Layton v. Home Indem. Co.

• Decision Date: 23 May 1941
• Docket Number: 28208.
• Citation: 113 P.2d 538,9 Wn.2d 25
• Court: Washington Supreme Court
• Parties: LATON v. HOME INDEMNITY CO. et al

113 P.2d 538

9 Wn.2d 25

LATON v. HOME INDEMNITY CO. et al

No. 28208.

Supreme Court of Washington

May 23, 1941

Department 1.

Action by Ida Layton against the Home Indemnity Company to recover an alleged balance owing under a compromise settlement following the rendition of a judgment against Dean Golden who carried public liability insurance under a policy issued by the indemnity company, wherein the Columbia Clinic Incorporated, and Dean Golden were brought in as additional parties.Judgment for the Columbia Clinic, Incorporated, and the plaintiff appeals.

Judgment reversed, with directions.

Appeal from Superior Court, Cowlitz County; Hon Howard J. Atwell, judge.

W. H Sibbald, of Kelso, for appellant.

Edgar P. Reid, of Kelso, for respondent.

STEINERT Justice.

This is a contest over certain proceeds of a public liability insurance policy.Plaintiff sought to recover the proceeds by virtue of an assignment of a claim thereto by her daughter, who previously had obtained a judgment for damages for personal injuries against the individual named as the insured in the policy.DefendantColumbia Clinic, Inc., claimed the proceeds by virtue of its alleged statutory lien for hospital services rendered to the injured daughter.Trial by the court, without a jury, resulted in findings and conclusions upon which the court entered judgment establishing and foreclosing the lien, and directing payment of the proceeds to the defendant clinic.Plaintiff appealed.

The facts as found by the trial court in its memorandum decision and formal findings are not in dispute.On August 30, 1936, Evelyn Maricelli, while riding in an automobile driven by defendantDean Golden, was seriously injured through the negligence of the driver.The injured girl was taken to Longview and was placed in a hospital conducted by respondent, Columbia Clinic, Inc.The clinic at all times herein mentioned maintained a staff of licensed physicians, a corps of nurses, and the usual paraphernalia and equipment found in modern hospitals.Miss Maricelli remained in the hospital until February 23, 1937, a period of almost six months, during which time she received constant surgical or medical treatment as required.After her discharge from the hospital, the clinic rendered her no further treatment, but, with reference to her former injuries, did take X-ray pictures of her on October 18, and November 2, respectively, of that year.

At the time of her injury, on August 30, 1936, Miss Maricelli was an employee of Longview Fibre Company, and as such employee was covered by a medical aid contract existing between her employer and the respondent clinic.That contract, however, contained the following provision or exception: 'Services in Case of Accident.It is further understood that it shall not be the intent of this contract that the contractor [Columbia Clinic, Inc.] will render services either surgical or hospital in cases of injury caused by the negligence of others where the party liable shall have insurance protection.'

At the time of the accident, defendant Golden carried public liability insurance under a policy issued by defendantHome Indemnity Company, with limitation of liability in the sum of $5,000 for injury to any one person.

On November 30, 1936, Miss Maricelli, while still in the hospital, instituted an action for damages against defendant Golden, the driver of the car in which she had been injured.On November 1, 1937, which was about eight months after she had left the hospital, she obtained a judgment against Golden in the sum of $6,500 for general damages, plus her costs amounting to $53.65.Golden thereafter gave notice of appeal from that judgment.

In the meantime, on March 13, 1937, which was after Miss Maricelli had left the hospital, the legislature passed an act (Laws of 1937, chapter 69), under the provisions of which hospitals, nurses, and physicians rendering services for traumatic injuries were given liens upon claims and rights of action for the recovery of compensation by persons injured through the fault or negligence of others.The act became effective June 9, 1937.Further reference to that statute will be made later.

Subsequent to the entry of the judgment against defendant Golden, negotiations were begun between Miss Maricelli, Golden, and Home Indemnity Company, looking to a compromise and settlement of that litigation.The result was that on February 18, 1938, Miss Maricelli signed and delivered to Home Indemnity Company a release and discharge of Dean Golden from further liability.At the same time, the indemnity company delivered to her its draft in the sum of $4,053.65 (which included the costs amounting to $53.65), payable jointly to Miss Maricelli and respondentColumbia Clinic, Inc.At that time, the clinic had not claimed or filed any lien for its services.According to the findings of the court, Miss Maricelli claimed, at the trial below, that she was told by Home Indemnity Company, at the time of the delivery of the draft to her, that the clinic, respondent herein, would not claim any part of the money, and would endorse the draft, but that it was necessary to make the clinic one of the payees in the draft in order to protect the indemnity company.The trial court did not find as a fact, however, that such representations had been made.

When the draft was presented to respondent clinic, it refused to endorse the instrument unless payment were made for the medical and hospital services which it had rendered to Miss Maricelli.Further, the clinic then announced, for the first time, that it claimed a lien on the judgment in the damage action and upon any settlement thereof.In the afternoon of the following day, February 19, 1938, Miss Maricelli returned the draft to Home Indemnity Company, and demanded another draft in its place, to be made payable to her alone.In the meantime, on the morning of the same day, the clinic had filed and caused to be recorded its claim of lien for services in the sum of $1,498.80.There is no contention here on the part of appellant that the amount of respondent's claim is unreasonable.

As a result of further negotiations and agreement between Miss Maricelli and Home Indemnity Company, during the afternoon of February 19, 1938, the indemnity company delivered to her its draft in the sum of $3,053.65 (which included the costs amounting to $53.65), and retained the balance of $1,000, being twenty-five per cent of the basic amount of the settlement, to protect the indemnity company against any lien which the respondent clinic might assert.Under the terms of the lien statute above mentioned, the amount of such lien may not exceed twenty-five per cent of the amount of the award, judgment, or settlement to which it relates.

On February 21, 1938, Miss Maricelli assigned to her mother, appellant herein, her claim to the balance of $1,000 owing under the compromise settlement.Appellant, on March 12, 1938, instituted this action against Home Indemnity Company alone to recover that amount.Later, Columbia Clinic, Inc., and Golden were brought in as additional parties.Golden, however, defaulted, and the indemnity company, upon paying the amount retained by it into the registry of the court, was dismissed from the action.The cause then proceeded against Columbia Clinic, Inc., alone, with the result, as already stated, that its alleged lien was upheld, and the money deposited with the court was ordered to be paid to it.

For the convenience of the reader, we summarize, in their chronological sequence, the above events: August 30, 1936, Evelyn Maricelli was injured, and entered the hospital; November 30, 1936, she instituted suit against Golden; February 23, 1937, she was discharged from the hospital; March 13, 1937, the legislature passed the hospital and medical lien act; June 9, 1937, the lien act became effective; October 18, 1937, Miss Maricelli was X-rayed by respondent clinic; November 1, 1937, she obtained judgment against Golden; November 2, 1937, she was again X-rayed by respondent; February 18, 1938, she executed a release of Golden, and received a draft from Home Indemnity Company payable to herself andrespondent; on the same day, respondent refused to endorse the draft, and orally claimed a lien for its services; February 19, 1938, in the forenoon, respondent filed its lien; on the same day, in the afternoon, Miss Maricelli received the second draft, in the reduced amount, and the indemnity company retained the balance amounting to $1,000; February 21, 1938, Miss Maricelli assigned her claim for the $1,000 to appellant; March 12, 1938, appellant instituted the present action.

The lien statute here in question provides as follows:

'Section 1.Every operator of a hospital and every duly licensed nurse, practitioner, physician and surgeon rendering service for any person who has received a traumatic injury shall have a lien upon any claim, right of action and/or money to which such person is entitled against any tort feasor and/or insurer of such tort feasor for the value of such service, together with costs and such reasonable attorney's fees as the court may allow, incurred in enforcing such lien: * * * Provided, further, That all the said liens for service rendered to any one person as a result of any one accident shall not exceed twenty-five (25) per centum of the amount of an award, verdict, report, decision, decree, judgment or settlement.'(Italics original.)

'Sec. 2.No person shall be entitled to the lien given by the preceding section unless he shall, within twenty (20) days after the date of such injury, or, if settlement has not been a[e]ffected with and payment made to such injured person, then at any time Before such settlement and payment, file

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