Lopez v. Morley

• Decision Date: 22 October 2004
• Docket Number: No. 2-03-1106.,2-03-1106.
• Parties: Servando LOPEZ, Plaintiff and Petitioner-Appellee and Cross-Appellant, v. Maureen Jane MORLEY, Defendant (Provena Mercy Center, Respondent-Appellant and Cross-Appellee).
• Court: United States Appellate Court of Illinois

817 N.E.2d 592

352 Ill. App.3d 1174

288 Ill.Dec. 234

Servando LOPEZ, Plaintiff and Petitioner-Appellee and Cross-Appellant, v. Maureen Jane MORLEY, Defendant (Provena Mercy Center, Respondent-Appellant and Cross-Appellee).

No. 2-03-1106.

Appellate Court of Illinois, Second District.

October 22, 2004.

John J. Rademacher Sr., Knepper & Kibby, P.C., Chicago, for Provena Mercy Center.

Joseph C. Loran, Matthew J. Herman, Kinnally, Krentz, Loran, Hodge & Herman, P.C., Aurora, for Servando Lopez. George M. Bebble, Momkus, McCluskey, McAndrew & Monroe, LLC, Downers Grove, for Maureen Jane Morley.

Timothy J. Reuland, Lindner, Speers & Reuland, P.C., Aurora, for Amicus Curiae Illinois Trial Lawyers Association.

Justice KAPALA delivered the opinion of the court:

Respondent-appellant and cross-appellee, Provena Mercy Center (Provena), appeals from the judgment of the circuit court of Kane County granting the motion by plaintiff and petitioner-appellee and cross-appellant, Servando Lopez, to extinguish Provena's lien under the Hospital Lien Act (Act) (770 ILCS 35/1 (West 2002)). Plaintiff cross-appeals from the trial court's denial of his motion for Supreme Court Rule 137 (155 Ill.2d R. 137) sanctions. We affirm.

I. BACKGROUND

Plaintiff received medical treatment from Provena for injuries suffered on December 23, 2001, during an automobile accident with defendant, Maureen Jane Morley. Provena charged plaintiff $33,753.27 for this treatment. Plaintiff does not dispute that the charges were reasonable and customary. Provena took a hospital lien for the full amount of the charges. 770 ILCS 35/1 (West 2002).

Plaintiff had health insurance coverage that was administered by United Health Care (United). United had a contract with Provena, in which Provena agreed to accept less than the reasonable and customary value of services rendered to certain insured persons, including plaintiff. Under the terms of their contract, the amount paid by United would be considered full payment for the services rendered to the insured, and Provena would not seek recovery for any additional amounts from the insured. United paid Provena $4,900 as full payment for the services rendered to plaintiff.

Plaintiff subsequently filed suit against defendant for his injuries. The parties settled the matter for $120,000. During the settlement negotiations plaintiff represented that his medical bills from Provena amounted to $33,753.27. Also, during the pendency of the suit, plaintiff contacted Provena about the balance of his bill. Provena informed plaintiff's attorney on at least two occasions that plaintiff had a zero balance with Provena. Plaintiff then filed a petition to adjudicate Provena's hospital lien. Plaintiff's position was that Provena did not have a lien because it had accepted $4,900 as full payment from United and, therefore, Provena was not owed any further money. Plaintiff cited our decision in N.C. v. A.W., 305 Ill.App.3d 773, 239 Ill.Dec. 244, 713 N.E.2d 775 (1999), that he claimed was conclusive. Provena responded that although it could not recover any further amounts from plaintiff directly, it still held a valid lien for the difference between what was charged and what was paid by United. Provena admitted that the authority cited by plaintiff supported plaintiff's contentions but Provena also argued that we should overrule our previous ruling and allow Provena to recover on the lien. Plaintiff also moved for Rule 137 sanctions against Provena for contending that it had a right to recover on the lien despite controlling precedent. The trial court extinguished Provena's lien and denied plaintiff's motion for sanctions.

Provena filed a timely appeal and plaintiff filed a timely cross-appeal. On appeal, the Illinois Trial Lawyers Association (ITLA) filed a motion for leave to file an amicus curiae brief in support of plaintiff, which we granted.

II. DISCUSSION

Provena contends that our holding in N.C. violates public policy and the language of section 1 of the Act (770 ILCS 35/1 (West 2002)) and, therefore, should be overturned. Provena contends that we should follow the reasoning enunciated by the Fourth District in Rogalla v. Christie Clinic, P.C., 341 Ill.App.3d 410, 276 Ill.Dec. 489, 794 N.E.2d 384 (2003). Plaintiff and the ITLA in its amicus curiae brief argue that our decision in N.C. was sound and should be upheld.

In N.C. the plaintiff was injured as result of an automobile accident with the defendant. The plaintiff was treated at Northern Illinois Medical Center (NIMC). NIMC's bill totaled $22,551. The plaintiff was insured by Great West Life & Annuity Insurance Co. (Great West) through a preferred provider organization (PPO) plan. This PPO plan was affiliated with One Health Plan of Illinois, Inc. (One Health). One Health had contracted with NIMC to provide bulk business to NIMC in return for NIMC receiving a reduced rate as full payment for its services. This contractual savings was passed on to Great West through its contract with One Health. One Health's contract with NIMC also provided that, except for deductibles, coinsurance, copayments, and charges for nonapproved and noncovered services, a One Health member was not liable for any amount over what was paid by the insurer. As a result, Great West paid NIMC only $4,200 as full payment for the plaintiff's medical bills. NIMC acknowledged that it had been paid in full by Great West. N.C., 305 Ill.App.3d at 775, 239 Ill.Dec. 244, 713 N.E.2d 775.

The plaintiff filed a personal injury action against the defendant. During the pendency of the suit, NIMC took a lien pursuant to the Act against the proceeds of the lawsuit. The plaintiff filed a petition to adjudicate NIMC's lien. Subsequently, the defendant's liability carrier offered the defendant's policy limit of $100,000 as full and final payment for the plaintiff's claim against the defendant. The plaintiff accepted the offer. The trial court then determined that NIMC's lien should be extinguished because NIMC's contract with One Health precluded NIMC from collecting under its lien. N.C., 305 Ill.App.3d at 774-75, 239 Ill.Dec. 244, 713 N.E.2d 775.

On appeal, we affirmed the trial court's decision to extinguish NIMC's lien. N.C., 305 Ill.App.3d at 775-77, 239 Ill.Dec. 244, 713 N.E.2d 775. We reasoned that the lien existed to satisfy the plaintiff's debt to the hospital. N.C., 305 Ill.App.3d at 775, 239 Ill.Dec. 244, 713 N.E.2d 775. However, we further found that NIMC's contract with One Health extinguished all debts once NIMC was paid the agreed-upon rate. N.C., 305 Ill.App.3d at 775, 239 Ill.Dec. 244, 713 N.E.2d 775. Therefore, we held that the lien must also be extinguished because there was no debt to satisfy. N.C., 305 Ill.App.3d at 775, 239 Ill.Dec. 244, 713 N.E.2d 775.

NIMC contended that it could enforce the lien against the defendant's property as the party responsible for the plaintiff's injuries even if it could not recover from the plaintiff directly. N.C., 305 Ill.App.3d at 775,239 Ill.Dec. 244,713 N.E.2d 775. We rejected this argument for four reasons. N.C., 305 Ill.App.3d at 775-76,239 Ill.Dec. 244,713 N.E.2d 775. First, we held that the plaintiff incurred the debt, not the defendant. N.C., 305 Ill.App.3d at 775,239 Ill.Dec. 244,713 N.E.2d 775. Second, we found that the debt had been paid. N.C., 305 Ill.App.3d at 775,239 Ill.Dec. 244,713 N.E.2d 775. Third, we found that even if a debt existed, the lien would be on the plaintiff's assets, not the defendant's. N.C., 305 Ill.App.3d at 775-76,239 Ill.Dec. 244,713 N.E.2d 775. Finally, we found that the fact that the plaintiff received a settlement from the defendant did not entitle NIMC to receive more than the amount it contracted for. N.C., 305 Ill.App.3d at 776,239 Ill.Dec. 244,713 N.E.2d 775.

Next, NIMC contended, citing Gordon v. Forsyth County Hospital Authority, Inc., 409 F.Supp. 708 (M.D.N.C.1975), that the plaintiff would be unjustly enriched by receiving reimbursement for medical bills over the amount he actually paid. N.C., 305 Ill.App.3d at 776, 239 Ill.Dec. 244, 713 N.E.2d 775. However, we found Gordon distinguishable. N.C., 305 Ill.App.3d at 776-77, 239 Ill.Dec. 244, 713 N.E.2d 775. The plaintiff's treatment in Gordon was given free of charge. N.C., 305 Ill.App.3d at 776, 239 Ill.Dec. 244, 713 N.E.2d 775. The plaintiff then recovered damages for medical services in his tort suit. N.C., 305 Ill.App.3d at 776, 239 Ill.Dec. 244, 713 N.E.2d 775. The hospital had a lien against the lawsuit proceeds and the court found that the hospital was due payment under the lien because it would be unconscionable to permit the taxpayers to bear the expense of the plaintiff's medical services while allowing the plaintiff to recover for those services. N.C., 305 Ill.App.3d at 776, 239 Ill.Dec. 244, 713 N.E.2d 775. However, since NIMC had received compensation for its services we found that Gordon did not apply. N.C., 305 Ill.App.3d at 776-77, 239 Ill.Dec. 244, 713 N.E.2d 775.

Finally, we noted that it was not inequitable for NIMC to receive only 18.6 cents on the dollar. N.C., 305 Ill.App.3d at 777, 239 Ill.Dec. 244, 713 N.E.2d 775. NIMC voluntarily contracted for such a rate in exchange for an increase in patients. N.C., 305 Ill.App.3d at 777, 239 Ill.Dec. 244, 713 N.E.2d 775. We found that NIMC was simply experiencing buyer's remorse. N.C., 305 Ill.App.3d at 777, 239 Ill.Dec. 244, 713 N.E.2d 775.

In Rogalla v. Christie Clinic, P.C., 341 Ill.App.3d 410, 276 Ill.Dec. 489, 794 N.E.2d 384 (2003), the Fourth District disagreed with our reasoning in N.C. The plaintiff in Rogalla received medical services from Christie Clinic, P.C. (Christie), in connection with an automobile accident. Christie had entered into a capitation agreement with the plaintiff's health maintenance organization (HMO), Personal Care. The capitation agreement provided that Christie would receive a certain amount each month from Personal Care and that this amount would be considered...