609 S.W.3d 468
Ark. Ct. App.2020Background
- On Sept. 15, 2008, Charlie Youngblood (Lexicon employee) was injured at work; Liberty Mutual was Lexicon’s workers’ compensation carrier and paid $83,074.82 in medical benefits and $31,220.55 in indemnity.
- Youngblood sued third parties for negligence; Liberty intervened in 2014 asserting a statutory subrogation lien on any third-party recovery.
- Youngblood confidentially settled with the defendants in Oct. 2018 and informed Liberty; Liberty refused to withdraw its lien.
- Youngblood moved to void Liberty’s lien and dismiss Liberty; the circuit court held a made‑whole hearing in May 2019 and found Youngblood was not made whole, dismissing Liberty with prejudice.
- Youngblood then sought attorneys’ fees under Ark. Code § 11‑9‑715 for Liberty’s controversion; the circuit court awarded fees based on the $31,220.55 indemnity Liberty claimed and controverted.
- Liberty appealed, arguing § 11‑9‑715 does not permit fee awards outside the Workers’ Compensation Commission and that its subrogation lien did not amount to a controversion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 11‑9‑715 authorizes attorneys’ fees outside the Workers’ Compensation Commission | Youngblood: Fees are available where carrier’s conduct forces claimant to incur litigation costs, regardless of forum | Liberty: Statute applies only to Commission proceedings; no fee award in circuit court | Court: Fees may be awarded in circuit court; barring that result would create an absurd disparity between forums |
| Whether Liberty’s assertion of a subrogation lien constituted a "controversion" under § 11‑9‑715 | Youngblood: Liberty’s lien forced him to litigate a made‑whole hearing and incur fees, so it controverted his benefits | Liberty: Filing a lien (or intervening) does not automatically controvert the claim | Court: Liberty’s attempt to recoup paid benefits after settlement required Youngblood to defend his awarded benefits and thus constituted a controversion; fees proper |
Key Cases Cited
- Brock v. Townsell, 309 S.W.3d 179 (Ark. 2009) (statutory construction and avoiding absurd results)
- Ark. Game & Fish Comm’n v. Gerard, 541 S.W.3d 422 (Ark. 2018) (purpose of attorneys’‑fees statutes: place litigation burden on party that made it necessary)
- Cleek v. Great S. Metals, 981 S.W.2d 529 (Ark. 1998) (attorneys’‑fees statutory purpose and burden allocation)
- Logan County v. McDonald, 206 S.W.3d 258 (Ark. App. 2005) (made‑whole rule; fees when employee not made whole)
- Harvest Foods v. Washam, 914 S.W.2d 776 (Ark. App. 1996) (direct proof of controversion requires claimant to incur legal expenses defending benefits)
- Aluminum Co. of Am. v. Henning, 543 S.W.2d 480 (Ark. 1976) (controversion precedent)
- Cagle Fabricating & Steel, Inc., 861 S.W.2d 114 (Ark. App. 1993) (controversion and fee principles)