NO. 8 8 - 4 9 2
IN THE SUPREME COURT OF THE STATE OF MONTANA
1989
EUGENE J . HONEY,
Claimant and Appellant,
VS.
STOLTZE LAND AND LUMBER COMPANY,
Employer and Respondent,
and
STOLTZE LAND AND LTJMREF. COMPANY,
Defendant and Respondent.
APPEAL FROM: Workers' Compensation Court,
The Honorable Timothy Reardon, Judge presiding
COTJNSEL OF RECORD:
For Appellant:
John G. Bell; Bell, Corn & Bell, P.C., Hamilton, Montana
For Respondent :
Alan L. Joscelyn; Gough, Shanahan, Johnson & Waterman,
Helena, Montana
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Submitted on Briefs: Dec. 16, 1 9 8 8
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Decided: February 7, 1 9 8 9
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Mr. Justice John Conway Harrison delivered the Opinion of the
Court.
This appeal arises from the decision of the Workers'
Compensation Court limiting claimant's attorney's fees to the
contingent fee aqreement without considering the time records
and affidavit of his counsel. F e reverse and remand for an
7
evidentiary hearing.
On February 10, 1984, Eugene Honey sustained a
compensable injury. By order dated July 29, 1988, the
Workers' Compensation Court determined claimant was entitled
to 50 weeks of permanent partial disability benefits at the
rate of $138.50 per week for a sum total of $6,925. The
order further stated:
4. Claimant is entitled to attorney fees
and costs. Because the injury occurred
in 1984, the contingency fee is the
appropriate means of computing claimant's
entitlement. The standard agreement
approved by the Division of Workers'
Compensation for cases being resolved by
this Court allows for an award of 33
percent of the benefits received as a
result of the attorney's effort.
Therefore, in the case at bar, claimant
is entitled to attorney fees of 33
percent of $6,925.00, or $2,208.79 [sic],
subject to the terms set forth in the
Judgment number three.
Continuing a review of the order, paragraph number 3. stated:
3. Claimant is entitled to an award of
attorney fees and reasonable costs
pursuant to Section 39-71-612, MCA. The
attorney for the claimant shall serve
this Court and opposing counsel no later
than 20 days from the date of this Order
a statement of the hours he or she
compiled in pursuing this matter, the
costs incurred, a statement of the
attorney's customary and current hourly
fee and a copy of the fee agreement as
approved by the Division of Workers'
Compensation. Claimant's counsel shall
submit a proposed Order specifying the
amount of attorney fees claimed. If the
defendant or the claimant believes the
amount due the claimant's attorney is
unreasonable, then each has 30 days from
the date of this Order to file a Motion
for Evidentiary Hearing Regardinq
Reasonableness of Attorney Fees; the
motion shall be accompanied by an
affidavit and statement of the grounds on
which either the defendant or the
claimant believes the amount due the
claimant's attorney is unreasonable.
Pursuant to the order, claimant's attorney filed a copy
of the attorney-client agreement under which the claimant
agreed to pay his attorney a contingent fee. In addition,
claimant's attorney filed a sworn affidavit which established
he worked on the case a total of 111.10 hours, which resulted
in claimed attorney's fees of $9,443.50, and costs of
$1,335.85. The affidavit also contained detailed statements
of time records converted to a monetary sum based on the
attorney's customary and current hourly rate. Finally,
claimant's attorney submitted a proposed order specifying the
amount of attorney's fees claimed. Claimant' s attorney dj-S1
not, however, request an evidentiary hearing.
In response to the fee proposal, the respondent filed a
letter with the Workers' Compensation Court, objecting to any
award in excess of the contingent fee agreement. By order
dated August 31, 1988, the Workers' Compensation Court found:
[A]s part and parcel of the Judgment
herein, the Court directed counsel for
the claimant to prepare and file with the
Court a compilation of the number of
hours devoted to the prosecution of the
claim and to set forth a reasonable
hourly rate. This is all in accord with
the ruling of the Supreme Court in [Wight
v. Hughes Livestock Co., Inc. (1983), 204
Mont. 98, 6 6 4 P.2d 3031... , in which
one of the criteria allowing the presumed
reasonableness of the contingency fee is
the number of hours required to prosecute
the claim and granting either party an
opportunity to request an evidentiary
hearing to deviate from the presumed
propriety of the contingent fee.
Claimant complied with the directive of
the Court and has filed a statement of
hours wherein he claims 111 hours and a
total attorney fee under that contention
in excess of $10,000.00.
Employer/insurer has responded, raisinq
no objection to the 33 percent contingent
fee, but objecting to any fee in excess
of the contingent fee for the reason that
no evidentiary hearing was requested
wherein the Court would take evidence to
deviate from the presumption of the
reasonableness of the contingent fee.
Having considered the matter, the Court
finds that the claimant has not requested
an evidentiary hearing so as to allow the
Court to deviate from the presumed
reasonableness of the contingency fee
and, accordingly, finds that the
contingency fee is reasonable and directs
that the insurer pay attorney fees in the
amount of $2,708.79 and costs as
submitted.
Claimant appeals from the foregoing order, alleging the
lower court committed reversible error by fixing attorney's
fees at the amount of the contingent fee contract without an
evidentiary hearing. We agree.
In Wight v. Hughes Livestock Co., Inc. (1983), 204
Mont. 98, 6 6 4 P.2d 303, this Court adopted several elements
to he considered in determining the reasonableness of
contingent fee contracts and the amount of attorney's fees to
he awarded.
[Iln determining a reasonable attorneys
fee . . . [the judge] must engage in a
balancing process and consider on
contingent basis the following factors:
"(1) The anticipated time and labor
required to perform the legal service
properly.
" (2) The noveltv and difficulty of legal
issues involved in the matter.
" (3) The fees customarily charged for
similar legal services.
" ( 4 ) The possible total recovery if
successful.
"(5) The time limitations imposed by the
client or circumstances of the case.
" (6) The nature and length of the
attorney-client relationship.
" (7) The experience, skill and
reputation of the attorney.
"(8) The ability of the client to p:
a'
for the legal services rendered.
" (9) The risk of no recovery." . . .
Not mentioned . .
. but surely a.
factor to be considered, is the market
value of the lawyer's services at the
time and place involved.
Wight, 664 P.2d at 311-312, citing Clark v. Sage (Idaho
1981), 629 P.2d 657, 661. The above are more than mere
suggestions, " [t]he lower court was required to consider the
foregoing in its determination of the reasonableness of the
contingent fee contract and the amount of attorneys fees to
. .
be awarded. " Mcnanold v. B. N. Transport, Inc (Mont 1985) ,
701 P.2d 1001, 1004, 42 St.Rep. 940, 944. However, the
Workers' Compensation Judge, in fixing the fee of $2,208.79,
did not consider the proper factors.
The respondent maintains that the Workers' Compensation
Court cannot vary from the contingent fee agreement in the
absence of a hearing, given the strong presumption of
reasonableness in favor of the approved agreement. Instead,
the party wishing to depart from the contingent fee must
request a hearing. Respondent argues the lower court's order
must be affirmed.
Claimant contends he was not required to request an
evidentiary hearing. The lower court's order required the
claimant's attorney to submit a proposed order for reasonable
attorney fees, supported by documentation. Only in the event
a party believes the amount due under the proposed order is
unreasonable would an evidentiary hearing be necessary.
Claimant argues the respondent's letter objecting to any fee
greater than the contingency amount was, in effect, an
implied request for a hearing. Finally, claimant states the
order was ambiguous, and he should be allowed a hearinq
before the Workers' Compensation Court to establish an award
of fees under the Wight guidelines.
Neither party presents a definitive answer to explain
the absence of a request for an evidentiary hearing. Nor
does such absence explain the lower court's disregard for the
documentation presented by the claimant's attorney. Indeed,
the facts demonstrate a need for an evidentiary hearing. On
the one hand, the claimant's attorney submitted an affidavit
and time records establishing 110.10 hours were expended
toward the case and justifying fees of nearly $10,000.
Further, clai-mant's secured an award of $6,925 for
his client.
Certainly, substantial additional evidence reflecting
the Wight guidelines is necessary before the Workers'
Compensation Court may determine reasonable attorney's fees.
Therefore, we reverse the decision of the Workers'
Compensation Court and remand for an evidentiary hearing.