Opinion
September 22, 1943.
Appeal from State Department of Labor.
The accident happened on September 2, 1932, which resulted in the injury and death. The deceased left surviving a widow and several children. Claimants elected, under section 29 Work. Comp. of the Workmen's Compensation Law, to pursue their remedy against a negligent third party. In due time the action against the third party was settled for $12,500, with the consent of the compensation insurance carrier for the employer. The case came on for a hearing to determine deficiency awards and on January 21, 1935, deficiency award was made to the widow. This was found to be erroneous in that it failed to award compensation to the infants. It came on again on February 6, 1941, and an award was made. The decision and award were again corrected on March 25, 1941. An application for review by the Industrial Board was made on February 18, 1941, and on May 11, 1941, the Industrial Board handed down a memorandum affirming the award fixed by the referee and the case was closed. The question presented on this appeal is whether the amendment to section 29 Work. Comp. of the Workmen's Compensation Law, relating to third-party actions and deficiency compensation, has retroactive application to cases where the injury, death, settlement of third-party actions and original award of deficiency compensation occurred before the effective date of the amendment. On the date of the accident which caused the death, section 29 Work. Comp. of the Workmen's Compensation Law provided, among other things, that in the case of a third-party action the insurance carrier shall contribute only the deficiency, if any, between the amount of the recovery against such other person actually collected and the compensation provided or estimated by this chapter for such case. It had been held under the old section that the person beginning the third-party action was compelled to pay the attorney's fees, and that the amount collected was the whole amount of money for which the settlement or judgment was made. Section 29 was amended in 1937 [L. 1937, ch. 684], and clearly indicated that the deduction of reasonable necessary expenditures, including attorney's fees, incurred in effecting such recovery should first be deducted in determining the amount actually collected by those entitled to compensation and that the insurance carrier should contribute the deficiency, if any, between the amount of recovery, after deducting the expenses of the collection, and the compensation provided or estimated. The change in 1937 made it certain that the expenses of collection ought to be deducted because they were never received by the person beginning the third-party action, and in computing any deficiency which the insurance carrier must contribute the words — "the amount of recovery * * * actually collected" — (§ 29, subd. 4) must be deemed to mean the amount collected after the deduction of reasonable and necessary expenditures, including attorney's fees, incurred in effecting the recovery. The clarification by the amendment of section 29 in 1937 was only procedural and, therefore, had application to cases where the injury, death and settlement of the third-party actions and awards of deficiency compensation occurred before the effective date of the amendment. Award reversed and the matter remitted to the State Industrial Board with directions to deduct from the amount of the recovery the sums paid for attorney's and other fees and to compute the deficiency award on the basis of the amount thus actually collected, with costs against the State Industrial Board. All concur.