Community Hosp. v. Carlisle, 45A03-9403-CV-128

• Decision Date: 13 March 1995
• Docket Number: No. 45A03-9403-CV-128,45A03-9403-CV-128
• Citation: 648 N.E.2d 363
• Parties: COMMUNITY HOSPITAL, Appellant-Defendant, v. Jerrie CARLISLE, as Parent and Natural Guardian of Phillip Hill, a Minor, and Jerrie Carlisle, individually, Appellees-Plaintiffs.
• Court: Indiana Appellate Court

Page 363

648 N.E.2d 363

COMMUNITY HOSPITAL, Appellant-Defendant, v. Jerrie CARLISLE, as Parent and Natural Guardian of Phillip Hill, a Minor, and Jerrie Carlisle, individually Appellees-Plaintiffs.

No. 45A03-9403-CV-128.

Court of Appeals of Indiana.

March 13, 1995.

David T. Rolland, Highland, for appellant.

Barry D. Sherman & Joseph P. Allegretti, Sherman & Allegretti, Hammond, for appellees.

OPINION

HOFFMAN, Judge.

Appellant-defendant Community Hospital appeals from the grant of appellees-plaintiffs Jerrie Carlisle and Phillip Hill's (collectively plaintiffs) motion for summary judgment in an action for determination of the proper distribution of settlement proceeds pursuant to the Hospital Lien Statute, IND.CODE § 32-8-26-3 (1988 Ed.).

The trial court found the following facts to be undisputed. On July 13, 1992, Phillip Hill was a passenger in a car involved in an automobile collision with Carl Matthews. Matthews was insured by State Farm Insurance Company (State Farm). Hill was admitted to Community Hospital on July 13, 1992, and remained there until July 16, 1992. The amount of the resulting hospital bill was $4,713.35. $3,713.35 is currently due.

On July 30, 1992, Community Hospital filed with the Lake County Recorder's office its hospital lien for the amount of its bill. Community Hospital sent a copy of the lien to State Farm and to plaintiffs.

State Farm paid plaintiffs $26,250.00 in settlement of the claim. This amount reflected a 25% reduction based upon the comparative fault of Roger Carlisle, Hill's stepfather and driver of the car involved in the collision.

The Lake Superior Court later reduced Community Hospital's lien by 25% under the Indiana Comparative Fault Act, IND.CODE § 34-4-33-12 (1990 Supp.); by 1/3, the amount owing to plaintiffs' attorney for his fee; and by other pro rata costs under the Hospital Lien Statute. See IND.CODE § 32-8-26-3. Thereafter, in July 1993, Community Hospital filed a complaint in the trial court objecting to the reduction of its lien. Plaintiffs moved for summary judgment once more seeking reduction of Community Hospital's lien by the above amounts. The trial court granted summary judgment in plaintiffs' favor on the issue of reduction of the lien by the amount of attorney's fees. However, finding National Ins. Association v. Parkview Memorial Hospital (1992), Ind.App., 590 N.E.2d 1141 (hospital lien not subject to reduction under Indiana Comparative Fault Act) to be controlling, the trial court refused to apply the Comparative Fault Act to further reduce the lien. This appeal ensued.

Community Hospital presents one issue on appeal which we restate as: whether the trial court erred in reducing its hospital lien by the amount of plaintiffs' attorney's fees and costs.

IND.CODE § 32-8-26-3, commonly referred to as the Hospital Lien Statute, provides, in pertinent part:

"Lien for reasonable and necessary charges upon any claims accruing to patient; scope of lien; allowance to patient

Sec. 3. (a) A person, firm, partnership, association, limited liability company, or corporation maintaining a hospital in the state, or a hospital owned, maintained, or operated by the state or a political subdivision has a lien for all reasonable and necessary charges for hospital care, treatment, or maintenance of a patient (including emergency ambulance services provided by the hospital) upon any cause of action, suit, or claim accruing to the patient, or in the case of the patient's death, the patient's legal representative, because of the illness or injuries that:

(1) gave rise to the cause of action, suit, or claim; and

(2) necessitated the hospital care, treatment, or maintenance.

(b) The lien:

(1) except as provided in subsection (c), applies to any amount obtained or recovered by the patient by settlement or compromise rendered or entered into by the patient or by the patient's legal representative;

(2) is subject and subordinate to any attorney's lien upon the claim or cause of action; ... and ...

(5) must first be reduced by the amount of any medical insurance proceeds paid to the hospital on behalf of the patient after the hospital has made all reasonable efforts to pursue the insurance claims in cooperation with the patient.

(c) If a settlement or compromise that is subject to subsection (b)(1) is for an amount that would permit the patient to receive less than twenty percent (20%) of that amount if all of the liens created under this chapter were paid in full, the liens must be reduced to a pro rata basis to the extent that will permit the patient to receive twenty percent (20%) of that amount."

(Emphasis added.)

Community Hospital argues IND.CODE § 32-8-26-3 requires a hospital lien to be subordinate and subject to an attorney's lien only where the settlement proceeds are insufficient to pay all claims upon the fund. Plaintiffs disagree. They contend the unambiguous language of the statute mandates that a hospital lien is to be reduced by the amount of attorney's fees in all cases.

The underlying purpose of the Hospital Lien Statute is to "insure that hospitals are compensated for their services," National Ins., 590 N.E.2d at 1144. This purpose is effected by giving...