Kelly v. Marvin's Midtown Chiropractic, LLC

• Decision Date: 01 November 2011
• Docket Number: Nos. WD 72747,WD 72748.,s. WD 72747
• Citation: 351 S.W.3d 833
• Parties: Tarika KELLY, Respondent,Marie Espino, Respondent, v. MARVIN'S MIDTOWN CHIROPRACTIC, LLC, Appellant.
• Court: Missouri Court of Appeals

351 S.W.3d 833

Tarika KELLY, Respondent,Marie Espino, Respondent,

v.MARVIN'S MIDTOWN CHIROPRACTIC, LLC, Appellant.

Nos. WD 72747

WD 72748.

Missouri Court of Appeals, Western District.

Nov. 1, 2011.

Jerry W. Potocnik, for Appellant.

Andrew Schendel, for Respondents.

Before Division Three: VICTOR C. HOWARD, Presiding Judge, ALOK AHUJA, Judge and KAREN KING MITCHELL, Judge.

VICTOR C. HOWARD, Judge.

Marvin's Midtown Chiropractic, LLC, appeals the judgments of the trial court denying its claims for statutory liens on the proceeds of Tarika Kelly's and Marie Espino's personal injury settlements. It contends that the trial court erroneously declared that it was not entitled to a hospital lien under section 430.225, RSMo Cum.Supp.2011, because it was not supported in whole or in part by charity. The judgments are reversed, and the cases are remanded with directions.

This case arose from two interpleader actions filed by the Castle Law Firm to determine the ownership of certain insurance settlement proceeds. Marvin's Midtown Chiropractic is a chiropractic clinic organized under the laws of Missouri as a for-profit limited liability company. A large majority of its practice is dedicated to treating persons injured in automobile accidents. Marvin's is not a public hospital or public clinic, it is not incorporated as an eleemosynary institution, and it is not supported in whole or in part by charity.

On September 19, 2008, Tarika Kelly was involved in an automobile accident. Ms. Kelly received chiropractic treatments from Marvin's for injuries she sustained as a result of the accident. Her total bill was $2751.25.

Marie Espino was involved in an automobile accident on November 19, 2008. She also received chiropractic treatments from Marvin's for injuries she sustained as a result of the accident. Her total bill was $2401.25.

Both Ms. Kelly and Ms. Espino retained the Castle Law Firm to represent them in their personal injury claims. Marvin's sent notices of liens of service to the Castle Law Firm and to the tortfeasors' insurance carriers. Ms. Kelly ultimately settled her claim for $7300. Ms. Espino settled her claim for $8500. The Law Firm held back $2751.25 and $2401.25, respectively, from the settlement proceeds and filed the petitions in interpleader claiming that both their clients and Marvin's claimed an interest in them.

Both cases were consolidated for trial. At trial, Marvin's argued that it was entitled to assert statutory hospital liens under section 430.225 against Ms. Kelly's and Ms. Espino's insurance recoveries. Ms. Kelly and Ms. Espino contended that Marvin's was not entitled to the liens because it was not supported in whole or in part by charity, a requirement they argued was imposed by the statute. The trial court entered judgments against Marvin's and awarded the interpleaded funds to Ms. Kelly and Ms. Espino finding that Marvin's did not create valid statutory liens on the women's personal injury settlements because it is not within the class of recipients entitled to enforce hospital liens; specifically because it is not supported in whole or in part by charity. This appeal by Marvin's followed.

The sole issue in this appeal is whether Marvin's created valid statutory hospital liens on the proceeds of Ms. Kelly's and Ms. Espino's personal injury settlements for the services that it provided them.

Review of a court-tried case is governed by Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). Beckett v. Dep't of Soc. Servs., Div. of Med. Servs., 948 S.W.2d 250, 251 (Mo.App. E.D.1997). As such, the trial court's judgment will be affirmed unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law. Id. Statutory interpretation is a question of law that is reviewed de novo. S.S. v. Mitchell, 289 S.W.3d 797, 799 (Mo.App. E.D.2009).

Hospital lien statutes exist in most states, and most were first adopted in the Great Depression. Via Christi Reg'l Med. Ctr., Inc. v. Reed, 45 Kan.App.2d 356, 247 P.3d 1064, 1068 (2011). They were designed with a dual purpose: to ensure that injured patients are quickly treated without first considering if the patients are able to pay and to protect health care providers financially so that they could continue to provide care. Id.

Section 430.230, RSMo 2000, Missouri's hospital lien law, was originally enacted in 1941. It provides, in pertinent part:

Every public hospital or clinic, and every privately maintained hospital, clinic or other institution for the care of the sick, which is supported in whole or in part by charity, located within the state of Missouri, or any such hospital duly incorporated under the laws of Missouri providing for the incorporation of eleemosynary institutions, shall have a lien upon any and all claims, counterclaims, demands, suits, or rights of action of any person admitted to any hospital, clinic or other institution and receiving treatment, care or maintenance therein for any cause including any personal injury sustained by such person as the result of the negligence or wrongful act of another, which such injured person may have, assert or maintain against the person or persons causing such injury for damages on account of such injury, for the cost of such services....

§ 430.230. The statute allows certain hospitals and clinics to file liens against patients and participate in the recovery of any personal injury claim that the patient may have in order to recoup payment for services. SSM Cardinal Glennon Children's Hosp. v. State, 68 S.W.3d 412, 414 (Mo. banc 2002); §§ 430.230 to 430.250. Section 430.230 allows only three classes of providers to assert liens: (1) a “public hospital or clinic,” (2) a “privately maintained hospital, clinic or other institution for the care of the sick, which is supported in whole or in part by charity,” and (3) a “hospital duly incorporated under the laws of Missouri providing for the incorporation of eleemosynary institutions.” To qualify for a lien under section 430.230, a hospital must also be either located in Missouri or duly incorporated under the laws of Missouri. § 430.230; Beckett, 948 S.W.2d at 251.

During the General Assembly's 1999 legislative session, at least three bills were introduced with the purpose of creating a new hospital lien law. SSM Cardinal Glennon, 68 S.W.3d at 414. “All of these bills sought to expand the scope of the hospital lien law to allow certain defined clinics, health practitioners and other institutions the same rights as hospitals to hold liens on any claims a patient may have for personal injury.” Id. at 414–15. None of the bills were passed. Id. at 415.

In January 1999, House Bill 343 was introduced. Id. It sought to change or repeal provisions regarding the procedure and qualifications for licensing various professions. Id. As it worked its way through the House and Senate, various amendments were added to H.B. 343. Id. One was Senate Amendment No. 9 creating a new section 430.225, RSMo, which altered the scope of the hospital lien law in a manner similar to that proposed in the three previous bills. Id. “[T]he law was expanded to cover certain additional health practitioners and provided that all lienholders who gave notice would share in fifty percent of the amount due the patient in the proportion that each claim bears to the total amount of all other liens of health care providers.” Id. H.B. 343, which included the new section 430.225, was signed into law in July 1999. Id. at 416.

A number of privately maintained hospitals supported in whole or in part by charity challenged the constitutionality of H.B. 343. Id. “The hospitals concluded that the amendment to the hospital lien law threatened to reduce the amounts that might otherwise be available to the hospitals to cover unpaid fees.” Id. The Missouri Supreme Court found that inclusion of the new section 430.225 amending the hospital lien law in a bill titled “relating to professional licensing” violated the constitutional single-subject requirement. Id. at 417. It further determined that H.B. 343 relating to professional licensing was complete and workable and would have been adopted without the inclusion of section 430.225. Id. at 418. Thus, the Supreme Court severed from H.B. 343 the provision that created section 430.225 and declared it void. Id.

In 2003, the General Assembly reenacted section 430.225 without apparent change. It provides, in pertinent part:

2. Clinics, health practitioners and other institutions, as defined in this section, shall have the same rights granted to hospitals in sections 430.230 to 430.250.

§ 430.225.2. Clinics, health practitioners and other institutions are defined in subsection 1 of section 430.225 as follows:

(2) “Clinic”, a group practice of health practitioners or a sole practice of a health practitioner who has incorporated his or her practice;

(3) “Health practitioner”, a chiropractor licensed pursuant to chapter 331, RSMo, a podiatrist licensed pursuant to chapter 330, RSMo, a dentist licensed pursuant to chapter 332, RSMo, a physical therapist licensed under chapter 334, RSMo, a physician or surgeon licensed pursuant to chapter 334, RSMo, or an optometrist licensed pursuant to chapter 336, RSMo, while acting within the scope of their practice;

(5) “Other institution”, a legal entity existing pursuant to the laws of this state which delivers treatment, care or maintenance to patients who are sick or injured.

It is undisputed that Marvin's is a chiropractic clinic under sections 430.225.1(2) and (3). The trial court concluded, however, that because Marvin's is not supported in whole or in part by charity, it is not entitled to assert a statutory lien. The question in this appeal, therefore, is whether the health care providers specified in section 430.225 must be supported in whole or in part by charity to be entitled to a hospital lien under sections 430.230 to 430.250 as...