Michel v. Dist. Ct.
| Citation | 17 P.3d 1003,117 Nev. 145 |
| Decision Date | 22 February 2001 |
| Docket Number | No. 34082.,34082. |
| Parties | Herbert L. MICHEL, Jr., A Professional Law Corporation, Petitioner, v. The EIGHTH JUDICIAL DISTRICT COURT of the State of Nevada, In and For the COUNTY OF CLARK, and the Honorable Gene T. Porter, District Judge, Respondents, and Yolanda B. Cervantes; Preferred Chiropractic; and Diagnostic Imaging of Southern Nevada, Real Parties in Interest. |
| Court | Supreme Court of Nevada |
Your Legal Power and Herbert L. Michel, Jr., Las Vegas, for Petitioner.
Beckley, Singleton, Jemison, Cobeaga & List and Beau Sterling and Daniel F. Polsenberg, Las Vegas; Ronald J. Israel, Las Vegas, for Real Party in Interest Diagnostic Imaging of Southern Nevada.
Robert M. Ebinger, Las Vegas, for Real Party in Interest Preferred Chiropractic.
Yolanda B. Cervantes, Las Vegas, in Proper Person, Real Party in Interest.
Before YOUNG, ROSE and BECKER, JJ.
This case arose when petitioner, an attorney, deducted his fees from an arbitration award, placed the remaining funds in interpleader, naming his client and certain medical service providers holding liens to the award as defendants, and then sought to be discharged from the action. The district court refused the petitioner's motion for discharge. Petitioner now seeks an extraordinary writ directing the district court to discharge him from the action. Although we decide that an attorney lien takes priority over a medical provider lien when an award is insufficient to pay all liens against the award, we conclude that a writ is not appropriate because the petitioner's request for discharge is premature.
On April 7, 1996, Yolanda B. Cervantes and three other members of her family were injured in an automobile accident. Thereafter, Cervantes hired attorney Herbert L. Michel to file a personal injury action on her behalf. Although not supplied in the record, Michel apparently had a contingency fee agreement with Cervantes in which Cervantes agreed to pay Michel forty percent of any amounts recovered.
The defendant in Cervantes' personal injury action did not contest liability, and the parties proceeded to arbitration to resolve the issue of damages. Cervantes claimed that the accident caused soft tissue injuries and the death of the fetus she was carrying at the time of the accident. The arbitrator awarded Cervantes $14,705.00 in total damages for her soft tissue injuries, but did not compensate her for medical bills associated with the loss of the fetus because the arbitrator determined that the accident did not cause the loss.
Cervantes had incurred medical bills in the amount of $28,346.26 in treating her injuries. Thus, her arbitration award was insufficient to pay the liens of all of her medical providers. Michel and the medical providers were unable to agree on a pro-rata share of the arbitration award. Consequently, Michel deducted attorney fees and costs totaling $6,511.73 and interpleaded the remaining $8,193.27, naming Cervantes and the medical service providers as the defendants. Michel then sought to be discharged from the interpleader action.
Diagnostic Imaging of Southern Nevada ("DIS"), one of the interpleaded defendants, failed to file a timely answer in the interpleader action. Consequently, the district court entered default judgment against it in December 1998. Thereafter, in February 1999, DIS filed a motion to set aside the default judgment and a motion nunc pro tunc to file an answer. The motion claimed that, according to NRCP 55(c), there was excusable neglect and good cause to set aside the default judgment for faulty service of process. The district court granted DIS's motions.
In its answer and counterclaim, DIS argued that Michel should disgorge his attorney fees since all liens were "on an equal footing" and requested that all parties to the interpleader action be given a pro-rata share of the total settlement.
On February 19, 1999, the district court denied Michel's motion for discharge from the interpleader action. Michel filed a motion for reconsideration of the district court's refusal to discharge him. Michel also filed a motion to strike DIS's untimely answer and counterclaim. The district court denied both motions.
Michel then filed this petition for extraordinary relief contending that the district court exceeded its jurisdiction by refusing to discharge him from the interpleader action and by refusing to strike DIS's counterclaim.
An extraordinary writ may issue to arrest the proceedings of the district court when such proceedings exceed the district court's jurisdiction or to compel the court to perform an act that the law requires as a duty resulting from an office, trust, or station. See NRS 34.320 (writ of prohibition); NRS 34.160 (writ of mandamus). Petitions for extraordinary relief are addressed to the sound discretion of this court and may only be issued when there is no plain, speedy, and adequate remedy at law. See Harvey L. Lerer, Inc. v. District Court, 111 Nev. 1165, 901 P.2d 643 (1995). Michel argues that the district court exceeded its jurisdiction by failing to discharge him from the interpleader action because he has no right, title, or interest whatsoever in the litigation. Michel contends that his attorney lien had absolute priority over the liens of the medical providers, and therefore, his interest in the interpleader action dissolved when he deducted his attorney fees before depositing the remaining proceeds with the district court.1
To determine whether the district court has exceeded its jurisdiction or is otherwise required by law to discharge Michel from the action, we must first consider whether attorney liens are, in fact, given priority over other liens. Because we conclude that attorney liens enjoy priority, we must also consider the procedure for perfecting and, ultimately, enforcing the lien.
NRS 18.015 provides an attorney with a lien for attorney fees against any settlement or judgment obtained:2
Although NRS 18.015 does not directly address the issue of priority of attorney liens, Michel argues that this court held that attorney liens are superior to other types of liens, citing Muije v. A North Las Vegas Cab Co., 106 Nev. 664, 799 P.2d 559 (1990). In Muije, this court held that an equitable offset took priority over a perfected attorney lien because the attorney lien attached solely to the net judgment after the offset was taken. See id. at 667, 799 P.2d at 561. In so concluding, this court then observed that, "[o]nce a net judgment is determined, then the attorney lien is superior to any later lien asserted against that judgment." See id.
In Cetenko v. United California Bank, 30 Cal.3d 528, 179 Cal.Rptr. 902, 638 P.2d 1299, 1301 (1982), cited with approval by this court in Muije, the California Supreme Court explained the policy rationale for holding an attorney lien superior to that of a judgment creditor when the funds from the judgment are insufficient to satisfy all liens:
[P]ersons with meritorious claims might well be deprived of legal representation because of their inability to pay legal fees or to assure that such fees will be paid out of the sum recovered in the latest lawsuit. Such a result would be detrimental not only to prospective litigants, but to their creditors as well.
Id., 179 Cal.Rptr. 902, 638 P.2d at 1304.
DIS counters that public policy actually favors giving higher or equal priority to medical service provider liens. DIS is concerned that, if medical provider liens are not given priority or equal treatment, "it would not be long before doctors would cease to perform their services until they were paid." Nicolletti v. Lizzoli, 124 Cal.App.3d 361, 177 Cal. Rptr. 685, 689 (1981) (). DIS argues further that medical provider liens serve a vital public purpose of promoting the health and well being of the community by allowing assistance to people without the ability to pay, promoting health care to the poor, and encouraging the adequate and prompt treatment of accident victims. See In re Estate of Cooper, 125 Ill.2d 363, 126 Ill.Dec. 551, 532 N.E.2d 236, 239 (1988) ().
Although enforcing medical provider liens undoubtedly serves an important public policy interest, DIS fails to cite any authority that actually gives priority to medical service provider liens over attorney liens. Indeed, the weight of authority holds to the contrary—attorney liens come first. See Hanna Paint Mfg. Co. v. Rodey, 298 F.2d 371 (10th Cir.1962); Cetenko, 179 Cal.Rptr. 902, 638 P.2d at 1299; Harlow v. Lloyd, 15 Kan. App.2d 497, 809 P.2d 1228 (1991); Barnes v. Verry, 154 Minn. 252, 191 N.W. 589 (1923); Chattanooga Sewer Pipe Works v. Dumler, 153 Miss. 276, 120 So. 450 (1929).
In addition to the authority above, we note that NRS 108.600(2) gives attorney liens priority over "hospital liens": "No [hospital] lien shall apply or be allowed against any sum incurred by the injured party for necessary attorney fees, costs and expenses incurred by the injured party in securing a settlement,...
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