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Buckley v. Montana State Fund

Court of Workers Compensation of Montana

July 21, 2005

LAVERN BUCKLEY Petitioner
v.
MONTANA STATE FUND Respondent/Insurer.

          Submitted: July 14, 2004

          COMMON FUND ATTORNEY FEE ORDER

          Mike McCarter Judge

         Summary:

         After establishing that additional benefits were due certain claimants receiving social security disability benefits, the claimant's attorney sought common fund attorney fees.

         Held:

         The 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.

         Topics:

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 reasonable.

         ¶1 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).

         ¶2 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.

         ¶3 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.

         ¶4 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, the ...

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