National Account Systems of Lincoln, Inc. v. Glasscock, S-93-806

Citation247 Neb. 620,529 N.W.2d 529
Decision Date24 March 1995
Docket NumberNo. S-93-806,S-93-806
PartiesNATIONAL ACCOUNT SYSTEMS OF LINCOLN, INC., a Nebraska Corporation, Appellee, v. Pamela J. GLASSCOCK, Appellant.
CourtSupreme Court of Nebraska

Syllabus by the Court

1. Health Care Providers: Liens: Liability: Costs. Hospitals are liable for their pro rata portion of the legal expenses and costs where they seek payment out of a judgment or settlement for the amount of a lien filed pursuant to Neb.Rev.Stat. § 52-401 (Reissue 1993).

2. Health Care Providers: Liens: Judgments: Attorney Fees: Costs. By recovering the full amount the hospital lienholder was due under the lien, less its proportionate share for attorney fees and litigation expenses, the hospital lienholder's debt has been fully satisfied, and it may not pursue other remedies against the patient merely because it did not receive 100 cents on the dollar for the lien.

T.J. Hallinan and Kenneth Cobb, of Cobb, Hallinan & Ehrlich, P.C., Lincoln, for appellant.

James A. Cada, Lincoln, for appellee.


WHITE, Chief Justice.

On July 29, 1988, Pamela J. Glasscock was injured in a two-automobile accident. As a result, Glasscock incurred $20,253.65 in medical services rendered by several health care providers. Glasscock eventually filed suit against the driver of the other vehicle and negotiated a settlement of $150,000. In the process, Glasscock incurred $5,611.60 in litigation expenses and $42,816.29 in attorney fees. To ensure payment of their debts, the health care providers asserted hospital or physician's liens pursuant to Neb.Rev.Stat. § 52-401 (Reissue 1993).

The health care providers subsequently assigned their interests of $709.48 to National Account Systems of Lincoln, Inc. From the settlement award, Glasscock's attorney, Kenneth Cobb, sent National Account Systems a check for $290.81, the amount it was due less one-third for attorney fees and for its pro rata share of the litigation expenses. National Account Systems returned the check, demanding payment in full and contending that it was not required to pay proportionate shares of either Cobb's fees or the litigation expenses.

When Cobb and Glasscock refused, National Account Systems sued Glasscock, contending that it was entitled to recover the full amount of $709.48 plus attorney fees and costs. The county court for Lancaster County entered judgment for National Account Systems, requiring Glasscock to pay National Account Systems $709.48 plus $75 in attorney fees. The Lancaster County District Court affirmed. Glasscock appealed to the Nebraska Court of Appeals, and we removed this case pursuant to our authority to regulate the caseloads of the appellate courts.

On appeal, Glasscock argues that both the county court and the district court erred in holding that the holders of hospital liens are not subject to pro rata reduction for reasonable attorney fees and litigation expenses. After the parties filed their briefs in this case, we decided In re Guardianship & Conservatorship of Bloomquist, 246 Neb. 711, 523 N.W.2d 352 (1994), which is controlling. In Bloomquist, we addressed for the first time the issue of whether § 52-401 requires a hospital lienholder to pay proportionate shares of attorney fees and litigation expenses incurred in litigating or settling a personal injury claim.

Section 52-401 provides:

Whenever any person shall employ a physician, nurse, or hospital to perform professional service or services of any nature, in the treatment of or in connection with an injury, and such injured person shall claim damages from the party causing the injury, such physician, nurse, or hospital, as the case may be, shall have a lien upon any sum awarded the injured person in...

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