pan y , Home State Count y Mutual Insurance (“HSCM I”), ultim ate ly settle d Delgado’s bodi ly i nju ry cl aims ag ain st Cab in for th e pol icy l imi t of $25, 028. Af ter receivi ng the sett lem entprocee ds f rom HSCMI, Delgado f iled a de clarato ry judgme nt act ion to dete rmine the am oun ts to w hich T MLIRP an d Delgado’s att orne y w ere enti tl ed. TM LIR P filed an answ er and count er cl aim, deny ing all of the a ll eg ati ons made

2 in Del g ado’ s o ri g ina l peti ti on and ass erti ng thatD elg ado’ s d ecl aratory ju d gm ent a cti on con st it u te d a fr iv olo us fili ng . Del g ado fil ed a tradi ti onal moti on for summar y j udg ment,B y a w a rd i n g D e l g a d o $ 8 ,3 4 2 .6 6 i n a tto rn e y ’ s fe e s a n d $ 2 9 5 .0 0 i n c o s ts , t h e tri a l c o u rt o s te n s ib ly 3 d e n i e d T M L IR P ’ s m o ti o n fo r s u m m a ry j u d g m e n t. 3 re q uest ing a he ar ing and attor ney ’s fees i n the amount of $8,342.6 7 and ex pense s o f $89 7.1 1 to be ded ucte d f rom the se ttlem entp rocee ds. Delg ado also cont end ed th at his tr ial co unsel ’s l aw

fir m, Touchy

& G re en, L .L.P ., w as ent it le d t o 3 3 % of the remaini ng set tl ement proceed s, or an a ddi ti onal $5,2 62.74. TMLIR P fil ed a tradi ti onal moti on for summar y j u d gm e n t and a respon se to Del g ado’ s mot ion , arg uin g thatD elg ado’ s a cti on w as friv olo us and that it w as “e nti tl ed to firs t money , before any one els e col lects any su m.” TM LIR P furt her arg ued t hat t he l abor code enti tl es couns el for D elg ado t o no more than one- thi rd of the recov er y due to t he
car ri er and that “[ i] f the l awy er has done nothi ng , or act ual ly made it harder for t he c ar ri er to recover its subrogated in terest s, as in this case , the Court has th e discretion to award the a ttor ney

no fees. ” T h e t ri a l co urt cond ucte d a he aring on the comp eting mo tions for sum ma ry judgme nt an d late r en tered a f inal judgme nt grant ing in part and d enying in part Delgado ’s
m o ti o n fo r su m m a ry jud gm e n t a n d pro vidi n g th e fo llo wing: The Co urt orders t hat P lai nti ff Jo rg e D elg ado r e tain th e amountof Ei g ht Thousand Three hundred F orty -Tw o Dol lars and Sixty Six cents ($ 8,342. 66) from the se ttl ement c heck i n hi s p oss ess ion from H ome Sta te C ounty Mu tual , as att or ney ’s fees and T w o H undred N ine ty -F iv e D oll ars ( $295.00 ) in tax abl e c our

t cost s a nd remitthe bal ance of the s ettl ement proceed s t o Tex as Mu nic ipa l Leag ue In terg ov er nmental R is k P ool , t o w it , $16 ,390. 34.[ ] 3 This appeal foll ow ed. II. S TA NDA RD OF R EVI EW W e rev ie w su m m a ry j udg ments de nov o. Provident Life & Accide nt In s. Co. v. Knott , 128 S.W .3d 2 11, 2 15 (Te x . 200 3). W hen , as here , bot h partie s m ove fo r summ ary judgme nt on the sam e issues, a nd th e trial court grants one mot ion an d de nies th e oth er,4

the app ellate court det ermin es all que stions prese nte d and , if t he trial co urt erred, ren ders the judg ment t he tr ial co urt s houl d hav e rendered. Va len ce Oper ati ng C o. v . D or sett , 164 S.W .3d 656 , 661 (Tex. 2005 ). T he quest ions prese nte d in this ap pea l turn on sta tuto ry construct ion. Sta tuto ry constr uct ion i s a l eg al q uest ion thatw e rev iew de n ov o. Sta te v. Sh um ake , 199 S.W .3d 279, 284 ( Tex . 200 6)

. In re sol v ing an is sue of stat utor y co nst ru cti on, w e first loo k t o the pla in lan gua ge o f

t h e s tatut e. Tex. Health Ins. Ris k Pool v. Sw. S er

v. Lif e Ins . C o. , 272 S.W .3d 7 97, 8 00- 01 ( T e x. App.–A ust in 2008, no pet .) ; Gen. Mo tor s C or p. v . Br ay , 243 S.W .3d 6 78, 685 (Tex

. App.–A ust in 2007, no pet.)

. W e re ad the sta tute as a w hol e and g iv e meani ng to the lang uag e that is cons is tent w it h other prov is ion s in the s tatut e. Dal las Cou nty Cm ty. C oll. D is t. v. Bolton , 185 S.W .3d 8 68, 8 7 2 -7 3 (Tex . 200 5) ; Tex. D ep’ t of Tr ansp. v. Cit

y o f Su nset

Val ley, 146 S.W .3d 637 , 642 (Tex. 2004 ).

III . A N AL Y S IS By his sole issue, Delg ado conte nds th at his trial atto rney i s entitle d to collect atto rney’s fees and othe r costs associat ed wi th ob tainin g the settlem entprocee ds be fore TMLIR P is enti tl ed to coll ectthe “n et amoun t.” TM LIR P c ounters b y arg uin g thatD elg ado is not enti tl ed to recov er any fees or co sts assoc iat ed w it h the under ly ing thi rd -p arty ac ti on. A . A pp licab le L aw It is undi sput ed th at D elg ado w as prov ide d w or kers’ co mpensat ion co verag e and that chapt er

417 of t he lab or code appl ies in the i nst ant c ase. See T EX . L AB . C OD E A NN . § 417. 001 ( Ver non 200 6)

. Cha pter 417 per mits a c ov ered employ ee to pursue a thi rd -p arty law sui t ag ain st the respon si ble thi rd par ty

. See i

d. § 4 1 7

. 0 0 1 ( a )

. I n s u c h c a ses , t heS u b r o g a tio n e n tit le s o n e p a r ty t o e n f o r c e th e r ig h ts a n d r e c o v e r th e r e m e d ie s o fa n o th e r p a r ty. 4 B L A CK ’ S L AW D I C T I O N A R Y 14 67 (8t h e d. 20 04 ).

T he T exas Supr em e C our t has st at ed t hat sect i on 4 17. 001 oft he l aborcode was ad opt ed t o pr ev ent 5 ov er com pensat i on t o an em pl oy ee and t o r educe t he bur den ofi nsur ance t o em pl oy er s and t he p ubl i c. See C api t ol Aggregat es, I nc. v. G reat Am

. I ns. C o. , 408 S

. W

. 2d 922, 924 (T ex. 1966) (st at i ng t he p ur pose oft he pre de c es s or s t atut e t o s ec t i on 41 7.00 1).

I n pa r t i cul ar , sect i on 4 17. 002( a) pr ov i des t hat : “ [ t ] he net am ount re cov er ed by a cl ai m ant i n a t hi r d- 6 pa rt y ac t i on sh al l be us ed t o rei m bu rse t he i ns ura nc e c arri er for b en efi t s , i nc l ud i ng m ed i c al b en efi t s , tha t ha ve be en pa i d fo r t he co m pe ns ab l e i njury

. ” T EX
. L AB
. C OD E A NN
. § 4 17

. 00 2(a ) ( V ern on 20 06 ). 5 w or kers’ co mpensat ion ca rr ier i s s ubrog ated to the ri g hts of the employ ee for

anybenefit s 4 paid bythe carrier. Id. § 41 7.001( b)

. 5 The dist ri buti on of proceed s recov ered from t hird par ti es is g ov er ned by

se cti on 4 17.002. See i

d. § 4 1 7

. 0 0 2 ( V e r n o n 2 0 0 6 )

. U n d e r s e c t i o n 4 1 7

. 0 0 2 , “ [ t ] he net a m ount
re cov er ed bya claima nt in a th ird-party act io n s hall be used to reimb urse the insurance
car ri er .” Id. ( emphasi s a dded)

. In many ca ses , t he money

recov ered g oes firs t t o the 6
w or kers’ co mpensat ion insurance car ri er , and “‘un ti l [the] carr ier is rei mburs ed in f ull , t he
em ployee or his represen tatives have no rig ht to any of such f und s.’” Tex. Mut. Ins . C o.
v. Ledbetter

, 2 5 1 S. W .3 d 3 1 , 36 (T e x. 20 0 8 ) (qu o ti n g Cap itol Aggr egr ates , 408 S.W .2d a t 923) ; see Ar

gonaut Ins . C o. v

. Ba ker , 87 S.W .3d 5 26, 5 30 ( Tex . 200 2) ( “Thus , rather than the e mploy ee ow ing the money and bei ng forc ed to di sg org e i t, the c ar ri er i s first enti tl ed to th e mo ney up to th e tot al am oun t of ben ef its it has paid .

. . .”); see also Tex. W orkers’ Comp. Ins. Fund

v. Travis , 912 S .W .2d 8 95, 8 97-9 8 (Te x . App .–Fo rt W orth 199 5, no wr it). After the c ar ri er

i s ful ly reimbursed, then any

addi ti onal money

g oes to the employ ee. See T EX . L AB . C OD E A NN . § 417 .00 2(b). First-mone y reimb ursem ent is essen tial to the w orkers’ compens ati on s y ste m beca use itreduce s c ost s t o the ca rrier and, thus , t o the empl oy er and t he publ ic

. Ledbetter , 251 S. W .3d a t 35; Per for m ance Ins . C o. v

. F ra ns , 902 S.W .2d 582, 585 ( Tex . Ap p.–H oust on [1 st Di st. ] 199 5, w ri t den ied ).S e c ti o n 4 1 7 .0 0 3 (a ) o f th e l a b o r c o d e p ro v i d e s th a t: 7 A n i n s u ra n c e c a rr i e r w h o s e i n te re s t i s n o t a c ti v e l y re p re s e n te d b y a n a tto rn e y i n a th i rd -p a rty act i on sh al l paya f ee t o an at t or ney r epr esent i ng t he cl ai m ant i n t he a m ount agr eed on be t w ee n t he att orn ey an d t he i ns ura nc e ca rr i er. I n t he ab s en c e o f an ag ree m en t , t he co urt s h a ll a w a r d to th e a tt o r n e y p a ya b le o u t o fth e in s u r a n c e c a r r ie r ’s r e c o v e r y:

( 1) a r easona bl e f ee f or r ecov er y of t he i nsur ance car r i er ’ s i nt er est t hat m ay not exceed one- t hi r d of

t he i nsur ance car r i er ’ s r ecov er y ; and ( 2) a pr opor t i onat e sha r e of expe nses. I d. § 4 17

. 00 3(a ) ( V ern on 20 06 ). 6 H ow ev er , s ect ion 417. 003 of the lab or co de prov ide s th a t, a s compens ati on for pursu ing the t h ird-party action , the emp loyee’s attorne y may recov er fees a nd “a propor ti onate share of ex pense s” for se rv ic es re ndered. T EX . L AB . C OD E A NN . § 417. 003( a) (V er non 200 6) ; 7 see Il l. Nat’ l Ins . C o. v

. Pe re z , 794 S.W .2d 373, 377 (Tex . Ap p.–C or pus Chr is ti 1990, w ri t den ied ) (s tati ng thatthe pur pose of aw ardin g attor ney ’s fees i s t o pay the
em ployee’s atto rney for the ben ef it accruing to the ca rrier as a result of the at torne y ’s efforts in re cov er

y or se ttl emen t of a thi rd -p arty ca se)

. The emplo y ee’ s a ttor ney may re c o v e r t h e fe e s a n d e x p e n s e s o n l y i n t h e fo l l o w i n g s i t u a t i o n s : ( 1 ) t h e i n s u re r h i re s a n atto rney to represen t it, butthe at torne y doe s not act iv ely represe nt it; (2) the em ployee’s atto rney repre sent s both the em ployee an d the insurer; or (3) the insur e r is a ctiv ely
re present ed byi ts attor ney w ho par ti ci pates i n obt ain ing a recov er y . See T EX . L AB . C ODE A NN . § 417. 003; Univ. of Tex. Hea lth Sci. Ctr. at San Anto nio v. Mata & B ordini, In c. , 2 S.W .3d 312 , 316 n.2 (T ex. App.– San Anto nio 19 99, pet. den ied); see also Be nchmark Ins. Co. v. Sul

li van , No

. 1 2 -0 7 -0 0 2 2 3 -C V , 2 0 0 9 T e x. A p p . L E XI S 2 9 4 7 , a t** 1 2 -1 3 (T e x. Ap p .– T yler

Ap r. 30 , 2 0 0 9 , n o pe t. ) (m e m . o p .) (cit in g City of Ar li ngton v. Lu m m us , 871 S.W .2d 5 36, 5 37 ( Tex . Ap p.–F ort W orth 19 94, w ri t den ied ))

.N ei t he r part y requ es t ed fi nd i ng s of fac t or co nc l us i on s of l aw i n t hi s m att er. 8 7 B. A tt or ney ’s F ees W e f irs t a n alyz e the propr iety of the t ri al cour

t’ s a w ard of atto rn ey ’s fees. A t ri al
cour t’ s a w ard of atto rne y’s f e e s u nder se cti on 417. 003 of the lab or co de i s rev iew ed for abuse of dis creti on. See E ri vasv. St

ate F ar mMut. Auto Ins . C o. , 141 S.W .3d 6 71, 6 76 (Tex

. App.–E l Paso 2004, no p et.) ; see a lso Ben chm ark , 2009 T ex . Ap p. LE X IS 2 947, at *11. W hen a tr ial co urt aw ards attor ney ’s fees under se cti on 417. 003 and no fin din g s o f fact or con clusions o f

law are f iled or requested , w e imp ly all necessa ry

f indings to sup port the tr ial court ’s j udg ment. See Har tfor d Ac cident & In dem . C o. v . Bu ck lan d , 882 S.W .2d 8 440 , 446 (Tex. App. –Dallas 19 94, w rit denied ). As p re v iously me ntion ed, section 417 .00 2(a) provides thatthe workers’ compens ati on i nsurance car ri er i s e nti tl ed to first- m o n e y reimbursementfrom t he “ net amount re cov ered” by

the cl aimanti n a t hird- par ty ac ti on. The “ net a mount recov ered” has b e e n interpret ed a s “the third-pa rty recovery

less the em ployee’s atto rney’s fees. ” Tex. W or ker s’ C om p. Ins. Fund v

. Alcor ta , 989 S.W .2d 8 49, 8 52 (Tex . Ap p.–San Ant oni o 1999, no pet .)

. “Thati s, by

st atuto ry

des ig n, t he ‘first money ’ ow ed to the car ri er —th e netamount recovered un der sectio n 4 1 7

. 0 0 2 (a )—is a sum w hich ha s bee n redu ced b y allow able atto rney’s fees u nde r section 41 7.0 03. ” Id. ; see Er iv as , 141 S.W .3d a t 676 , 678 ( adopti ng t h e re a s o n i n g o f Alcor ta ); Ins . C o. of

N. Am . v

. Wri ght , 8 8 6 S

. W

. 2 d 3 3 7 , 3 4 4 (T e x. App.–H oust on [1 st Di st. ] 199 4, w ri t den ied ) (“ W e find th a t th e ‘ n et amoun t’ su bje ct to subrog ati on i s t he amountrecei v ed by the cl aimantafter

appropr iat e deducti ons for atto rney’s fees a nd co urt costs ha v e be en ta ken. ”); see also Res olu ti on Over si ght C or p.
v . G a r za , No. 03-0 8-00 481 -CV, 200 9 T ex. App

. LEXIS 5324, at **2 2-24 (Tex. App. –Au stin Jul y 10, 2009, no pet . h.) ( mem. op.) (s ame). By allo w ing clai mant’ s attor ney s to recov er8

attor ney ’s fees and a propo rt ion ate share of ex pense s before the w or kers’ co mpensat ion carrier is reimb ursed , the legi slature ’s g oals of (1) compe nsa t in g claima nts w hose attor ney s p er

form w or k for

the benefit of a subrog ated ins urance car ri er and (2 ) prohi bit ing the i nsurance car ri er

from obt ain ing a “ free r ide ” from the ef forts of the cl aimant ’s att or ney a r e fu rt h e r e d

. See Cae sar v. Bohac ek , 176 S.W .3d 282 , 285 (Tex. App. –Hou ston [1st Dis t. ] 20 0 4 , n o pe t. ) (ci ti n g Pr ewitt & Sam pson v. City of D all

as , 7 1 3 S

. W

. 2 d 7 2 0 , 7 2 3 (T e x. App .–Dallas 1 986 , w rit ref ’d n.r.e. )). Here, D elg ado al leg ed th at: ( 1) the set tl ement proceed s w ere procured s ole ly on accou nt of

his ow n ef

forts; an d (2) T MLIRP hired leg al coun sel, bu t TML IRP’s coun sel did notactiv ely participa te in the p rocurem ento f t he settle me nt proce eds f rom HSCMI. In his
or ig ina l peti ti on, Del g ado state d the foll ow ing as to TMLIR P’ s i nv olv ement i n the under ly ing thi rd -p arty

ac ti on: TML’ s [ TMLIR P] a ttor ney , M arg are t Reav es, di d not hin g to br ing about settle me nt. Ms. Reaves’[s] inv olvemen t include d the w riting of three let ters, a l etter to Home Stat e Cou nty Mu tual Ins urance adv is ing of thei r subrog ati on cl aim

. . . , a letter

to Tou ch y & Green, L.L.P . adv is ing of thei r subrog ati on claim . .

. , and a se cond le tter to T ouch y & Green, L.L. P. ad v ising of TML’s re fusal to ne g oti ate a reduct ion of the s ubrog ati on i nterest

. . . . A rev iew of the reco rd supp orts Delgado’s con ten tion th at counse l for T MLIRP did not a cti v ely

par ti ci pate in the u nder ly ing thi rd-p a rt y a cti on and that the s ettl ement w as procured s ole ly

by the efforts of Del g ado’ s t ri al attor ney . See E ri vas , 141 S.W .3d at 67 8 (“ An at tor ney

‘ act iv ely re present s’ a car ri er w hen he or she ‘t akes st eps, adeq uate w hen
m e a su re d by th e di f

f icu lt y of th e ca se , t o ward pro se cu t in g th e cla im .’ ”) (qu o ti n g Hartford Accide nt &Inde m . C o. , 882 S.W .2d a t 447 ); see a lso Ben chm ark , 2009 Tex . Ap p. LE X IS 2947, at * 13 (“ W hen a compar is on of the re specti v e role s o f the att or ney s s how s t hat o ne atto rney w as prima rily respo nsible fo r recovery of the sub rogation am oun t, a trial court’s9

findi ng thatthe fee shoul d be appor ti oned c omplet ely

to that attor ney

i s n o t a n abus e of dis creti on.” ). C ounse l for TM LIR P mere ly in fo rmed al l par ti es inv olv ed i n the under ly ing thi rd -p arty

ac ti on th at TM LIR P had a s ubrog ati on c lai m. If D e lgado’s att or ney

had not negotia ted the set tlem ent , TML I RP w ould not ha v e recovered an ything f rom HSCMI, so Del g ado’ s w or k d ur ing the s e ttl ement ne g oti ati ons cl ear ly adv anced TMLI RP ’s i nterest

. Thus, Del g ado’ s tr ial attor ney w as enti tl ed to reason abl e att or ney ’s fees notto ex ceed onethi rd of the procured s ettl ement proceed s. See T EX . L AB . C OD E A NN . § 41 7.0 03(a )(1), ( d);
see als o Hick

s v . Cro wn Equi

p. C or p. , No. 01- 98- 00631- CV , 1999 T ex . App. LEX IS 7 832, at * 12 ( Tex . Ap p.–Oct. 21, 1 999, pet. deni ed) ( not d esi g nated for publ ic ati on) ( noti ng that , und er section 417 .00 3(d) of the lab or code , “only the amo untrecovered for ben ef its” shoul d be cons ide re d i n aw ardin g att or ney ’s fees)

. In t he unde rl y ing thi rd -p arty a ct io n , Del g ado recei v ed $25, 028 i n s ettl ement proceed s from H SC MI , and the tr ial courtaw arded D elg ado’ s t ri al attor ney $8,3 42.66, or one -third of

the set tlem ent proce eds, in atto rney’s fees. Becau se the aw ard of atto rney’s fees co mp orts w ith section 417 .00 3 of the lab or code , w e con clude thatthe trial court did not a buse it s d is creti on. See T EX . L AB . C OD E A NN . § 417. 003( a) (1 ); Er iv as , 141 S.W .3d a t 678; see a lso Ben chm ark , 200 9 Tex . Ap p. LE X IS 2 947, at * *13- 15. C. Exp ense s In hi s o ri g ina l peti ti on and moti on for summary j udg ment, Del g ado req uest ed $897.11 for c ost s a ss oci ated w it h prosec uti ng the under ly ing thi rd -p arty act ion

. In addi ti on, Del g ado urg ed th e tr ial co urt t o aw ard Touchy & G re en, L .L.P . one -t hird of the re maini ng $15,788 .22 s ubrog ati on i nterest , or $5,2 62.74, for s er

v ic es re ndered to TMLIR P. The tr ial
cour t, in it s final jud g ment, aw arded Del g ado $295.00 in tax abl e cour t cos ts and ordered Del g ado t o remitthe re maini ng bal ance of $16,390. 34 to TMLI RP

.W e no t e t hat T M LI R P’ s ar gum ent t hat D el gado’ s r ecov er y of at t or ney ’ s f ees a nd co st s was cap ped 9 at one - t hi r d of

t he se t t l em ent pr oceeds pr ocur ed i s unf ounde d. A cl os e r eadi ng o fsect i on 4 17. 003 de m on s t rat es t hat onl y t he r ecov er y of r easona bl e at t or ney ’ s f ees i s capp ed a t one - t hi r d of t he wor k er s’ c o m p e n s a ti o n in s u r a n c e c a rr i e r’s re c o v e ry. S e e id

. W ith r e s p e c t t o e x p e n s e s , a c la im a n t’s a tt o r n e y’s re c o v e ry o f e x p e n s e s is o n l y c a p p e d b y th e f a c t f i n d e r’s d e te rm i n a ti o n o f “a p ro p o rti o n a te s h a re o f e x p e n s e s .” See i d. § 4 17

. 00 3(a )( 2). 10 Sect ion 4 1 7

. 003 (a)(2) of the lab or code provi des th at w hen the workers’ compens ati on i nsurance car ri er i s n ot acti v ely

represen te d i n the under ly ing thi rd -p arty act ion , c lai mant’ s a ttor ney i s e nti tl ed to “ a propor ti onate share of ex pens e s.” See T EX . 9 L AB . C OD E A NN . § 417. 003( a) (2 ). Si mil ar to the a w ardin g of attor ney ’s fees, a n aw ard of
ex pense s s hal l b e d e d u cte d from t he w or kers’ co mpensat ion i nsurance car ri er ’s “ net
am oun t recovered.” See i d. §§ 417. 002( a) , 417 .003( a) (2 ); see als o Wrig ht , 886 S.W .2d at 34 4. O n ap p e a l , D e l g a d o arg u e s th a tse c t i o n 41 7

. 0 0 3 ( a ) ( 2 ) al l o w s for th e re c o v e r

y o f all expense s associat ed wi th prose cuting the und erly ing third-party action . How ever, in
m a k in g t h is a rg u m e n t , De lg a d o h a s n o td ir e c t e d u s t o a n y r e le va n tc a s e l a w, n o r a re we aw are of any , i nter preti ng se cti on 417. 003 of the lab or co de i n s uch a w ay . Fur ther more, Delgado ha s not direct ed u s to any comp ete nt evidence in the record supp o rting his cont enti on th at he i ncur re d s ubst anti allym o re than $295. 00 i n ex pense s. Bas ed on the
re cord before u s, w e c annot say thatthe tr ial co urt er re d i n det er mini ng that$295. 00
cons ti tuted a “p ro por

ti onate share” of D elg ado’ s e x pense s. See i d. W e the re fore c oncl ude that the t ri al cour

t di d noter r in aw ardin g D elg ado $29 5.00 in ex pense s. See i d. Del g ado al so arg ued i n hi s o ri g ina l peti ti on and moti on for summar y jud g ment t hat Touchy & G re en, L .L.P . i s e nti tl ed to $5,2 62.74 from TMLI RP fo r se rv ic es re ndered. How ever, once again, Delg ado has no t provided su p p o rt f o r th is claim. Th e trial court alread y aw arde d Delgado $8 ,34 2.6 6 in atto rney’s fees a nd $ 295 .00 in ex pen ses, an d this11

sec ondar

y req uestfor $ 5,262. 74 i n fees do es not compor t w it h s ect ion 417. 003 of the lab or code. See i

d. Thus, w e c oncl ude t hat t he tr ial co urt di d noter r in re fusing to aw ard Touchy & Green, L.L.P . t he addi ti onal req uest ed $5, 262.74 in fees. Base d on t h e fo r e g o i n g , w e c o n c l u d e t h a tt h e t r i a l c o u rtd i d n o te r r i n a w a rd ing Delgado at to rn e y’s f ees a nd “a prop ortion ate share of ex pen ses” before T MLIRP’s
re imbursement

. W e furt her co ncl ude t h a t t he tr ial co urt di d noter r in deter mini ng the amount o f attor ney ’s fees and ex pense s to w hic h Del g ado w as enti tl ed and the s ubrog ati on cl aim to w hic h TML IR P w as enti tl ed. As a r e su lt , w e ov er ru le Del g ado’ s s ole i ss ue on appeal

. Mo re ov er , bec ause w e hav e conc lud ed that Del g ado w as enti tl ed to att or ney ’s fees and c o sts before TML IR P w as enti tl ed to reimbursement , w e reje ct TMLIR P’ s a rg ument that Del g ado’ s d ecl ara to ry judg ment acti on and subs eq uent appeal w ere fri v olo us. See De La Ve ga v. Taco Caban a, In c. , 974 S.W .2d 152, 154 ( Tex . Ap p.–San Ant oni o 1998, no pet.) ( “I t i s w ell es tabl is hed, how ev er , t hat a proceed ing i s ‘ friv olo us’ w hen i t ‘ lac ks an arg uabl e bas is ei ther

i n l aw or i n fact. ’” ( q uoti n g N e it zk e v. W il lia ms , 490 U .S. 319, 325 (198 9), quoted with appr oval i n Johnso n v. Lynaugh , 796 S.W .2d 7 05, 7 06 ( Tex . 199 0) (p er cu ri am)) ). W e the re fore ov er ru le TMLIR P’ s c ro ss -i ss ue. IV. C ONCL US I ON Hav ing ov er ru led al l is sues on a ppeal , w e aff ir m the jud g ment of the tr ial co urt.

_________

_________

______ DO RI C ON TRERAS G AR ZA, J u s t i c e Me moran dum Opi nio n del iv ered and filed thi s t he 31s t day

of Aug ust , 200 9.