Cases decided after Quinn have struggled to determine when the doctrine of equitable apportionment should be applied. (See e.g., Kaplan v. Industrial Indem. Co. (1978) 79 Cal.App.3d 700 [ 145 Cal.Rptr. 219]; Walsh v. Woods (1982) 133 Cal.App.3d 764 [ 184 Cal.Rptr. 267]; Walsh v. Woods (1986) 187 Cal.App.3d 1273 [ 232 Cal.Rptr. 629]; Steinberg v. Allstate Ins. Co. (1990) 226 Cal.App.3d 216 [ 277 Cal.Rptr. 32].) The problem arises when both the employee and employer (or employer's insurance carrier) retain separate attorneys, but one of the attorneys is more active than the other in securing recovery.
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.
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.).)
To determine whether a party has been active or passive, the key inquiry for the trial court is not whether that party has made an appearance in the case through counsel, but whether counsel’s activities contributed to securing or preserving the fund. (See Draper v. Aceto (2007) 26 Cal.4th 1086, 1095; Walsh v. Woods (1986) 187 Cal.App.3d 1273, 1278-1279 (Walsh) [“the pivotal issue of active participation by separate counsel is a question of fact for the trial court alone”].) The “mere retention of separate counsel is not enough to defeat the common fund doctrine.”
The amount of the judgment owing to the passive beneficiary may be reduced to compensate the active litigant for his [or her] attorney fees. [Citation.]" ( Walsh v. Woods (1986) 187 Cal.App.3d 1273, 1276.) Under section 3860, the trial court must set reasonable attorney fees and costs based on efforts which created a common fund.
. . ." ( Walsh v. Woods (1986) 187 Cal.App.3d 1273, 1276 [ 232 Cal.Rptr. 629].) As the Raisola court noted, "Section 3860 codifies an identical result when an injured party settles a claim with the tortfeasor."
However, allocation is inappropriate when the injured party and the lienholder employ separate attorneys who each actively participate in the generation of the fund out of which fees are sought. ( Walsh v. Woods (1986) 187 Cal.App.3d 1273, 1278-1279 [ 232 Cal.Rptr. 629] ( Walsh II); Kaplan v. Industrial Indem. Co., supra, 79 Cal.App.3d at p. 710.) In such circumstances, "sound policy reasons . . . militate against efforts to weigh the relative contributions of counsel in an attempt to avoid liability for the other party's attorney's fees."
The question of "active participation" by a particular counsel is one of fact for the trial court. ( Walsh v. Woods (1986) 187 Cal.App.3d 1273, 1278 [ 232 Cal.Rptr. 629].) (2)Application of the Correct Test. Appellant urges that the court committed an error of law because it applied the incorrect legal standard.
The employee's attorneys are entitled to attorneys' fees based on the amount of the lien unless the attorney for the lienholder actively participated in prosecuting the suit. ( Walsh v. Woods (1982) 133 Cal.App.3d 764, 767 [ 184 Cal.Rptr. 267]; confirmed in Walsh v. Woods (1986) 187 Cal.App.3d 1273, 1278 [ 232 Cal.Rptr. 629].) Attorneys' fees can be recovered from the "liened portion of the judgment even where the lien has been assigned to the third party."
C. BISHOP WAS AN ACTIVE PARTICIPANT IN THE LITIGATION In Walsh v. Woods (1986) 187 Cal.App.3d 1273, the trial court denied plaintiff's motion for an award of apportioned attorneys' fees under subdivision (b) because the employer's counsel, " 'actively participated' in the lawsuit, albeit minimally." (Id. at p. 1275.)