White v. ST. ALPHONSUS REGIONAL MED. CENTER, No. 26000.

• Court: Idaho Court of Appeals
• Writing for the Court: LANSING.
• Citation: 31 P.3d 926,136 Idaho 238
• Parties: KENNETH F. WHITE, CHTD., a professional corporation, Plaintiff-Respondent, v. ST. ALPHONSUS REGIONAL MEDICAL CENTER, an Idaho Corporation, Defendant-Appellant.
• Decision Date: 23 July 2001
• Docket Number: No. 26000.

31 P.3d 926
136 Idaho 238

KENNETH F. WHITE, CHTD., a professional corporation, Plaintiff-Respondent,
v.
ST. ALPHONSUS REGIONAL MEDICAL CENTER, an Idaho Corporation, Defendant-Appellant

No. 26000.

Court of Appeals of Idaho.

July 23, 2001.

Review Denied September 24, 2001.

Skinner, Fawcett & Mauk, Boise, for appellant. Charles W. Fawcett argued.

Kenneth F. White, Chtd., Nampa, for respondent.

31 P.3d 927

LANSING, Judge

This appeal presents a question as to which party holds the superior claim to payment from the proceeds of a personal injury

31 P.3d 928

settlement. One claimant is the hospital that provided medical services to the injured person and asserts a statutory hospital lien. The competing claimant is the attorney who represented the injured person to obtain the settlement. He claims a statutory or common law attorney's charging lien and, alternatively, requests application of the "common fund" doctrine. The district court imposed the common fund doctrine in favor of the attorney and on that basis held that the settlement proceeds should be applied first to pay the attorney fees, with the balance going to the hospital. The hospital appeals, and we reverse

FACTS AND PROCEDURAL HISTORY

The parties submitted a stipulation of facts, which the district court accurately summarized as follows:

On December 10, 1997, an accident occurred between a vehicle operated by Earl S. Kent (Kent) and a vehicle operated by Lorretta Krivanec (Krivanec). As a result of the accident Krivanec sustained serious injuries which required her hospitalization at [St. Alphonsus Regional Medical Center]. Krivanec was hospitalized from December 10, 1997, to January 13, 1998, during which time she incurred charges for services rendered by [St. Alphonsus] in the amount of $131,677.23. There is no dispute that the hospital charges by [St. Alphonsus] were reasonably incurred. Within 24 hours of the accident Kenneth White (White) was contacted by Krivanec's husband. On March 11, 1998, Krivanec signed a contingency fee agreement with White, which provided that White would be entitled to receive 25% of any settlement recovered on behalf of Krivanec. White expended time, effort and labor, as well as advanced costs, in settlement negotiations of Krivanec's claim against Kent....

Kent had liability insurance coverage at the time of the accident through Colonial Insurance Co. The policy limit of the insurance is $25,000.00 per person. On October 30, 1998, approximately ten months after the accident, Colonial tendered a check to White for $25,000.00 payable to White, [St. Alphonsus] and Krivanec.

[St. Alphonsus] recorded a Hospital Lien with the Ada County Recorder on March 27, 1998, within the ninety (90) day time period proscribed by the Hospital Lien Statute.

Recovery of the $25,000.00 policy limit was made without the necessity of an action being filed. Pursuant to the retainer agreement, White claims he is entitled to attorney fees in the amount of $6250.00 and costs advanced in the amount of $518.16. The contingency amount claimed by White in this matter is both reasonable and appropriate.

White and St. Alphonsus were unable to agree upon a disposition of the settlement proceeds. Consequently, White filed a petition seeking a declaratory judgment that he had a lien or other equitable claim against the settlement proceeds for the amount of his attorney fees and costs advanced that was superior to the St. Alphonsus hospital lien. St. Alphonsus filed a motion for summary judgment, which was submitted on stipulated facts. The district court held that the hospital lien took priority over any valid lien that White might possess. However, based upon application of the common fund doctrine, the district court went on to hold that White was entitled to receive payment out of the settlement proceeds for his fees and costs incurred in obtaining the settlement.

On appeal, St. Alphonsus argues that White possesses no lien on the settlement proceeds, that even if he holds a lien it is subordinate to the hospital lien, and that the common fund doctrine has no application where both claimants are creditors of the injured party.

ANALYSIS

In an appeal from a summary judgment, we apply the same standard of review utilized by the district court when ruling on the motion. Scona, Inc. v. Green Willow Trust, 133 Idaho 283, 286, 985 P.2d 1145, 1148 (1999); Drew v. Sorensen, 133 Idaho 534, 537, 989 P.2d 276, 279 (1999). Summary judgment may be entered only if "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Idaho Rule of Civil Procedure 56(c). In this case, the parties stipulated to the pertinent facts, and it is not

31 P.3d 929

contended that there are any material factual issues. Therefore, the sole issue presented by the motion is one of law upon which we exercise free review. Roell v. Boise City, 130 Idaho 199, 200-01, 938 P.2d 1237, 1238-39 (1997); Friel v. Boise City Hous. Auth., 126 Idaho 484, 485, 887 P.2d 29, 30 (1994); Farm Credit Bank of Spokane v. Stevenson, 125 Idaho 270, 272, 869 P.2d 1365, 1367 (1994)

It is undisputed that, pursuant to Idaho Code § 45-701,¹ et seq., St. Alphonsus possesses a statutory hospital lien on the settlement paid by Kent's liability insurer. The hospital's lien consumes the entire $25,000 recovery unless White has a superior claim to a portion of the proceeds.

A. Attorney's Lien

The first question presented is whether White also possessed a statutory lien. If so, we must determine the relative priority of the liens. The statute that authorizes an attorney's charging lien is I.C. § 3-205, which provides:

The measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties, which is not restrained by law. From the commencement of an action, or the service of an answer containing a counterclaim, the attorney who appears for a party has a lien upon his client's cause of action or counterclaim, which attaches to a verdict, report, decision or judgment in his client's favor and the proceeds thereof in whosoever hands they may come; and can not be affected by any settlement between the parties before or after judgment.

(Emphasis added.) Based on the italicized portion of this statute, St. Alphonsus argues that no attorney's lien can arise unless a lawsuit has been initiated by the attorney against the wrongdoer on behalf of the injured person. In the present case, White negotiated a settlement with Kent and Kent's liability insurer without having filed a lawsuit. For that reason, St. Alphonsus argues, no attorney's lien arose.

We agree. Unambiguous language in a statute must be given force according to its plain meaning by courts applying the statute unless clearly expressed legislative intent is contrary or unless plain meaning leads to absurd results. Idaho Dep't of Health & Welfare v. Jackman, 132 Idaho 213, 215, 970 P.2d 6, 8 (1998); George W. Watkins Family v. Messenger, 118 Idaho 537, 539-40, 797 P.2d 1385, 1387-88 (1990); Zener v. Velde, 135 Idaho 352, 17 P.3d 296 (Ct.App.2000); Atkinson v. State, 131 Idaho 222, 224, 953 P.2d 662, 664 (Ct.App.1998). The plain language of I.C. § 45-701 makes the commencement of an action or service of a counterclaim a prerequisite for the creation of an attorney's charging lien. While the fairness of this limitation might be debated, it cannot be said that it leads to an absurd result. Rational reasons for the requirement can be readily discerned. If a wrongdoer does not tender compensation to an injured person until after a lawsuit has been filed, it is likely that the services of the injured person's attorney were instrumental in achieving the payment. On the other hand, where the wrongdoer capitulates and settles before any action is filed, the significance of the attorney's services is in much greater doubt; it might as readily be assumed that the wrongdoer intended to provide compensation all along and that the attorney had little, if anything, to do with inducing the settlement. The...