Ellis v. Industrial Commission , 91 Utah 432 ( 1937 )

There is a long story forming a background to this proceeding. Two reviews have been before this court in which Glen Spencer was the applicant, plaintiff, or petitioner for a review of the action of the Industrial Commission of Utah. The opinions are reported in Spencer v. Industrial Comm., 81 Utah 511,20 P.2d 618; Id., 87 Utah 336, 40 P.2d 188, and on rehearing in 87 Utah 358, 48 P.2d 1120. After the case of Spencer v.Industrial Commission, just referred to, had been decided by the court, there was, as alleged by Mr. Paul G. Ellis, attorney for Mr. Spencer, some delay on the part of the Industrial Commission in the making of an award to Spencer. When the award was made, the Industrial Commission made an allowance to Mr. Ellis as attorney's fee in the sum of $300.

Before the first petition to the Supreme Court had been filed, Mr. Spencer and Mr. Ellis had entered into a written agreement, to the effect that Mr. Ellis was to undertake and carry the matter to the Supreme Court and to a conclusion for a contingent fee of 50 per cent of the amount Spencer should receive in the event an award should be made to Spencer for his alleged disability. This agreement was made after the Industrial Commission had denied Spencer compensation, and before Mr. Ellis had appeared in the case.

The issues or claims are set forth in a stipulation by counsel as follows: 1

"It is hereby stipulated by and between Geo. Y. Wallace, as attorney for P.G. Ellis, and Bagley, Judd Ray, as attorneys for Utah State Road Commission and The State Insurance Fund, that upon the hearing and disposition of the issues made upon the amended petition of P.G. Ellis it may be considered:

"1. That the Industrial Commission claims the right to fix and determine the fees of attorneys appearing in support of claims for compensation filed with the Industrial Commission, both for services rendered before the Commission and before the Supreme Court on certiorari.

"2. That the Commission claims that in fixing fees of attorneys appearing in matters coming before the Commission it may determine such fees without regard to any contracts made or entered between applicants for compensation and their attorneys for services rendered either before the Commission or before the Supreme Court on certiorari.

"3. That the Commission claims that an award of compensation made by it is not subject to any attorney's lien for services rendered by said attorney in procuring said compensation whether the attorney does or does not have a contract with the applicant fixing as between the applicant and the attorney the fees of such attorney.

"4. That the records and files pertaining to Claim No. 2985 may be considered by the Commission as a part of the record made on said amended petition.

"5. That the testimony of P.G. Ellis marked for identification Exhibit ``X' and made a part hereof may be considered by the Commission in so far as the same is competent, relevant and material.

"6. That the issues made by applicant's amended and supplemental petition and the answer thereto may be submitted for decision."

Paragraphs Nos. 1, 2, and 3 refer to the authority claimed to be vested in the Industrial Commission as to the matter of attorney's fees in cases arising before the commission. They are questions of law and may be considered on this review only if passed upon by the commission and included in the record before us for review. Paragraph No. 4 of the stipulation refers to file No. 2985, which is the number of the Spencer file in the matter of the application of Glen Spencer for compensation before the Industrial Commission and would appear to be only a matter to be referred to as evidence before the Industrial Commission, indicating some measure of the amount of work done by the attorney before the commission and on the reviews before the Supreme Court. Paragraph No. 5 stipulates that Mr. Ellis' testimony, in so far as competent, relevant, and material, may be considered by the commission. Paragraph No. 6 submits the matter to the Industrial Commission for decision.

The record is here for review, only upon the application of Mr. Ellis for review upon the matter of the determination by the Industrial Commission of the attorney's fee and the amount thereof. The commission fixed the fee of its own motion at the sum of $300. Later, and upon the petition and amended and supplemented petition of Mr. Ellis and the taking of testimony thereon and in pursuance thereof, the commission made findings and rendered a decision. The amount allowed for the services of Mr. Ellis as attorney in the Spencer Case was again fixed at the sum of $300.

Much is said in the briefs on file herein about the conflicting interests represented by the commission, and, as regarded by the applicant, the unfortunate 2 setup in the administration of the Workmen's Compensation Law (42-1-1 et seq.), the State Insurance Fund, and kindred matters.

Any desired change in these matters is for the Legislature. If it be found that the policy established tends to work unfairness or injustice as to parties before the Industrial Commission, or fails in the accomplishment of the purposes of the law, application to the Legislature should be made to remedy the situation. We shall not further refer to the discussion of these matters.

Applicant maintains that the amount fixed by the commission is wholly inadequate and is not commensurate with the amount of labor expended, the time consumed, nor the value of the service performed. The fee was fixed by the commission by virtue of the authority conferred by section 42-1-81, R.S. Utah 1933. It is there provided:

"In all cases coming before the industrial commission in which attorneys have been employed, the commission is vested with full power to regulate and fix the fees of such attorneys."

That the commission originally fixed the attorney's fee without petition or the taking of testimony is of no consequence in this case, for the reason plaintiff herein later filed an application to have the commission fix the fee, at the same time objecting to the amount as fixed and questioning the authority of the commission to fix or determine attorney's fees for services rendered other than before the commission. Applicant also filed a supplemental and amended application and later filed a petition for a rehearing. It was, as heretofore shown, stipulated after testimony taken that "the records and files pertaining to Claim No. 2985 (the Spencer Case) may be considered by the commission as a part of the record made on the amended petition," also that the testimony of P.G. Ellis, which is included as a part of the record, might, in so far as competent, relevant, and material, be considered by the commission. During the taking of testimony, relative to attorney's fees and pursuant to the amended and supplemental application, counsel for plaintiff, among other things, stated:

"I think that section 42-1-81 empowers the Commission to fix the fees for services of an attorney on behalf of an applicant before it. I deny that that section, properly construed, empowers the Commission to fix fees for services of an attorney before the Supreme Court. I deny that the Commission under that section has the right to act arbitrarily in fixing fees, but can only fix the fees after taking testimony and making findings justified by the testimony."

That the fixing of an attorney's fee was before the commission for hearing and determination is clear; that testimony was taken on the issue is not open to question; that a decision was rendered is manifest from the petition for rehearing and the application to this court for a review of the 3 decision. The question here for review is: May the Industrial Commission regulate and fix attorneys' fees in all cases coming before the commission in which an attorney has been employed? It is apparently conceded that the commission has power to regulate and fix the fees of attorneys in cases before the commission, barring arbitrary or capricious action on the part of the commission, but counsel for plaintiff divides that authority, limiting the power of the commission, first, to fix fees for services rendered while the cause is actually pending before the commission, and second, denying that the commission has authority to consider fees or services rendered in the proceeding before the Supreme Court.

We are of the opinion the distinction is not tenable. It is one cause. The review in effect either affirms or reverses the decision of the commission. No matter what the decision on the writ of review by the Supreme Court, the cause begins and ends with the Industrial Commission. This court does not direct the commission what orders or findings to make. It determines whether or not the commission was in error as to matters of law. Section 42-1-78, R.S. 1933; Colonial Bldg Loan Ass'n v. IndustrialComm., 85 Utah 65, 38 P.2d 737; Ogden Union Ry. Depot Co. v. Industrial Comm., 85 Utah 124, 38 P.2d 766; Chase v.Industrial Comm., 81 Utah 141, 17 P.2d 205.

The power given to the commission to regulate and fix attorneys' fees includes all cases coming before the Industrial Commission in which attorneys have been employed. This power is vested in the commission by virtue of the statute, expressed in rather sweeping language. We do not find in this statute any power given to this court to regulate or fix attorneys' fees in industrial compensation cases, nor to do other than review the matter of attorneys' fees in the same manner and with the same limitations as the court may review any other decision of the Industrial Commission.

When an attorney has filed a petition either objecting to a fee fixed by the commission or asking 4 that a fee be fixed, he is entitled to ask for a rehearing thereon as provided by section 42-1-76, R.S. 1933, thus:

"Any party to a proceeding before the commission may, and before he can seek a review in the supreme court shall, within thirty days after written notice of its decision file an application before the commission for a rehearing of the matter."

The record reveals that the above section was complied with. The procedure for a review of the decision of the commission, the limitations and powers of review by the Supreme Court, and the limitations thereof are provided by sections 42-1-77 and 42-1-78, R.S. 1933, as follows:

"Within thirty days after notice that the application for a rehearing is denied, or, if the application is granted, within thirty days after notice of the rendition of the decision on the rehearing, any party affected thereby may apply to the supreme court for a writ of certiorari for the purpose of having the lawfulness of the original award or the award on rehearing inquired into and determined." Section 42-1-77.

"Such writ shall be made returnable not later than thirty days after the date of the issuance thereof, and shall direct the commission to certify its record, which shall include all the proceedings and the evidence taken in the case, to the court. On the return day the cause shall be heard unless for good cause the same is continued. No new or additional evidence may be introduced in such court, but the cause shall be heard on the record of the commission as certified by it. The review shall not be extended further than to determine:

"(1) Whether or not the commission acted without or in excess of its powers.

"(2) If findings of fact are made, whether or not such findings of fact support the award under review." Section 42-1-78.

The conclusiveness of the findings of the commission and the nature of the judgment to be entered by the court upon review are provided by section 42-1-79, R.S. 1933, which reads:

"The findings and conclusions of the commission on questions of fact shall be conclusive and final and shall not be subject to review; such questions of fact shall include ultimate facts and the findings and conclusions of the commission. The commission and every party to the action or proceeding before the commission shall have the right to appear in the review proceeding. Upon the hearing the court shall enter judgment either affirming or setting aside the award."

No construction of the Utah statute relating to the regulating or fixing of attorneys' fees by the commission has heretofore been made by this court. An examination of the statutes of other jurisdictions relating to attorneys' fees in workmen's compensation acts reveals that generally it is provided that claims for compensation under the acts are not assignable, that compensation and claims are exempt from claims of creditors, and claims of attorneys, physicians, hospitals, etc., for services under the act are subject to approval either by the commission, board, or department, or by the court making the award. Contracts relating to contingent fees are in certain instances recognized as legal, but the fee notwithstanding the contract is still subject to the approval of the commission or board or the court.

We are of the opinion that, although the contract for a 50 per cent attorney's fee was admitted as between the parties, it is not binding upon the commission in view of our statute on the subject. We think this is true notwithstanding the general statute (section 6-0-40, R.S. 1933) providing 5 the compensation of an attorney and counselor for his services is governed by agreement, express or implied, which is not restrained by law. Section 6-0-40 is a general statute, while section 42-1-81 is a special statute, and were there a conflict the latter would control as related to the special subject to which it applies.

In other jurisdictions, under statutes, some of which are of similar import, in none of which do we find the exact wording found in the Utah statute, and none which are as broadly sweeping in terms, the right of an Industrial Commission, board, or court to regulate, fix, or limit the fees of counsel contrary to contract terms has been challenged.

As indicative of the trend and attitude of the courts and bar upon the matter of compensation of attorneys in industrial compensation cases, we take the liberty of quoting rather liberally from the case of Corbin v. Wilkinson, 175 Okla. 247,52 P.2d 45, 47, which in turn quotes from a New York case. The Oklahoma court says:

"The New York statute is almost identical with our own.Matter of Fisch, 188 A.D. 525, 177 N.Y.S. 338, 342, is in point. Fisch, a lawyer, entered into a contract of employment with his client for 50 per cent of the award. Afterwards, the lawyer learned of the statute providing ``claims for legal services in connection with any claim arising under this chapter * * * shall not be enforceable unless approved by the commission. If so approved, such claim or claims shall become a lien upon the compensation awarded, but shall be paid therefrom only in the manner fixed by the commission.' Laws N.Y. 1914, c. 41, § 24. Thereupon, the lawyer informed his client that he would proceed no further before the Industrial Commission unless he received some security or guaranty that he would receive the 50 per cent agreed upon in the written contract. The client's brother then entered into a contract with the lawyer for the payment of the 50 per cent, and deposited $500 in order to guarantee the performance of the contract. An award was rendered for $864.90. The attorney's fee was fixed by the commission at $150. Check for the attorney fee was delivered to the lawyer, but he refused to accept, and brought suit on the contract with the brother. Judgment on the contract for the 50 per cent of the award was entered in the trial court. Apparently, neither the client nor his brother appealed; but, the bar association of the city of New York commenced proceedings in the nature of disbarment. In this proceeding, the New York Appellate Court said: ``We cannot approve a course of contract which appears to us to be a palpable evasion of one of the great purposes of the act. If it be understood that the courts approve the action of an attorney in procuring a third party to agree to pay to him an amount equal to 50 per cent of the recovery, it is quite obvious that that third party will in some way or other recover it from the workman, and so the workman will in the end be no better off in this regard than if this remedial legislation had not been passed. Members of the bar should honestly, straightforwardly, and sincerely aid in the carrying out of this beneficent legislation, and if they are unwilling to do the work for the amount allowed by the commission they should stand aside and let others do it."

In the case of Yeiser v. Dysart, 267 U.S. 540,45 S. Ct. 399, 400, 69 L. Ed. 775, it is said:

"When we add the considerations that an attorney practices under a license from the State and that the subject-matter is a right created by statute it is obvious that the State may attach such conditions to the license in respect of such matters as it believes to be necessary in order to make it a public good."

We have heretofore indicated the limits imposed by statute upon this review.

The evidence consists of the written contract between Mr. Spencer and Mr. Ellis. We have indicated the commission is not bound by that contract. Applicant by his counsel and counsel for the State Insurance Fund stipulated that, if three attorneys, naming them, were called, they would testify

"that the fees provided for in the contract between Mr. Ellis and Mr. Spencer identified as Exhibit ``A' provide for fair, just and reasonable fees under the circumstances of the case. They would further testify that the sum of $300.00 allowed by the Commission was not a fair, reasonable and just fee for Mr. Ellis' services, but was less than that amount. They would further testify that the controlling factor in fixing fees in this case is the contingent element involved. They would further testify that a fee of $300.00 if intended to cover only Mr. Ellis' services before the Industrial Commission and not his services before the Supreme Court on review, that that amount would be less than a fair and reasonable fee; but that a fair and reasonable fee for his services before the Commission alone irrespective of his services before the Supreme Court, considering the contingent element in the case, would be at least $500.00."

It was also stipulated as heretofore indicated:

"That the records and files pertaining to claim No. 2985 may be considered by the Commission as a part of the record made on the amended petition. That the testimony of P.G. Ellis marked for identification Exhibit ``X' and made a part hereof may be considered by the Commission in so far as the same is competent, relevant and material."

Mr. Ellis' testimony as contained in Exhibit X makes no reference to any amount other than as contained in the contract Exhibit A. His testimony details the interviews between himself and Mr. Spencer, the correspondence between himself, Spencer, and the commission, the negotiations for a settlement, the petitions and hearings before the commission and the Supreme Court, the typewriting of briefs, and a general and detailed history of the proceedings before the commission and in the Supreme Court.

The foregoing is a summary of all the evidence before the Industrial Commission relating to matters upon which the commission could base findings and a decision as to the amount to be allowed as attorney's fees.

The commission made findings, a large part of which are based upon the records and files. Because of the nature of this case, we deem it pertinent to quote the findings in full:

"This matter came on for hearing before the Industrial Commission of Utah on February 6, 1936, at ten o'clock A.M., in Room 414 State Capitol, Salt Lake City, Utah, upon the supplemental petition of P.G. Ellis, attorney for Glen Spencer, praying for an order of the Commission vacating the decision made and entered by the Commission on December 13, 1935, in so far as said decision relates to and fixes the attorney fees of P.G. Ellis for services rendered in connection with this matter. P.G. Ellis was present in person and represented by his attorney, George Y. Wallace. Glen Spencer was present in person, and the State Road Commission and the State Insurance Fund were represented by Paul H. Ray. Testimony was offered by Mr. Spencer and by Mr. Ellis, and the parties hereto having filed their written pleadings and the matter having been submitted, the Commission makes the following findings of fact:

"Findings of Fact: "I. That Glen Spencer filed an application with the Industrial Commission praying for compensation on account of injuries alleged to have occurred on or about the 9th day of April, 1932; that on June 24, 1932, the Industrial Commission of Utah rendered its decision denying compensation in said matter; that Spencer filed an application for rehearing, which application was on June 30, 1932, denied. That in about the month of July, 1932, Spencer employed P.G. Ellis, an attorney and counsellor at law, to represent him in said matter; that Ellis accepted such employment, and as attorney for Spencer procured a review in the proceedings had before the Commission by the Supreme Court of Utah, and on January 10, 1935, the Supreme Court of Utah annulled the decision of the Industrial Commission denying compensation; that the defendants applied to the Supreme Court of the State of Utah on September 12, 1935, again concluded that the decision of the Industrial Commission of Utah was erroneous and annulled the same.

"II. The Commission further finds that thereafter, on October 1, 1935, a motion was filed in behalf of Spencer setting the matter for rehearing before the Commission; that said matter was set for rehearing and the rehearing thereon was had before the Commission in the hearing room thereof at the State Capitol, Salt Lake City, Utah, on October 24, 1935.

"III. That thereafter, on the 13th day of December, 1935, the Commission rendered its decision in said matter wherein it made the following order:

"``Wherefore, it is ordered, that compensation be and the same is hereby awarded to be paid to Glen Spencer by the Utah State Road Commission and or the State Insurance Fund at the rate of $12.12 per week beginning as of April 10, 1935, all accrued payments to be paid to the applicant in a lump sum and to continue thereafter once every four weeks until such time as the applicant has been discharged by the attending physician as surgically healed and his condition fixed, and in any event the payments are not to continue or to be paid to the applicant for a period to exceed 312 weeks from the date of the injury.

"``It is further ordered, that the Utah State Road Commission and or the State Insurance Fund pay to Attorney P.G. Ellis, Felt Building, Salt Lake City, Utah, the sum of $300.00. This fee is fixed pursuant to title 42-1-81, Revised Statutes of Utah 1933. The said sum of $300.00 is to be deducted from the accrued compensation due the applicant.'

"IV. The Commission further finds that the sum of $300.00 was paid to P.G. Ellis in accordance with said order and received by Ellis on the 14th day of December, 1935, and said payment has been held and retained ever since said time by the said Ellis.

"V. The Commission further finds that on the 14th day of December, 1935, the said Ellis filed his petition herein setting forth in substance that he had a written contract with Spencer fixing the terms of his compensation for services rendered to Spencer; that the award made by the Commission on account of services rendered by Ellis was not in accord with the terms of said written contract; that the Commission was without power to disregard said written contract and fix a fee for services other and different than that fixed by said contract; that the Commission was without power to fix and determine petitioner's fee without first giving notice to petitioner and conducting a hearing thereon; that the Commission was without power to fix and determine the amount of the fee to which petitioner was entitled for services rendered in the Supreme Court; that the petitioner has a lien upon the sum awarded to Spencer by said decision of December 13, 1935.

"VI. The Commission further finds that petitioner, P.G. Ellis, represented Spencer as attorney from about the month of July, 1932, to and including the 13th day of December, 1935; that as such attorney he appeared and represented applicant Spencer before the Supreme Court of the State of Utah and there filed written briefs and made oral arguments as shown by the records and files herein, and also before the Industrial Commission.

"VII. The Commission further finds that prior to the 13th day of December, 1933, one of the members of the Commission was informed that there was a purported written contract between Spencer and P.G. Ellis under and by the terms of which Spencer had agreed to pay Ellis in consideration for his services 50% of all compensation awarded by the Commission to Spencer for and on account of the alleged injury of April 9, 1932.

"VIII. The Commission further finds that on July 21, 1921, it adopted resolution No. 1724, which reads as follows:

"``I move that attorneys' fee in compensation cases be rated on the basis of ten dollars ($10.00) as a minimum fee, plus five per cent (5%) of the total amount awarded; provided, that in each case where the above rating would be unjust to the parties concerned, the Commission will exercise its discretion in estimating the fee allowed.'

"IX. The Commission further finds that in fixing the sum of $300.00 as attorney fees to be paid to P.G. Ellis for his services rendered in behalf of Spencer in this matter it intended to cover his services rendered before the Industrial Commission and before the Supreme Court of Utah and determined that $300.00 was a fair fee for said services."

We have heretofore held that the Industrial Commission is not bound to accept the opinion of a physician testifying as an expert unless such was the only reasonable conclusion to reach in the premises. Utah Delaware Min. Co. v. IndustrialComm., 76 Utah 187, 289 P. 94. We see no good reason 6, 7 why the same rule should not apply to other expert opinion evidence. The rule is definitely settled that, unless the Commission arbitrarily and capriciously disregards competent, material, and substantial evidence, if there is competent, material evidence to support the decision of the commission, it will not be disturbed by the Supreme Court. This has been many times affirmed as settled law in this jurisdiction. That we may not agree as to the amount allowed or think it should have been a greater amount is beside the question. We are without authority to change it in the instant case. It is not necessary to cite the cases.

In view of the provision of the statute giving the commission authority to fix and regulate fees of attorneys for services under the act, and that it is manifest from all the statutes and cases upon the matter that the fees should be measured according to the workingman's station, a different measure should be applied than in contingent fee cases in court, or 8-11 upon contracts based upon unliquidated claims. That Mr. Ellis has done an unusual amount of work on the case and, if measured by the standard of contingent fees allowed in court trials for personal injury cases, no charge could be laid as to the contract being unfair or not in accordance with the practice other than in industrial cases, considering the elements and work involved in the Spencer Case, is conceded. Fees for attorneys and doctors and others rendering services in cases before the Industrial Commission are not measured by the same standard of measurement as in legal proceedings before courts or other bodies than those administering workmen's compensation acts. Under the Workmen's Compensation Act, if an injured employee is entitled to recover at all, the amount is fixed and definite, not contingent. The proceedings under the law are intended to be direct, informal, summary, and inexpensive. If the commission under the powers given by the statute concluded that the circumstances of the case were extraordinary and justified the allowing of a lien, we are not prepared to say it might not do so under the broad power given to "regulate and fix" attorneys' fees in all cases coming before the commission. There is no occasion in the instant case for the discussion of any conflicts arising between the attorneys' lien statute and the sections of the Industrial Act. There is evidence in the record that called upon the commission to weigh it and determine the amount to be allowed as attorney's fee. We cannot say that the evidence is of such character as to show that the commission acted unreasonably, arbitrarily, or capriciously so as to make the question one of law. We may not weigh the evidence. An award has been made. The fee has been fixed and paid. We cannot say the commission acted without or in excess of its powers. Neither can we say the findings of fact do not support the award under review. There was evidence submitted to the commission such as to require it to make an award. There was other evidence than the opinion evidence of attorneys from which the commission might determine the amount of the fee. Opinions of attorneys of necessity must be based largely upon the record and as stated by them the contingent element. The commission had before it all of the subject matter for consideration. We cannot say the commission was bound to accept the opinion evidence to the exclusion of the other evidence in the record. Utah Delaware Min. Co. v. Industrial Comm., supra; Ostler v. Industrial Comm., 84 Utah 428, 36 P.2d 95; Harness v. Industrial Comm., 81 Utah 276, 17 P.2d 277.

Other related questions might be discussed and additional authorities cited. The fundamental issue of the power to regulate and fix attorneys' fees by the commission in industrial cases is disposed of. The related questions need not be discussed.

The award is affirmed.