{ "id": 3416174, "name": "JOSEPH LEMMER, Plaintiff-Appellant, v. GARY KARP, Defendant-Appellee.-(HARTFORD INSURANCE COMPANY, Appellee.)", "name_abbreviation": "Lemmer v. Karp", "decision_date": "1977-12-30", "docket_number": "No. 76-57", "first_page": "190", "last_page": "195", "citations": [ { "type": "official", "cite": "56 Ill. App. 3d 190" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "174 N.E.2d 7", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "pin_cites": [ { "page": "15" } ], "opinion_index": 0 }, { "cite": "30 Ill. App. 2d 132", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5790551 ], "weight": 3, "pin_cites": [ { "page": "148" }, { "page": "148" } ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/30/0132-01" ] }, { "cite": "216 N.E.2d 827", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "pin_cites": [ { "page": "832" } ], "opinion_index": 0 }, { "cite": "71 Ill. App. 2d 114", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 2587508 ], "weight": 2, "pin_cites": [ { "page": "123" } ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/71/0114-01" ] }, { "cite": "237 Ark. 954", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1737926 ], "weight": 2, "pin_cites": [ { "page": "956" }, { "page": "813" } ], "opinion_index": 0, "case_paths": [ "/ark/237/0954-01" ] }, { "cite": "48 Wis. 2d 290", "category": "reporters:state", "reporter": "Wis. 2d", "case_ids": [ 8670721 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/wis-2d/48/0290-01" ] }, { "cite": "253 A.2d 502", "category": "reporters:state_regional", "reporter": "A.2d", "case_ids": [ 8111531 ], "opinion_index": 0, "case_paths": [ "/a2d/253/0502-01" ] }, { "cite": "451 S.W.2d 528", "category": "reporters:state_regional", "reporter": "S.W.2d", "case_ids": [ 10144732 ], "opinion_index": 0, "case_paths": [ "/sw2d/451/0528-01" ] }, { "cite": "54 Tenn. App. 410", "category": "reporters:state", "reporter": "Tenn. App.", "case_ids": [ 8506856 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/tenn-app/54/0410-01" ] }, { "cite": "218 N.E.2d 327", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "17 N.Y.2d 857", "category": "reporters:state", "reporter": "N.Y.2d", "case_ids": [ 2275889 ], "opinion_index": 0, "case_paths": [ "/ny-2d/17/0857-01" ] }, { "cite": "172 Neb. 128", "category": "reporters:state", "reporter": "Neb.", "case_ids": [ 2596278 ], "weight": 2, "pin_cites": [ { "page": "133" } ], "opinion_index": 0, "case_paths": [ "/neb/172/0128-01" ] }, { "cite": "361 N.E.2d 1100", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "66 Ill. 2d 119", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5463533 ], "weight": 4, "pin_cites": [ { "page": "124" }, { "page": "124" }, { "page": "124" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/66/0119-01" ] } ], "analysis": { "cardinality": 550, "char_count": 12471, "ocr_confidence": 0.886, "pagerank": { "raw": 1.1281257473241778e-07, "percentile": 0.5751059231638601 }, "sha256": "0320e23b9aae4999473720479493348784ef63a375d601aa3ded9c39d700a9da", "simhash": "1:240f47f8bd888273", "word_count": 2025 }, "last_updated": "2023-07-14T16:43:47.132655+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "JOSEPH LEMMER, Plaintiff-Appellant, v. GARY KARP, Defendant-Appellee.\u2014 (HARTFORD INSURANCE COMPANY, Appellee.)" ], "opinions": [ { "text": "Mr. JUSTICE BOYLE\ndelivered the opinion of the court:\nJoseph Lemmer, hereinafter \u201cplaintiff,\u201d brought an action for injuries against the defendant, Gary Karp. After an arbitration hearing, plaintiff was awarded *7,750 in settlement of his action.\nPrior to this settlement, on plaintiffs motion, an order was entered denying all lien rights of plaintiffs insurer, Hartford Insurance Company (hereinafter \u201cHartford\u201d). Thereafter, the trial court vacated this order on Hartford\u2019s petition. The trial court also entered an order that the subrogation provisions of the insurance contract between plaintiff and Hartford were in full force and effect and that Hartford had a valid lien for the full amount of the benefits paid to the plaintiff. Plaintiff\u2019s request for a credit against the lien of the subrogee (Hartford) of *716.38 for one-third of the attorney\u2019s fees and a proportionate share of litigation expenses incurred by plaintiff in obtaining Hartford\u2019s portion of the settlement was denied by the trial court. From the gross settlement amount of *7,750, plaintiff paid one-third to his attorneys for attorneys\u2019 fees and reimbursed his attorneys *1,237.20 for expenses incurred in maintaining the litigation. The trial court ordered plaintiff to pay Hartford\u2019s claim for subrogated medical expenses of *345 and income continuation payments of *1,804.16, for a total of *2,149,16 arising out of the insurance contract subrogation provisions.\nThe sole issue presented for review is whether the trial court erred in denying plaintiffs request for a credit against the lien of an intervening party for the intervenor\u2019s proportionate share of attorneys\u2019 fees and litigation expenses incurred by the plaintiff in maintaining his personal injury action.\nThe plaintiff contends that Baier v. State Farm Insurance Co. (1977), 66 Ill. 2d 119, 361 N.E.2d 1100, a recent Illinois Supreme Court decision, is dispositive of this issue.\nIn Baier, the supreme court held that a plaintiff\u2019s attorney, who negotiated a settlement which included a direct payment to the subrogee, is entitled to recover reasonable compensation from the subrogee \u201cin proportion to the benefit received by the subrogee.\u201d (Baier, 66 Ill. 2d 119, 124.) The supreme court found that \u201c[t]his theory of recovery by an attorney, known as the \u2018fund doctrine,\u2019 is based on the equitable concept that an attorney who performs servic\u00e9s in creating a fund should in equity and good conscience be allowed compensation out of the whole fund from all those who seek to benefit from it.\u201d Baier, 66 Ill. 2d 119, 124.\nWe note first that the Baier case is not directly on point to our factual situation. The equitable considerations expressed therein are, however, equally applicable here.\nIn Baier, the court\u2019s decision was based on the \u201cfund doctrine,\u201d where an attorney may recover for his services in the creation of a fund from all those who benefit from the fund. In our case, it is the plaintiff who has brought the action to recover the subrogee\u2019s proportionate share of attorneys\u2019 fees and expenses which plaintiff paid in full to his attorney for the creation of the fund and from which the subrogee received its subrogated share. Thus, plaintiff cannot assert the \u201cfund doctrine\u201d because his attorney has already been compensated in full for his services out of the whole fund. In addition, plaintiff is unable to rely upon the \u201cfund doctrine\u201d because its application in Illinois has been confined only to attorneys and not plaintiffs who have not been fully compensated for their services and expenses in creating the fund. Baier, 66 Ill. 2d 119, 124.\nThis limited interpretation of the \u201cfund doctrine\u201d does not preclude this court from applying the same equitable considerations contained therein to eliminate inequitable constraints upon the rights of the plaintiff. In our opinion, it promotes legal nepotism to allow recovery for the attorney from the subrogee when he has not been paid in full for his legal services in the creation of the fund and yet deny recovery based on the same equitable approach to his client who has paid his attorney in full out of the proceeds of the whole fund and has not been reimbursed by the subrogee for its proportionate share of legal fees and expenses in the creation of the fund. Such a legal result, in our opinion, flies in the face of equity.\nA review of decisions in other jurisdictions shows that our equitable approach to the allocation of attorneys\u2019 fees and expenses among parties, one of whom does not participate in the creation of the fund but benefits thereby, is well accepted.\nThe Nebraska Supreme Court stated it thusly in United Services Automobile Association v. Hills (1961), 172 Neb. 128, 133, 109 N.W.2d 174, 177:\n\u201c[t]he applicable rule is that where the holder of the subrogation right does not come into the action, whether he refuses to do so or acquiesces in the plaintiff\u2019s action, but accepts the avails of the litigation, he should be subjected to his proportionate share of the expenses thereof, including attorney\u2019s fees.\u201d\nThe court further determined that its decision was based on the equitable theory that one who incurs expenses for the recovery of money for the benefit of an equitable subrogation right holder should be allowed reimbursement for a proportionate share of the expense which was for the benefit of the holder of the subrogation right.\nIn a New York case, Herbert Rosenthal Jewelry Corp. v. St. Paul Fire & Marine Insurance Co. (1966), 17 N.Y.2d 857, 218 N.E.2d 327, the court allowed the allocation of attorneys\u2019 fees and litigation expenses between the insurer, who had brought the action, and the insured, who had recovered an additional sum due to the insurer\u2019s efforts in creating the fund. Thus, the amount of the insured\u2019s recovery was reduced because it had not participated in the creation of the fund by the insurer.\nIn a Tennessee case, Tennessee Farmers Mutual Insurance Co. v. Pritchett (1964), 54 Tenn. App. 410, 391 S.W.2d 671, the court found that the insurer, who had notice that its insured would proceed with a suit for damages in an automobile collision case and did nothing to protect its interests, could not recover the amount which it had paid the insured for his damages without paying its proportionate share for the services of the attorney who obtained the settlement for the insured.\nIn a Texas case, State Farm Mutual Automobile Insurance Co. v. Elkins (Tex. Civ. App. 1970), 451 S.W.2d 528, the court held that the pro rata costs and expenses incurred by the insured in obtaining recovery from a tort-feasor were to be borne by the insurer who shared in the insured\u2019s recovery.\nThe Supreme Court of Delaware in Phillips v. Liberty Mutual Insurance Co. (Del. 1969), 253 A.2d 502, found that the insurer, who was entitled to be reimbursed for insurance money it had paid to the insureds, was liable for its share of legal fees and expenses incurred by the insureds in obtaining judgment against the gas suppliers.\nThe Supreme Court of Wisconsin in State Farm Mutual Automobile Insurance Co. v. Geline (1970), 48 Wis. 2d 290, 179 N.W.2d 815, held that an attorney was entitled to reasonable compensation for services rendered in the creation of the fund from all those who benefit, from the fund if the subrogee has notice of the action and elects not to participate as a party with its own legal counsel.\nIn an Arkansas case, Washington Fire & Marine Insurance Co. v. Hammett (1964), 237 Ark. 954, 956, 377 S.W.2d 811, 813, the court, in considering a similar factual situation, stated that:\n\u201c* * * when the insurance company has benefited from the work done by the insured\u2019s attorney there is no inequity in requiring it to bear its fair share of the collection expense.\u201d\nIn addition, Illinois has also allowed recovery to an individual such as plaintiff in Vignali v. Farmers Equitable Insurance Co. (1966), 71 Ill. App. 2d 114, 216 N.E.2d 827. In Vignali, the court deducted from the proceeds of a subrogated insurer\u2019s dram shop settlement the attorneys\u2019 fees and expenses incurred in procuring plaintiff\u2019s suit, because \u201csuch expenses would have been paid by the insurer if it had initiated the action [and] the result should have been the same even if such recovery was secured by the insured.\u201d Vignali, 71 Ill. App. 2d 114, 123, 216 N.E.2d 827, 832.\nIn the instant case Hartford next argues that plaintiff\u2019s recovery of a proportionate share of attorneys\u2019 fees out of Hartford\u2019s subrogation award is a direct violation of its contract which provided that Hartford \u201cis entitled to the proceeds of any settlement or judgment that may result from the exercise of any rights of recovery of the injured person* * *.\u201d (Emphasis added.) (Trust Agreement, par. 7.) Hartford will be reimbursed by the plaintiff to the extent of any \u201cproceeds\u201d plaintiff receives minus Hartford\u2019s proportionate share of attorneys\u2019 fees and expenses.\nAs this court stated in Remsen v. Midway Liquors, Inc. (1961), 30 Ill. App. 2d 132, 148, 174 N.E.2d 7, 15, the meaning and interpretation to be placed on the term \u201cproceeds.\u201d:\n\u201c \u2018* * * \u201c* * * depends on its context, depends very much on the connection in which it is employed and the subject matter to which it is applied.\u201d* * *\u2019 \u201d\nFurther:\n\u201c\u201c***\u201c*** the word \u2018proceeds\u2019 has many meanings and varied usages and is in many instances of doubtful meaning. The subject matter and purpose of a contract must be considered in order to determine the meaning of the word as used by the parties. As used, the word has been variously defined, * * it has been held to mean gross, proceeds and net proceeds.\u201d * * *\u2019 \u201d (30 Ill. App. 2d 132, 148.)\nEquitably, we feel the only interpretation of the term \u201cproceeds\u201d as used in this contract is that the amount the subrogee actually received would be reduced by its proportionate share of attorneys\u2019 fees and expenses. Accordingly, we find no violation of the parties\u2019 contract provisions because \u201cproceeds\u201d in this cause means the subrogee\u2019s net proceeds after a deduction of its proportionate share of attorneys\u2019 fees and expenses.\nHartford also argues that equity requires this court to interpret \u201cproceeds\u201d to mean that the available proceeds be used first to repay any subrogation lien, with the remainder retained by the plaintiff. However, such an interpretation of \u201cproceeds\u201d is clearly inequitable to the plaintiff, especially when the subject matter and purpose of this contract are considered. (Remsen v. Midway Liquors, Inc. (1961), 30 Ill. App. 2d 132, 174 N.E.2d 7.) Therefore we reverse the order of the trial court which denied plaintiff credit against Hartford\u2019s lien for attorneys\u2019 fees and expenses incurred.\nComputation of the amount of credit for attorneys\u2019 fees and expenses to which plaintiff is entitled against Hartford\u2019s lien was not determined by the trial court in light of its denial of plaintiff\u2019s motion. Plaintiff asks this court to enter an order reducing Hartford\u2019s lien by *716.38 for attorneys\u2019 fees, which is one-third of Hartford\u2019s lien of *2,149.16, and to further reduce Hartford\u2019s lien by *334.04, which plaintiff asserts is Hartford\u2019s proportionate share of the *1,237.20 of litigation expenses incurred by plaintiff in this action. It is clear from this record that the total settlement was for *7,750 and that reasonable attorneys\u2019 fees on such a settlement would be one-third of this amount. Accordingly, we find that it is not paramountly unfair to require Hartford to pay attorneys\u2019 fees of *716.38 based on one-third of its share of the judgment. In addition, we find that Hartford\u2019s lien on the total settlement amounts to approximately 27 percent of the gross settlement of *7,750. Therefore, this court finds that plaintiff\u2019s request that Hartford share in the same 27 percent portion of the total litigation expenses in the amount of *334.04 is reasonable and equitable and is supported by the record.\nFor the reasons stated, the judgment of the circuit court of Kane County is reversed with instructions to enter an order reducing Hartford\u2019s lien of *2,149.16 by *1,050.42 \u2014 to *1,098.74.\nJudgment reversed and remanded with instructions.\nSEIDENFELD and WOODWARD, JJ., concur.", "type": "majority", "author": "Mr. JUSTICE BOYLE" } ], "attorneys": [ "Lloyd J. Tyler, of Tyler, Peskind & Solomon, of Aurora, for appellant.", "Juergensmeyer, Zimmerman & Smith, of Elgin, for appellee." ], "corrections": "", "head_matter": "JOSEPH LEMMER, Plaintiff-Appellant, v. GARY KARP, Defendant-Appellee.\u2014 (HARTFORD INSURANCE COMPANY, Appellee.)\nSecond District\nNo. 76-57\nOpinion filed December 30, 1977.\nLloyd J. Tyler, of Tyler, Peskind & Solomon, of Aurora, for appellant.\nJuergensmeyer, Zimmerman & Smith, of Elgin, for appellee." }, "file_name": "0190-01", "first_page_order": 212, "last_page_order": 217 }