Opinion ID: 2638534
Heading Depth: 3
Heading Rank: 1

Heading: The Consortium's Claim to Settlement Funds Obtained on Behalf of David W. Warden

Text: On February 15, 2000, David Warden, an Alaska Native, was injured in a motor vehicle accident with Mary Copley, who was insured by Allstate Insurance Company. Warden received medical treatment from ANMC for injuries to his back and neck between February 15, 2000 and March 8, 2001. Shortly after the accident, Warden engaged counsel Robert Rehbock and entered into a contingency fee agreement entitling Rehbock to a percentage of any recovery. Allstate entered into negotiations with Warden, seeking to minimize its obligation by emphasizing Warden's pre- and co-existing conditions. Allstate declined to enter any settlement agreement unless there was full and final release of all parts of the claim. The Consortium did not respond to Allstate's efforts to obtain medical records and information concerning the care Warden received, only providing such documentation after further efforts by Warden and Rehbock. On May 3, 2001, the Consortium recorded a health care provider's lien pursuant to AS 34.35.450-.482 for $8,947.22, the alleged value of services provided to Warden. Copies of the recorded lien were forwarded by certified mail to Allstate and its insured, Mary Copley. The transmittal letter to Allstate included a request that ANMC be named as the payee on any check issued arising out of the accident. The Consortium provided a copy of the lien to Warden, who apprised Allstate of the lien claim and continued to seek recovery for all claims. On August 3, 2001, Allstate settled with Warden for $24,947.22 to cover all losses and to release all claims against Copley and Allstate. Out of this amount, Allstate issued a separate settlement check on the same day for $8,947.22 made payable to Rehbock Rehbock & Wittenbrader In Trust for David Warden, and ALASKA Native Medical Center. The same day, Rehbock informed the Consortium that he proposed to turn over two-thirds of the total check for that lien and receive the remaining one-third for his fees but that he would not disburse any of the disputed lien to my client or for my fee pending our resolution of the dispute. The Consortium therefore declined to endorse the check, and the disputed funds were placed with the court and then, by stipulation, held in Rehbock's trust account. Rehbock has at this point only taken for his fee one-third of the non-disputed funds. The Consortium filed a complaint in superior court on September 9, 2001 against Settlement Funds Held for or to be Paid on Behalf of David W. Warden seeking to foreclose its lien under AS 34.35.480. Warden's answer admitted that the Consortium rendered medical services to Warden and had recorded a lien for $8,947.22, but challenged the validity of the lien. The parties filed cross-motions for summary judgment, with the Consortium moving to foreclose its lien and with Warden arguing that the Consortium could not assert a lien because Warden was entitled to free treatment at ANMC, or in the alternative, that the Consortium's lien recovery should be reduced by the percentage in the contingency fee agreement between Warden and Rehbock. Without elaborating on its reasoning, the superior court held that the Consortium was entitled to foreclose its lien and was entitled to the full amount less its pro rata share of the attorney's fees and costs Warden incurred to obtain the settlement proceeds from Allstate. The Consortium appeals the pro rata reduction of its lien recovery. Warden cross-appeals the superior court's ruling that the Consortium was entitled to foreclose on its lien.