Guardianship and Conservatorship of Bloomquist, In re

• Citation: 246 Neb. 711,523 N.W.2d 352
• Decision Date: 28 October 1994
• Docket Number: S-92-825,Nos. S-92-752,s. S-92-752
• Parties: In re GUARDIANSHIP AND CONSERVATORSHIP OF Johnathan Harley BLOOMQUIST, a Protected Person. Catherine M. YAEGER, Conservator, Appellant, v. CITY OF LINCOLN, Doing Business As Lincoln General Hospital, Creditor, Appellee. Michael CENTAMORE, Appellant, v. Robert COCANOUGHER, Appellee, and AMISUB (Saint Joseph Hospital), Inc., Intervenor-Appellee.
• Court: Supreme Court of Nebraska

Page 352

523 N.W.2d 352

246 Neb. 711

In re GUARDIANSHIP AND CONSERVATORSHIP OF Johnathan Harley BLOOMQUIST, a Protected Person.

Catherine M. YAEGER, Conservator, Appellant, v. CITY OF LINCOLN, Doing Business As Lincoln General Hospital, Creditor, Appellee.

Michael CENTAMORE, Appellant, v. Robert COCANOUGHER, Appellee, and AMISUB (Saint Joseph Hospital), Inc., Intervenor-Appellee.

Nos. S-92-752, S-92-825.

Supreme Court of Nebraska.

Oct. 28, 1994.

Syllabus by the Court

1. Judgments: Appeal and Error. Regarding questions of law, an appellate court has an obligation to reach a conclusion independent of that of the trial court.

2. Statutes: Legislature: Intent. When asked to interpret a statute, a court must determine and give effect to the purpose and intent of the Legislature as ascertained from the entire language of the statute considered in its plain, ordinary, and popular sense. In construing a statute, a court must look at the statutory objective to be accomplished, the problem to be remedied, or the purpose to be served, and then place on the statute a reasonable construction which best achieves the purpose of the statute, rather than a construction defeating the statutory purpose.

3. Appeal and Error. A case is not authority for any point not necessary to be passed on to decide the case or not specifically raised as an issue addressed by the court.

4. Attorney Fees: Equity. The common fund doctrine is founded on the equitable concept that an attorney who performs services in creating a fund should in equity and good conscience be allowed compensation out of the whole fund from all those who seek to benefit from it.

5. Subrogation: Words and Phrases. Subrogation involves the substitution of one person in the place of another with reference to a lawful claim, demand, or right, so that he who is substituted succeeds to the rights of the other in relation to the debt or claim and its rights, remedies, or securities.

6. Liens: Debtors and Creditors: Words and Phrases: Appeal and Error. A lien is a right afforded by law to have an obligation satisfied out of particular property. A lien is a qualified right of property which a creditor has in or over specific property of his debtor, as security for the debt or charge or for performance of some act.

7. Subrogation: Equity: Trusts. A subrogation right is essentially an equitable right to recover and account for a trust fund.

Allan J. Eurek of Pierson, Fitchett, Hunzeker, Blake & Loftis, Lincoln, for appellant Yaeger.

James W. Knowles, Jr. of Knowles Law Office, Omaha, for appellant Centamore.

Linda W. Rohman and Douglas L. Curry of Erickson & Sederstrom, P.C., Lincoln, for appellee City of Lincoln.

Neil B. Danberg, Jr., Conal L. Hession, and Matthew G. Dunning of Kennedy, Holland, DeLacy & Svoboda, Omaha, for intervenor-appellee.

Roger S. Keetle, Lincoln, for amici curiae Nebraska Hosp. Ass'n and Nebraska Ass'n of Hospitals and Health Systems.

HASTINGS, C.J., WHITE, CAPORALE, FAHRNBRUCH, LANPHIER, and WRIGHT, JJ., and BOSLAUGH, J., Retired.

LANPHIER, Justice.

Nebraska's hospital lien statute, Neb.Rev.Stat. § 52-401 (Reissue 1993), grants medical providers a statutory lien. The lien attaches to any financial recovery that a patient may receive from a third party in the amount of the reasonable value of medical services necessarily performed. The two cases before us have been consolidated upon appeal. The issue presented in these cases is whether or not a hospital with a perfected lien is obligated to share pro rata in the patient's reasonable costs of recovery from the third party.

Appellants urge that the common fund doctrine applies. The common fund doctrine provides that a plaintiff's attorney, whose efforts create a fund to which others also have a claim, is entitled to recover his fees and costs from the entirety of that fund. Black's Law Dictionary 276 (6th ed. 1990). Appellees argue that the common fund doctrine does not apply because they are creditors, rather than subrogees. As creditors, they are entitled to be paid in any event. Appellees also argue that because there is no contractual relationship between the hospital and the attorney, the hospitals are not obligated to the attorney. Section 52-401 is silent regarding medical providers' liability for attorney expenses. Appellants assert that West Neb. Gen. Hosp. v. Farmers Ins. Exch., 239 Neb. 281, 475 N.W.2d 901 (1991), is dispositive of the issues before this court and requires reversal of the lower courts' decisions. In both of these cases before us, the lower courts held that the medical provider was not obligated to pay a pro rata portion of the patient's attorney fees and costs. The injured parties appealed to the Nebraska Court of Appeals, and that court affirmed the lower courts' judgments in In re Guardianship & Conservatorship of Bloomquist, 2 Neb.App. 756, 514 N.W.2d 656 (1994). We granted appellants' petitions for further review.

PROCEDURAL AND FACTUAL BACKGROUND

The facts are stipulated or otherwise undisputed in both cases, and we are presented with a question of law.

The matter of case No. S-92-752 arose from a traffic accident involving Johnathan Harley Bloomquist, a minor child. Bloomquist was struck by a car on September 27, 1989, and sustained a closed head injury. He was taken by ambulance to Lincoln General Hospital (LGH) for emergency medical care.

LGH provided medical services valued at $16,456.15 to Bloomquist as a result of his injuries from the car accident. Catherine M. Yaeger, Bloomquist's aunt, petitioned for and was appointed his guardian and conservator. The verified petition for appointment of conservator filed with the Lancaster County Court discloses that Bloomquist was indigent and unable to pay any medical bills.

LGH perfected a hospital lien pursuant to § 52-401. The hospital lien, in the amount of $16,456.15, attached to any sum awarded Bloomquist in judgment or obtained by settlement or compromise of any personal injury claim arising out of his accident.

Bloomquist's conservator retained an attorney, Allan Eurek, to prosecute a tort action against the car's driver, Kim Folsom. The conservator consented to a contingent fee agreement pursuant to which Eurek would receive one-third of any amounts recovered on Bloomquist's behalf.

After filing suit and conducting discovery, the conservator was able to achieve a settlement of $100,000. The conservator then applied to have the settlement approved by the county court, as well as her plan to pay medical providers the amounts due them, less their proportionate share of the costs of recovering the settlement.

The parties agree that LGH has a perfected lien, as required by § 52-401, on the settlement proceeds. The parties further agree that the efforts of the conservator's attorney, Eurek, resulted in the settlement of $100,000 and that his requested fee of $33,333, representing 33 1/3 percent of the recovery, plus costs of $815.78, is reasonable. Finally, the parties agreed that if LGH is required to share in attorney fees and expenses, its fair share is $5,619.57.

LGH was given notice of the proceedings in the county court and appeared as an interested Following a hearing in the county court for Lancaster County, the parties were permitted to submit briefs regarding the attorney fees issue. By order dated March 3, 1992, the county court ruled that LGH would receive the full amount of its lien without deduction for attorney fees and the other expenses of prosecuting Bloomquist's personal injury claim.

party, claiming the full value of the services rendered without any reduction for the costs of litigation. Eurek contended that his services, expended for the benefit of Bloomquist, also benefited LGH and that, therefore, LGH was liable to him for an attorney fee in the amount of one-third of the sum recovered for the benefit of the hospital. The disputed amount, $5,619.57, was paid into court to be distributed upon resolution of the issue of LGH's liability to Eurek, if any.

Eurek appealed the county court's ruling to the district court for Lancaster County. The district court affirmed the decision of the county court, and again, Eurek perfected an appeal. In appealing to the Court of Appeals, Eurek took no action to stay the district court's judgment. Consequently, the funds originally paid into court were disbursed to LGH.

The matter of case No. S-92-825 arose when the plaintiff-appellant, Michael Centamore, suffered a partial amputation of his right heel when a power lawnmower ran over his heel. The accident occurred on premises owned by Robert Cocanougher. As a result of his injuries, Centamore was hospitalized at Saint Joseph Hospital, the intervenor herein, from June 2 to 29, 1990, at a cost of $44,016.40.

Centamore retained James W. Knowles, Jr., as counsel to pursue his claim for damages against Cocanougher. Centamore's fee agreement with his attorney was for a contingent fee of one-third, together with out-of-pocket expenses incurred in the prosecution of the action. Centamore filed a negligence action in the Douglas County District Court against Cocanougher.

On September 12, 1990, the Nebraska Department of Social Services (DSS) filed a lien with Knowles for amounts paid by DSS to Saint Joseph Hospital and to various physicians who examined and/or treated Centamore. By the time this matter was tried to a jury, DSS' lien was $8,700.73.

On October 29, 1990, Saint Joseph filed a lien with Cocanougher's insurance carrier, State Farm Insurance Company, for $44,015.40. Subsequent to the filing of the lien, DSS paid $4,332.51 on Saint Joseph's bill, and Saint Joseph amended its lien to $39,683.89.

Centamore's case was tried to a jury, and a $75,000 verdict was returned in Centamore's favor. Pursuant to the fee agreement, Knowles was entitled to an attorney fee of $25,000 and reimbursement of $1,386.13 which represented costs incurred in the handling of the claim. Centamore's coun...