The Legislature has declared that, after attorney fees and costs have been paid, the employer is entitled to full reimbursement for the compensation it paid to the employee, and the employee is entitled to the remaining portion of the judgment only after the employer has been fully reimbursed. ( Gapusan v. Jay (1998) 66 Cal.App.4th 734, 741-742 & fn. 5, 78 Cal.Rptr.2d 250 ( Gapusan ); see Abdala , supra , 3 Cal.App.4th at p. 376, 4 Cal.Rptr.2d 130.) Ensuring the employer is fully reimbursed for the compensation it paid before the employee recoups anything other than attorney fees and costs is consistent with the overall purpose of the workers' compensation system, which guarantees employees prompt payment for industrial injuries without regard to fault in exchange for a smaller recovery than the employee may obtain through litigation.
The Courts of Appeal have consistently and reasonably construed this provision to mean that, when employer and employee are separately represented, the reasonable value of the employee's attorney's services is determined not by reference to the total amount of the settlement, by weighing the respective contributions of each attorney in achieving settlement, or by giving any consideration to the settlement's benefits to the employer, but by reference to the actual benefit that the settlement confers on the attorney's own client, the employee. (See Gapusan v. Jay (1998) 66 Cal.App.4th 734, 745-747 [ 78 Cal.Rptr.2d 250]; Crampton v. Takegoshi (1993) 17 Cal.App.4th 308, 318 [ 21 Cal.Rptr.2d 284], disapproved on other grounds in Phelps v. Stostad [(1997)] 16 Cal.4th 23, 34 [construing parallel language in section 3856]; Walsh v. Woods (1986) 187 Cal.App.3d 1273, 1276-1279 [ 232 Cal.Rptr. 629] [same]; Eldridge v. Truck Ins. Exchange (1967) 253 Cal.App.2d 365, 367 [ 61 Cal.Rptr. 347] [same].)" ( Summers, supra, 20 Cal.4th at p. 1028 (plur. opn. of Kennard, J.).)
The Courts of Appeal have consistently and reasonably construed this provision to mean that, when employer and employee are separately represented, the reasonable value of the employee's attorney's services is determined not by reference to the total amount of the settlement, by weighing the respective contributions of each attorney in achieving settlement, or by giving any consideration to the settlement's benefits to the employer, but by reference to the actual benefit that the settlement confers on the attorney's own client, the employee. (See Gapusan v. Jay (1998) 66 Cal.App.4th 734, 745-747; Crampton v. Takegoshi (1993) 17 Cal.App.4th 308, 318, disapproved on other grounds in Phelps v. Stostad, supra, 16 Cal.4th 23, 34, [construing parallel language in section 3856]; Walsh v. Woods (1986) 187 Cal.App.3d 1273, 1276-1279 [same]; Eldridge v. Truck Ins. Exchange (1967) 253 Cal.App.2d 365, 367 [same].) The same is true for the employer's attorney in this joint prosecution situation: The reasonable value of the attorney's services is determined by reference to the benefit conferred on the client, the employer, and without regard to any incidental benefit conferred on the employee.
To avoid apportionment, a lienholder must provide sufficient factual detail to establish the activities of employer’s counsel constituted “a conscientious effort in the circumstances to address the substantive issues encompassed by the lienholder’s case.” (See ibid. [rejecting as insufficient a lienholder’s showing that failed to explain the precise nature of the services provided, state the hours expended by counsel, or provide a concrete description of activities tending to show a serious attempt to advance the employer’s case]; Gapusan v. Jay (1998) 66 Cal.App.4th 734, 745-746.) Defendant did not do so.
It may: (1) intervene in an injured worker's action, (2) file an independent action, or (3) assert a lien in an injured worker's action. (§§ 3852, 3853, 3856; see Gapusan v. Jay (1998) 66 Cal.App.4th 734, 739, fn. 3 [ 78 Cal.Rptr.2d 250] ( Gapusan); O'Dell v. Freightliner Corp. (1992) 10 Cal.App.4th 645, 653 [ 12 Cal.Rptr.2d 774] ( O'Dell); 16 Couch on Insurance (3d ed. 2000) § 225:152.) This ensures the employee does not get a double recovery, the third party does not have to defend two lawsuits, and compensation insurance rates are minimized.
"The phrase 'subject to' means 'subordinate to.'" Gapusar v. Jay, 66 Cal. App. 4th 734, 741 (1998); see also Swan Magnetics, Inc. v. Superior Court, 56 Cal. App. 4th 1504, 1510 (1997) ("The phrase 'subject to' as not synonymous with 'according to' or 'consistent with'; it means conditioned upon, limited by, or subordinate to."). "Subordinate means inferior in order, nature, dignity, power, importance, or the like."
"An employer is entitled to press its reimbursement claims only against a judgment or settlement in favor of its employee." (Gapusan v. Jay (1998) 66 Cal.App.4th 734, 743.) Here, there was no judgment in favor of Carranza: she dismissed her complaint against Svetlik and recovered no money from him, and the court vacated the January 2015 judgment.
What is clear from the case law, however, is that the question whether a party has been an active participant in prosecuting an action or a mere passive beneficiary is an issue of fact to be determined by the trial court. (Walsh, supra, 187 Cal.App.3d at p. 1278; Raisola, supra, 205 Cal.App.3d at p. 1009; Steinberg v. Allstate Ins. Co. (1990) 226 Cal.App.3d 216, 221; Kavanaugh v. City of Sunnyvale (1991) 233 Cal.App.3d 903, 915 (Kavanaugh); Hartwig, supra, 2 Cal.App.4th at p. 1557; Gapusan v. Jay (1998) 66 Cal.App.4th 734, 745-746 (Gapusan).) That alone proves to be determinative in this case because in opposing the motion for attorney fees in the trial court below, defendants failed to present any evidence regarding TRM's activity prior to settling the matter with defendants and dismissing its complaint in intervention.
After a judgment or order is reversed on appeal, the case generally proceeds to retrial in the trial court as if the appealed judgment or order had never been rendered. (Gapusan v. Jay (1998) 66 Cal.App.4th 734, 743.) But subsequent trial court proceedings are subject to any specific directions given by the appellate court in connection with the remand, such as a partial retrial or entry of a particular judgment.
[Citations.]" ( Gapusan v. Jay (1998) 66 Cal.App.4th 734, 742 [ 78 Cal.Rptr.2d 250].) Plaintiffs have not raised a separate argument regarding the loss of consortium cause of action; however, plaintiffs requested that this court reverse the trial court's judgment in its entirety.