Summary
In McCamey v. Payer, 135 Ohio St. 660, 22 N.E.2d 127, this court reversed the judgments of the Court of Common Pleas and the Court of Appeals and remanded the cause to the Court of Common Pleas for further proceedings not inconsistent with that opinion.
Summary of this case from State, ex Rel. v. Court of Common PleasOpinion
No. 27365
Decided July 12, 1939.
Workmen's compensation — Contracts between claimants and attorneys governed by statute — Sections 1465-90 and 1465-111, General Code — Section 35, Article II, Constitution.
APPEAL from the Court of Appeals of Cuyahoga county.
In 1931, Julia McCamey, the plaintiff, appellant herein, filed a claim for death benefits on behalf of herself and minor children with the Industrial Commission of Ohio, alleging that the death of her husband was directly attributable to an accidental injury sustained in the due course of his employment by a contributor to the State Insurance Fund. This claim was denied upon original hearing and rehearing, but on appeal to the Court of Common Pleas Mrs. McCamey recovered a favorable verdict and judgment, such judgment being affirmed by the Court of Appeals.
Thereupon the Industrial Commission awarded the claimant the maximum sum of $6,500, payable at the rate of $18.75 per week. On application, fees were allowed her counsel by the trial court in the sum of $500.
Mrs. McCamey employed one Harry F. Payer, an attorney at law of Cleveland, to prosecute her claim and entered into a written agreement with him covering the fees to be received. Such agreement provided in substance that if the claim was approved by the Industrial Commission the attorney was to have 33 1/3 per cent of the amount awarded, otherwise he "shall receive a sum of money equal to fifty per cent of whatever recovery may be had in the case on trial thereof; and in case said claim or suit is settled prior to trial, then said first party shall receive an amount equal to fifty per cent of whatever may be received in such settlement. * * * The said second party does hereby assign and set over to said first party an undivided fifty per cent interest in and to the above claim and cause of action and whatever amount may be received or recovered thereon, as security for the payment of his fees for services as aforesaid."
Early in May of 1934 there came into the hands of Mrs. McCamey and her attorney from the Industrial Commission two checks: one for $500, payable to the attorney and representing fees as fixed by the court; the other for $3,782.14, payable to Mrs. McCamey and representing the amount then due in connection with the award made. Both checks, representing the aggregate sum of $4,282.14, were collected by the attorney. He took $3,325 as attorney fees, which included fees of $1,108.33 and $150, respectively, asserted to be owing two associate counsel; $15.75 was taken to pay two court reporters, and $100 was retained for the payment of two physicians for "expert services." Mrs. McCamey received the balance of $841.39 and ostensibly signed a release, admittedly drawn in Mr. Payer's office, wherein gratification was expressed for "the splendid result secured by my attorneys." As noted above, the total award to Mrs. McCamey was $6,500, the balance to be paid in weekly installments.
This release described the entire transaction in detail, and concluded with the following statement:
"In consideration of the premises I hereby release my said attorneys from any and all claims of whatsoever description and agree to indemnify them and hold them harmless. This instrument is signed by me after careful reading and explanation in the presence of my friend and former employer, Mrs. Dalrymple, this 8th day of May, 1934." The name of "Marjorie W. Dalrymple" is signed to the instrument as a witness.
The present action was commenced by Mrs. McCamey, as plaintiff against Harry F. Payer, as defendant, to recover the amount of fees he had received out of the award, over and above the $500 fee allowed by the court, on the ground that the contract therefor was illegal and invalid.
An answer was interposed, containing three defenses: (1) That the attorney fees were voluntarily paid without fraud or duress, and cannot be recovered back; (2) that the services rendered at the request of the plaintiff were reasonably worth more than the amount paid, and (3) that plaintiff had released the defendant, in writing, from all further obligations of every kind and character and had agreed to indemnify him and save him harmless.
A reply was filed, denying the affirmative allegations of the answer and denying the execution of the release. Plaintiff further alleged that if a release was signed, such signature was secured by misrepresentation.
When the case came on for trial, the Court of Common Pleas took the position that a valid release would operate as a bar to the plaintiff's action for money, and required her to proceed in chancery in an effort to set it aside, over objection and exception of her counsel.
Upon the evidence adduced, the court found such release entirely valid, constituting a bar to plaintiff's money action. Judgment was accordingly entered in favor of the defendant, which judgment was affirmed, on appeal, by a divided Court of Appeals.
The case is in the Supreme Court by reason of the allowance of a motion to certify the record.
Mr. Martin J. Monahen, for appellant.
Messrs. Payer, Corrigan, Bleiweiss Cook, for appellee.
In considering this appeal, the important question for determination is whether the contract involved was authorized or valid.
The State Insurance Fund possesses peculiar characteristics. It owes its existence to legislative action by the General Assembly of Ohio and is created through compulsory contributions by certain employers of labor for the beneficient and salutary purpose of compensating workmen and their dependents for accidental injuries, disabilities or death occasioned to the workmen by their engagement in industrial pursuits.
Negligence and contributory negligence do not affect the right to compensation, the test of the right to an award being whether the employment had some causal connection with the injury, disability or death, by reason of its activities, its conditions or its environments. 42 Ohio Jurisprudence, 665, Section 77.
Theoretically at least, a primary object of the Workmen's Compensation Law is to afford a speedy and inexpensive method for the adjustment and payment of compensation claims, without the delay and expense incident to litigation as was formerly the case. The presumption exists that the Industrial Commission will act fairly and impartially in disposing of the claims brought before it. As a matter of fact, the vast majority of claims terminate in the commission upon the findings and orders of that body.
It cannot be denied that in the presentation and prosecution of a workman's compensation claim the services of a capable and experienced attorney are often desirable and even necessary, and that he is entitled to and should receive a reasonable fee for the services rendered. This was recognized by the General Assembly in the enactment of Section 1465-111, General Code, relating to "services in matters before the Industrial Commission."
As a further indication of its cognizance of the propriety of attorney fees in workmen's compensation. cases, the General Assembly enacted Section 1465-90, General Code, relating to the allowance of fees for services performed in the Court of Common Pleas. Legislation of this character might well be extended and liberalized. Attorney fees for the prosecution of cases in all the courts could be provided for, as has been done in other states. Statutes in some of the states allow attorney fees up to one-third of an award, when approved by specified authority. Suggestions along this line have been made, but have as yet met with no response from the legislative branch of our state government.
Section 35, Article II of the Ohio Constitution, now reads:
"For the purpose of providing compensation to workmen and their dependents, for death, injuries or occupational disease, occasioned in the course of such workmen's employment, laws may be passed establishing a state fund to be created by compulsory contribution thereto by employers, and administered by the state, determining the terms and conditions upon which payment shall be made therefrom. * * *"
From the above statement it is apparent that the people of Ohio were interested principally in seeing that any fund which might be established would be dispensed primarily for the benefit of workmen and their dependents, and its distribution was therefore made dependent on legislative approval.
This court is in sympathy with the proposition that fair and adequate attorney fees should be provided for in workmen's compensation cases; but under both the letter and the spirit of the Constitution, such fees, and contracts relating thereto, based upon payments from the State Insurance Fund, must find sanction in statutory expressions of the General Assembly.
Of course we do not mean to imply that a claimant may not select an attorney and contract for his services, but we do mean to say that any arrangement as to fees must not run contra to applicable parts of Sections 1465-90 and 1465-111, General Code, or extend beyond their terms and plain implications.
Provisions in workmen's compensation acts limiting the amounts which attorneys may charge claimants in connection with prosecuting their claims, and making such fees subject to approval by a designated tribunal have frequently been upheld. See Yeiser v. Dysart, 267 U.S. 540, 69 L. Ed., 775, 45 S.Ct., 399; Woodward Iron Co. v. Bradford, 206 Ala. 447, 90 So. 803; Buckler v. Hilt, 209 Ind. 541, 200 N.E. 219, 103 A. L. R., 901; Gritta's Case, 241 Mass. 525, 135 N.E. 874; May v. Hoertz Son, 204 Mich. 432, 170 N.W. 305; Sarja v. Pittsburgh Steel Co., 154 Minn. 217, 191 N.W. 742.
In the much discussed case of Adkins v. Staker, 130 Ohio St. 198, 198 N.E. 575, this court had occasion to pass upon a contingent contract for attorney fees in a workmen's compensation case. It was there held that a contingent contract under which an attorney was to receive from a claimant for his services one-half of any award made is against public policy and invalid. A majority of the court adheres to the decision in the Staker case and is unable to distinguish it in principle from the instant case.
The members of this court recognize the validity of contingent fee contracts generally and appreciate the fact that there is something to be said from a practical standpoint for their sanction, assuming their reasonableness in workmen's compensation cases where an attorney works diligently, capably and successfully for his client; but we cannot escape the inhibitions contained in our organic and statutory law by approving a contract of the type presented in the instant case, ignoring as it does the existing statutory expressions as to attorney fees. If contingent fee contracts, whereby an attorney is to receive a substantial part of any award made, are to meet approval in Ohio, the General Assembly is the agency, under the Constitution, to say so.
It follows that the judgments of the Court of Common Pleas and of the Court of Appeals are reversed and the cause remanded to the Court of Common Pleas for further proceedings not inconsistent with this opinion.
Judgment reversed and cause remanded.
WEYGANDT, C.J., ZIMMERMAN, WILLIAMS, MYERS and HART, JJ., concur.
DAY and MATTHIAS, JJ., dissent.