Kindt v. Otis Elevator Co

In Kindt v. Otis Elevator Co. (1995) 32 Cal.App.4th 452, the Court of Appeal reversed the trial court's denial of the employee's Labor Code section 3856 motion to allocate from a workers' compensation lien an amount for attorney fees and costs she incurred in obtaining the judgment from which the lien was satisfied. The appellate court held the evidence was insufficient to show the workers' compensation insurer lienholder actively participated in the lawsuit resulting in the judgment. (Id. at p. 453.) The record in Kindt, supra, 32 Cal.App.4th 452 showed that the workers' compensation insurance carrier for Kindt's employer (the Intervener) filed a complaint in intervention seeking to enforce its workers' compensation benefits lien rights against any judgment obtained by her in her third party lawsuit against Otis and others. One week before trial, Otis purchased the Intervener's lien rights and the complaint in intervention was dismissed. After obtaining judgment against Otis, Kindt filed a motion for attorney's fees and costs under section 3856. Kindt's attorney filed a declaration averring that "his law firm had tried the case to jury verdict without any assistance from Intervener. Intervener did not institute any discovery, notice any depositions in anticipation of trial, or retain any expert witnesses on behalf of Kindt. All of the costs of trial were borne by Kindt's attorneys." (Id. at p. 454.) Otis opposed the motion, arguing that the Intervener's counsel had actively participated until the week before trial, when Otis had purchased the Intervener's lien rights. A declaration from Otis's trial counsel averred that the Intervener had actively participated " 'by attending all depositions, the arbitration, the mandatory settlement conference, and expert depositions.' " (Kindt, supra, 32 Cal.App.4th at p. 454.) Supplemental declarations from Kindt's trial counsel averred that in those depositions, the Intervener's counsel had asked only one question of one witness and in its expert witness designations had simply named " ' "all such witnesses so designated by the Plaintiff and Defendants in this case." ' " (Id. at p. 455.) The Intervener's trial counsel explained his failure to examine each of the deponents was that most of the information had been previously brought out by attorneys for defendant property owner or by plaintiff's attorney. He also declared his firm had expended 86.25 hours pursuing its complaint in intervention. (Ibid.) The Court of Appeal in Kindt found the trial court erred in finding the evidence sufficient to show active participation by the Intervener's counsel. The declaration of its counsel stated counsel's involvement in a "very general manner"; counsel attended three depositions, but asked only one question of one witness, his expert witness designation was insufficient and the declaration failed to indicate how the hours claimed were actually spent. "We do not know whether Intervener's counsel was making a 'conscientious attempt' to advance his client's interests or was simply riding on the coattails of Kindt's counsel while, at the same time, making it appear to the contrary by placing a ' "warm body" ' whenever and wherever the opportunity arose.' " (Kindt, supra, 32 Cal.App.4th at p. 460.) The declaration of the Intervener's counsel did not constitute sufficient evidence to establish the active participation necessary to defeat the employee-plaintiff's entitlement to attorney's fees. (Ibid.) The court reiterated that "the employee is entitled to attorney fees unless there has been active participation by the intervener. It does not matter which attorney has worked the hardest, be it plaintiff's, intervener's, or codefendant's." (Ibid.) Kindt followed the reasoning of Hartwig v. Zacky Farms (1992) 2 Cal.App.4th 1550 (Hartwig), in which the compensation carrier intervened in the lawsuit and assigned its lien claim to the defendant shortly before trial. The plaintiff successfully moved for attorney fees under section 3856. On appeal, the Hartwig court held that the evidence was insufficient to support a finding that the intervener actively participated in the lawsuit. In discussing the showing in Hartwig, the Kindt court states: "The only evidence of the intervener's efforts in procuring the common fund consisted of the declaration of its counsel which provided, in relevant part, 'Our office spent much time and expense in pursuing our client's recovery. Our records will reflect that our firm had a representative attend and participate in the deposition of plaintiff, attend settlement conferences, prepare opposition to defendant's Motion for Summary Judgment, attend the hearing on Motion for Summary Judgment, prepare Demand to Exchange List of Expert Witnesses, attend trial confirmation conferences and attend the deposition of defendant employee.' (Hartwig, at pp. 1555-1556.)" (Kindt, supra, 32 Cal.App.4th at p. 458.) The appellate court held the showing was facially insufficient. " 'This unspecific and ambiguous showing falls well short of affirmatively demonstrating the active participation required to defeat apportionment.' " (Kindt, at p. 459.)