The opinion of the court was delivered by: John E. Miller, District Judge.
The present proceeding arises upon a petition for distribution
of money paid in satisfaction of the judgment heretofore entered
in this case. 116 F. Supp. 491. The primary question raised by the
petition relates to the proper disposition of attorneys' fees,
and the determination of this question requires a reference to
the proceedings heretofore had in the case.
In January, 1953, Lonnie Sisney, Virgil C. Carroll, and Paul A.
Jennings were employed by Harry B. Hogan, a contractor. On
January 26, 1953, Sisney, Carroll and Jennings were injured by
the negligence of a third party while they were acting within the
scope of their employment with Hogan in Arkansas. Saint
Paul-Mercury Indemnity Company, the workmen's compensation
insurance carrier for Hogan, was notified of the accident and the
Company in turn notified Messrs. Allen, Woolsey & Fisher, its
attorneys in Springfield, Missouri. On January 27, 1953, Mr.
Fisher, accompanied by Hogan, went to the Bull Shoals Dam where
the accident occurred and made a preliminary examination of the
incident. On January 28 and 29, another attorney associated with
said law firm visited the site of the accident and took the
statements of several witnesses.
All three of the injured workmen had been admitted to Saint
John's Hospital in Springfield, Missouri, and Mr. Fisher, and
other members of his firm, had a number of conferences with them
concerning their compensation benefits. Saint Paul admitted its
liability to all three of the injured employees for compensation
benefits, and there was never any dispute concerning said
About two weeks after the accident Mrs. Sisney contacted Mr.
Arthur N. Wood, an attorney in Yellville, Arkansas, and informed
him of the accident and of the fact that Sisney was worrying
about everything. At that time the Sisneys were living in a house
owned by Mr. Wood's father-in-law, and were acquainted with Mr.
Wood. Mr. Wood told Mrs. Sisney that her husband should not be
worrying and that the most important thing was for him to get
In the meantime, on February 25, 1953, Carroll and Jennings
employed the firm of Allen, Woolsey & Fisher to represent them in
a third party suit against M. Lanza, doing business as Lake
Charles Electric Company. On March 2, 1953, Carroll and Jennings,
through their attorneys, filed separate suits against Lanza in
the Circuit Court of Baxter County, Arkansas.
On March 7, 1953, after having talked to Mrs. Sisney several
times, Mr. Wood wrote a letter for Mrs. Sisney to take to her
husband. He advised Sisney not to worry about the bills and other
matters, not to sign any papers, but to accept the compensation
payments. He also told Sisney that if anyone talked to him
(Sisney) about the accident, to send them to him (Wood). Mr. Wood
then arranged for some of Sisney's creditors to give him further
credit at that time.
On March 20, 1953, the Carroll and Jennings cases were removed
to this Court by the defendant.
In April, 1953, Sisney conferred with Mr. Wood and they reached
an oral agreement for Wood to represent Sisney for a fee of
one-third of the amount, if any, recovered by Sisney from Lanza
over and above the amount that would have to be repaid to the
workmen's compensation carrier, if any. Mr. Wood talked to
several witnesses about the accident, and did some research of
the law pertaining to Sisney's rights, but in view of Sisney's
poor physical condition Wood did not feel that the time was ripe
for filing suit against Lanza. In this connection it should be
noted that Sisney was in and out of the hospital five times from
the time of the accident until June 3, 1953, and even at the time
of the trial on November 5 and 6, he was still required
to have medical treatment every two weeks, and was still
emotionally disturbed. See, Finding of Fact No. 8 in Carroll v.
Lanza, D.C.Ark., 116 F. Supp. 491, at page 500.
In May, 1953, Messrs. Goodwin & Riffel, attorneys in Little
Rock, Arkansas, were employed by Saint Paul to take action on its
claim for compensation it was then paying to Sisney. A conference
was had with Messrs. Allen, Woolsey & Fisher in Springfield,
Missouri, and it was decided that the Goodwin firm would be
associated with the Allen firm in representing Saint Paul,
Carroll and Jennings. It was also decided that suit should be
filed by Saint Paul and Hogan, with Sisney being joined as a
plaintiff, against Lanza to recover the compensation payments
made by Saint Paul to Sisney. In the Sisney case the Allen firm
was to be associated with the Goodwin firm.
On June 13, 1953, a suit was filed by Saint Paul and Hogan
against Lanza, and Sisney was made a party plaintiff. On the
previous day, June 12, Messrs. Goodwin & Riffel had written
Sisney advising him of the filing of the suit and enclosing a
copy of the complaint.
On June 27, 1953, Hogan and Saint Paul were permitted to
intervene in the Carroll and Jennings cases. In August, 1953,
several letters were written to Sisney, in addition to two
telephone calls, regarding the taking of Sisney's discovery
deposition. Sisney informed Mr. Wood that someone wanted to take
his deposition for use in the Carroll and Jennings cases, and
Wood told Sisney that would be all right since later he might
want the cooperation of Carroll and Jennings in the trial of his
The date for the taking of the deposition was finally set for
August 27, 1953. On August 26, Messrs. Goodwin, Riffel, Fisher,
Carroll and Koonce, Saint Paul's claims manager, went to Sisney's
home and discussed the accident with him. Sisney then accompanied
them to the site of the accident and he and Carroll pointed out
the relevant locations. They then went by the home of a witness,
David P. York, and discussed the case with him. Sisney's
discovery deposition was taken on August 27, 1953, the defendant
being represented by Messrs. Wright, Harrison, Lindsey & Upton
and the plaintiffs being represented by Messrs. Goodwin & Riffel
and Mr. Fisher.
A pre-trial conference was held on August 31, 1953, and at that
time the three cases were consolidated for trial. On September 1,
1953, upon consent of the attorneys present the Court entered an
order striking the cases from the trial calendar in the Harrison
Division and transferring the case to Fort Smith for trial to the
Court, without a jury. Mr. Wood had no notice of the pre-trial
conference and was not present.
Early in October, 1953, Mr. Riffel and Mr. Koonce made a trip
to the scene of the accident to contact other witnesses. On
October 7, 1953, Goodwin & Riffel wrote to Sisney requesting that
he fill out blank withholding forms showing his past income. On
October 26, they went to Sisney's home, ...