Opinion ID: 6333579
Heading Depth: 3
Heading Rank: 1

Heading: State Court Suit

Text: In 2018, Judy Lynn Parker was injured in a car accident in New Mexico and taken to the Hospital for treatment. Midland, the Hospital’s billing agent, filed a notice of hospital lien with the county clerk in the amount of $15,171.26 for Parker’s treatment. See N.M. Stat. Ann. § 48-8-1(A). The Hospital also mailed copies of the notice to 21st Century Centennial Insurance Company (21st Century), the responsible party’s insurer, and Parker’s attorney, the Lyle Law Firm. The Lyle Law Firm attempted to settle the hospital lien under the theory that Parker’s claim would eventually exceed the $50,000 limit of the responsible driver’s liability coverage and the lien should be reduced to $2,124.03 based on the common fund doctrine and principles of equitable subrogation. Midland disputed application of the precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. 2 Appellate Case: 21-2035 Document: 010110673869 Date Filed: 04/21/2022 Page: 3 doctrine of equitable subrogation because the Hospital did not have a subrogation interest in Parker’s recovery from 21st Century; however, it agreed that Parker was entitled to a reduction under the common fund doctrine and offered to reduce the lien to $10,620.13. The Lyle Law Firm refused the offer; instead, it proceeded to negotiate a settlement with 21st Century for $50,000. When it received the $50,000 check, the firm took out what it was owed for attorneys’ fees and other costs and disbursed the remaining funds to Parker. The Jackson Law Firm stepped in because the one-year deadline for filing suit on the hospital lien was fast approaching. See id. § 48-8-3(B). When the parties failed to reach an agreement, it filed suit in state court on behalf of the Hospital and against Parker on the theory that she held the disbursed funds in a constructive trust for the benefit of the Hospital, and against 21st Century and the Lyle Law Firm as parties who had notice of the lien but nonetheless disbursed the funds before the lien had been satisfied. See id. § 48-8-3(A). Attached to the complaint was a “Court-Annexed Arbitration Certificate,” which notified the court that the amount in controversy was less than $25,000. Aplees. Suppl. App. at 15. Under the local rules, such cases are typically referred to a local arbitrator, which gives the parties an opportunity to resolve the dispute quickly and at less expense.