Court Opinion

ID: 880551
Source: CourtListenerOpinion
Date Created: 2013-06-05 00:14:17.563263+00
Date Added: 2024-06-11T15:36:23.267385
License: Public Domain

NO. 8 8 - 4 9 2

                  IN THE SUPREME COURT OF THE STATE OF MONTANA

                                           1989

EUGENE J . HONEY,
            Claimant and Appellant,
    VS.

STOLTZE LAND AND LUMBER COMPANY,

            Employer and Respondent,

    and
STOLTZE LAND AND LTJMREF. COMPANY,

            Defendant and Respondent.

APPEAL FROM:           Workers' Compensation Court,
                       The Honorable Timothy Reardon, Judge presiding
COTJNSEL OF RECORD:
          For Appellant:

                       John G. Bell; Bell, Corn         &   Bell, P.C., Hamilton, Montana
          For Respondent :

                       Alan L. Joscelyn; Gough, Shanahan, Johnson            &   Waterman,
                       Helena, Montana
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                                          Submitted on Briefs:           Dec. 16, 1 9 8 8
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                                             Decided:           February 7, 1 9 8 9
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Mr. Justice John Conway Harrison delivered the Opinion of the
Court.

      This appeal arises from the decision of the Workers'
Compensation Court limiting claimant's attorney's fees to the
contingent fee aqreement without considering the time records
and affidavit of his counsel. F e reverse and remand for an
                                 7
evidentiary hearing.
      On February 10, 1984, Eugene Honey sustained a
compensable injury.    By order dated July 29, 1988, the
Workers' Compensation Court determined claimant was entitled
to 50 weeks of permanent partial disability benefits at the
rate of $138.50 per week for a sum total of $6,925.       The
order further stated:
          4. Claimant is entitled to attorney fees
          and costs.   Because the injury occurred
          in 1984, the contingency fee is the
          appropriate means of computing claimant's
          entitlement.     The standard agreement
          approved by the Division of Workers'
          Compensation for cases being resolved by
          this Court allows for an award of 33
          percent of the benefits received as a
          result   of    the   attorney's   effort.
          Therefore, in the case at bar, claimant
          is entitled to attorney fees of 33
          percent of $6,925.00, or $2,208.79 [sic],
          subject to the terms set forth in the
          Judgment number three.

Continuing a review of the order, paragraph number 3. stated:
          3. Claimant is entitled to an award of
          attorney   fees  and   reasonable  costs
          pursuant to Section 39-71-612, MCA. The
          attorney for the claimant shall serve
          this Court and opposing counsel no later
          than 20 days from the date of this Order
          a statement of the hours he or she
          compiled in pursuing this matter, the
          costs incurred, a statement of the
          attorney's customary and current hourly
          fee and a copy of the fee agreement as
          approved by the Division of Workers'
          Compensation.   Claimant's counsel shall
          submit a proposed Order specifying the
          amount of attorney fees claimed. If the
          defendant or the claimant believes the
          amount due the claimant's attorney is
          unreasonable, then each has 30 days from
          the date of this Order to file a Motion
          for    Evidentiary   Hearing    Regardinq
          Reasonableness of Attorney Fees; the
          motion   shall be    accompanied by    an
          affidavit and statement of the grounds on
          which   either the defendant or the
          claimant believes the amount due the
          claimant's attorney     is unreasonable.
      Pursuant to the order, claimant's attorney filed a copy
of the attorney-client agreement under which the claimant
agreed to pay his attorney a contingent fee. In addition,
claimant's attorney filed a sworn affidavit which established
he worked on the case a total of 111.10 hours, which resulted
in claimed attorney's fees of $9,443.50, and costs of
$1,335.85.  The affidavit also contained detailed statements
of time records converted to a monetary sum based on the
attorney's customary and current hourly rate.        Finally,
claimant's attorney submitted a proposed order specifying the
amount of attorney's fees claimed. Claimant' s attorney dj-S1
not, however, request an evidentiary hearing.
      In response to the fee proposal, the respondent filed a
letter with the Workers' Compensation Court, objecting to any
award in excess of the contingent fee agreement. By order
dated August 31, 1988, the Workers' Compensation Court found:
           [A]s part and parcel of the Judgment
           herein, the Court directed counsel for
           the claimant to prepare and file with the
           Court a compilation of the number of
           hours devoted to the prosecution of the
           claim and to set forth a reasonable
           hourly rate. This is all in accord with
           the ruling of the Supreme Court in [Wight
           v. Hughes Livestock Co., Inc. (1983), 204
           Mont. 98, 6 6 4 P.2d 3031...     , in which
           one of the criteria allowing the presumed
           reasonableness of the contingency fee is
           the number of hours required to prosecute
           the claim and granting either party an
           opportunity to request an evidentiary
           hearing to deviate from the presumed
           propriety    of    the    contingent   fee.
           Claimant complied with the directive of
           the Court and has filed a statement of
           hours wherein he claims 111 hours and a
           total attorney fee under that contention
           in excess of $10,000.00.
          Employer/insurer has responded, raisinq
          no objection to the 33 percent contingent
          fee, but objecting to any fee in excess
          of the contingent fee for the reason that
          no evidentiary hearing was requested
          wherein the Court would take evidence to
          deviate from the presumption of the
          reasonableness of the contingent fee.
           Having considered the matter, the Court
           finds that the claimant has not requested
           an evidentiary hearing so as to allow the
           Court to deviate from the presumed
           reasonableness of the contingency fee
           and,   accordingly,    finds   that   the
           contingency fee is reasonable and directs
           that the insurer pay attorney fees in the
           amount   of   $2,708.79   and   costs  as
           submitted.

      Claimant appeals from the foregoing order, alleging the
lower court committed reversible error by fixing attorney's
fees at the amount of the contingent fee contract without an
evidentiary hearing. We agree.
      In Wight v. Hughes Livestock Co., Inc. (1983), 204
Mont. 98, 6 6 4 P.2d 303, this Court adopted several elements
to he considered in determining the reasonableness of
contingent fee contracts and the amount of attorney's fees to
he awarded.
            [Iln determining a reasonable attorneys
            fee . . . [the judge] must engage in a
           balancing   process   and   consider   on
            contingent basis the following factors:
           "(1) The anticipated time and labor
           required to perform the legal service
           properly.
           " (2) The noveltv and difficulty of legal
           issues involved in the matter.
           " (3) The fees customarily charged        for
           similar legal services.

           " ( 4 ) The possible   total   recovery    if
           successful.
           "(5) The time limitations imposed by the
           client or circumstances of the case.
           " (6) The nature and length        of     the
           attorney-client relationship.
           " (7) The    experience,    skill         and
           reputation of the attorney.
           "(8) The ability of the client to p:
                                              a'
           for the legal services rendered.
           " (9) The risk of no recovery."      . . .
                 Not mentioned    .   .
                                   . but surely a.
           factor to be considered, is the market
           value of the lawyer's services at the
           time and place involved.
Wight, 664 P.2d   at 311-312, citing Clark v. Sage (Idaho
1981), 629 P.2d   657, 661.  The above are more than mere
suggestions, " [t]he lower court was required to consider the
foregoing in its determination of the reasonableness of the
contingent fee contract and the amount of attorneys fees to
                                                .          .
be awarded. " Mcnanold v. B. N. Transport, Inc (Mont 1985) ,
701 P.2d 1001, 1004, 42 St.Rep. 940, 944.      However, the
Workers' Compensation Judge, in fixing the fee of $2,208.79,
did not consider the proper factors.
      The respondent maintains that the Workers' Compensation
Court cannot vary from the contingent fee agreement in the
absence of a hearing, given the strong presumption of
reasonableness in favor of the approved agreement. Instead,
the party wishing to depart from the contingent fee must
request a hearing. Respondent argues the lower court's order
must be affirmed.
      Claimant contends he was not required to request an
evidentiary hearing.   The lower court's order required the
claimant's attorney to submit a proposed order for reasonable
attorney fees, supported by documentation. Only in the event
a party believes the amount due under the proposed order is
unreasonable would an evidentiary hearing be necessary.
Claimant argues the respondent's letter objecting to any fee
greater than the contingency amount was, in effect, an
implied request for a hearing. Finally, claimant states the
order was ambiguous, and he should be allowed a hearinq
before the Workers' Compensation Court to establish an award
of fees under the Wight guidelines.
      Neither party presents a definitive answer to explain
the absence of a request for an evidentiary hearing.      Nor
does such absence explain the lower court's disregard for the
documentation presented by the claimant's attorney. Indeed,
the facts demonstrate a need for an evidentiary hearing. On
the one hand, the claimant's attorney submitted an affidavit
and time records establishing 110.10 hours were expended
toward the case and    justifying fees of nearly $10,000.
Further, clai-mant's         secured an award of $6,925 for
his client.
       Certainly, substantial additional evidence reflecting
the   Wight guidelines is necessary before the Workers'
Compensation Court may determine   reasonable attorney's fees.
Therefore,  we   reverse the  decision of   the Workers'
Compensation Court and remand for an evidentiary hearing.