Attorney Fees Lien

Attorney Fees: Lien

MONTANA SUPREME COURT DECISIONS

Lockart v. New Hampshire Insurance Company and Liberty Northwest v. Petak, 1999 MT 205 The attorneys fee lien codified at section 37-61-420, MCA, applies to medical benefits recovered due to the efforts of the attorney in a workers' compensation claim. This follows from the conclusion that medical benefits are compensation benefits within the WCA. Attorneys fees under an attorney retainer agreement approved by the DOL are thus recoverable from the medical benefits otherwise payable directly to medical providers.

WORKERS' COMPENSATION COURT DECISIONS

Arneson v. Travelers Property Casualty [02/28/06] 2006 MTWC 7 An attorney fee lien attaches upon the filing of an Attorney Retainer Agreement with the Department of Labor and Industry, Lockhart v. New Hampshire Ins. Co., 1999 MT 205, ¶ 26, 295 Mont. 467, 984 P.2d 744. However, where the language of the Agreement precludes the inclusion of medial benefits in the fee calculation unless the insurer denies all liability, or denies payment and the attorney obtains such benefit for the claimant, a delay in the payment of the medical bills is not sufficient to establish the entitlement to attorney fees.

Bustell v. AIG Claims Service, Inc. [05/03/05] 2005 MTWCC 23 Attorney fees awarded against an insurer must be credited pro rata against fees due the claimant’s attorney both from the claimant and from medical providers subject to Lockhart liens. The amount of the credit must be determined by dividing the amount of the attorney fee award by the claimant’s estimated lifetime benefits. The resulting percentage is the percentage by which the Lockhart lien must be reduced and also the percentage by which the fees owed by the claimant with regard to non-medical benefits must be reduced.

Bustell v.AIG Claims Service, Inc. and Ins. Co. of PA [8/18/03] 2003 MTWCC 50 The Lockhart attorney fee lien applies to all medical benefits secured through the efforts of the claimant's attorney. Lockhart v. New Hampshire Ins. Co., 1999 MT 205, 295 Mont. 467, 984 P.2d 744. Where the insurer has denied all liability and the Court finds the claim compensable, those efforts encompass both past and future medical benefits, therefore the lien applies to all medical benefits, past and future.

Broeker v. State Fund [5/3/02] 2002 MTWCC 25 Where the precedent in a case arguably may establish an entitlement to additional benefits by other similarly situated claimants, a notice of attorney fees lien with regard to similarly situated claimants will not be quashed even though the litigation is in its early stages and a class of beneficiaries or entitlement has not yet been established. The purpose of the lien notice is to preserve the right to attorney fees should other claimants become entitled to additional benefits as a result of the current litigation.

Kemp v. CIGNA Property & Casualty [12/16/99] 1999 MTWCC 81 Following Lockart v. New Hampshire Ins. Co., 1999 MT 205, counsel for a medical provider wrote an insurer asserting that the medical provider must be paid its fees without deduction of the 20% attorney fee lien which the Supreme Court had decided must come out of medical benefits when the attorneys work resulted in obtaining medical benefits in a disputed liability case. Counsel attempted to distinguish Lockart as applying only when other benefits were not sufficient to satisfy the fees. WCC held counsel's argument was frivolous under Lockart, suggesting it may be sanctionable if made in a case in which counsel actually appeared.

Doug Lockart v. New Hampshire Insurance Company and Liberty Northwest v. Nancy Petak [7/31/98] 1998 MTWCC 60, rev'd Lockart v. New Hampshire Insurance Company and Liberty Northwest v. Petak, 1999 MT 205 Consolidated cases raised the issue whether claimants' attorneys are entitled to attorney fees with regard to medical benefits secured with their efforts paid out of medical benefits. WCC held attorneys are not entitled to satisfy their fee liens from medical benefits secured on behalf of clients.

Murer, et al. v. State Fund [2/24/98] 1998 MTWCC 14 In Murer v. State Fund, 942 P.2d 69 (1997), the Supreme Court held that the petitioners' attorney was entitled to attorneys' fees from benefits obtained for non-party claimants under the common fund doctrine. On remand, the WCC was required to determine the appropriate amount of fees. After providing notice to potential non-party claimants, holding a hearing taking input from such individuals, and hearing testimony from claimant's counsel, Court approves agreement that counsel will receive 15% of any benefits which may be paid as a result of this litigation.