Washoe Medical Center, Inc. v. Reliance Ins. Co.

• Decision Date: 30 April 1996
• Docket Number: No. 26941,26941
• Parties: WASHOE MEDICAL CENTER, INC., a Non-Profit Nevada Corporation, Appellant, v. RELIANCE INSURANCE COMPANY, a Pennsylvania Corporation, Licensed to do Business in the State of Nevada, Respondent.
• Court: Nevada Supreme Court

Page 288

915 P.2d 288

112 Nev. 494

WASHOE MEDICAL CENTER, INC., a Non-Profit Nevada Corporation, Appellant, v. RELIANCE INSURANCE COMPANY, a Pennsylvania Corporation Licensed to do Business in the State of Nevada, Respondent.

No. 26941.

Supreme Court of Nevada.

April 30, 1996.

Appeal from an order of the district court granting respondent's motion to dismiss and denying appellant's motion for partial summary judgment. Second Judicial District Court, Washoe County; Steven R. Kosach, Judge.

Durney, Brennan and Shea, Reno, for Appellant.

Thorndal, Backus, Armstrong, and Balkenbush, and Charles L. Burcham, Reno, for Respondent.

OPINION

YOUNG, Justice:

Appellant Washoe Medical Center, Inc. ("WMC") provided treatment for a patient, Kathryn Boyer ("Boyer"), who was injured in an automobile accident by an uninsured driver. WMC filed notice of a hospital lien on Boyer's automobile insurance company, respondent Reliance Insurance Company ("Reliance"), for Boyer's hospital costs. Reliance paid the proceeds from Boyer's uninsured motorist ("UM") policy to Boyer, rather than WMC.

WMC filed suit against Reliance pursuant to NRS 108.650, seeking to recover the amount of the UM benefits paid to Boyer. Reliance filed a motion to dismiss, arguing that Nevada's hospital lien statute does not apply to a patient's UM benefits. WMC moved for partial summary judgment, arguing that the express language of NRS 108.650 allows a hospital lien to reach a patient's UM benefits.

On March 9, 1995, the district court granted Reliance's motion to dismiss and denied WMC's motion for partial summary judgment. WMC appeals, arguing that the district court erred in granting Reliance's motion to dismiss because the language of NRS 108.650 is very comprehensive, contains no exclusions for UM insurance and must be liberally construed to promote the legislative intent.

DISCUSSION

In Edgar v. Wagner, 101 Nev. 226, 227, 699 P.2d 110, 112 (1985), this court stated that "[o]n review of a motion to dismiss, our task is to determine whether or not the challenged pleading sets forth allegations sufficient to make out the elements of a right to relief." (Citations omitted.) The Edgar court further stated that "[t]he complaint cannot be dismissed for failure to state a claim unless it appears beyond a doubt that the plaintiff could prove no set of facts which, if accepted by the trier of fact, would entitle him to relief." Id. at 228, 699 P.2d at 112 (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957)).

The question presented in this case is whether Nevada's hospital lien statute encompasses the UM benefits paid to an insured pursuant to her automobile insurance policy.

This court has recognized that "lien statutes are remedial in character and should be liberally construed...." Las Vegas Plywood v. D & D Enterprises, 98 Nev. 378, 380, 649 P.2d 1367, 1368 (1982). However, this court has also indicated that "[s]tatutes should be interpreted so as to effect the intent of the legislature in enacting them; the interpretation should be reasonable and avoid absurd results." Las Vegas Sun v. District Court, 104 Nev. 508, 511, 761 P.2d 849, 851 (1988) (citations omitted).

This court has stated that "[w]hen a statute is susceptible to but one natural or honest construction, that alone is the construction that can be given." Building & Constr. Trades v. Public Works, 108 Nev. 605, 610, 836 P.2d 633, 636 (1992) (citation omitted). The Building & Construction Trades court further stated that "[w]hen construing a specific portion of a statute, the statute should be read as a whole, and, where possible, the statute should be read to give meaning to all of its parts." Id. (citation omitted).

In applying these principles to the present case, we conclude that Nevada's hospital lien statute, when read as a whole, indicates that the legislature did not intend hospital liens to encompass an injured person's first-person UM coverage.

Nevada's hospital lien statute is codified at NRS 108.590 et seq. Two provisions are particularly applicable to our review of the present issue. First, NRS 108.590(1), the provision addressing the extent of the hospital's lien, provides in pertinent part:

Whenever any person receives hospitalization on account of any injury, and he ... claims damages from the person responsible for causing the injury, the hospital has a lien upon any sum awarded the injured person or his personal representative by judgment or obtained by a settlement or compromise to the extent of the amount due the hospital for the reasonable value of the hospitalization rendered before the date of judgment, settlement or compromise.

(Emphasis added.)

The second applicable provision is NRS 108.610, which sets forth the notice requirements for perfecting a hospital lien. NRS 108.610(3) states in pertinent part:

Prior to the date of judgment, settlement or compromise, [the hospital must] serve a certified copy of the notice of lien by registered or certified mail upon the insurance carrier, if known, which has insured against liability of the person, firm or corporation alleged to be responsible for causing the injury and alleged to be liable for damages on account thereof and from which damages are claimed.

(Emphasis added.)

We conclude that Nevada's hospital lien statute does not encompass an individual's UM benefits for several reasons. First, the language of NRS 108.590(1) indicates that a hospital's lien rights are effectuated only when the person who receives hospitalization "claims damages from the person responsible for causing the damage." Consequently, we conclude that hospital liens do not attach unless an injured person claims damages from the third-party tortfeasor and the injured person is subsequently awarded damages pursuant to a judgment, settlement or compromise with the third-party tortfeasor or the third-party tortfeasor's insurance carrier. See NRS 108.590(1).

Second, we conclude that NRS 108.610(3) supports our determination that UM benefits are not encompassed by Nevada's hospital lien statute. Pursuant to NRS 108.610(3), a hospital must perfect its hospital lien by giving notice to "the insurance carrier ... which has insured against liability of the person ... responsible for causing the injury and alleged to be liable for damages on account thereof and from which damages are claimed." Nothing in NRS 108.610(3) requires that the injured person's UM carrier receive notice of the hospital lien. Although Reliance received notice of WMC's hospital lien in the present case, we conclude that the legislature's omission of UM insurance carriers from the notice requirement of NRS 108.610 indicates that the legislature did not intend Nevada's hospital lien statute to encompass an individual's UM insurance coverage.

Our ruling in this case is consistent with another court's interpretation of a similar statute. See Kratz v. Kratz, 905 P.2d 753 (Okla.1995). In Kratz, the Supreme Court of Oklahoma stated that "[t]he obvious purpose of the hospital lien statute is to encourage hospitals to care for accident victims who might otherwise be non-paying patients." Id. at 756. However, the Kratz court recognized that

[a] lien that is not provided by the...