Court Opinion

ID: 9773152
Source: CourtListenerOpinion
Date Created: 2023-08-29 17:38:33.082703+00
Date Added: 2024-06-11T07:31:50.459117
License: Public Domain

BENAVIDES, Justice,
dissenting.
The trial court by default judgment allowed the recovery of attorney’s fees related to one-third of the $534,336.66 in future workers’ compensation death benefits which petitioner, Illinois National Insurance Company, (Illinois) has been relieved from paying because of the settlement between Perez’s survivors and certain third party defendants. The original opinion of this Court and the majority opinion on rehearing recognizes a subrogation recovery for the amount of death benefits Illinois has been relieved from paying pursuant to Article 8307 Section 6a. I do not believe that under Article 8307, Section 6a Illinois has a subrogation recovery nor subrogation right to recover for amounts not paid. Accordingly, Illinois should not pay attorney’s fees for a “subrogation recovery” it has no right to recover. Since I believe the attorney’s fees for the “subrogation recovery” alleged here do not arise under Article 8307, Section 6a, I would find error on the face of the record because the plaintiff did not allege a cause of action and the judgment on its face shows an unlawful recovery.
The petition purports to allege a cause of action for attorney’s fees pursuant to Section 6a of Article 8307 of the workers’ compensation statute, based on the amount *379that Illinois is relieved from paying as a result of the settlement. As discussed below, there is no such cause of action pursuant to Article 8307, Section 6a. A pleading which fails to state a cause of action cannot support a default judgment. Stoner v. Thompson, 578 S.W.2d 679 (Tex.1979); Allied Bank of Dallas v. Pleasant Homes, 757 S.W.2d 460, 462 (Tex.App.—Dallas 1988, no writ).
Similarly, the judgment states that this award of attorney’s fees is in accordance with Section 6a of Article 8307. The judgment indicates the calculation of the judgment amount to include ⅝ of the amount Illinois would have paid. A judgment based on the erroneous pleadings is also an error. See generally, Barrera v. Barrera, 668 S.W.2d 445, 447 (Tex.App.—Corpus Christi 1984, no writ). Further, as discussed below, Section 6a does not provide for the calculation or award of attorney’s fees in this manner; such calculation appearing on the face of the record is correctable by this Court.
Article 8307, Section 6a provides that when the claimant is represented by an attorney and the association’s interest is not actively represented by an attorney, the association shall pay such fee to the claimant’s attorney not to exceed one-third (½) of said subrogation recovery. Art. 8307 § 6a(a). Section 6a explicitly provides that a workers’ compensation carrier may recover only: (1) past compensation benefits paid; (2) medical expenses paid; and (3) attorney’s fees. Jones v. Liberty Mut. Ins. Co., 745 S.W.2d 901, 902 (Tex.1988). Hence, the subrogation recovery referred to in Section 6a must consist only of past compensation benefits paid and medical expenses paid. See generally, Providence Inst. for Sav. v. Sims, 441 S.W.2d 516, 519 (Tex.1969) (subrogation of a person making payment is recognized to the extent of his payment); McAllen State Bank v. Linbeck Constr. Corp., 695 S.W.2d 10, 24 (Tex.App.—Corpus Christi 1985, writ ref’d n.r.e.) (bank subrogee was subrogated only to the extent of its payment).
Historically, the subrogation recovery from which attorney’s fees were calculated was that monetary amount which was actually recouped by the workers’ compensation carrier as a result of either settlement or trial. See e.g. Buscher v. Bulldog Steel Products, 682 S.W.2d 406, 406-07 (Tex.App.—Eastland 1984, writ ref’d n.r.e.) ($49,000 paid and recouped by carrier via settlement; remanded for attorney’s fees to be apportioned from not more than one-third of $49,000); Hartford Ins. v. Branton & Mendelsohn, Inc., 670 S.W.2d 699, 700-04 (Tex.App.—San Antonio 1984, no writ) (subrogated insurer recovered the total amount it had paid the worker, $83,593,-33; attorney’s fees of 28.7% of recovery, $24,000 was proper); Union Carbide Corp. v. Burton, 618 S.W.2d 410, 412, 416 (Tex.Civ.App. —Houston [14th Dist.] 1981, writ ref’d n.r.e.) (carrier recouped $45,380.08 as reimbursement for workers’ compensation benefits previously paid; attorney’s fees of $13,500 from subrogated recovery appropriate, but remanded for proper apportionment). The actual subrogation recovery in this case, therefore, is $43,303.00, the amount that Illinois actually paid in the past for workers’ compensation benefits and medical expenses.
In support of the majority’s position that a release from future liability constitutes a subrogation recovery, it cites Vanguard, Ischy, and Chambers, and Article 8307 § 6a. Vanguard, 729 S.W.2d at 346; Ischy, 718 S.W.2d at 888; Chambers, 693 S.W.2d at 650. Although in each of these cases, the court did permit attorney’s fees based on the amount that a carrier was relieved from paying, their analysis and determinations are based on language in Article 8307, Section 6a which is taken out of context. In all three cases, the courts applied that language found in subsection (b) regarding “the benefit accruing to the association” to determine that the carrier’s subrogation recovery included unpaid future benefits. Vanguard, 729 S.W.2d at 346; Ischy, 718 S.W.2d at 888; Chambers, 693 S.W.2d at 650.
Subsection (b) applies when both the claimant and the carrier are represented by attorneys who actively participate in the *380third party lawsuit.1 Pursuant to subsection (b), the court is to apportion an attorney’s fees allowable out of the association’s subrogation recovery between such attorneys taking into account the benefit accruing to the association as a result of each attorney’s service, the aggregate of such fees not to exceed thirty-three and one-third per cent (33½%) of the subrogated interest.
Traditionally, this subsection is interpreted as providing that the courts should assess the respective contributions of each attorney with regard to the subrogation recovery; in other words, whether recovery of the lien was due entirely to one attorney’s efforts, or whether both participated and to what extent. See e.g. Liquidation Div. of Bd. of Ins. v. Kronzer, 744 S.W.2d 146, 148 (Tex.App.—Houston [14th Dist.] 1987, no writ); Hartford Ins., 670 S.W.2d at 704; International Ins. Co. v. Burnett and Ahders Assoc., 601 S.W.2d 199, 200-202 (Tex.Civ.App.—El Paso 1980, writ ref’d n.r.e.).
A court may not judicially amend a statute and add words that are not implicitly contained in the language of the statute. Jones, 745 S.W.2d 902; Seay v. Hall, 677 S.W.2d 19, 25 (Tex.1984). Only when it is necessary to give effect to the clear legislative intent can we insert additional words into a statutory provision. Jones, 745 S.W.2d at 902; Hunter v. Fort Worth Capital Corp., 620 S.W.2d 547, 552 (Tex.1981). There is no indication in Section 6a that the Legislature intended the carrier’s subrogation recovery to include the amount that the carrier is released from paying in the future. Illinois had no subrogated interest in the $534,336.66. It cannot recover such amount and should not be charged for recovering what it cannot recover.
Therefore, I cannot agree with the majority that there is a cause of action for attorney’s fees based on the amount that a carrier is released from paying in the future pursuant to Article 8307, Section 6a. It follows, therefore, that I cannot agree with the majority that Article 8307 Section 6a authorizes the court to award attorney’s fees based on the amount that the carrier is released from paying in the future. I would hold that there is error on the face of the pleadings and error on the face of the judgment in the award and calculation of attorney’s fees. Accordingly, I would sustain Illinois’ third point of error and reverse the default judgment to the extent it awards attorney’s fees representing one-third of the amount Illinois has been relieved from paying, and affirm the award of attorney’s fees of $14,434.33, based only on Illinois’ actual subrogation recovery. Further, since the court allowed the Per-ezes to withdraw more than the proper amount of attorney’s fees from the court’s registry, I would affirm Illinois’ fourth point of error complaining of the withdrawal of the excess amount.

. Respondent’s original petition recited in its paragraph IV, "At no time during the pendency of the lawsuit did Illinois National Insurance Company intervene and assert any claim against Plaintiff or Defendant.