Cases | Herron v. Gabby¿s Goodies, 24 P.3d 747 (Kan. Ct. App. 2001) | 2018
The victim was struck by an intoxicated driver and sued both the driver and the owner of the vehicle. The victim subsequently received $25,000 in crime victims compensation and settled his lawsuit for $178,925. After expenses and attorney fees were paid, $36,390.30 of the settlement remained. The compensation board sought repayment of the $25,000 award and agreed to accept half of the victim’s net recovery. The victim filed a motion for determination of the board’s subrogation lien, claiming that it should be reduced proportionally to adjust for attorney fees paid in recovering damages. The district court, reading Kan. Stat. Ann. § 74-7312 to permit an allowance of attorney fees, ordered the lien reduced to 65% of the original $25,000, or $16,250. The board appealed. The appellate court held that the district court erred in ruling that § 74-7312 permits the allowance of attorney fees. The statute provides that the board must ask the claimant to bring an action on its behalf. The victim’s failure to give the board notice before filing suit effectively prevented the board from asking him to proceed as trustee of the State and hindered the board’s ability to protect its interest early. Further, the 35% contingency fee of the victim’s attorneys was arguably disproportionate to the work required to recover a judgment for insurance policy limits. The board made an interest-free loan with no guarantee of repayment and sought to recover the money in order to make it available to another victim in need.