Opinion ID: 1105607
Heading Depth: 1
Heading Rank: 5

Heading: Attorney Fees under LSA-R.S. 23:1103

Text: The last issue for consideration is whether the appellate court erred in ordering Federated, as worker's compensation carrier, to pay a portion of the attorney fees incurred by plaintiff in its suit against Federated, as the UM carrier, under LSA-R.S. 23:1103. LSA-R.S. 23:1103, which became effective on January 1, 1990, provides, in pertinent part, as follows: A. (1) In the event that the employer or the employee or his dependent becomes party plaintiff in a suit against a third person, as provided in R.S. 23:1102, and damages are recovered, such damages shall be so apportioned in the judgment that the claim of the employer for the compensation actually paid shall take precedence over that of the injured employee or his dependent;....C C. If either the employer or employee intervenes in the third party suit filed by the other, the intervenor shall only be responsible for reasonable legal fees and costs incurred by the attorney retained by the plaintiff. Such reasonable legal fees shall not exceed one third of the intervenor's recovery for pre-judgment payments or pre-judgment damages. The employee as intervenor shall not be responsible for the employer's attorney fees attributable to post-judgment damages nor will the employer as intervenor be responsible for the attorney fees attributable to the credit given to the employer under Paragraph A of this Section. This section was a codification of the doctrine enunciated by this Court in Moody v. Arabie, supra , wherein we held that the plaintiff and the intervenor compensation insurer were co-owners of the right to recover damages from the third party and that the co-owners were obligated to bear their proportionate share of the reasonable attorney fees, according to their interests in the recovery. 498 So.2d at 1085. The appellate court held that, for the purposes of the application of this rule, [i]t is of no moment that, through mere coincidence, Federated was the worker's compensation insurer as well as the insurer. 95-0013, ___ So.2d at ___. The appellate court found that because Federated, as the UM carrier, was legally liable to pay an employee damages because of his injury and was not included in the list of persons excluded from the category of third persons under LSA-R.S. 23:1032, that Federated, as worker's compensation carrier, was entitled to be reimbursed for its compensation outlay from such third person. Id. However, as worker's compensation carrier, Federated was also liable for attorney fees incurred by plaintiffs in bringing suit against Federated, as UM carrier. Id. This holding is erroneous. The facts of this case are similar to a case recently decided by this Court. In Hebert v. Jeffrey, 95-1851 (La.4/8/96), 671 So.2d 904, the plaintiff sued his co-employee and his employer's liability insurer in tort. The plaintiff's employer, self-insured for worker's compensation, simultaneously paid worker's compensation to its injured employee and automobile liability premiums to the liability insurer. The employer intervened in the suit seeking to recover the worker's compensation benefits it had paid to the plaintiff. The trial court rendered a judgment in favor of the employer but deducted a 25% attorney fee under Moody. The appellate court reversed and awarded the compensation paid without a deduction for attorney fees. We affirmed the appellate court's ruling because unlike Moody, the employer and plaintiff in Hebert were adversaries asserting adverse legal positions and because the employer, self-insured for worker's compensation, voluntarily paid the compensation that the law encourages it to pay, and simultaneously, though payment of automobile liability insurance premiums, provided the very insurance pot which has facilitated plaintiff's recovery of full tort damages. 671 So.2d at 908. Likewise, for the same reasons expressed in Hebert, we refuse to extend the Moody doctrine to force a worker's compensation carrier to pay a portion of plaintiffs' legal fees under LSA-R.S. 23:1103 where the worker's compensation carrier and UM carrier are the same and the UM carrier is the only viable defendant in the case. That Federated and plaintiffs were adversaries is evident by the actions taken by Federated, as worker's compensation carrier, in joining Federated's, as UM carrier, motions for summary judgment on the limits of the UM and umbrella policies, and the fact that the trial judge severed Federated's intervention from the plaintiffs' main demand upon plaintiffs' motion. More importantly, Federated provided the funds from which plaintiffs were seeking general damages. Therefore, the appellate court's ruling is reversed and Federated is not required to pay a portion of the plaintiffs' attorney fees under LSA-R.S. 23:1103. [4]