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University of Texas Health Science Center v. Mata & Bordini Inc.4/30/1999
AFFIRMED
This appeal presents the question of whether a private attorney may recover attorney's fees and expenses of litigation out of a self-insuring governmental entity's workers' compensation subrogation lien. We answer this question in the affirmative and affirm the order of the trial court.
Factual and Procedural History
In April 1994, while employed by The University of Texas Health Science Center at San Antonio (hereinafter "UTHSC"), Paul Harvey sustained work-related injuries due to the negligence of Overnight Transport Company. UTHSC, a self-insuring governmental entity, paid Harvey workers' compensation benefits totaling $108,739.25. Thereafter, the law firm of Mata & Bordini, Inc. (hereinafter "the law firm") pursued a third-party action against Overnight Transport on behalf of Harvey. The third-party action was filed in state court and later removed to federal court on the basis of diversity jurisdiction. It is undisputed that the law firm, at no time, purported to represent UTHSC's interest in the third party action, and that despite notification of the third-party action, the Attorney General did not intervene in the lawsuit on behalf of UTHSC to recover UTHSC's statutory subrogation interest. Once in federal court, the parties reached a settlement agreement in the amount of $400,000.00. UTHSC then requested payment of its statutory subrogation lien. In response, the law firm demanded payment of its attorney's fees pursuant to section 417.003 of the Labor Code. UTHSC refused, claiming it was not governed by that provision of the Labor Code.
The law firm filed a declaratory suit to construe portions of the Labor Code, seeking apportionment of fees and expenses out UTHSC's subrogation lien. The parties then filed competing motions for summary judgment, asserting their respective interpretation of the pertinent Labor Code provisions. Both parties also sought attorney's fees under section 37.009 of the Texas Civil Practice & Remedies Code for the prosecution of the declaratory action; the law firm also sought fees pursuant to section 38.001 of the Texas Civil Practice & Remedies Code.
The trial court entered an order granting in part and denying in part the law firm's motion for summary judgment, and granting in part and denying in part UTHSC's motion for summary judgment. Specifically, with respect to the relief sought by the law firm, the trial court declared that section 417.003 was applicable to UTHSC, granted an apportionment of attorney's fees to the law firm out of UTHSC's subrogation interest and a proportionate amount of expenses, but denied the law firm's request for attorney's fees related to prosecution of the declaratory action. UTHSC's motion for summary judgment was denied to the extent the trial court determined that section 417.003 was applicable to UTHSC; its motion was granted to the extent the trial court denied the law firm's request for additional attorney's fees under either the Declaratory Judgment Act or section 38.001 of the Texas Civil Practice and Remedies Code.
Both parties timely perfected appeal from the trial court's order. UTHSC challenges the trial court's award of attorney's fees and expenses to the law firm pursuant to section 417.003 of the Labor Code, and argues the trial court erred in failing to award attorney's fees in its favor pursuant to the Declaratory Judgment Act. In its sole point of error, the law firm asserts the trial court abused its discretion in denying its request for additional attorney's fees in connection with the prosecution of the declaratory action.
Standard of Review
The party moving for summary judgment has the burden of sho
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