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SAINT PAUL-MERCURY INDEMNITY COMPANY v. LANZA

June 2, 1955

SAINT PAUL-MERCURY INDEMNITY COMPANY, HARRY B. HOGAN, D/B/A HARRY B. HOGAN PAINTING COMPANY, AND LONNIE SISNEY, PLAINTIFFS,
v.
M. LANZA, D/B/A LAKE CHARLES ELECTRIC COMPANY, DEFENDANT.



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 compensation.

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 well first.

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 case.

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, ...


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