Gallagher Bassett Services v. Phillips

• Decision Date: 11 April 2008
• Docket Number: 1070416.
• Citation: 991 So.2d 697
• Parties: GALLAGHER BASSETT SERVICES, INC. v. Nelia D. PHILLIPS et al.
• Court: Alabama Supreme Court

991 So.2d 697

GALLAGHER BASSETT SERVICES, INC. v. Nelia D. PHILLIPS et al.

1070416.

Supreme Court of Alabama.

April 11, 2008.

William E. Pipkin, Jr., and Scott P. Hooker of Austill, Lewis & Pipkin, P.C., Mobile, for appellant.

Mathew B. Richardson and Sidney W. Jackson III of Jackson, Foster & Graham, LLC, Mobile, for appellee Nelia D. Phillips.

Wesley Pipes and Ginger D. Johnson of Wesley Pipes, LLC, Mobile, for appellees John Patrick Couch, M.D., and Physician's Pain Specialist of Alabama, P.C. and John Patrick Couch, M.D.

WOODALL, Justice.

Gallagher Bassett Services, Inc. ("Gallagher"), appeals from an order denying its motion for permission to intervene in an action by Nelia D. Phillips against Dr. John Patrick Couch and Physician's Pain Specialist of Alabama, P.C. ("PPSA"), alleging medical malpractice. We dismiss the appeal.

The dispositive facts are undisputed. On April 3, 2002, Phillips fell from a ladder and fractured her left wrist. The accident occurred while Phillips was in South Carolina engaged in her employment with RGIS Inventory Specialists ("RGIS"). She filed a claim with the South Carolina Workers' Compensation Commission against RGIS and its workers' compensation carrier, Gallagher, which began paying workers' compensation and medical benefits.

The medical benefits included payment for treatment by Dr. Couch for "complex regional pain syndrome of the left upper extremity and hand." That treatment included the surgical implantation on June 25, 2003, of a "spinal cord stimulation device" to alleviate pain. On June 23, 2005, however, after suffering a series of complications associated with the implantation, Phillips commenced a medical-malpractice action against Dr. Couch and PPSA.

Phillips did not apprise Gallagher or RGIS of the litigation in the manner prescribed by S.C.Code 1976, § 42-1-560(b). Nevertheless, RGIS learned of the action, and its attorney sent a letter dated April 12, 2006, to Phillips's attorney, stating:

"I am the attorney representing [RGIS] and its insurance carrier in the above-referenced workers' compensation claim in South Carolina. It has come to my attention that you are Nelia Phillips's attorney in the medical malpractice claim against [PPSA] and John Patrick Couch, M.D., case no. 05-2326. Please allow this letter to serve as written confirmation of my client's lien rights on any settlement proceeds or judgment proceeds that may arise from the medical malpractice case. I would request that you contact me prior to any settlement being finalized so that we may protect our lien. Please feel free to call me if you have any questions.

                        "Very truly yours
                        "[Signature]
                        "Brian O'Keefe
                  "BGO/kna
                  "cc: Diane Brohman, Gallagher Bassett
                    Services, Inc. (via e-mail & U.S. mail)
                    Wesley Pipes, Esquire, Wesley Pipes
                    LLC [attorney for Dr. Couch and
                    PPSA]"
                

(Emphasis added.)¹

On July 13, 2006, the attorney for RGIS and Gallagher addressed another letter to Phillips's attorney, stating, in pertinent part:

"I have been asked to represent the interests of Ms. Nelia Phillips's employer and its workers' compensation insurance carrier with regard to their statutory lien against any recovery had by Ms Phillips in the above referenced third-party action. As we discussed, Section 25-5-11 of the Alabama Workers' Compensation Act provides the employer and its workers' compensation insurance carrier with a statutory lien against any recovery had by the employee which is to provide both reimbursement for disability and medical benefits paid to or on behalf of the employee by the employer/carrier and as a credit against the employer/carrier's future liability for both disability and medical benefits. The employer/carrier has paid out $47,139.28 to Ms. Phillips for disability benefits and has paid out $292,680.01 for medical treatment provided to Ms. Phillips.

"On behalf of the employer [RGIS] and its workers' compensation insurance carrier, [Gallagher], I am asking that you and Ms. Phillips agree to protect my client's lien against any recovery had by Ms. Phillips in the above referenced third-party action. As we discussed, if we are unable to obtain such agreement from you and Ms. Phillips with regard to the employer/carrier's lien, I will have no alternative but to proceed with filing a complaint in intervention in order to assert and protect the employer/carrier's lien."

Phillips's attorney responded with a letter dated July 18, 2006, stating, in pertinent part:

"I briefly reviewed § 25-5-11 in response to your letter. I am certainly no workers' comp. expert but I fail to see how that section provides a subrogation interest in Ms. Phillips's medical negligence case. Please enlighten me with the specific provisions you are referring to and/or case law concerning same.

"Secondly, are you aware that Ms. Phillips and her employer were both based in Myrtle Beach, South Carolina, at the time of the fall? I don't see how § 25-5-11 applies to this situation."

In September 2007, the parties in Phillips's medical-malpractice action agreed to a settlement and, on October 18, 2007, filed the following joint "stipulation of dismissal with prejudice": "Pursuant to Alabama Rules of Civil Procedure 41(a)(1), all parties who have appeared in this action, Plaintiff, Nelia D. Phillips, and Defendants, [PPSA] and [Dr. Couch], stipulate to the dismissal on the merits, with prejudice, of Defendants, [PPSA] and [Dr. Couch]."

The next day, October 19, 2006, Gallagher filed a "motion for leave to intervene" and a proposed complaint in intervention. The complaint "demand[ed] satisfaction of its statutory workers' compensation subrogation lien." On October 26, 2007, the trial court denied Gallagher's motion, and Gallagher appealed.

On appeal, Gallagher contends that the trial court exceeded its discretion in denying its motion for permission to "intervene to protect its statutory lien following the settlement of the underlying medical-malpractice case." Gallagher's brief, at vii. According to Gallagher, its right to intervene arises under S.C.Code 1976, § 42-1-560(b), which provides, in pertinent part:

"The injured employee or, in the event of his death, his dependents, shall be entitled to receive the compensation and other benefits provided by this Title and to enforce by appropriate proceedings his or their rights against the third party .... In such case the carrier shall have a lien on the proceeds of any recovery from the third party whether by judgment, settlement or otherwise, to the extent of the total amount of compensation, including medical and other expenses paid, or to be paid by such carrier ...."

(Emphasis added.)

Dr. Couch, PPSA, and Phillips, on the other hand, insist that this appeal must be dismissed, because, they say, the stipulation of dismissal terminated the medical-malpractice action, rendering void the order challenged by Gallagher, from which no appeal may lie. For that proposition, they cite Greene v. Town of Cedar Bluff, 965 So.2d 773 (Ala.2007). We agree.

Greene stands for the proposition that...