Submitted: July 14, 2004
COMMON FUND ATTORNEY FEE ORDER
establishing that additional benefits were due certain
claimants receiving social security disability benefits, the
claimant's attorney sought common fund attorney fees.
claimant's attorney is entitled to common fund fees in
the amount of 25% of the benefits payable as a result of his
efforts in the present litigation. The 25% is reasonable in
light of the relatively small amount of benefits due each
individual claimant and in light of the attorney's fee
agreement with his own client.
Attorney Fees: Common Fund. Where there is
no evidence upon which the Court could conclude that the
insurer acted unreasonably, and where the claimant
establishes not only his own right to additional benefits but
also the right of other similarly situated, identifiable
claimants to additional benefits, the claimant's attorney
is entitled to attorney fees out of the additional benefits
which are paid as a result of his efforts.
Attorney Fees: Common Fund. Where an
attorney's approved fee agreement provides for a 25%
contingent fee and the average amount of benefits secured for
other nonparticipating claimants is small relatively speaking
(here $4, 000), assessment of a 25% fee against the benefits
obtained for the other nonparticipating claimants is
This matter came on for hearing on July 14, 2004, to
determine the amount of the common fund attorney fees. Mr.
Lawrence A. Anderson appeared on behalf of the claimant. Mr.
Thomas E. Martello appeared on behalf of the Montana State
Fund (State Fund).
The claimant in this case sought additional benefits due to
him on account of the State Fund's failure to reduce the
social security offset when auxiliary social security
benefits ceased. He sought the additional benefits on his own
behalf and on behalf of other similarly situated claimants.
The parties determined that in fact the State Fund had in
some cases continued to offset auxiliary benefits after such
benefits had ceased. In a cooperative endeavor, they then
determined which claimants were affected and have now
determined the amounts of additional benefits due those
claimants. The cooperation in this case has been exemplary
and has resulted in the identification of approximately $250,
000 in additional benefits due the identified claimants.
Where litigation by a single individual entitles other
claimants to additional benefits, a "common fund is
created." And, where a common fund exists, "the
common fund doctrine 'authorizes the spread of fees among
those individuals benefitting from the litigation which
created the common fund.'" Rausch v. State
Compensation Ins. Fund, 2002 MT 203, ¶ 45, 311
Mont. 210, ¶ 45, 54 P.3d 25, ¶ 45.
In determining whether common fund attorney fees are
appropriate, the Court must consider three factors. Those
factors are as follows:
First, a party (or multiple parties in the case of a
consolidated case) must create, reserve, increase, or
preserve a common fund. This party is typically referred to
as the active beneficiary. Second, the active beneficiary
must incur legal fees in establishing the common fund. Third,