Prince George's County v. Feissner

¹²⁵ Powers, J., delivered the opinion of the Court. These two appeals from judgments of the Circuit Court for Prince George’s County came to this Court on separate records from two different cases decided in that court. Both cases were filed by Karl G. Feissner, a member of the bar, appellee here, against Prince George’s County, Maryland, appellant here. Although each case asserts a separate cause of action, and despite some differences in the facts and in the procedures which led to the decisions below, both require consideration of the same sections of the Workmen’s Compensation Law and both are controlled by the same authorities.

The statutes involved are § 33 and § 57 of Code, Art. 101. The question, in short, is whether the attorney for a claimant in a workmen’s compensation case may collect a fee approved under § 57 from the claimant’s governmental employer, when the compensation award is discharged in full by § 33, because benefits furnished by the employer under a pension system are better than the benefits provided in the award. The Seger Case — No. 975 On 5 December 1975 Feissner filed a suit at law in contract against Prince George’s County. The basis of the claim, as alleged in a special count, was an order of the Workmen’s Compensation Commission entered on 3 September 1975 in the claim of Samuel T. Seger v. Prince George’s County.

The order was incorporated into the pleading by reference. It approved a petition by Feissner for attorney’s fees and medical fees, and directed the employer to pay to Feissner, as counsel for the claimant, the sum of $5,659.00. The order bore the Commission’s imprint that the fees were to be paid from the final weeks of compensation due in the case. The County filed general issue pleas.

A motion for summary judgment filed by Feissner and opposed by the County was heard and denied. After further proceedings, including interrogatories and answers, the case was set for ¹²⁶ non-jury trial on 3 September 1976. On that day the case was submitted to Judge James H. Taylor upon stipulated exhibits, which the parties agreed contained the pertinent facts, and upon arguments of counsel. The exhibits included: (a) A Commission order dated 3 March 1975 finding Seger permanently totally disabled, and ordering the employer to pay compensation at the rate of $96.80 weekly, beginning 1 August 1973, not to exceed the sum of $45,000.00; subject to the provisions of the Workmen’s Compensation Law.

(b) Feissner’s petition to the Commission in July 1975 for attorney’s fees and medical fees. (c) A Commission order dated. 3 September 1975 approving the petition and directing the employer to pay Feissner $5,659.00. (d) The County’s record of compensation paid. Lump sum payments were made to Seger on 2 May 1975 in the amount of $8,905.60, bringing to date the payments accrued under the order.

The record further shows that Seger was paid $193.60 every two weeks through 15 June 1976. The total paid to Seger under the award was $14,520.00, leaving $30,480.00 of the $45,000.00 award unpaid. (e) A Commission order dated 2 June 1976. Exercising its continuing jurisdiction, the Commission made findings on several issues.

It found 1) That Art. 101, § 33 was applicable in this case, 2) That the pension paid by the employer was greater than the compensation benefits, and 3) That as to the employer’s responsibility for payment of the attorney’s fee, since there were no monies to be paid to the claimant, the claim for attorney’s fee was denied. (f) Docket entries in an appeal to the circuit court originally taken by the County from the Commission’s award of 3 March 1975, which appeal the County later dismissed on 18 November 1975. After arguments of counsel, the judge ruled. He noted that at the time of the Commission’s award of 3 March 1975 (and ¹²⁷ the fee order of 3 September 1975) there was no Article 101, Section 33 issue before the Commission.

He said, in part: “An award had been made earlier by the Commission, monies had been paid to the claimant and yet this attorney whose work had gone into the case had. not received any monies, and according to the order was not entitled to receive any until the final weeks of payment. Well, I think that the lien attached to the right of collection of it, it just was not there at the time. Now, the Commissioner] says it’s under my continuing jurisdiction and I can come back and modify this and the Commission did issue an order to modify the earlier order. * * * They are saying, in effect, that we made an award, but because of Section 33 setoff, there was no money and inasmuch as there was no money the lien could not attach. Well, the fact is there was some money, because somebody paid the man $15,000.

Now, whether or not they should have paid him is another thing. Now it seems fair, he’s going to get $15,000 plus his pension, it doesn’t seem fair then you say they ought to go against Seger. The lien as far as I am concerned, or my view is the lien attached upon the issuance of the original order in this case, in so long as there was money it ought to have been reserved for the payment of the attorney’s fees. It wasn’t done and when it was determined that the setoff was greater than the — the setoff was greater than the amount available to Mr. Seger, then his payments were terminated as far as the award of the Commission was concerned.

But it still leaves the attorney in limbo, and I think we ought to construe that the lien attached and the right to the money was there, but the right to collect it wasn’t there at the time. And once a lien attached, the money ought to have been held for the payment of the award, so I think we’ll allow counsel fees in the amount of the original order by the ¹²⁸ Commission, by the order of the 3rd of September 1975.” It was an error of law for the court to hold that Prince George’s County was liable to pay the attorney’s fee to Feissner for his representation of Seger. We must reverse. The McCallum Case — No. 754 On 15 April 1976 Feissner filed a second suit in contract in the circuit court against Prince George’s County, Maryland, a body corporate.

The declaration contained several common counts, which we need not notice further, and a special count. The basis of the cause of action asserted in the special count was an order of the Workmen’s Compensation Commission, entered on 2 March 1976, attached and incorporated into the pleading by reference. The order, on a caption showing William D. McCallum as claimant and the County as employer, said: “ORDERED, That the Petition for Attorney’s Fees be, and the same hereby is, granted, and it is further ORDERED, That Karl G. Feissner, Attorney for the .Claimant be awarded counsel fees in the sum of Nine Thousand [sic] Dollars ($6,100.00).” The declaration alleged that the County had failed and refused to honor the order, and prayed for judgment for $6,100.00, with interest and costs. With the declaration Feissner filed a motion for summary judgment, saying that there was no genuine dispute as to any material fact, and that he was entitled to judgment as a matter of law.

The motion was supported by his affidavit, in which he said that he represented McCallum in three claims before the Workmen’s Compensation Commission; that as a result of those proceedings an order was entered in favor of McCallum for benefits; and that an order was entered approving the petition for attorney’s fees. The affidavit went on to say that notwithstanding the entry of the order for ¹²⁹ attorney’s fees, the County had failed and refused to pay the amount ordered. No other evidentiary material was submitted in support of the motion for summary judgment. Maryland Rule 610.

No statement of points or citation of authorities was filed. Maryland Rule 319. Prince George’s County filed general issue pleas to the declaration and filed an unsworn pleading, signed only by counsel, entitled “Answer to Motion for Summary Judgment”. Attached to that answer was a copy of the Commission’s order of 5 February 1976, directing Prince George’s County, employer and self-insurer, to pay compensation to McCallum.

The order recites that the hearing had been held on two issues, one of which was whether the employer was entitled to credit for payments made from disability retirement against any compensation awarded in the case, in accordance with the provisions of Article 101, § 33. The Commission made a finding on that issue that the employer was entitled to the credit. Also in the order the Commission found the claimant to be permanently totally disabled and awarded compensation for permanent total disability at the rate of $96.80 weekly, beginning April 1, 1974, not to exceed the sum of $45,000.00. The County’s answer to the motion for summary judgment amounted in substance to a statement of points in opposition, but included no citation of authorities.

The significant points were that the County was not the correct defendant; that the Commission’s award of 5 February 1976 recognized the § 33 set-off; and that the Commission’s order awarding the attorney’s fee was not an award of compensation and did not call upon the County as employer and self-insurer to pay any funds to or on behalf of the claimant. On this state of the record the motion for summary judgment was argued before Judge James H. Taylor on 9 July 1976. It does not appear that anything else in the nature of evidence was placed before the court. Arguments of ¹³⁰ counsel were not recorded.

Judge Taylor granted the motion and the clerk entered judgment 1 in favor of Feissner against Prince George’s County in the amount of $6,100.00, with interest from date and costs. The court erred in granting summary judgment. It was not necessary for the County to supply evidence to show a genuine dispute of material facts. The undisputed facts in the pleadings, the affidavit, and the Commission orders before the court, failed as a matter of law to state a cause of action.

We must reverse the judgment. The Law — Attorneys’ Fees It is desirable to understand the place of attorneys’ fees in our compensation law. Ordinarily, fees are a matter between attorney and client. In workmen’s compensation' cases in Maryland, the State exercises a limited control, expressed in Art. 101, § 57, which says, in pertinent part: “* * * No person shall charge or collect any compensation for legal services in connection with any claims arising under this article, * * * unless the same be approved by the Commission.

When so approved, such fee or claims shall become a lien upon the compensation awarded, but shall be paid therefrom only in the manner fixed by the Commission. Upon application of any party in interest, the Commission shall have full power to hear and determine any and all questions which ¹³¹ may arise concerning legal services rendered in connection with any claim under this article * * *. Orders of the Commission regulating payments * * * for legal services may be enforced in the courts of this State, or may be appealed from in like manner as awards for compensation under this article.” Rule 22 of the Commission’s Rules of Procedure provides for the filing of applications for allowance of compensation for legal services. The Rule contains this provision: “The filing of a petition for a fee with the Commission and service of a copy on the employer and insurer, or employer-self-insurer, or the State Accident Fund, as the case may be, shall be notice to said employer and insurer or employer, self-insurer, or the State Accident Fund, to reserve in escrow the amount of fee requested in such petition until such time as the amount of the fee is determined by the Commission.” Under the provision of § 57 that a fee, when approved, “shall be paid [from the compensation awarded] only in the manner fixed by the Commission”, it appears to be a general, if not universal, practice of the Commission to provide in a fee order that the fees are to be paid from the final weeks of compensation due in this case. 2 Two decisions of the Court of Appeals shed light on the question.

In Hoffman v. Liberty Mutual, 232 Md. 51 , 191 A. 2d 575 (1963), the insurer overpaid an award (as reduced on appeal), and then claimed that there were no funds for payment of an attorney’s fee. The fee had become a lien when it was ordered, and the insurer was required to hold ¹³² enough funds in escrow to discharge the lien. The insurer in fact did so, and recognized the lien by stopping payments to the claimant when they reached a sum which, when added to the attorney’s fee and doctors’ fees, would equal the total original award. The Court held that after the lien attached, and funds to pay it were held in escrow, the lien was not discharged by the reduction, on appeal, of the total compensation payable.

The Court said, at 56-57: “The appellee cannot set aside in escrow the original fee, prosecute an appeal resulting in a lower award, and then take the position that the attorney’s lien does not apply. This would defeat the purpose of the law and the rule adopted pursuant thereto. The fact that appellee was compelled to make payments during the pendency of the appeal was not the result of appellant’s action, but of the law, for this has been established since Branch v. Indemnity Ins. Co. (1929), 156 Md. 482 , 144 Atl. 696 .

But for the appellant’s lien the appellee would have been compelled to pay out the full amount of the first award before the appeal was determined. Appellee is estopped from claiming there is no fund from which the lien can be satisfied. The lien of the fee attached at the time of the Commission’s original order * * *. We hold that the lien was still in effect and that appellee is deemed to be holding in escrow the amount of appellant’s fee.

Appellee instituted the appeal and it can not be allowed to say now that by being successful in reducing the award, appellant’s fee is extinguished when the lien was in effect all along.” In Chanticleer Skyline Room v. Greer, 271 Md. 693 , 319 A. 2d 802 (1974) the Court of Appeals affirmed the judgment of this Court in the same case, reported at 19 Md. App. 100 , 309 A. 2d 638 (1973). The issue was whether the payment of an approved attorney’s fee, for which a lien had attached and for which the funds had been held in escrow by the insurer, ¹³³ was a payment of compensation to the employee for the purpose of the five year bar against the continuing jurisdiction of the Commission to make modifications or changes in its findings or orders, as authorized by Art. 101, § 40(c). In that case the original injury was sustained in 1960, and it appears that the last payment to the claimant was in 1966, but because of the pendency of an appeal, an attorney’s fee ordered in March 1966 was not paid. The appeal was long dormant, and was dismissed in March 1970.

In June 1970 the insurer paid the attorney’s fee. In December 1971 the claimant applied for an additional award. The Commission held that the application was barred by the five year rule. The Superior Court of Baltimore City, this Court, and