Smith v. City of Austin , 670 S.W.2d 743 ( 1984 )

McKAY, Justice.

This is an appeal complaining of the refusal of the trial court to award a lump sum attorneys’ fee in a worker’s compensation death case. Lee Craig Smith, who was employed in the Police Department of the City of Austin, died as a result of a motorcycle accident. He was survived by his wife, Marshalene Louise Smith, and two of his minor children, Trevor Shane Smith and Olivia Leigh Smith. He was also survived by another son by a previous marriage, Steven Craig Smith, who was joined as a party plaintiff by the trial court. The Industrial Accident Board awarded full death benefits payable weekly, and attorneys’ fees of twenty-five percent (25%) payable weekly were awarded. Both parties appealed. At the time of trial, the City of Austin admitted liability, and judgment was rendered for the widow and each of the minor children, and appellant was awarded an attorneys’ fee of $40,000 payable in weekly installments of $24.79 per week.

Pursuant to a request the trial court made “Conclusions of Fact and Law,” and the finding applicable to this appeal reads as follows:

The Court finds that $40,000.00 shall be the maximum amount payable to Jeff Smith, attorney for attorneys’ fees and that $40,000 is less than 25% of the maximum benefits payable to Marshalene Louise Smith, Trevor Shane Smith and Olivia Leigh Smith in the event Marshal-ene Louise Smith does not remarry and lives out her life expectancy. The finding that Jeff Smith should receive $40,-000.00 in attorneys’ fees was intended by this Court to limit the maximum recovered by Jeff Smith, attorney, rather than indicate any intention to award a lump sum attorneys’ fee or indicate that there would be any basis in fact or in law for attorneys’ fees payable in lump sum.

Appellant brings two points of error: No. 1, “The trial court committed error in awarding appellant's attorneys a limited fee of $40,000.00 to be paid on a weekly basis which action was in violation of Article 8306 § 7d and § 8”; No. 2, “The failure of the trial court to award appellant’s attorneys a lump sum fee constituted an abuse of discretion.” We discuss them together.

In appellant’s brief it is admitted that “it is within the complete discretion of the trial court as to whether or not to award lump sum attorneys’ fees in such a case,” but the contention is made that once the trial court has determined to deny the request for lump sum attorneys’ fees, under art. 8306 ¹ §§ 7d and 8, the trial court has no authority to limit the total recovery of attorneys’ fees to $40,000.00 and to order same to be paid in weekly installments. We disagree.

Article 8306 § 7d provides:

For representing the interest of any claimant in any manner carried from the Board to the courts, it shall be lawful for the attorney representing such interest to contract with any beneficiary under this law for an attorneys’ fee for such representation, not to exceed twenty-five per cent (25%) of the amount recovered, such fee for services so rendered to be fixed and allowed by the trial court in which such matter may be heard and determined.

In fixing and allowing such attorneys’ fee, the court must take into consideration the benefit accruing to the beneficiary as a result of such services. No attorneys’ fees (other than the amount which the Board may have approved) shall be allowed for representing a claimant in the trial court unless the court finds that benefits have accrued to the claimant by virtue of such representation, and then such attorneys’ fee may be allowed only on a basis of services performed and benefits accruing to the beneficiary.

Provided, however, that in all cases involving fatal injuries where the Association admits liability on all issues involved and tenders payments of maximum benefits in writing under this Act while the death benefits claim of such beneficiaries is pending before the Board, then no attorneys’ fee shall be allowed. (Emphasis added.)

Appellant argues that the trial court was authorized only to fix an attorneys’ fee expressed in terms of a percentage of the benefits to be received by the claimants on a weekly basis in the future up to the statutory maximum of 25%, but was not authorized to limit the maximum recovery of attorneys’ fees to a dollar amount. The court found that the surviving widow had a life expectancy of 52.4 years, and if she did live that long she would receive as much as $324,151.00 over that period, and it is evident that 25% of that figure would be in excess of $80,000.

The trial court found “that no benefit accrued to Plaintiffs ... as a result of the appeal of this case from The Industrial Accident Board.” Art. 8306 § 7d provides that the attorneys’ fee in a worker’s compensation case “be fixed and allowed by the trial court....”

The rule in Texas in worker’s compensation cases seems to be settled that the amount of attorneys’ fees and the method of payment of same are matters to be determined in the discretion of the trial court. Texas Employers Insurance Association v. Motley, 491 S.W.2d 395, 396-7 (Tex.1973); American States Insurance Co. of Texas v. Caddell, 644 S.W.2d 884, 888 (Tex.App.—Tyler 1982, no writ); Walters v. Fidelity & Casualty Company of New York, 611 S.W.2d 934, 938 (Tex.App.—Eastland 1981, no writ).

The court said in Texas Employers Insurance Association v. Motley, supra at p. 397, “But this court has construed the rest of that Section [7d] to give the court independent discretion as to the fixing of attorney’s fees.” (Emphasis added.)

We hold that the trial court did not abuse its discretion by awarding a fee of $40,000.00 to the attorney for claimants and ordering the same payable weekly. Appellant’s points are overruled.

Judgment of the trial court is affirmed.

1 . Articles refer to Texas Civil Statutes Annotated (Vernon).