Carlson v. Powers

• Decision Date: 20 February 1992
• Docket Number: No. 2-91-0403,2-91-0403
• Citation: 167 Ill.Dec. 625,225 Ill.App.3d 410,587 N.E.2d 1240
• Parties: , 167 Ill.Dec. 625 Scott CARLSON, Plaintiff-Appellee, v. Robert POWERS et al., Defendants (Good Shepherd Hospital, Lienholder-Appellant).
• Court: United States Appellate Court of Illinois

Page 1240

587 N.E.2d 1240

225 Ill.App.3d 410, 167 Ill.Dec. 625

Scott CARLSON, Plaintiff-Appellee, v. Robert POWERS et al., Defendants (Good Shepherd Hospital Lienholder-Appellant).

No. 2-91-0403.

Appellate Court of Illinois Second District.

Feb. 20, 1992.

Ronald J. Hennings, Terrance B. McGann, Grabowski & Clutts, Evanston, for Good Shepherd Hosp.

Dennis E. Carlson, John N. Dore, Chicago, for Scott Carlson.

Justice NICKELS delivered the opinion of the court:

Lienholder, Good Shepherd Hospital (hospital), appeals from an order of the circuit court of Lake County ruling that plaintiff's attorney's statutory lien (Ill.Rev.Stat., 1990 Supp., ch. 13, par. 14) included the costs and expenses of litigation and had priority over the hospital's lien (Ill.Rev.Stat.1989, ch. 82, par. 97 et seq.), which totally exhausted the funds available without payment of the hospital's lien. The hospital raises the following issues on appeal: (1) whether the trial court had the authority to reduce its lien to less than one-third of amount of the settlement reached in plaintiff's personal injury action; (2) whether plaintiff's court costs and litigation expenses could be included as part of his attorney's lien; and (3) whether public policy requires that the provisions of the Hospital Lien Act (Ill.Rev.Stat.1989, ch. 82, par. 97 et seq.) be enforced. In response, plaintiff's attorney asserts that the hospital failed to demonstrate it possessed a valid statutory lien and that the attorney was additionally entitled to an equitable lien for expenses and costs of the litigation in addition to its statutory lien. We affirm.

Plaintiff, Scott Carlson, was injured in an automobile accident on December 21, 1982. He was eventually admitted to the hospital for a course of treatment, for which expenses totalled $8,731.90.

In 1987, Carlson entered a contingent fee contract with his attorney providing that from any proceeds realized from Carlson's claim, his attorney would receive reimbursement of costs incurred and fees of 40% of such proceeds. Carlson's attorney filed a complaint on November 30, 1987, seeking damages from four defendants arising from Carlson's personal injuries as a result of the 1982 automobile accident. The counts against one defendant were dismissed in November 1989, and plaintiff settled with two of the three remaining defendants for $10,000 on October 16, 1990, which settlement is the subject of the present litigation over lien priorities.

After the unsuccessful trial of his claim against the remaining defendant, Carlson filed two post-trial motions on November 21, 1990, which were denied in mid-March 1991. On April 9, 1991, Carlson again filed a post-trial motion requesting the court to reconsider and vacate its prior rulings on his post-trial motions, which was again denied on April 18, 1991.

However, on January 9, 1991, before the court ruled on Carlson's initial post-trial motions, Carlson filed a motion seeking to adjudicate the lien of the hospital and other health care providers. The motion alleged that Carlson's litigation costs, expenses and attorney's fees totalled $14,350.98. The hospital was the only health care provider and lienholder to respond to Carlson's motion. The hospital responded that as a not-for-profit corporation, it was entitled to a lien in the amount of $8,731.90 pursuant to the Hospital Lien Act (Ill.Rev.Stat.1989, ch. 82, par. 97 et seq.). The hospital argued that its lien could only be reduced to one third of Carlson's settlement, or $3,333.33, as provided in the statute and that Carlson's attorney was not entitled to deduct his fees or costs under the "common fund" doctrine. In response Carlson's attorney argued the hospital had failed to establish it was not-for-profit and that his attorney's lien had priority for the entire amount of Carlson's settlement.

On February 27, 1991, the court entered its order adjudicating the liens of Carlson's attorney and the health care providers. The court found that the hospital had a valid lien for $3,333.33 and that Carlson's attorney had a valid attorney's lien for 40% of the settlement or $4,000, which is not disputed. The court further ruled that Carlson's attorney's lien had priority, which is again not disputed. However, in addition to Carlson's attorney's fees, the circuit court found Carlson's attorney's lien included the costs of suit for a total of $14,350.98, and that his attorney was entitled to the full settlement of $10,000. Finally, the court adjudicated all remaining liens at $0 as no other health care provider proved the existence of its lien.

On March 28, 1991, the hospital filed its notice of appeal of the circuit court's February 27, 1991, order and asserts that the lower court was without authority to reduce its lien beyond the already statutorily reduced amount of one-third of Carlson's settlement, that costs and expenses of suit can not be included in an attorney's statutory lien, and that public policy requires that the hospital's lien be enforced.

Prior to considering the merits of this appeal, we are obligated to determine the question of our jurisdiction, although such issue was not raised by the parties. (Deerfield Management Co. v. Ohio Farmers Insurance Co. (1988), 174 Ill.App.3d 837, 838-39, 124 Ill.Dec. 423, 529 N.E.2d 243.) Thus, we note that the hospital's jurisdictional statement incorrectly indicates...