Case Title: Keene v. Stattman

Citation: 256 N.W.2d 295

Docket Number: 

State: minnesota

Court: Minnesota Supreme Court

Date: 1977-07-08T00:00:00Z

Document:
256 N.W.2d 295 (1977) Bernard KEENE, Respondent, v. Arthur W. STATTMAN, Jr., et al., Defendants, Unity Hospital, Appellant. No. 46923. Supreme Court of Minnesota. July 8, 1977. *296 Barna Guzy, Hynes, Giancola & Jensen, and Robert C. Hynes, Minneapolis, for appellant. McGarry & Brody and Robert E. McGarry, St. Paul, for respondent. Heard before MacLAUGHLIN, SCOTT and STAHLER, JJ., and considered and decided by the court en banc. SCOTT, Justice. This is an appeal from a judgment of the Ramsey County District Court requiring Unity Hospital (Unity) to pay a pro rata share of the plaintiff's attorneys fees for recovery of damages arising out of an automobile accident. We affirm. The following excerpt from the district court's memorandum summarizes the relevant facts on appeal: Each party alludes to the issue of whether the hospital has a lien upon the proceeds of the settlement, but the ultimate and deciding question is whether the hospital is required to pay a pro rata share of the plaintiff's attorneys fees in the form of a setoff against plaintiff's total bill with the hospital. The trial court expressed its opinion as follows: The respondent relies mainly on the case of Robertson v. Johnson, 294 Minn. 201, 200 N.W.2d 316 (1972), in seeking to force Unity to share his attorneys fee.[1] The facts of Robertson were similar to those in the present case. Robertson received a damage award of $88,102, of which $37,708.53 was for medical services provided by Steele County. Robertson's attorney took his case on a contingent-fee basis, as did McGarry in this case. Steele County sought to recover its total costs from the settlement proceeds without having to pay a pro rata share of Robertson's attorneys fees. The county had acquired a medical lien pursuant to statute, which made such lien "subject * * * to any attorney's lien." We held: We also stated: In both the Robertson and Blazek cases, we relied upon Minn.St.1974, § 481.13, which provided in part: The statute further provided that the lien may be established and the amount determined by the court summarily in the original *298 action. § 481.13(3). Since no hospital lien was filed under Minn.St. 514.68, in the case at hand, that statute only becomes important to show the legislative intent, in that its final clause also states "subject, however, to any attorney's lien." Unity argues that, since it did not file a hospital lien, that statute does not apply and Unity therefore should be free to collect its debt in any manner desired. However, it would appear that the only reason Unity has not filed a separate lawsuit is the fact that the patient was indigent. The record does not disclose any representation expense, intervention, or separate judgment against the plaintiff by any attorney on behalf of the hospital at the conclusion of the litigation. The only funds available are those resulting from the settlement, through the efforts of the attorney. As we said in Robertson, it would therefore not be appropriate on equitable principles to share in the fruits of the attorney's efforts without paying a pro rata share in the acquisition of those very funds which would reimburse the hospital for its charges. We hold that coupled with the above facts the basis for our decision must be that the attorney in fact did recover and disburse the funds owing by his client to the hospital, less a reasonable amount for the attorneys fees as determined by the trial court, or is ready, willing, and able to do so. In this case the trial court correctly made such a determination and we affirm, not only on the grounds that the plaintiff's attorney had a prior lien for his fees when he commenced the action, as provided in Minn.St. 481.13, but also on equitable grounds, as discussed above. Affirmed. [1] The difference to Keene is $1,584.83. Of the total award of $15,000, McGarry will receive $5,000 as his fee. If Keene must pay this in full, and then pay his bill at Unity, he will be left with $5,245.50. If the hospital pays a pro rata share of McGarry's fee (1/3 of the bill, or $1,584.83), Keene will be left with $6,830.33.