Court of Appeals of Texas,

Dallas.

The CITY OF DALLAS, Appellant,

v.

Charles L. CAPERTON, A Professional Corporation, and Fred Katani, Appellees.

No. 05–01–01736–CV.

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Oct. 30, 2002.

Attorneys & Firms

Charles S. Black, Jr., for The City of Dallas.

Charles L. Caperton, pro se.

Before Justices JAMES, WRIGHT, and RICHTER.

MEMORANDUM OPINION

Opinion By Justice WRIGHT.

*1 The City of Dallas appeals the judgment awarding Charles L. Caperton, a professional corporation, attorney’s fees to be paid from funds received in settlement of an underlying lawsuit. In a single point of error, the City contends the trial court erred by awarding Caperton attorney’s fees because there is no evidence to support the award. Because the facts are well-known to the parties and the issues of law are settled, we issue this memorandum opinion. See Tex.R.App. P. 47.1.

Chapter 417 of the Texas Labor Code governs third-party liability in workers’ compensation cases. Section 417.001 provides that a workers’ compensation carrier is subrogated to the rights of an injured worker for any benefits paid by the carrier. Tex. Lab.Code Ann. § 417.001 (Vernon Supp.2002). The carrier’s subrogation right creates a lien against any future recovery against a third party. Therefore, the carrier is entitled to recover one hundred percent of compensation paid to an insured employee as a result of the employee’s recovery of damages from a third party in a negligence action. Workers’ Compensation Ins. Fund v. Travis, 912 S.W.2d 895, 897 (Tex.App.-Fort Worth 1995, no writ); see also Tex. Lab.Code Ann. § 417.002(a).

Section 417.003 governs the award of attorney’s fees in such a case. When an insurance carrier is not actively represented by an attorney in a third-party action, the award of attorney’s fees to the claimant’s attorney is mandatory. See Tex. Lab.Code Ann. § 417.003(a). If the carrier and the claimant’s attorney have not agreed on a fee, the court is to make an award out of the insurance carrier’s recovery against the third-party tortfeasor. Id. The court must award “a reasonable fee for recovery of the insurance carrier’s interest that may not exceed one-third of the insurance carrier’s recovery.” Id.

Here, the City paid almost $200,000 to or on behalf of Officer Fred Katani after he was seriously injured on duty as a police officer for the City. The insurance carrier for Lorenzo Cortez, the driver responsible for Katani’s injuries, agreed to pay the policy limits of $20,000. After the City and Caperton could not agree on an amount to be paid to Caperton for attorney’s fees, the City filed this declaratory judgment. The case was tried on stipulated facts. The only evidence offered by Caperton in support of his claim for $6,630.06 in fees was his contingency fee agreement with Katani.

In Arthur Anderson & Co. v. Perry Equip. Corp., 945 S.W.2d 812 (Tex.1997), the Texas Supreme Court held a party’s contingent fee agreement is admissible and should be considered by the factfinder in determining the reasonableness of attorney’s fees under the Deceptive Trade Practices Act. Id. at 818. However, a contingency fee agreement alone will not support an award of attorney’s fees because it does not provide a “meaningful way to determine if the fees were in fact reasonable and necessary.” Id . This holding has been extended from the DTPA to other awards of statutory attorney’s fees. See, e.g., AU Pharmaceutical, Inc. v. Boston, 986 S.W.2d 331, 339 (Tex.App.-Texarkana 1999, no pet.) (breach of settlement agreement); Lubbock County v. Strube, 953 S.W.2d 847, 857–58 (Tex.App.-Austin 1997, pet. denied) (Texas Whistleblower Act); Purina Mills, Inc. v. Odell, 948 S.W.2d 927, 940 (Tex.App.-Texarkana 1997, writ denied) (products liability/negligence/breach of warranty/DTPA). In accord with Arthur Andersen, we conclude that although the contingent fee agreement between Katani and Caperton was a factor to be considered by the trial court in making its award of attorney’s fees under section 417.003, it alone will not support the award of attorney’s fees. Without evidence of the factors identified in the Texas Rules of Professional Conduct, the trial court had no meaningful way to determine if $6,630.06 in fees was reasonable. See Arthur Andersen, 945 S.W.2d at 818–19. We sustain the City’s sole issue.

*2 Accordingly, we reverse the trial court’s judgment and render judgment that Caperton take nothing.