Appeal, No. 330, Oct. T., 1962, from order od Court of Common Pleas No. 7 of Philadelphia County, Dec. T., 1960, No. 1460, in case of Francesco Mazzeo v. M. & J. B. McHugh et al. Order affirmed.
Peter P. Liebert, 3rd, with him John J. McDevitt, 3rd, for appellants.
Alexander F. Barbieri, for appellee.
Before Rhodes, P.j., Ervin, Wright, Woodside, Watkins, Montgomery, and Flood, JJ.
[ 199 Pa. Super. Page 401]
This is a workmen's compensation case. We are here concerned with an appeal by the employer and its insurance carrier from an order of the court of common pleas affirming a decision of the workmen's compensation
[ 199 Pa. Super. Page 402]
board reinstating claimant's compensation. The dispute involves the amount of credit which should be allowed as a result of the settlement of a suit by claimant against a third party tortfeasor.
On December 12, 1954, Francesco Mazzeo was employed as a laborer by M. & J. B. McHugh, general contractors. While in the course of his employment, Mazzeo was struck by a tractor-trailer owned by Biter's Transfer Company, and operated by one of its employes. As the result, claimant's pelvis was fractured and he was totally disabled. Under date of December 23, 1954, an open compensation agreement was executed calling for the payment of $32.50 per week. Mazzeo thereafter instituted a trespass action against Biter's Transfer Company and, on July 24, 1956, settlement of this action was accomplished for a gross sum of $32,500.00. Compensation payments were thereupon discontinued. At that time the carrier had paid $4,889.44 by way of compensation and medical expenses. This sum was repaid to the carrier by way of subrogation, less an attorney's fee of twenty-five percent. After the deduction of the gross subrogation payment, and certain incidental costs amounting to $533.05, the balance of $27,077.51 was divided equally between claimant and his attorney, or $13,538.76 to each.
The present proceeding had its inception in a petition for reinstatement filed by claimant on July 23, 1958, in which he alleged that he was still totally disabled, and desired "to establish my right to compensation and the extent of subrogation allowable against compensation payable to me". In its answer to this petition, the carrier asserted that claimant had received in the third party action a sum in excess of its total compensation liability. At the hearing before the referee there was no dispute as to the facts. Counsel for the carrier took "the position here that the fee which was charged by the attorney ... of fifty percent on a
[ 199 Pa. Super. Page 403]
settlement of the net amount, is unreasonable, an unreasonable fee". Counsel for the claimant took the position (a) that it was the carrier's burden to show that the fee was unreasonable, (b) that the compensation authorities did not have jurisdiction to fix the fee in the third party action, and (c) that the carrier should have questioned the reasonableness of the fee at the time of the third party settlement. The referee concluded that, since claimant had been charged a counsel fee of fifty percent, the carrier was entitled to a credit against compensation due after the settlement in amount of ...