Texas Judiciary Online - HTML Opinion

Because Criaco was = not a party,=20 assignee, or third-party beneficiary of either of the agreements, = any=20 breach of those agreements was not a breach of a legal right = belonging to=20 him, and he was not a proper person to bring suit to enforce those = agreements. Whether or not courts have labeled such a = deficiency as=20 a lack of standing, that is nevertheless what it is, and there is = no other=20 basis upon which a party can lack standing to assert a contract=20 claim. Therefore, unless: (1) the concept of standing simply = does=20 not apply to a contract action; (2) standing is not a component of = subject=20 matter jurisdiction in a contract action; or (3) a lack of subject = matter=20 jurisdiction does not deprive a court of jurisdiction in a = contract=20 action, then Criaco=3Ds lack of standing = for the=20 claims he asserted deprived the trial court of subject matter = jurisdiction=20 to adjudicate those claims, and we can only vacate or reverse the = judgment=20 of the trial court and order those claims dismissed for want of=20 jurisdiction.

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/s/ =20 Richard H. Edelman

Justice

Judgment rendered and = Majority=20 and Dissenting Opinions filed June 7, 2007.

Panel consists of = Justices=20 Anderson, Edelman, and Frost. (Frost, J., = majority).

^{^[1]} &nb= sp; =20 West = Orange-Cove=20 Consol. Indep. Sch. Dist. v. Alanis, 107 S.W.3d 558, = 583 (Tex.=20 2003).

^{^[2]} &nb= sp; =20 The only = copies of this=20 agreement in our record are signed only by = Robinson.

^{^[3]} &nb= sp; =20 It is = undisputed that=20 Sompo made this payment.

^{^[4]} &nb= sp; =20 Where, as here, = an=20 employee, who has been injured and received workers compensation = benefits,=20 also seeks damages from a third-party tortfeasor, the = workers=3D compensation carrier = is=20 subrogated to the rights of the employee to the extent of the = benefits it=20 has paid. See Tex. Lab. Code Ann. ' 417.001(a), (b) = (Vernon 2006);=20 Tex. Workers Comp. Ins. Fund v. Alcorta, 989 S.W.2d 849, = 851 (Tex.=20 App.CSan Antonio 1999, no=20 pet.). In that event, the net amount recovered by the = claimant in=20 the third-party action is applied to reimburse the = workers=3D compensation carrier = for the=20 benefits it has paid. Tex. Lab. Code Ann. ' 417.002(a) (Vernon=20 2006). In addition:

(a) An insurance carrier whose = interest is=20 not actively represented by an attorney in a third-party action = shall pay=20 a fee to an attorney representing the claimant in the amount = agreed on=20 between the attorney and the insurance carrier. In the absence of = an=20 agreement, the court shall award to the attorney payable out of = the=20 insurance carrier=3Ds recovery:

(1) a reasonable fee for recovery of = the=20 insurance carrier=3Ds interest that may not exceed one-third of the = insurance=20 carriers recovery; . . . .

* =20 * = *

(d) For = purposes of=20 determining the amount of an attorney=3Ds fee under this = section,=20 only the amount recovered for benefits . . . that have been = paid by=20 the insurance carrier may be considered.

Tex. Lab. Code Ann.=20 ' 417.003(a), (d) = (Vernon 2006)=20 (emphasis added). Reading sections 417.001-.003 together, an = award=20 of attorney=3Ds fees under section = 417.003=20 requires both that an amount be recovered by a subrogated = insurance=20 carrier, and that it be recovered from the amount recovered by the = claimant in the third-party action. In this way, where the = efforts=20 of a claimant=3Ds attorney to obtain = a recovery=20 for the claimant also inures to the benefit of the subrogated = insurance=20 carrier that receives a portion of that recovery, the = claimant=3Ds attorney receives a = fee for=20 the portion being paid to the subrogated carrier (as well as the = remainder=20 going to the claimant) so that the attorney is compensated the = entire=20 recovery his efforts have obtained without being penalized for the = fact=20 that part of it happens to go to the carrier.

In this case, rather than recovering any = of the=20 workers=3D compensation benefits it paid from the = amount=20 recovered by Robinson in settlement of the third-party UIM = lawsuit,=20 Sompos=3Ds obligation under the agreements to pay = the=20 workers=3D compensation lien, i.e. to = itself,=20 amounted to a relinquishment of its rights to subrogation and thus = no=20 recovery of any benefits it had paid to Robinson from the amount = Robinson=20 recovered in the third-party action. Because = Robinson=3Ds recovery was not reduced to reimburse = the=20 subrogated insurance carrier, Criaco=3Ds fee on Robinson=3Ds recovery was never reduced so as to = warrant any=20 payment of a compensating fee under section 417.003. =20 Criaco=3Ds position thus seeks to obtain a fee = calculated=20 as if there had been a third-party recovery for Robinson of = $466,414=20 ($385,000 + $81,414) that was then reduced by a payment of $81,414 = to=20 Sompo as the subrogated workers=3D compensation carrier, which was not the = = case.