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In re Murer

Court of Workers Compensation of Montana

March 8, 1995

IN THE MATTER OF: JACK MURER, JAY HARBRIDGE, SUSAN VERNON, STEVE PICKETT, JAMES BROWN, KEITH MORDJA, and BRUCE NELSON in their individual capacities and also in theircapacities as representatives of a class of workers' compensation and occupational diseaseclaimants and beneficiaries described herein Petitioners
v.
MONTANA STATE COMPENSATION INSURANCEFUND, AND ALL PLAN I AND II INSURERS OF THE CLASS OF CLAIMANTS AND BENEFICIARIES Defendants.

          ORDER REGARDING INTERVENTION AND ATTORNEY LIEN

          Mike McCarter JUDGE

         Summary: On remand from the Supreme Court in Murer v. Montana State Compensation Mutual Ins. Fund, 267 Mont. 516 (1994) (Murer II), attorneys for claimants asserted lien for attorneys fees on all additional benefits paid as a result of the precedent established in Murer II. The fees would be paid out of amounts otherwise payable to unnamed claimants. An attorney representing thirteen claimants affected by Murer II, but not named in that case, seeks to intervene in this proceeding. State Fund requests an order from this Court that it withhold twenty-five percent of benefits payable to unnamed claimants for payable as attorney fees should the attorneys in Murer prevail on their lien.

         Held: Motion to intervene granted as to attorney fee entitlement only. State Fund's request denied.

         Topics:

Attorney Fees: Common Fund. On remand from the Supreme Court in Murer v. Montana State Compensation Mutual Ins. Fund, 267 Mont. 516 (1994) (Murer II), attorneys for claimants asserted lien for attorneys fees on all additional benefits paid as a result of the precedent established in Murer II. The fees would be paid out of amounts otherwise payable to unnamed claimants. An attorney representing thirteen claimants affected by Murer II, but not named in that case, was granted leave to intervene in this proceeding.
Attorney Fees: Lien. On remand from the Supreme Court in Murer v. Montana State Compensation Mutual Ins. Fund, 267 Mont. 516 (1994) (Murer II), attorneys for claimants asserted lien for attorneys fees on all additional benefits paid as a result of the precedent established in Murer II. The fees would be paid out of amounts otherwise payable to unnamed claimants. An attorney representing thirteen claimants affected by Murer II, but not named in that case, was granted leave to intervene in this proceeding.
Common Fund Litigation. On remand from the Supreme Court in Murer v. Montana State Compensation Mutual Ins. Fund, 267 Mont. 516 (1994) (Murer II), attorneys for claimants asserted lien for attorneys fees on all additional benefits paid as a result of the precedent established in Murer II. The fees would be paid out of amounts otherwise payable to unnamed claimants. An attorney representing thirteen claimants affected by Murer II, but not named in that case, was granted leave to intervene in this proceeding.

         This matter is before the Court following the November 21, 1994 decision of the Montana Supreme Court in Murer v. Montana State Compensation Mutual Ins. Fund, 51 St. Rptr. 1145 (1994). In Murer the Court held that the $299 cap on temporary total disability benefits which was adopted in 1987 and renewed in 1989 expired on June 30, 1991. Therefore, the cap on temporary total disability benefit payable after June 30, 1991, with respect to injuries occuring between July 1, 1987 and June 30, 1991, reverted to the state's average weekly wage at the time of the particluar injury. The Court remanded the case with instructions that this Court determine the amount of additional benefits due the claimants.

         One of the issues arising on remand concerns the entitlement of claimants' attorneys to attorney fees. The attorneys -- Mr. Alan M. McGarvey and the law firm of McGarvey, Heberling, Sullivan & McGarvey, P.C. ("McGarvey") -- claim they are entitled to attorney fees on all additional benefits paid as a result of the precedent established in this case. Their claim extends to amounts which may be paid to claimants who are not parties to this action and who are either unrepresented or represented by other counsel. The fee would be paid out of amounts otherwise payable to those claimants. McGarvey and the State Fund have phrased the issue as follows:

Whether claimants are entitled to spread the cost of litigation proportionately to all claimants benefiting by this litigation pursuant to the common fund/substantial benefit doctrine.

(Stipulated Facts and Issues, Contentions, and Contested Issues, docketed March 1, 1995, at page 2.)

         In pursuit of the attorney fee claim, McGarvey notified the State Fund that he has an attorney lien on amounts due all claimants as a result of the Supreme Court decision. The lien is confirmed in a letter to one of the State Fund's counsel on December 4, 1994, wherein McGarvey advises Mr. Bradley J. Luck:

The final purpose of this letter is to document our assertion of a lien on benefits paid to any claimant pursuant to this ruling. This lien is based upon the workers' compensation statutes, the Montana attorney lien statutes, and the common fund doctrine. This demand is asserted on behalf of the law firm of McGarvey, Heberling, Sullivan & McGarvey, P.C., and on behalf of the individual claimants we represent to assure that the named plaintiffs are not unfairly saddled with the burden of the costs and fees associated with this litigation. The amount of the lien so asserted depends in part upon the size of the common fund, in part on the amount of additional work that is hereafter necessary to implement the ruling, and ultimately depends upon the Court's determination of the appropriate common fund fee and apportionment of costs. In any event, the lien asserted is not greater than 25% of benefits paid pursuant to this ruling nor less than 10% of such payments.
As you are aware, any payments by an insurer in derogation of this lien subjects the insurer to liability to this firm and to our clients for the amount of the lien. Therefore, if it is now or hereafter becomes apparent that your clients intend to make payments to the claimants in derogation of the lien hereby asserted, we would ask that you ...

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