Opinion ID: 1143264
Heading Depth: 1
Heading Rank: 4

Heading: The history of the statutes confirms the intent of the Legislature to require the apportionment of attorneys' fees.

Text: Until 1947 neither the Legislature nor the courts had considered the question of the apportionment of fees between the worker and his employer who share in a fund created by a suit against a third party; when the issue did arise, however, the Legislature manifested its clear intention that courts should apportion fees in such cases. Construing the 1939 version of the statute in question, we faced for the first time in Dodds v. Stellar (1947) 30 Cal.2d 496 [183 P.2d 658], the question of the application of equitable principles to the provisions for attorneys' fees. In that case this court considered a request to apportion attorneys' fees between the active litigant and the passive beneficiary of the action. Writing over the dissent of Justices Carter and Schauer, we ruled that the concept of apportionment had no place in the worker's compensation statute. The Legislature, however, promptly indicated otherwise at its next session, specifically requiring the apportionment of attorneys' fees in cases which went to judgment. (Stats. 1949, ch. 120, § 2, pp. 355-356.) Moreover, the court in Dodds in effect instructed the Legislature to draft a statute like the present one if it wished to provide for equitable apportionment. Dodds held that the statute as then written expressed the legislative intent not to apportion because it required the trial court first to satisfy the employer's claims and only thereafter to take care of the worker and his attorney: In view of these express provisions ... emphasizing that ... the statutory recoupment right in favor of the employer or its insurance carrier has first consideration, there is no basis for ... apportioning litigation expenses between the parties benefiting from the recovery. ( Dodds v. Stellar, supra, 30 Cal.2d 496, 505; (italics added.) Following the suggestions implicit in the passage just quoted, the Legislature, in providing first for the worker's attorney's fee, has written the statute precisely in the manner the Dodds court indicated would express a legislative intent to enact apportionment; we must give effect to this clear expression of the legislative will. Moreover, events subsequent to Dodds make clear the steadfastness of the Legislature's intent to apportion. Five years after Dodds litigants asked us to apply the doctrine of apportionment to the analogous situation of out-of-court settlements. In R.E. Spriggs, Inc. v. Industrial Acc. Com. (1954) 42 Cal.2d 785 [269 P.2d 876], this court held that the Legislature's provision for apportionment in cases in which judgment was pronounced did not warrant the application of that principle to cases settled before judgment. Once more the Legislature promptly enacted legislation to the contrary; it expressed its preference for the views of Justice Carter, who again in dissent had urged the application of the traditional equitable doctrines to cases in which settlements had been reached. (Stats. 1957, ch. 615, § 1, p. 1825.) In 1959 the Legislature recodified the statutes and provided for the priority of attorneys' fees in cases in which the recovery did not satisfy both the claim for a reasonable attorney's fee and the recoupment of an employer's workers' compensation payments; the present litigation arises from this recodification. Defendant argues that because the new statute compressed and reworded the former enactment, which had clearly provided for apportionment, we should assume that the Legislature meant to obliterate the procedure that it had twice invoked in the previous decade. A reading both of the legislative history and of the words of the statute, however, points to the contrary. First, as we have shown above, the Legislature used significant portions of the former statute verbatim, thus inviting reference to the former interpretation. Second, as we have shown, in rewriting the statute the Legislature carefully observed the ruling in Dodds: that by placing the attorney's fee first in the claims against the worker's recovery it could effect equitable apportionment of fees. (See Dodds v. Stellar, supra, 30 Cal.2d 496, 504-505.) Third, other purposes, unrelated to the apportionment of fees, explain the other changes that the Legislature did make. The 1959 legislation evidently had two such goals. It sought primarily to effect an equitable adjustment in the amount with which the employer would be credited against future benefit awards. [11] As we have explained, it secondarily intended to increase the incentive for attorneys to press workers' cases by assuring them that the employer's recoupment would not deny them recompense for their efforts in litigating the case. Thus we find both an entirely consistent alternative explanation for the legislative changes and an indication in the retained wording that the courts were still to apply the principle of apportionment. This interpretation obtains additional support from the circumstance that leading legislative commentators writing contemporaneously with the passage of the legislation gave no hint that the Legislature repealed the mandate to apportion attorneys' fees. Both the annual summary of legislation prepared by the Committee on Continuing Education of the Bar, [12] and Witkin's Summary of California Law [13] treated the amendments as essentially technical, a conclusion entirely in accord with the routine and uncontested passage of the bills by the Legislature. [14] Such contemporaneous construction of course may shed important light on legislative intent. ( First Nat. Bank v. Kinslow (1937) 8 Cal.2d 339, 346 [65 P.2d 796].) Turning to the arguments of defendant, we shall show they do not suffice to establish that apportionment of attorneys' fees conflicts with equitable principles or with their legislative incorporation in section 3856.