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VALENTINO v. RICKNERS RHEDEREI

June 24, 1976

Vito VALENTINO, Plaintiff,
v.
RICKNERS RHEDEREI, G.M.B.H., SS ETHA, Defendant



The opinion of the court was delivered by: WEINSTEIN

MEMORANDUM AND ORDER

 WEINSTEIN, District Judge.

 Plaintiff, a longshoreman employed by a stevedore, was injured while working aboard a vessel owned by the defendant. The stevedore had paid $15,488.31 for medical and other expenses of the plaintiff and had a lien for that amount on any recovery by the plaintiff. Plaintiff was awarded $5,000.00 by the jury.

 Counsel for plaintiff moved to be awarded a fee out of the proceeds of the suit. The stevedore then intervened to oppose the motion in order to preserve its priority of lien on the $5,000.00 recovery. It took no other action during the course of the litigation.

 On a recovery of $5,000.00 the contingent fee retainer agreement between plaintiff and his attorney provides for $2,000.00 in attorney's fees and expenses plus $70.00 for court costs without deductions for liens. It reads in pertinent part as follows:

 
". . . such percentages shall be computed on the net sum recovered after deducting taxable costs. . . . But for the following or similar items, there shall be no deduction in computing such percentages: liens . . .."

 Plaintiff's attorney has expressed the intention to turn over the fee to the client. Without conceding any obligation, the stevedore has agreed that it will reimburse plaintiff's counsel for the court costs and expert witness fees in the total sum of $420.00.

 There is no issue raised by any of the parties about the reasonableness of the fee. The retainer agreement is consistent with those in general use in this jurisdiction. Given the amount of time for preparation and trial, the fee is appropriate on any quantum meruit basis. For reasons indicated below we hold that the stevedore, who will receive the sole benefit from the action, should pay the legal fee and costs and disbursements out of the sum it receives as a result of its lien.

 To dispose of the usual longshoreman's injury action, the law must reconcile three interests: those of the injured longshoreman, the stevedore who hired him, and the owner on whose ship he was injured. See, generally Landon v. Lief Hoegh & Co., 386 F. Supp. 1081 (E.D.N.Y.1974) (Dooling, J.), aff'd, 521 F.2d 756 (2d Cir. 1975), cert. denied, 423 U.S. 1053, 96 S. Ct. 783, 46 L. Ed. 2d 642 (1976) (describing the situation prior and subsequent to 1972 Amendments to 33 U.S.C. § 905). Under the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. §§ 901-950, the stevedore compensates the longshoreman for medical and other expenses related to the accident. The longshoreman may sue the shipowner responsible for his injury; if he does not sue within six months the stevedore may bring suit. The shipowner-defendant is liable for damages to the longshoreman incurred as a result of the shipowner's negligence, with no deduction for the amount paid as compensation by the stevedore pursuant to the Act. Pope & Talbot, Inc. v. Hawn, 346 U.S. 406, 74 S. Ct. 202, 98 L. Ed. 143 (1953).

 If the longshoreman brings the lawsuit, the stevedore has a lien on any recovery for the amount of medical and related expenses paid as compensation.The longshoreman keeps the surplus. The statute makes no reference to attorneys fees in cases where the longshoreman is plaintiff.

 If the stevedore sues it retains enough to satisfy its lien and attorneys fees and pays four-fifths of the remainder to the longshoreman. 33 U.S.C. § 933(e)(1). In this district, at least, it is the longshoreman rather than the stevedore who sues.

 The issue raised by this case involves another distinct, though derivative, interest: that of the injured longshoreman's attorney. The question now posed is whether he should be paid out of the res secured through his efforts although the client has received no benefit. While the cases in this circuit seem to suggest that the answer has been "no," fairness and ethical considerations as well as recent changes to the Longshoremen's and Harbor Workers' Compensation Act indicate that the answer is "yes."

 There are four possible fee situations. First, where the longshoreman's suit results in a recovery substantially exceeding the lien, the normal practice, as we have observed it, is for the stevedore to recoup the entire lien unless, as part of a settlement discussion, there is some voluntary reduction in its claim. As a result, in most cases the entire attorney's fee is paid out of the proceeds going to the longshoreman with, as we understand the matter, the fee being based upon a percentage of the longshoreman's share.

 Second, where there is no recovery by the longshoreman there is, of course, no issue as to fee since these are all contingent fee cases. While the client is responsible for payment of the costs and disbursements in the action, it is probably not usual to press the client ...


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