Van Deusen v. United States Fidelity & Guaranty Co.
Petitioners Duane and Barbara Van Deusen appealed the denial of their request for apportionment of attorney's fees against United States Fidelity and Guaranty Company (USF&G). USF&G was the workers' compensation and liability insurer for Duane's employer, Goettle, and its lien was satisfied from the Van Deusens' third-party award for personal injuries. Special Term had denied the apportionment based on the precedent set in *France v Abstract Tit. Div. of Tit. Guar. Co.*, which held that when the lienor is also the employer's liability insurer, the attorney's efforts are considered adverse, extinguishing the contribution obligation. This court reconsidered the *France* ruling, deeming it unfair to injured plaintiffs and contrary to the legislative intent behind the Workers' Compensation Law amendment regarding lienor contribution to litigation costs. The court found no legal or logical reason to differentiate an injured employee's recovery based on whether the employer's compensation and liability insurance were with one or two carriers. Consequently, the court reversed the Special Term's order and remitted the matter for further proceedings, instructing that litigation costs be calculated based on the direct benefit the lienor received from the recovery through lien recoupment, with an additional consideration for any wrongfully withheld compensation benefits.