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County Workers Compensation Pool v. Davis9/16/1991
d the injured worker obtains a judgment or settlement for an amount greater than the insurer's workers' compensation liability, the insurer receives a distinct monetary benefit and at the same time is relieved of the expense, time, and effort which it otherwise would have been required to expend in separately pursuing its subrogation claim against the tortfeasor.
A basic rule of equity permits an apportionment under circumstances where a party has been successful in creating a fund from which other passive beneficiaries derive monetary advantage. E.g., Tuttle, 580 P.2d at 1382; Allstate Ins. Co. v. Steinberg, 226 Cal. App. 3d 216, 277 Cal. Rptr. 32 (1990). We believe that this rule of equitable apportionment is particularly applicable to the circumstances of this case. Indeed, a contrary rule would require the employee to bear the litigation expenses for that very part of the recovery which the employee is obligated by statute to pay over to the insurer, thereby resulting in a substantial pecuniary benefit to the insurer at the expense of the employee. We accordingly hold that where, as here, an injured employee's tort claim against a third party is settled for an amount greater than the insurer's subrogation claim for workers' compensation benefits, and the insurer has not actively participated in the tort litigation, a court may order the insurer to pay a reasonable share of the attorney fees and court costs incurred by the employee in the tort litigation.
We hasten to add that any order of apportionment of attorney fees and court costs between the insurer and the employee must be reasonable and be tailored to the circumstances of the case. An insurer's active participation in the tort litigation, for example, and its significant contribution to a favorable judgment or settlement award would certainly be appropriate matters for a court to consider in determining whether, and if so in what manner, to apportion the litigation expenses between the insurer and the employee. In the instant case, the trial court ordered the insurer to pay the same percentage of attorney fees from its gross recovery as the employee was obliged to pay and also to pay a percentage of court costs commensurate with the ratio of the insurer's subrogation interest to the total settlement award. In light of the fact that the insurer's participation in the tort litigation consisted only of filing a complaint in intervention to protect its full subrogation interest against any apportionment of attorney fees, we are satisfied that the order of apportionment was reasonable under the particular circumstances of this case.
The judgment of the court of appeals is affirmed.
Disposition
JUDGMENT AFFIRMED.
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