Texas Mutual Insurance Company v. Anita DeJaynes, Individually and as Next Friend of Alyssa DeJaynes, Noah Matthew DeJaynes, and Emma Michelle DeJaynes, Minor Children

COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS

TEXAS MUTUAL INSURANCE §
COMPANY,
§
No. 08-18-00147-CV
Appellant, §
Appeal from
v. §
143rd District Court
§
ANITA DEJAYNES, of Ward County, Texas
INDIVIDUALLY AND AS NEXT §
FRIEND OF ALYSSA DEJAYNES, (TC# 15-12-23771-CVW)
NOAH MATTHEW DEJAYNES, §
AND EMMA MICHELLE
DEJAYNES, MINOR CHILDREN, §

Appellee. §

OPINION

In a worker’s compensation case, a worker’s attorney who successfully appeals an adverse

determination of the Division of Worker’s Compensation (DWC)--subject to approval by the

court--is entitled to attorney’s fees.1 The fees, however, cannot exceed 25 percent of the claimant’s

recovery. 2 They are also paid out of that recovery. 3 In this case, the DeJayneses’ attorney

1
TEX.LAB CODE ANN. § 408.221(a),(b).

2
TEX.LAB CODE ANN. § 408.221(i).

3
TEX.LAB CODE ANN. § 408.221(b).
successfully overturned a DWC decision, and as a result, obtained for a widow and the children of

a deceased worker past benefits, and a stream of future weekly benefits. The attorney asked for a

fee equal to 25 percent of unpaid past benefits, and 25 percent of future benefits calculated on the

basis of the widow’s anticipated life expectancy. The attorney also presented some evidence of

his fee based on the time actually spent and an hourly rate, which somewhat approximates the 25

percent contingency fee. The trial court ordered payment of a commuted lump sum fee equal to a

25 percent contingency adjusted for interest and discounting (that is, taking 25 percent of past

benefits with added interest, and 25 percent of projected future benefits discounted to present

value).

Texas Mutual Insurance Company (Texas Mutual) appeals only the attorney’s fee award,

claiming: (1) the commutation of the fee award is at odds with the worker’s compensation statute

and a DWC rule; (2) the fees must be based on an hourly rate multiplied by the time spent, and not

a contingency; (3) measured by the time and rate standard, some of the work claimed was not

reasonable or necessary, and the hourly rate was excessive; and (4) a jury must decide the amount

of the fees. Appellees, (collectively the DeJayneses), challenge our subject matter jurisdiction to

hear this matter.

We conclude that we have subject matter jurisdiction. While we reject most of Texas

Mutual’s contentions, we agree that the hourly rate used to justify the fee included a risk modifier

that the legislature has rejected in worker’s compensation cases. Accordingly, we reverse the order

on attorney’s fees and remand for a new hearing solely on that issue.

BACKGROUND

2
 This case arises out of a workplace accident that took the life of Jaime DeJaynes.4 He died

in a single vehicle accident while driving a company work truck. The worker’s compensation

insurance carrier, Texas Mutual, initially paid Jaime’s widow and children weekly death benefits

under the Texas Worker’s Compensation Act (the Act). Under the Act, a deceased worker’s

spouse is entitled to death benefits for life, unless the spouse remarries (and if remarried, then for

only an additional 104 weeks). TEX.LAB CODE ANN. § 408.183(b). Qualifying children are

entitled to benefits until they reach age 18, or up to age 25 if they are enrolled as a full-time student

in an accredited education institution. Id. at § 408.183(c)(d). Benefits are based on a percentage

of the deceased worker’s average weekly wage. Id. at § 408.181.

Texas Mutual, however, stopped those payments after it obtained a toxicology report from

Jaime’s post-accident medical records. Under the Act, a blood test or urinalysis showing the

voluntary introduction into the body of certain controlled substances creates a rebuttable

presumption that the worker is intoxicated and does not have the normal use of mental or physical

faculties. Id. at § 401.013(c). An insurance carrier is not liable for worker’s compensation benefits

if the injury “occurred while the employee was in a state of intoxication” as defined in the Act. Id.

at § 406.032. In this case, the toxicology report showed the presence of Delta 9 Carboxy THC,

which is a metabolite found in the blood after the ingestion of marijuana.

Disputed issues in worker’s compensation claims must first be resolved through an

administrative review process. Id. at § 410.024 (benefit review conferences); § 410.151 (contested

case hearings); § 410.202 (administrative appeals); § 410.251 (requirement to exhaust

administrative process prior to filing suit). Ms. DeJaynes challenged the carrier’s suspension of

benefits through that process. The DWC identified and resolved two issues: (1) was Jaime

4
Mr. DeJaynes first name is spelled differently in the record. We use the “Jaime” spelling for clarity.

3
intoxicated so as to impair his normal functions (the applicable statutory test for an intoxication

defense); and (2) did Texas Mutual waive that defense by not asserting it timely. As to this second

issue, an insurance carrier is required to raise a defense within 60 days of receiving a claim unless

the defense could not reasonably have been discovered earlier. Id. at § 409.021(c),(d). Texas

Mutual contended that through no fault of its own, it did not obtain the toxicology report until 83

days after learning of the claim. Texas Mutual prevailed on both of these issues before the DWC.

Jaime’s widow and children then appealed that adverse determination to a district court.

The trial court then acquired jurisdiction over the two issues that had been administratively

resolved. Id. at § 410.302 (“A trial under this subchapter is limited to issues decided by the appeals

panel and on which judicial review is sought.”). Texas Mutual filed a motion for partial summary

judgment on the first issue--whether Jaime was intoxicated at the time of the accident. Texas

Mutual prevailed on that motion when the DeJayneses effectively conceded the issue by not filing

a response. The court tried the second issue--whether the carrier waived the defense--to a jury.

This time, the DeJayneses prevailed and Texas Mutual does not contest that portion of the case on

appeal. It has in fact paid past due benefits and restarted death benefits to the DeJayneses. Rather,

we are asked to review only a separate order incorporated into the final judgment that awards the

DeJayneses’ attorney his fees.

Regarding attorney’s fees, the DeJayneses’ counsel filed a motion with the trial court that

asked two things: (1) approve 25 percent of the benefits as the amount of the attorney’s fees; and

(2) to “commute” the fee such that Texas Mutual would advance the total amount due, rather than

pay incremental portions of the fee as it made on-going benefit payments to the DeJayneses. As

to the fee amount, the DeJayneses’ counsel included his own affidavit that set out the terms of his

fee contract. He also set out his qualifications, described the work done in the case, and described

4
what a comparative fee would be under a time and rate analysis. We add a bit more detail to each

of those topics.

First, the Dejayneses and their counsel had previously entered into a written fee contract

entitling the attorney to a 25 percent contingency fee from any benefits awarded to the DeJayneses.

Because of their success at trial, the DeJayneses will potentially recover a total of $1,936,778.54.

Broken down, that sum includes past-due benefits, that with interest, totals $144,978.54. Twenty-

five percent of those past benefits amounts to $36,244.64 in fees. Based on life expectancy tables,

Ms. DeJaynes will be paid future benefits for 40.4 years that when reduced to present value, totals

$803,305.97. Twenty-five percent of that discounted sum amounts to $200,826.49, and when

combined with the past due attorney’s fees, they both total $237,071.13 in attorney’s fees.

Counsel’s affidavit further attests that he was well qualified to handle this matter, being:

(1) board certified in worker’s compensation law by the Texas Board of Legal Specialization; (2)

having practiced law for 21 years in this area; and (3) being a frequent speaker at legal education

seminars on worker’s compensation.

Finally, several portions of the affidavit address the potential fee had the matter been

calculated on a rate multiplied by hour basis. Counsel averred that he is familiar with the rates

charged locally, as well as state-wide, on similar matters. He noted that the case was complicated

from the standpoint of overcoming the marijuana issue, the uniqueness of the waiver issue, and

the amount in controversy. He claimed that the proper hourly fee in the matter is $450 per hour:

Although my attorneys’ fee in this case is a contingency fee of 25%, for
comparative purposes, my normal hourly rate for contingent legal services is
$450.00 per hour. This is computed by taking into account my normal hourly rate
of $300.00 for standard work which is paid by a client regardless of win or loss plus
the contingent risk of loss that I bear on a contingent case.
In arriving at this hourly rate, counsel also considered a past agreement he had in another case with

Texas Mutual, a survey of legal fees by “Texas Lawyer Magazine,” counsel’s experience from

5
approximately fifty jury trials, and his level of expertise. He acknowledges the DWC caps hourly

fees at either $200 or $250 per hour depending on the issue.

Counsel then concluded that he expended approximately 457 hours of time on the matter,

but that total does not include time by his staff, law clerks, or two associate attorneys. Nor does

the estimate include future time he anticipated expending for filings before the DWC, nor expenses

borne by his firm. The affidavit does not specify the amount of time spent on any particular task,

but generally claims counsel expended time for the following services:

• Traveling to Austin, Texas, and Kansas City, Kansas, to consult with potential
experts.

• Multiple trips to Monahans, Texas, to speak with potential witnesses, view
the accident scene, appear in court proceedings, ascertain community beliefs
and investigate the case.

• Conducting “monthly focus groups” on the case in Lubbock, Odessa, and Big
Spring, to include travel.

• Filing the petition, conducting discovery, resolving discovery disputes,
researching legal and medical issues, responding to pre-trial motions, and
trying the case. In this regard, counsel claims that he was required by Texas
Mutual to respond to unnecessary matters, such as discovery disputes that did
not result in any material change to discovery, attending a hearing on an
uncontested partial summary judgment motion, and traveling to Florida to
depose Ms. DeJaynes, rather than taking her deposition telephonically.
Counsel also included Ms. DeJaynes’s affidavit attesting that she was satisfied with counsel’s

representation, and she approved of the fee agreement.

Texas Mutual challenged the fee application. It argued that Section 408.221 of the Act

requires that fees be “based on the attorney’s time and expenses,” and thus preclude a traditional

contingency fee. Texas Mutual further argued that if considered only on a time and expense basis,

the claimed $237,071.13 fee was unreasonable for a two-day trial involving a single issue. Before

trial, the parties had taken only three depositions, and only three witnesses testified at trial. It

6
attached as an exhibit a billing memo from the DeJayneses’ counsel obtained through discovery.

The billing memo, with some redactions, itemized the 457 hours in various time entries. The

memo included block entries, such as eight hours of “travel” with no other detail provided. Texas

Mutual’s own attorneys charged no more than $195 in that locality. A State Bar study found the

median hourly rate for a 21-year practitioner in “West Texas” was $273 dollars per hour in 2015.5

And even accepting the claimed $450 hourly rate, and the time claimed, the resulting attorney’s

fee totals $205,650, some $31,000 less than the 25 percent contingency amount. Texas Mutual

suggested the trial court approve $79,375 as a reasonable fee. Finally, it challenged the

commutation of the fee, instead arguing that any fee should be paid out over time.

The trial court entered a judgment that reversed the final decision and order of the DWC.

The final judgment also ordered a lump-sum payment of attorney’s fees in accordance with a

separately filed order. That order approved attorney’s fees of $237,071.13, commuted and to be

paid in lump sum.

ISSUES ON APPEAL

Texas Mutual brings six issues on appeal. As a matter of statutory construction, its first

two issues contend that a trial court could not commute attorney’s fees for future death benefits

because the amount: (a) might exceed a statutory 25 percent cap on fees; and (b) under a DWC

rule, commuted fees can only be paid out of a “sum certain award or order to pay benefits,” neither

of which are present here. Also as a matter of statutory construction, Texas Mutual contends in its

third issue that the trial court erred in approving a contingency fee, rather than an award based on

5
The work performed for this case began in December 2015 and ended in September 2017. The State Bar study was
based on a survey of practitioners. Fourteen practitioners in “West Texas” with 21 or more years of experience
provided survey responses from which the median was determined. The “median” is the number found at the exact
middle of the set of values. A median can be computed by listing all numbers in ascending order and then locating
the number in the center of that distribution.

7
the attorney’s time and expenses. Its next two issues challenge the amount of the fee if based on

time and expenses, because the rate includes a multiplier based on the risks of contingency cases

(Issue Four), and the time expended was excessive for the nature of the case (Issue Five). Finally,

Issue Six argues that if commutation is appropriate, Texas Mutual had a right to have a jury decide

the reasonable amount of the fee.

The DeJayneses respond to these issues, but at the outset contend that we lack subject

matter jurisdiction to hear the case because Texas Mutual lacks standing to complain about the

amount of the fee. We begin with that issue.

STANDING

If a worker appeals an adverse decision from the DWC, and then prevails at the trial court,

the worker’s attorney is entitled to attorney’s fees paid out of the worker’s recovery. TEX.LAB

CODE ANN. § 408.221(a),(b). So here, the Dejayneses were entitled to weekly death benefits, and

any attorney’s fee would ordinarily be paid out of those sums on an on-going basis. The

DeJayneses’ counsel asked that those fees, however, be commuted--meaning that the payout over

Ms. DeJaynes’s expected lifetime was calculated, reduced to present value, and the gross amount

of the fee calculated so it could be paid immediately. Nonetheless, the amount of the fee still

comes out of the worker’s recovery, and the DeJayneses contend that Texas Mutual as a stranger

to the fee contract lacks standing to challenge it.

Standing is a prerequisite to subject matter jurisdiction, which is essential to a court’s

power to decide a case. Bland Independent School District v. Blue, 34 S.W.3d 547, 553-54 (Tex.

2000); Texas Ass’n of Business v. Texas Air Control Bd., 852 S.W.2d 440, 443–44 (Tex. 1993).

Because it implicates our subject matter jurisdiction, standing cannot be waived, and can be raised

for the first time on appeal. Tex. Ass’n of Bus., 852 S.W.2d at 445-46; Nauslar v. Coors Brewing

8
Co., 170 S.W.3d 242, 248 (Tex.App.--Dallas 2005, no pet.). We would have an obligation to raise

the issue ourselves. See Tex. Ass’n of Bus., 852 S.W.2d at 445-46 (noting that standing “may be

raised for the first time on appeal by the parties or by the court”); Martin v. Clinical Pathology

Laboratories, Inc., 343 S.W.3d 885, 888 (Tex.App.--Dallas 2011, pet. denied)(“Thus, standing

cannot be waived, and we may examine standing sua sponte if necessary.”).

Standing focuses on whether a party has a sufficient relationship with the lawsuit so as to

have a justiciable interest in its outcome. Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845,

848 (Tex. 2005). The general test for standing requires that there be a real controversy between

the parties that will actually be determined by the judicial declaration sought. Tex. Ass’n of Bus.,

852 S.W.2d at 446; Lovato, 171 S.W.3d at 849. This means that litigants must be “properly

situated to be entitled to [a] judicial determination.” Lovato, 171 S.W.3d at 849.

A party who is personally aggrieved by an alleged wrong has standing to sue. Nootsie Ltd.

v. Williamson County Appraisal Dist., 925 S.W.2d 659, 661 (Tex. 1996). Moreover, a party has

standing if they (1) have sustained, or is immediately in danger of sustaining, some direct injury

as a result of the wrongful act complained of; (2) have a direct relationship between the alleged

injury and claim sought to be adjudicated; (3) have a personal stake in the controversy; (4) have

suffered some injury in fact, either economic, recreational, environmental, or otherwise; or (5) are

an appropriate party to assert the public’s interest in the matter, as well as their own. Taylor v.

Margo, 508 S.W.3d 12, 24-25 (Tex.App.--El Paso 2015, pet. denied), cert. denied, 137 S.Ct. 391

(2016), citing Nauslar, 170 S.W.3d at 249.

The DeJayneses focus on language from our opinion in State Off. of Risk Mgt. v. Olivas,

509 S.W.3d 499 (Tex.App.--El Paso 2016, no pet.). Olivas also involved a dispute over the amount

of commuted attorney’s fees to be paid following a district court trial. In approving the worker’s

9
attorney’s fee request, we stated that the insurance carrier “is a stranger to this dispute, other than

it was required to disburse the attorney’s fee from sums it was already responsible for paying.” Id.

at 509. That conclusion was not made, however, in reference to a standing dispute. Instead, we

considered the carrier’s relationship to the fee agreement in the context of how much evidence was

necessary to support the fee award. Id. Indeed, if the carrier lacked standing in Olivas, we would

have dismissed the case for want of jurisdiction and not reached the merits. See Garcia v. City of

Willis, No. 17-0713, 2019 WL 1967140, at *2 (Tex. May 3, 2019)(even though not raised by the

parties, “we are duty-bound to determine whether [standing] exists[.]”).

And here, we conclude that Texas Mutual has a sufficient relationship to the issue of

attorney’s fee issue to give it standing. Texas Mutual was ordered to advance the entire amount

of attorney’s fee that would otherwise be payable out of the DeJayneses’ weekly benefit checks.

That stream of payments is based on actuarial tables that may or may not reflect Ms. DeJaynes’s

actual lifespan. That stream could also end should Ms. DeJaynes ever decide to remarry. Thus,

by paying a commuted fee, Texas Mutual is being asked to accept the risk that Ms. DeJaynes will

live to at least her estimated life expectancy, or not remarry. Acceptance of that risk gives it a

personal stake in the controversy, and at least some potential injury in fact. See CenterPoint

Energy Entex v. R.R. Commn. of Texas, 213 S.W.3d 364, 368 (Tex.App.--Austin 2006, no

pet.)(utility complaining of franchise fee had standing even though it might have recovered the full

amount over time from municipal customers). That interest also distinguishes this case from the

proposition stated in Transcontinental Ins. Co. v. Crump, 330 S.W.3d 211, 229 (Tex. 2010) that

“[t]he insurance carrier can only be said to pay these fees in the technical sense that it drafts a

separate check for the attorney’s fees, payable directly to the claimant’s attorney.” The

DeJayneses’ cross-point challenging standing is overruled.

10
 COMMUTATION

In its first two issues, Texas Mutual challenges the trial court’s order that commuted the

attorney’s fee amount. Issue One contends the award could potentially exceed the statutory 25

percent cap on fees. Issue Two contends that a DWC rule only allows commutation out of a “sum

certain award or order to pay benefits.” Because both arguments turn on construction of a statute

or administrative rule, we start with our applicable standards for doing so.

Standard of Review

Statutory construction is a legal question that we review de novo. Entergy Gulf States, Inc.

v. Summers, 282 S.W.3d 433, 437 (Tex. 2009). Our primary focus in statutory interpretation is to

give effect to legislative intent, considering the language of the statute, as well as its legislative

history, the objective sought, and the consequences that would flow from alternate constructions.

Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 383 (Tex. 2000). We seek that intent “first and

foremost” in the statutory text. Lexington Ins. Co. v. Strayhorn, 209 S.W.3d 83, 85 (Tex. 2006).

We consider the words in context, and not in isolation. In re Office of the Atty. Gen. of Texas, 456

S.W.3d 153, 155 (Tex. 2015)(“Given the enormous power of context to transform the meaning of

language, courts should resist rulings anchored in hyper-technical readings of isolated words or

phrases”). We must presume that every word in a statute has been used for a purpose and that

every word excluded was excluded for a purpose. City of Richardson v. Oncor Electric Delivery

Co., 539 S.W.3d 252, 260 (Tex. 2018).

These general rules apply unless enforcing the plain language of the statute as written

would produce absurd results. Entergy, 282 S.W.3d at 437; see C & H Nationwide, Inc. v.

Thompson, 903 S.W.2d 315, 322 n.5 (Tex. 1994)(“Statutory provisions will not be so construed

or interpreted as to lead to absurd conclusions, great public inconvenience, or unjust

11
discrimination, if the provision is subject to another, more reasonable construction or

interpretation.”). Stated another way, we are required to presume that the legislature has acted

reasonably. TEX.GOV’T CODE ANN. § 311.021(3)(legislative enactments intend “a just and

reasonable result.”).

And because Texas Mutual also directs us to an administrative rule, we note that courts

should interpret an administrative rule as it would a statute, applying traditional principles of

statutory construction. TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 438 (Tex.

2011); Diaz v. R & A Consultants, 579 S.W.3d 460, 474 (Tex.App.--El Paso 2019, pet. filed).

The 25 Percent Cap

Texas Mutual first argues that commutation of the attorney’s fee could violate the 25

percent cap on fees found in Section 408.221 of the Act. The relevant text of the statute reads:

(e) The commissioner by rule or the court may provide for the commutation of an
attorney’s fee, except that the attorney’s fee shall be paid in periodic payments in
a claim involving death benefits if the only dispute is as to the proper beneficiary
or beneficiaries.
...
(i) Except as provided by Subsection (c) or Section 408.147(c), an attorney’s fee
may not exceed 25 percent of the claimant's recovery.6
TEX.LAB CODE ANN.§ 408.221. Texas Mutual argues that if the fee is commuted, it is possible

that the fee might exceed the 25 percent cap. For instance, Ms. DeJaynes could remarry, and while

her benefit checks would stop, Texas Mutual would have already paid out an attorney’s fee that

might be in excess of the cap. Or, if she passed away earlier than the life-expectancy tables predict,

the total attorney’s fees could also exceed the 25 percent cap.

We are not cited to any case law directly addressing Texas Mutual’s argument. Earlier

case law--decided under the prior worker’s compensation statute--allowed commutation of

6
Neither of the exceptions would apply here. Subsection (c) governs situations where the carrier appeals and loses.
Section 408.147(c) governs contests of supplemental income benefits.

12
attorney’s fee even where the future stream of payments was not necessarily fixed, including

payments to a spouse that could have terminated upon remarriage. See Texas Emp. Ins. Ass’n v.

Clapper, 605 S.W.2d 938, 943 (Tex.App.--Houston [1st Dist.] 1980, no writ); Texas Employers’

Insurance Association v. Flores, 564 S.W.2d 831, 833 (Tex.App.--Fort Worth 1978, writ ref’d

n.r.e.); Liberty Mutual Insurance Company v. Ramos, 543 S.W.2d 392, 393 (Tex.App.--El Paso

1976, writ ref’d n.r.e.). These cases relied on the Texas Supreme Court’s decision in Tex.

Employers Ins. Ass’n v. Motley, 491 S.W.2d 395 (Tex. 1973). Motley held that a trial court had

the discretion to commute an award, noting that the structure of the prior law restricted

commutation at the administrative level, but not once the case was appealed to a court. Id. at 396.

Motley notes that the amount of the future payments to the worker would be fixed in the judgment,

so there was no question as to the total amount of the worker’s award from which the attorney’s

share could be calculated. Id. Texas Mutual counters that the law in effect at that time did not

have an absolute cap of 25 percent on the fees, as does the present statute.7

We also addressed commutation in Olivas. But there, the carrier based its argument on

provisions of the Act that generally said that neither by settlement, nor court judgment, can future

benefits be paid in a lump sum. TEX.LAB.CODE ANN. §§ 410.257(b), 408.005(a). From this, the

carrier in Olivas argued that if the attorney’s fees are really being paid out of the worker’s recovery,

the attorney’s fee must also be paid over time. We rejected that claim, in part because Section

408.221(e) specifically allows for commutation in all but uncontested death benefit cases. 509

S.W.3d at 511. Moreover, the legislature is presumed to know the existing law when it enacts a

7
But to the contrary, Texas Mutual’s argument was seemingly addressed by the court in Flores which framed the
issue this way: “May the law sanction payment by first party to a third party of a contingent obligation of the second
party, when the obligation of the second party to make the payment might never occur?” 564 S.W.2d at 833. Flores
also noted that the law controlling its appeal included a 25 percent cap, and it held the trial court did not abuse its
discretion in awarding a commuted fee in a death benefits case. Id. at 832, 834.

13
statute, and commutation of attorney’s fee awards was accepted prior to the adoption of the new

Act. Id. at 512, citing TEX. GOV'T CODE ANN. § 311.023(4)(in construing a statute, a court may

consider “common law or former statutory provisions, including laws on the same or similar

subjects”). Had the legislature wanted to disallow commutation of attorney’s fees, it could have

done so, but instead it specifically permitted them. We reserved decision on other potential

challenges to commutation that the carrier had not urged in Olivas. 509 S.W.3d at 512 n.9 (noting

the carrier had not argued uncertainties of life expectancy tables or interest rate risks).

We reject Texas Mutual’s argument, however, because it would literally require every fee

in a death case to be based on a contingency, which is contrary to the wording of the statute, and

Texas Mutual’s other arguments. An example makes the point. Texas Mutual suggested below

that the trial court approve $79,375 as a reasonable fee. But even that amount might exceed the

25 percent cap if Ms. DeJaynes remarried or passed away within a short time of the judgment. The

only way to absolutely ensure that the 25 percent cap is not exceeded, would be to require some

contingency fee of 25 percent or less that is paid out over time. That way, if the underlying benefit

payments stopped, so too would the stream of attorney’s fees. But the plain text of the statute does

not require that attorney’s fee always be stated as a contingency. Instead, a contingency is only

one alternative, and every fee must be supported by evidence of the actual time and expenses of

the attorney. TEX.LAB.CODE ANN. § 408.221(a),(b).

Texas Mutual suggests that we can harmonize the provisions so that courts could commute

“future benefits only when the awarded fees fall short enough of the statutory cap such that

exceeding the cap is highly unlikely.” That is hardly a workable standard. It would require the

trial court to assess the likelihood of remarriage, or the health of the statutory beneficiaries, and

then define what is “highly unlikely.” It would leave trial courts little guidance on how close the

14
attorney’s fee would be to the 25 percent threshold before it is too close. And in this case, that

factual determination might well have been more fact intensive than the underlying issue that was

actually tried to the jury. As our supreme court has counseled, courts should not encourage

“satellite litigation as to attorney’s fees.” Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578

S.W.3d 469, 503 (Tex. 2019). Texas Mutual’s proposed construction would do just that.

We accordingly reject Texas Mutual’s claim that the 25 percent fee cap bars commutation

of attorney’s fee award when on-going payments might be terminated upon some future event. It

is enough that the approved fee, based on the expected benefit stream, does not exceed the 25

percent cap.

Sum Certain

Texas Mutual’s second argument contends that administrative rule 152.1(d) only allows

commutation out of a “sum certain award or order to pay benefits.” 28 TEX. ADMIN. CODE §

152.1(d)(2019)(Tex.Dep’t of Ins., Attorney Fees: General Provisions). Contending that neither

exist here, it claims commutation is not available. The full text of the rule provides in relevant

part:

An attorney’s fee for representing a claimant may upon request by the attorney or
carrier and approval by the commission be commuted to a lump sum only out of a
sum certain award or order to pay benefits. This commuted fee may be discounted
for present payment at the rate provided under the Act, § 401.023, and shall not
exceed 25% of the unpaid sum certain. A commuted fee shall be recouped by the
carrier out of the future income benefits paid to the represented claimant, not to
exceed more than 25% out of any single payment. The fee for representing a
claimant for death benefits cannot be commuted where the only dispute involves
identification of the proper beneficiaries.
Id. (emphasis added). Texas Mutual points us to the use of the term “sum certain” in other

contexts, claiming it excludes amounts based on actuarial forecasts. See Sharp v. Caterpillar,

Inc., 932 S.W.2d 230, 234 (Tex.App.--Austin 1996, pet. denied)(under franchise tax statute,

holding that estimated future retirement liabilities were not “a sum certain” and thus did not fall

15
within the statutory definition of “debt” under the statute). It also notes that the “sum certain” rule

post-dates earlier judicial decisions allowing commutation in death benefit cases.8

We conclude, however, that the argument fails for several reasons. First, Rule 152.1(d)

expressly references approval by the DWC of commuted fees, and not the district court. Next, the

rule requires that a commuted fee be paid “out of a sum certain award or order to pay benefits.”

28 TEX. ADMIN. CODE § 152.1(d). And while the trial court’s judgment did not include a specific

order to pay benefits, that was the natural result of its reversal of the DWC’s previous orders.

Third, reading the rule in context, as we must, undermines Texas Mutual’s claim. The last sentence

of the rule states: “The fee for representing a claimant for death benefits cannot be commuted

where the only dispute involves identification of the proper beneficiaries.” Id. That language

implies that commutation of benefits would be allowed in death benefit claims when some other

issue was contested. Finally, most death beneficiaries receive a future stream of benefits that might

be cut off on the happening of some future event. Eligible spouses are paid lifetime benefits until

they die or remarry. TEX.LAB.CODE ANN. § 408.183(b). Eligible children are paid benefits until

age 18, or possibly until age 25 if they are in school. Id. at § 408.183(c)(d). Eligible grandchildren

are entitled to benefits until they reach 18, or if they are already 18, then for a set number of weeks.

Id. § 408.183(f). But even that fixed amount of benefits would terminate on the death of the

grandchild. Id. Certain eligible dependents are entitled to lifetime benefits that terminate on the

death of the dependent, or the end of the physical or mental disability that renders them dependent.

Id. at § 408.183(e). Similarly, if there is no spouse, child, grandchild or dependent, a parent

8
The rule was adopted in 1994, while the several cases we noted in Olivas were all decided before that date. Cf. 19
Tex. Reg. 2548 (1994)(adopting rule) with Texas Emp. Ins. Ass’n v. Clapper, 605 S.W.2d 938, 943 (Tex.App.--
Houston [1st Dist.] 1980, no writ); Texas Employers’ Insurance Association v. Flores, 564 S.W.2d 831, 833
(Tex.App.--Fort Worth 1978, writ ref’d n.r.e.); Liberty Mutual Insurance Company v. Ramos, 543 S.W.2d 392, 393
(Tex.App.--El Paso 1976, writ ref’d n.r.e.).

16
receives a set number of weekly benefits. Id. at § 408.183(f-1). Yet those set benefits would also

terminate on the death of the parent. Id. Because all these scenarios lack a “sum certain” they

would not qualify for commutation under Texas Mutual’s reading of rule. But that interpretation

would effectively read the last sentence of Rule 152.1(d) out of the rule, and violate the

presumption that every word in a statute has been used for a purpose. Oncor Electric Delivery,

539 S.W.3d at 260.9 We overrule Issues One and Two.

CONTINGENCY OR MODIFIED LODESTAR?

In Texas Mutual’s next three issues, it challenges the fee award because it is based on a

contingency and not an hourly rate multiplied by the hours worked. It also contends the hourly

rate used for comparison purposes is based on an improper risk multiplier. Finally, Texas National

claims many of the hours spent were unjustified.

Texas Mutual’s argument returns us to the construction of Section 408.221 that we faced

in Olivas. The relevant portion of the statute provides:

(a) An attorney’s fee, including a contingency fee, for representing a claimant
before the division or court under this subtitle must be approved by the
commissioner or court.

(b) Except as otherwise provided, an attorney’s fee under this section is based on
the attorney’s time and expenses according to written evidence presented to the
division or court. Except as provided by Subsection (c). . . , the attorney’s fee shall
be paid from the claimant's recovery.
...
(d) In approving an attorney’s fee under this section, the commissioner or court
shall consider:
(1) the time and labor required;
(2) the novelty and difficulty of the questions involved;
(3) the skill required to perform the legal services properly;
(4) the fee customarily charged in the locality for similar legal services;
(5) the amount involved in the controversy;
(6) the benefits to the claimant that the attorney is responsible for securing; and

9
Given our resolution of this issue, we need not reach the DeJayneses’ alternate claim that a court’s application of the
DWC’s rules violates the separation of powers doctrine.

17
 (7) the experience and ability of the attorney performing the services.
TEX.LAB.CODE ANN. § 408.221. Subsection (a) expressly contemplates that contingency

agreements might be approved by either the DWC or a court. Subsection (b), however, provides

that an attorney’s fee must be based on the attorney’s time and expenses. Subsection (d) further

sets out seven of the factors that the Texas Disciplinary Rules for Professional Conduct use for

determining a reasonable fee. TEX. DISCIPLINARY R. PROF. CONDUCT 1.04, reprinted in TEX.

GOV'T CODE, tit. 2, subtit. G, app. A (State Bar Rules, art. X, § 9); see also Arthur Andersen & Co.

v. Perry Equip. Corp., 945 S.W.2d 812 (Tex. 1997)(adopting Rule 1.04 criteria for use in judging

reasonableness and necessity of attorney’s fees). The statute omits, however, the eighth factor:

“whether the fee is fixed or contingent on results obtained or uncertainty of collection before the

legal services have been rendered.” Cf. TEX. DISCIPLINARY R. PROF. CONDUCT 1.04(b)(8) with

TEX.LAB.CODE ANN.§ 408.221(d)(1-7).

We faced a similar issue in Olivas, where the insurance carrier challenged the commuted

attorney fee in a lifetime benefits case. The trial court approved a fee based on a 25 percent

contingency. 509 S.W.3d at 502. The attorney had also included an affidavit that addressed each

of the Section 408.221(d) factors, albeit some in an abbreviated fashion. Id. at 509. In particular,

the attorney had not included the total hours expended in the case, or any one particular task. Yet

the record before the trial court would have informed the trial court of the substantial work that

had been done: the case involved “twelve benefit review conferences and six contested case

hearings, resulting in six appeals to the DWC’s Appeals Panel, and two suits for judicial review.”

Id. at 501. We concluded that the trial court had not abused its discretion in approving the 25

percent contingency fee. Id. at 510. Two facets of the Olivas decision are important here.

First, we concluded that the purpose of the trial court approving the fee under Section

408.221(b) is primarily “to protect the worker from any potential overreaching by her own

18
attorney.” Id. at 509, citing Fidelity Union Cas. Co. v. Dapperman, 53 S.W.2d 845, 847

(Tex.App.--Amarillo 1932, writ ref’d)(approval of attorney’s fee is intended to “protect the

helpless and unwary from unconscionable contracts”). This function reconciles subsection (a)’s

allowance of contingency agreements, with subsection (b)’s requirement that a court consider the

time and expense expended by the attorney, as well as subsection (d)’s inclusion of most of the

Disciplinary Rule 1.04 factors. A hypothetical illustrates the point. Assume that in a case such as

this, the worker’s attorney was able to convince the insurance carrier to capitulate its position with

a single phone call at the outset of the case. In that situation, the trial court would have to consider

if the amount of time expended justifies the 25 percent contingency agreement between lawyer

and client, and the court might well conclude that it would not.10 So as we said in Olivas, the fact

of the contingency agreement by itself will not support a trial court’s approval of such a fee. The

lawyer must offer evidence to meet the requirements in Section 408.221(b) and (d). And once the

lawyer does so, we review the trial court’s decision for an abuse of discretion. Id. at 510, citing

Ragsdale v. Progressive Voters League, 801 S.W.2d 880, 881 (Tex. 1990). In conducting that

review, must decide whether the trial court had sufficient evidence before it to exercise that

discretion. Id., citing Alford v. Johnston, 224 S.W.3d 291, 298 (Tex.App.--El Paso 2005, pet.

denied).

10
Compare how federal courts treat fee applications in social security cases. By statute, when a court awards past due
benefits, it may allow “a reasonable fee . . . not in excess of 25 percent of the . . . past-due benefits” awarded to the
claimant’s attorney. 42 U.S.C. § 406(b)(1)(A). The fee is payable out of the claimant’s benefits. Id. The Court has
recognized that most social security claimants are represented under a contingency fee agreement, and the federal
statute does not require a lodestar analysis of the fee. Gisbrecht v. Barnhart, 535 U.S. 789, 803, 808-09 (2002). The
claimant’s attorney must show, however, that the fee sought is reasonable for the services rendered within the 25
percent boundary. Id. at 795; see also Rodriquez v. Bowen, 865 F.2d 739, 746 (6th Cir. 1989)(justifying reductions
from a 25 percent contingency based on “improper conduct or ineffectiveness of counsel” or “situations in which
counsel would otherwise enjoy a windfall because of either an inordinately large benefit award or from minimal effort
expended.”); McGuire v. Sullivan, 873 F.2d 974, 981 (7th Cir. 1989)(“In all cases, the court should consider the
reasonableness of the contingency percentage to make sure the attorney does not receive fees which are out of
proportion to the services performed, the risk of loss and the other relevant considerations.”).

19
 The second distinction that we drew in Olivas is that the order to pay attorney’s fees from

a worker’s recovery is not the same as fee-shifting that occurs in other contexts. When one party

seeks to have the opposing party pay their fees, courts will require the party seeking a fee to prove

the reasonableness and necessity of the requested attorney’s fees. Rohrmoos Venture, 578 S.W.3d

at 484. They do so through the “lodestar” formula:

Under the lodestar method, the determination of what constitutes a reasonable
attorney’s fee involves two steps. First, the court must determine the reasonable
hours spent by counsel in the case and a reasonable hourly rate for such work. The
court then multiplies the number of such hours by the applicable rate, the product
of which is the base fee or lodestar. The court may then adjust the base lodestar up
or down (apply a multiplier), if relevant factors indicate an adjustment is necessary
to reach a reasonable fee in the case.
El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 760 (Tex. 2012)(citations omitted). And there is little

doubt that the affidavit in this case would not provide sufficient information to meet the lodestar

test. The affidavit provided only a total number of hours with no breakdown of activities. Cf. City

of Laredo v. Montano, 414 S.W.3d 731, 736 (Tex. 2013)(claim that attorney spent 1,356 hours

reviewing thousands of documents and preparing for trial insufficient); El Apple, 370 S.W.3d at

763 (affidavit that provided gross number of hours was insufficient). These cases, however, were

fee-shifting cases where one litigant attempted to have their opponent pay its attorney’s fee.

Montano, 414 S.W.3d at 736; El Apple, 370 S.W.3d at 763; see also City of Burlington v. Dague,

505 U.S. 557, 562 (1992)(“The ‘lodestar’ figure has, as its name suggests, become the guiding

light of our fee-shifting jurisprudence.”)(emphasis added). We distinguished fee-shifting cases in

Olivas, noting that under Section 408.221, the trial court was approving an attorney’s fee

ultimately to be paid by the injured worker to her own counsel. 509 S.W.3d at 509, citing Arthur

Anderson, 945 S.W.2d at 818 (stating that while a contingent fee may be “a reasonable fee from

the standpoint of the parties to the contract” more would be required to make the fee reasonable

for purposes of shifting the fee to the other side).

20
 Applying these principles, we reject all but one of Texas Mutual’s attack on the amount of

the fee. First, we conclude that the trial court would not have abused its discretion in upholding a

25 percent contingency fee simply because it was a contingency. The text of Section 408.221(a)

expressly contemplates that contingency agreement could be approved. That plain text belies

Texas Mutual’s argument that contingency agreements are always improper as a matter of law.

And while Texas Mutual suggests that Section 408.221(a) might be referring to some other kind

of contingency agreement, it does not explain what that might be. A contingent fee agreement is

commonly understood:

Fees for legal services in litigation may be either “certain” or “contingent” (or some
hybrid of the two). A fee is certain if it is payable without regard to the outcome of
the suit; it is contingent if the obligation to pay depends on a particular result’s
being obtained. Under the most common contingent-fee contract for litigation, the
attorney receives no payment for his services if his client loses.
Dague, 505 U.S. at 560-61; see also Contingent fee, Black’s Law Dictionary 387 (10th ed. 2014)

(defining contingent fee as: “A fee charged for a lawyer’s services only if the lawsuit is successful

or is favorably settled out of court. Contingent fees are usually calculated as a percentage of the

client’s net recovery[.]”). The express reference to contingency agreements in Section 408.221(a)

must mean something. The fact that a fee is based on a contingency, therefore, does not disqualify

it for that reason alone. We accordingly overrule Issue Three.

We also find Texas Mutual’s challenge to the amount of time spent unavailing. It focuses

on the amount of time for: travel (161 hours); focus groups (40 hours); meeting with experts (16

hours); attending the summary judgment hearing (9 hours); and investigating the intoxication issue

(50 hours). For several of these issues, the DeJayneses claim that Texas Mutual forced the issue.

For instance, Ms. DeJaynes was deposed in Florida at Texas Mutual’s insistence when she was

offered for a telephonic deposition and had no real knowledge of the single issue submitted to the

jury. Additionally, the DeJayneses claim that Texas Mutual insisted on the summary judgment

21
hearing that could have been decided on written submission. As to the other items, the DeJayneses

claim the gravity of the suit required consulting with experts, even though an eventual decision

was reached to try the case on fact witnesses alone. We defer to the trial court on these particular

matters and note that it had some evidence from which to hear and reject these specific

challenges.11 Issue Five is overruled.

We must agree, however, with Texas Mutual’s argument on the appropriate hourly rate.

Texas Mutual offered a State Bar of Texas study on legal fees that for 2015 found the median

billing rate for highly experienced attorneys in West Texas was $273 per hour. The DeJayneses’

attorney referenced another publication reporting the statewide average billing rate of $267 per

hour (and $300 per hour in the Dallas area). And importantly here, the DeJayneses’ counsel

averred that his usual billing rate is $300 per hour, but because this was a contingency matter, he

used a $450 per hour rate. A careful review of Section 408.221(d) leads us to conclude that the

contingency nature of the fee agreement cannot be used--at least in this manner--to enhance the

fee. When the legislature adopted Section 408.221(d), it lifted seven factors from the Texas Rules

of Disciplinary Procedure used to evaluate fee agreements. It omitted an eighth factor that would

also consider “whether the fee is fixed or contingent on results obtained or uncertainty of collection

before the legal services have been rendered.” TEX. DISCIPLINARY R. PROF. CONDUCT 1.04(b)(8).

Elements of that eighth factor had been discussed in the case law as early as the Fifth Circuit’s

influential opinion in Johnson v. Georgia Hwy. Exp., Inc., 488 F.2d 714, 718 (5th Cir. 1974). Its

11
Of all these matters, the amount of travel is the most troubling, amounting to almost a solid month of travel time.
Courts have considerable discretion in evaluating travel time, and may, in their discretion reduce working and non-
working travel time. Am. Zurich Ins. Co. v. Jasso, 598 Fed. Appx. 239, 249-50 (5th Cir. 2015)(unpublished), citing
In re Babckock & Wilcox Co., 526 F.3d 824, 828 (5th Cir. 2008) (per curiam) and Watkins v. Fordice, 7 F.3d 453,
458–59 (5th Cir. 1993). Nonetheless, we leave to the trial judge the intricacies of travel in the vast plains of West
Texas.

22
omission from Section 408.022(d) must be accorded significance. And its inclusion in the analysis

here was far more than trivial.

The DeJayneses’ attorney sought a $237,071.13 fee based on a 25 percent contingency.

Taking the 457 hours claimed, multiplied by the $450 rate, nets a fee of $205,650, which is some

$31,000 less than the sum awarded. Stripping away the contingency enhancement leaves a $300

hourly rate which results in a $137,100 fee, almost $100,000 less than what was awarded. This

seems to us like a double enhancement based on a factor the legislature sought to exclude in the

approval of a fee. That is, the fact of the contingent nature of the case is first used to jump the

normal hourly fee from $300 to $450 per hour (a 50 percent increase), and then is used again to

justify the gap between a time and hour fee and the 25 percent contingency. This was just the sort

of double counting the Texas Supreme Court recently disapproved of in Rohrmoos. 578 S.W.3d

at 500 (“And an enhancement or reduction of the base lodestar figure cannot be based on a

consideration that is subsumed in the first step of the lodestar method.”).

Accordingly, we sustain Issue Four and remand the case for consideration of the fee in

accordance with this opinion. We emphasize, however, that because this is not a true fee-shifting

case, a strict application of the lodestar formula is not required. The trial court here approves the

attorney’s fee but must have before it evidence as required by Section 408.221(b) and (d). How it

evaluates that evidence lies within the trial court’s discretion. We remand only because one

significant piece of that evidence included a factor that the legislature has deemphasized in

worker’s compensation cases. On remand, the total number of hours spent by all of the

DeJayneses’ counsel and legal assistants, considered in light of appropriate hourly rates, and

including all of their expenses, may or may not just the total fee sought here. We leave that to the

trial court to decide.

23
 JURY OR BENCH TRIAL

Texas Mutual finally contends in Issue Six that it is entitled to have a jury decide the

appropriate fee. The Texas Supreme Court held in Crump that when an insurance carrier is asked

to pay the worker’s attorney fees out of its own funds under Section 408.221(c), it has a right to a

have a jury determine the amount of fees. Crump, 330 S.W.3d at 227 (“We hold that when a

question of fact exists on the reasonableness and necessity of a claimant’s attorney’s fees under

§ 408.221(c), the carrier has a right to submit that question to a jury.”). But it also noted that it

would be improper for a Section 408.221(b) attorney’s fee to be determined by a jury. Id. at 229-

30, quoting Tex. Employers Ins. Ass’n v. Hatton, 255 S.W.2d 848, 849 (1953)(“The amount of

attorney’s fees to be allowed in a compensation case is exclusively for the court and not the

jury[.]”). And the fees in this case were approved under Section 408.221(b).

Texas Mutual attempts to distinguish Crump, however, based on the commutation of the

fee. That is, because it is assuming the risk that the DeJayneses might not live to life expectancy,

or might otherwise trigger an early termination of benefits, it has enough stake in the controversy

to entitle it to litigate the attorney’s fee issue before a jury. We reject the argument for one reason.

The issue of a jury trial was first raised in a motion to modify the judgment, well after a

final judgment was signed, and the trial court had already ruled on the attorney’s fee issue. The

DeJayneses filed an original Motion for Approval of Attorney’s Fees on August 23, 2017 that they

amended on October 2, 2017. Texas Mutual filed a response which did not ask for jury trial, but

rather asked the trial court to set a fee of $79,375. The trial court heard the matter and signed its

order on attorney’s fee on May 22, 2018. On June 21, 2018, Texas Mutual filed its motion to

modify the judgment which for the first time first sought jury trial. At the same time, it filed its

demand for jury trial. We treat this issue as we would the denial of a motion for new trial which

24
is addressed to the trial court’s discretion--its ruling will not be disturbed on appeal in the absence

of a showing of an abuse of discretion. See Waffle H., Inc. v. Williams, 313 S.W.3d 796, 813

(Tex. 2010); Dir., State Employees Workers’ Compen. Div. v. Evans, 889 S.W.2d 266, 268 (Tex.

1994). Having expended its own time and resources deciding the question of attorney’s fees, the

trial court could well have exercised its discretion to deny the motion which essentially requested

a do-over before a jury.

Accordingly, we overrule Issue Six. Based on Issue Four, however, we reverse the order

awarding attorney’s fees and remand for consideration in accordance with this opinion. Otherwise,

the judgment below is affirmed.

ANN CRAWFORD McCLURE, Chief Justice (Senior Judge)
November 25, 2019

Before Rodriguez, J., Palafox, J., and McClure, C.J. (Senior Judge)
McClure, C.J. (Senior Judge), sitting by assignment

25