State Farm Mut. Auto. Ins. Co. v. Palm Springs General Hospital, Inc. of Hialeah, 38465

• Decision Date: 11 February 1970
• Docket Number: No. 38465,38465
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, v. PALM SPRINGS GENERAL HOSPITAL, INC. OF HIALEAH, a Florida corporation, Appellee.
• Court: Florida Supreme Court

Page 737

232 So.2d 737

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, v. PALM SPRINGS GENERAL HOSPITAL, INC. OF HIALEAH, a Florida corporation, Appellee.

No. 38465.

Supreme Court of Florida.

Feb. 11, 1970.

Rehearing Denied April 9, 1970.

David K. Tharp, of Walton, Lantaff, Schroeder, Carson & Wahl, Miami, for appellant.

Sinclair & Louis, Paul A. Louis, Bertha Claire Lee, Fay L. Becker and Frank Nussbaum, Miami, for appellee.

Thomas C. Britton, County Atty., and Thomas P. Abbott, Asst. County Atty., as amicus curiae.

CARLTON, Justice.

This is an appeal from a decision of the District Court of Appeal, Third District, 218 So.2d 793, which initially upheld the constitutionality of the Hospital Lien Act, Ch. 27032, Laws of Florida 1951, and various amendments thereto. The District Court also reversed a Circuit Court, Dade County, construction of the operation of the Act. Appellant brings this appeal under Article V, § 4(2), Florida Constitution, F.S.A. We affirm on both counts.

The facts pertinent to this litigation are reported in detail in the District Court opinion. We will briefly summarize them here. On November 6, 1966, Eutimio Leal was admitted as a patient at Palm Springs General Hospital. He had been injured in a serious automobile collision which apparently was caused entirely by the negligence of Joe Trollinger. Trollinger was insured by appellant, State Farm Insurance Company.

Leal's injuries were substantial. He remained hospitalized at Palm Springs General when his attorney filed a claim against Trollinger with State Farm on November 17. He was still hospitalized on December 21 when his attorney and a State Farm representative brought a settlement and release agreement for him to sign. After Leal signed the agreement, he was presented with a check for $9,000. This settlement was negotiated and executed without the knowledge of hospital authorities. Leal continued to receive treatment.

By January 11, 1967, Leal's hospital bill had risen to over $7,000. The hospital's comptroller called Leal's attorney who previously had indicated that his client was solvent, and inquired about Leal's ability to pay the bill. The comptroller was informed of the December 21 settlement. Subsequently, on January 14, 1967, Leal was transferred to another hospital. Nine days later appellee, Palm Springs General, filed a lien, by authority of the Hospital Lien Act, as follows:

'(U)pon any and all causes of action, suits, claims, counterclaims, and demands accruing to EUTIMIO LEAL and upon all judgments, settlements, and settlement agreements rendered or entered into by virtue thereof, on account of the injury or illness giving rise to such causes of action, suits, claims, counterclaims, demands, judgments, settlements, or settlement agreements, and which necessitated or shall have necessitated such hospital care, treatment, and maintenance as furnished the said EUTIMIO LEAL by Palm Springs General Hospital, Inc. of Hialeah.'

On February 9, 1967, hospital authorities filed a three-count complaint in Circuit Court naming appellant and the Leals as defendants. We are only concerned with Count I which was entitled 'Impairment of Hospital Lien.' It asked for damages against appellant and Leal, including a reasonable attorney's fee, after alleging that their settlement had impaired the hospital's lien under the Act. Appellant's answer to the complaint alleged that the Hospital Lien Act and its amendments were unconstitutional because unreasonable in classifications, and also because in reality the Act...