Shelby County Health Care Corp. D v. Nationwide Mut. Ins. Co.
| Decision Date | 13 October 2010 |
| Docket Number | No. W2008-01922-SC-R11-CV.,W2008-01922-SC-R11-CV. |
| Citation | 325 S.W.3d 88 |
| Parties | SHELBY COUNTY HEALTH CARE CORPORATION d/b/a Regional Medical Center v. NATIONWIDE MUTUAL INSURANCE COMPANY. |
| Court | Tennessee Supreme Court |
OPINION TEXT STARTS HERE
COPYRIGHT MATERIAL OMITTED.
Parks Tedford Chastain and Gordon C. Aulgur, Nashville, Tennessee, for the appellant, Nationwide Mutual Insurance Company.
Curtis H. Goetsch and Gary Carlton McCullough, Germantown, Tennessee, for the appellee, Shelby County Healthcare d/b/a Regional Medical Center.
Benjamin K. Lauderback, Hanson R. Tipton, and Sarah Larkin, Knoxville, Tennessee, for the amicus curiae, Tennessee Municipal League Risk Management Pool.
Melanie M. Stewart and Matthew S. Russell, Germantown, Tennessee, for the amicus curiae, Tennessee Defense Lawyers Association.
Edward Knight Lancaster and Julie Pedigo Bowling, Columbia, Tennessee, for the amicus curiae, Tennessee Farmers Mutual Insurance Company.
Robyn E. Smith and William Beesley Hubbard, Nashville, Tennessee, for the amicus curiae, Tennessee Hospital Association.
Kevin L. Holt, injured in an automobile accident in Arkansas, was first taken by ambulance to an Arkansas hospital and then transported to the Regional Medical Center in Memphis, where he incurred $33,823.02 in expenses. Shelby County Health Care Corporation, the operator of the Regional Medical Center, filed affidavits for a lien as prescribed by statute. Thereafter, Nationwide Mutual Insurance Company, which had medical coverage for Holt with limits of $5,000, paid $1,290 for ambulance services and $3,710 to the Arkansas hospital. Shelby County Health Care Corporation sued Nationwide for impairment of its lien, seeking as recovery the entire amount due for its medical services to Holt. The trial court awarded $5,000 in damages. The Court of Appeals revised the amount of the judgment to $33,823.02. Because we have determined that liens under the Hospital Lien Act do not attach to medical payment benefits paid pursuant to an insurance policy, the judgment of the Court of Appeals is reversed and the cause is dismissed.
On May 29, 2006, Kevin L. Holt (“Holt”) sustained head trauma in an automobile accident in Arkansas. He was initially taken by ambulance to the Regional Medical Center of Northeast Arkansas, but the nature of his injuries required his transfer to the Regional Medical Center in Memphis, a hospital operated by the plaintiff, Shelby County Health Care Corporation (“the Med”). On the day following the accident, Holt was discharged. While the record does not disclose the extent of Holt's injuries or the details of the treatment provided by the Med, the cost of its medical services amounted to $33,823.02. Holt was covered by a policy of insurance issued by the defendant, Nationwide Mutual Insurance Company (“Nationwide”), which included medical payment benefits up to $5,000.
On June 9, 2006, the Med filed an Affidavit for Hospital Lien as authorized by statute. The affidavit, signed by the Med's manager of insurance collections, named as “liable for the charges, costs, and expenses of hospital care, treatment and maintenance” both Holt and the “Municipal Health Benefit Fund,” an entity located in North Little Rock, Arkansas. Six days later, the Med notified by letter both Holt and the Municipal Health Benefit Fund of the affidavit. On September 25, 2006, the Med filed an amended affidavit adding Nationwide as a responsible party. Nationwide, the Municipal Health Benefit Fund, and Holt were sent notice of the amended affidavit within three days. After the filing of the lien, Nationwide made two medical benefit payments for medical care related to the accident-$1,290 to Medic One for ambulance services and $3,710 to the Regional Medical Center of Northeast Arkansas-which exhausted the medical benefits available under the policy.
On November 20, 2007, the Med-aware that Nationwide's $5,000 coverage limit had been exhausted-filed suit claiming that Nationwide had impaired its hospital lien by making payments to Medic One and the Arkansas hospital. The Med sought to recover $33,823.02, the full amount of Holt's hospital care costs. In response, Nationwide acknowledged that the Med had filed an affidavit for a hospital lien but denied any impairment of the lien.
Both the Med and Nationwide filed motions for summary judgment. In its motion for summary judgment, the Med contended that a hospital lien, by the terms of the statute, may be validly asserted against “claims” or “demands” arising out of an insurance contract, that unauthorized payments under a contract without approval of the lien holder constituted impairment of a hospital lien, and that the Med had a statutory right to recover the full cost of its services arising from Holt's care in the event of an impairment, regardless of any limitations on coverage. In its motion for summary judgment, Nationwide offered four alternative arguments based upon the terminology of the applicable statute: first, that there was no valid hospital lien against Nationwide because there had been no “judgment, settlement, or compromise,” as contemplated by the statute, on the claim; second, that even if the lien was valid, the direct payments to other medical service providers did not constitute an impairment of a lien because they were not made pursuant to a “judgment, settlement, or compromise;” third, that even if Nationwide did impair a valid lien, the Med's statutory right to recover was capped by statute at $1,666, one-third of the value of the policy; and fourth, that even if the Med was entitled to recover more than $1,666, it could not recover beyond the $5,000 limit of the policy.
Because no material facts were in dispute, the trial court granted summary judgment, concluding that the Med had a valid lien and that Nationwide had impaired the lien, but that the Med was entitled to recover only $5,000, the limits of the medical coverage. The Med appealed the ruling, arguing a statutory entitlement to the full $33,823.02. In response, Nationwide contended that the Med was not entitled to any recovery at all. The Court of Appeals, relying on a prior unpublished opinion, ruled that, under Tennessee Code Annotated section 29-22-104(b)(1) (2000), the lien had been impaired by Nationwide and the Med was entitled to recover the full “reasonable cost of ... hospital care, treatment and maintenance.” When Nationwide requested a rehearing, the Court of Appeals filed an amended opinion correcting a misstatement of fact in its initial ruling, but otherwise denied relief. This Court granted an application for permission to appeal by Nationwide to consider the validity of the hospital lien, whether the lien had been impaired, and, if so, the extent of liability.
Initially, a summary judgment may be granted only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Tenn. R. Civ. P. 56.04; Hannan v. Alltel Publ'g Co., 270 S.W.3d 1, 5 (Tenn.2008); Byrd v. Hall, 847 S.W.2d 208, 214 (Tenn.1993). The scope of review of a grant of summary judgment is well-established. Because our inquiry involves a question of law, no presumption of correctness attaches to the judgment, and our task is to review the record to determine whether the requirements of Rule 56 of the Tennessee Rules of Civil Procedure have been satisfied. Hunter v. Brown, 955 S.W.2d 49, 50-51 (Tenn.1997); Cowden v. Sovran Bank/Cent. S., 816 S.W.2d 741, 744 (Tenn.1991).
Further, when interpreting a statute, we “must first ascertain and then give full effect to the General Assembly's intent and purpose” in drafting those sections. Waldschmidt v. Reassure Am. Life Ins. Co., 271 S.W.3d 173, 176 (Tenn.2008). Our chief concern is to carry out the legislature's intent without unduly broadening or restricting the statute. Houghton v. Aramark Educ. Res., Inc., 90 S.W.3d 676, 678 (Tenn.2002) (quoting Owens v. State, 908 S.W.2d 923, 926 (Tenn.1995)). We presume that every word in a statute has meaning and purpose and should be given full effect if so doing does not violate the legislature's obvious intent. In re C.K.G., 173 S.W.3d 714, 722 (Tenn.2005) (quoting Marsh v. Henderson, 221 Tenn. 42, 424 S.W.2d 193, 196 (1968)). When the statutory language is clear and unambiguous, we simply apply its plain meaning. Eastman Chem. Co. v. Johnson, 151 S.W.3d 503, 507 (Tenn.2004). When a statute is ambiguous, however, we may refer to the broader statutory scheme, the history of the legislation, or other sources to discern its meaning. Colonial Pipeline Co. v. Morgan, 263 S.W.3d 827, 836 (Tenn.2008).
Hospital lien statutes have been adopted in over forty states, with the oldest such statute having been enacted in Nebraska in 1927. Bergan Mercy Health Sys. v. Haven, 260 Neb. 846, 620 N.W.2d 339, 345 (2000). Tennessee's Hospital Lien Act (the “HLA”), ch. 527, 1970 Tenn. Pub. Acts 529 (codified as amended, Tenn.Code Ann. §§ 29-22-101 to -107 (2000)), was adopted in 1970 and captioned “AN ACT to create for hospitals a lien upon all causes of action for damages accruing to persons having received care and treatment for illnessor injuries and to provide the procedure for the perfecting, recording, enforcement and release of such lien.” Id. at 529. In the ensuing decades, the HLA has been amended a handful of times, but has not been substantially altered. 1 As a result, the version of the HLA in effect at all times pertinent to this litigation is largely the same as the original enactment.
In a 1994 opinion, the Attorney General surveyed the legislative debate accompanying the enactment of the HLA in an effort to discern its purpose:
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