Reliance Insurance Co. v. Kronzer, Abraham & Watkins
The Reliance Insurance Company appealed a trial court's decision that awarded 25% of its subrogation recovery to the claimant's attorneys, Kronzer, Abraham & Watkins, as fees. Reliance had intervened in a personal injury lawsuit to recoup worker's compensation benefits paid to Chester Gilson. The core of the dispute was the applicability of a 1973 amendment to Article 8307, Section 6a, Texas Revised Civil Statutes Annotated, which permitted such attorney's fees. Reliance contended that its pre-existing right to full subrogation, which accrued with payments made to Gilson before the amendment's effective date of September 1, 1973, was protected by Article 8309, Section 3b, preventing retroactive application of the amendment. The appellate court agreed, concluding that Reliance's inchoate or contingent right to full recovery, including its own enforcement costs, had accrued prior to the amendment. Consequently, the trial court was unauthorized to deduct attorney's fees from Reliance's subrogation amount. The judgment was reformed to remove the attorney's fee provision and affirmed as modified.