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Murer v. Montana State Compensation Insurance Fund

Court of Workers Compensation of Montana

August 7, 1995

JACK MURER, et al Petitioners
v.
MONTANA STATE COMPENSATION INSURANCE FUND Defendant and BEVERLY HARDY, et al Intervenors.

         Reversed in Murer et al. v. Montana State Fund et al., 283 Mont. 210 (1997) (Murer III)

          ORDER DENYING ATTORNEY FEES UNDER COMMON FUND DOCTRINE

          MIKE MCCARTER JUDGE.

         Summary: After successful litigation establishing right of claimants to increase in benefit rate due to expiration of cap on compensation benefits in 1987 and 1989 Acts, attorneys for claimant argued the litigation had established a common fund requiring insurers to increase benefits of all impacted claimants and pay them attorneys fees on benefit increase for each claimant.

         Held: Request for attorneys fees with respect to benefits obtained for non-party claimants is denied.

         Petitioners commenced this action seeking an increase in the rate of disability benefits payable to them subsequent to June 30, 1991. At the time of their injuries, subsection (3) of section 39-71-701, MCA (1987) and (1989), provided a general cap on benefits:

(3) Weekly compensation benefits for an injury producing temporary total disability shall be 66 2/3% of the wages received at the time of the injury. The maximum weekly compensation benefits may not exceed the state's average weekly wage at the time of injury. . . . [Emphasis added.]

         However, subsection (5) of the same section provided a more specific cap with respect to the time period July 1, 1987 through June 30, 1991, providing:

(5) Notwithstanding subsection (3), beginning July 1, 1987, through June 30, 1989, [1991], weekly compensation benefits for temporary total disability may not exceed the state's average weekly wage of $299 established July 1, 1986.

         Similar caps were applicable to permanent total and permanent partial disability benefits. §§ 39-71-702(6) and -703(3), MCA (1987) and (1989).

         Petitioners and the respondent insurers interpreted the caps differently. The insurers relied on the usual rule that the law in effect at the time of the injury governs the payment of benefits, Buckman v. Montana Deaconess Hospital, 224 Mont. 318, 730 P.2d 380 (1986), and interpreted the subsection (5) cap as applying to all benefits payable with respect to injuries occurring between July 1, 1987 and June 30, 1991. Petitioners interpreted the subsection as applying only to benefits paid during that specific period of time. For a claimant injured between July 1, 1990 and June 30, 1991, the maximum amount at stake is $24 a week, which is the difference between the $299 cap specified in subsection (5) and the state's fiscal year 1991 average weekly wage of $323.

         Petitioners prevailed in Murer v. State Compensation Mut. Ins. Fund, 267 Mont. 516, 885 P.2d 428 (1994) (Murer II), and established a legal precedent that entitles many of the other claimants who were injured between July 1, 1987 and June 30, 1991, to increased benefits. Petitioners' attorneys now ask the Court to award attorney fees with respect to additional amounts that may be due those other claimants as a result of the precedent. In conjunction with their request, they have notified the only remaining respondent, [1] State Compensation Insurance Fund, that they claim a lien on all amounts payable as a result of the decision in Murer II.

         Petitioners' attorneys concede that they have no attorney fee agreement with the affected claimants from whose benefits the requested fees would be paid. They also agree that they have no statutory entitlement to such fees. Rather, they argue that their entitlement is an equitable one arising under common fund and/or substantial benefit doctrines.

         Procedural Issues

         The present claim for fees surfaced shortly after remand following Murer II. One of the initial issues raised regarding the claim is what notice, if any, should be given to claimants who may be affected by the claim. Petitioners' attorneys argued that all potentially affected claimants must be given notice. The Court asked for case citations supporting their contention. After reading some of the cases brought to my attention, I decided to ask the parties to brief the merits of the claim. If the claim is without merit, then no further notice is necessary. If the claim appeared to have merit, I could then determine what further notice should be given.

         Meanwhile, I granted a motion to intervene filed by a few of the potentially affected claimants. I also permitted two insurers -- Liberty Mutual and Liberty Northwest -- to intervene. Both interventions were limited to the attorney fee issue. Since the intervening insurers do not have a direct stake in the dispute, their participation shall be treated as in the nature of amicus curiae.

         Common Fund and Substantial Benefit Doctrines

         "[T]he traditional American rule ordinarily disfavors the allowance of attorneys' fees in the absence of statutory or contractual authorization . . . ." Hall v. Cole,412 U.S. 1, 4-5 (1974); accord, Fleischmann Corp. v. Maier Brewing,386 U.S. 714, 717 (1967); Alyeska Pipeline Co. v. Wilderness Society, 421 U.S. 240, 247 (1975). Montana follows the American rule. In re Dearborn Drainage Area, 240 Mont. 39, 42, 782 P.2d 898, 899 (1989). It has "consistently adhered to the principle that in the absence of some special agreement between the parties or statutory authorization ...


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