§8.1 Apportionment of Fees in Cases with Workers’ Compensation Subrogation Interest

The Case: Rushing v. Crockett , No. M2004-00324-COA-R3-CV, 2005 WL 415177 (Tenn. Ct. App. 2005).

The Basic Facts: Plaintiff suffered compensable work injury and injury by negligence of third party. The third party claim was resolved and the parties could not agree on a proportional allocation of fees.

The Bottom Line:

  • "The tort action was settled for $100,000.00. Without objection Montgomery County had been allowed to intervene to protect its subrogated interest which was stipulated to be $43,487.40. Thereafter, the attorney for the plaintiff, Mr. Rassas, filed a motion to apportion his fee pursuant to Tenn. Code Ann. § 50-6-112, which provides:
    [T]he attorney representing such injured worker . . . and effecting the recovery, shall be entitled to a reasonable fee for the attorney's services, and the attorney shall have a first lien therefor against the recovery; provided, that if the employer has engaged other counsel to represent the employer in effecting recovery against such other person, then a court of competent jurisdiction shall, upon application, apportion the reasonable fee between the attorney for the worker and the attorney for the employer, in proportion to the services rendered."
    2005 WL 415177 at *1.
  • "Mr. Rassas insists that he is entitled to a fee for his work in recovering the subrogable benefits, i.e., $43,487.40, while Mr. Nolan insists that each party should be responsible for his own fees, arguing that it would be unreasonable for Mr. Rasses to be paid a fee from the subrogable $43,487.40." Id.
  • "The worker's compensation case was litigated and Mr. Rassas was awarded a fee of $4,625.28 for his services rendered on behalf of his client, the injured employee. This fee was deducted from the fee [$13,046.22] awarded proportionately to Mr. Rassas for his services in the tort action. The trial court explained that this deduction was necessary 'to avoid a dual recovery.'" Id. at *3.
  • "We are unable to agree with this rationale. Mr. Rassas represented his client in two disparate actions. He was successful in both cases, and is entitled to be paid for his services in both cases. The proof shows that Mr. Rassas maintained separate files, there were other attorneys involved, discovery was separate as were depositions. We also note that the client, Mr. Rushing, paid a fee of 20% of his recovery of benefits; the employer paid no fee, but was fully subrogated to all awards paid, less fees. The deduction ordered by the court arguably refunds to the employer the award paid by Mr. Rushing to his attorney. We are not aware of any statutory authority for this deduction, which was awarded to Mr. Nolan, attorney for Bi-County Solid Waste Management, Inc." Id.
  • "We affirm the apportionment of the fees. The deduction of $4,625.29 from the fee of Mr. Rassas is vacated." Id.

Recent Cases:  Erwin v. Travelers Property Cas. Co. of America, No. E2009-01288-COA-R3-CV, 2010 WL 2593922 (Tenn. Ct. App. June 28, 2010) (upholding determination of attorneys’ fees for recovery of workers’ compensation subrogation lien).

After an accident, many injury victims and their families want more information on the accident and their legal rights. Consequently, many of them have found their way to these pages. While we are happy you are here, please understand Day on Torts: Leading Cases in Tennessee Tort Law was written to be a quick, invaluable reference for Tennessee tort lawyers. While the book provides the leading case for more than 300 tort law subjects and thousands of related case citations, it is not a substitute for personalized legal advice from a qualified lawyer.

Rather than researching these legal issues alone, we urge you to contact one of our award-winning lawyers who can sit down with you, review your case, answer your questions and clearly explain your rights and your options in a no-cost, no-obligation consultation. Our experienced attorneys handle all personal injury and wrongful death cases on a contingency basis, so we only get paid if we win. If for any reason you are unable to come to our office, we will gladly come to you.

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The foregoing is an excerpt from Day on Torts: Leading Cases in Tennessee Tort Law, published by John A. Day, Civil Trial Specialist, Fellow in the American College of Trial Lawyers, recipient of Best Lawyers in America recognition, Martindale-Hubbell AV® Preeminent™ rated attorney, and Top 100 Tennessee Mid-South Super Lawyers designee. Read John’s full bio here.

To order a copy of the book, visit www.dayontortsbook.com. John also blogs regularly on key issues for tort lawyers. To subscribe to the Day on Torts blog, visit www.dayontorts.com.

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