Court Opinion

ID: 9773151
Source: CourtListenerOpinion
Date Created: 2023-08-29 17:38:33.078298+00
Date Added: 2024-06-11T07:31:50.457053
License: Public Domain

ON MOTION FOR REHEARING
On rehearing, Illinois reargues four of its original points of error. We overrule the motion for rehearing and affirm the judgment of the trial court.
Illinois contends that this court erred by failing to address and ultimately hold that the doctrine of res judicata precluded the default judgment favoring respondents.
This court addressed the issue of res judicata in Marange v. Marshall, 402 *377S.W.2d 236, 240 (Tex.Civ.App.—Corpus Christi 1966, writ ref'd n.r.e.) saying:
The general principle, announced in numerous cases, is that a right, question, or fact, distinctly put in issue and directly determined by a court of competent jurisdiction as a ground of recovery or defense cannot be disputed in a subsequent suit between the same parties or their privies, or with another so identified in interest with such person that he represents the same legal right, the same question, the same particular controversy or issue which has been necessarily tried and finally determined upon its merits by a court of competent jurisdiction in a judgment in personam in a former suit, (emphasis added)
In the initial case, the judgment between respondents and Everest Minerals Corporation (Everest) adjudicated a settlement for the wrongful death of Jose Perez. The present case between Illinois and respondents concerns recovery of attorney’s fees under Tex.Rev.Civ.Stat.Ann. art. 8307 § 6a (Vernon Supp.1990) for workers’ compensation death benefits paid and future benefits saved from being paid because of the settlement in the previous case. Illinois in its suit does not “stand in the same shoes” as Everest in its suit because the second case does not involve the same legal right, question, or controversy or issue determined by the court in the previous case. The present suit is not barred by res judicata.
Illinois contends that this court erred by failing to address and subsequently hold that the trial court’s rendering of a default judgment for attorney’s fees violated Tex.Rev.Civ.Stat.Ann. art. 8307 § 6a (Vernon Supp.1990). Illinois also alleges that this court erred by failing to hold that tlie trial court improperly permitted respon-derte to withdraw $43,303.00 from the trial court’s registry as partial satisfaction of the attorney’s fees awarded to respondents. Specifically, Illinois argues that respondents’ recovery of one-third of the present cash value of the future benefits as attorney's fees is not allowable under the statute. Furthermore, Illinois argues that, should such a recovery be proper, the trial court erred in incorrectly awarding attorney’s fees based upon the total settlement award which respondent’s received from the three defendants in the original case. Illinois claims that respondent’s recovery should be limited to one-third of the amount which Everest paid in settlement.
Illinois is wrong in this assertion because the purpose of awarding attorney’s fees under Tex.Rev.Civ.Stat Ann. art. 8307 § 6a (Vernon Supp.1990), is to pay the plaintiff’s attorney for the benefit “accruing” to the carrier as a result of the plaintiff’s recovery or settlement of its third-party case. See McCollum v. Baylor Univ. Medical Center, 697 S.W.2d 22, 24-25 (Tex.App.—Dallas 1985, writ ref’d n.r.e.); Chambers v. Texas Employers Ins. Ass’n, 693 S.W.2d 648, 650 (Tex.App.—Dallas 1985, writ ref’d n.r.e.). A workers’ compensation insurance carrier's release from future liability for death benefits, due to a claimant’s procurement of a third-party recovery, constitutes a “subrogation re covery” thereby obligating the carrier, which did not intervene in the third-party action, for payment of the claimant’s attorney’s fees based upon the past and present cash value of future death benefits which the carrier was relieved from paying. Vanguard Ins. Co. v. Humphrey, 729 S.W.2d 344, 346 (Tex.App.—Houston [14th Dist.] 1987, writ ref’d n.r.e.); Ischy v. Twin City Fire Ins. Co., 718 S.W.2d 885, 888 (Tex.App.—Austin 1986, no writ); Tex.Rev. Civ.Stat.Ann. art. 8307 § 6a (Vernon Supp. 1990); see also, Tucker v. Texas Employers Ins. Ass’n, 768 S.W.2d 742, 744 (Tex.App.—Houston [1st Dist.] 1988, writ dism’d).
The present case is similar to the facts in the Ischy case. Ischy’s widow brought a third party suit for the wrongful death of her husband against her husband’s employer. Mrs. Ischy and the employer settled the third party claim. At the time of the settlement, Twin City Insurance Company (Twin City), the employer’s worker’s compensation carrier, had paid Mrs. Ischy over $12,000.00 in death benefits. Article 8307, § 6a allowed Twin City to recover the $12,-000.00 from Mrs. Ischy’s settlement as its subrogated interest. After Ischy tendered *378this amount to Twin City, her lawyer requested recovery of one-third of Twin City’s recovery of its subrogation interest as attorney’s fees.1 Twin City refused to pay this amount.
The Austin Court of Appeals stated that art. 8307 § 6a benefits a worker’s compensation carrier in two aspects when a worker settles a third-party claim. First, the worker must reimburse the carrier for all past benefits and medical expenses which he previously received from the carrier. Second, the worker may not receive any other benefits from the carrier until the third-party settlement amount is exhausted, because the settlement is treated as an advance against future benefits. The court reasoned that this recovery was a windfall especially when'the carrier did not intervene in the third-party case. The Austin court cited Chambers, 693 S.W.2d at 650, for the proposition that the true value of a carrier’s recovery of its interest in a third-party action included its release from liability for future benefits as well as reimbursement for all past benefits paid to the claimant. The court reasoned that the carrier’s reimbursement entitles a claimant’s attorney to one-third of the benefit accruing to the non-intervening carrier as a result of the claimant’s attorney’s efforts. The court reasoned by stating:
[A] determination of the “benefit accruing” in section (b) [of art. 8307 § 6a] necessarily derives from a finding of the carrier’s true subrogation interest under art. 8307 § 6a(a), the benchmark for calculating attorney’s fees.
Ischy, 718 S.W.2d at 887. The claimant’s attorney’s pursuit of the third-party case directly benefits two parties — the claimant and the non-intervening carrier. We conclude that the carrier’s “true subrogation interest” logically includes that portion of the workers’ compensation benefits which the carrier saved as a direct result of the claimant’s attorney’s efforts. This result is grounded in equitable considerations. Should this type of recovery not be allowed, the carrier would always benefit by allowing its interests to ride with the claimant’s attorney’s efforts and by not actively participating with its own counsel in the third-party action. Illinois’ assertion has no basis in the law as stated in Article 8307, section 6a. Respondents may recover attorney’s fees not to exceed one-third of the past and present cash value of future death benefits which Illinois saved as a consequence of respondent’s settlement. The motion for rehearing is overruled.
BENAVIDES, J., dissents.

. Article 8307 § 6a states that if an insurance company does not actively represent through counsel its interest in a third-party claim, the company shall pay the claimant's attorney a fee not to exceed one-third of the subrogation recovery. This compensates the claimant’s attorney for the benefit which the insurance company enjoyed as a result of the claimant’s efforts to negotiate and settle the third-party case.