Opinion ID: 2218842
Heading Depth: 1
Heading Rank: 7

Heading: The Interpleader Action.

Text: In early September 1987, McCord, on behalf of Perry, filed a negligence action against Alan Ehlers. The negligence action was settled with approval of Perry, LGH, and DSS for $100,000, subject to LGH and DSS' resolving their dispute concerning priority of their claims and liens regarding services rendered to Perry. When LGH and DSS were unable to resolve their differences, Battle Creek filed an interpleader action to determine distribution of the $100,000 settlement which Battle Creek paid into court. Defendants in the interpleader action were Perry, LGH, and DSS, with McCord as an intervenor in the proceedings. The legal interests of Gary Ehlers, Loren Wiemer, and First Insurance as plaintiffs in the interpleader action are undisclosed. The parties stipulated to the following: McCord, pursuant to his contingent fee contract with Perry for legal services, was entitled to one-third of Perry's recovery resulting from the Ehlers settlement by Battle Creek. LGH had provided Perry with hospital services totaling $116,309. DSS had paid $292,446 in medical expenses other than hospital expenses at LGH for Perry. The parties also stipulated facts bearing on Perry's general damages caused by the automobile accident, for example, Perry's age, education, employment history, permanent injury, and life expectancy. LGH based its claim on the hospital lien under § 52-401. DSS based its claim on two theories: (1) the assignment specified in § 68-1026, which assignment, according to DSS, became effective and operated from May 1, 1987, determined by DSS to be the date of Perry's eligibility for medical assistance benefits, and (2) the right of subrogation pursuant to § 68-716. Although the date of May 1, 1987, might have some administrative significance for accounting purposes, neither DSS nor the record discloses why or how May 1, 1987, was determined as the date of Perry's eligibility for state benefits or when that determination was made. On the basis of the stipulations, the court determined that McCord, LGH, and DSS had compromised their claims and waived their statutory liens, if any, because they knew that the [$100,000] settlement was insufficient to satisfy any one of their individual liens and claims. Further, based on the evidence regarding Perry's injury from the automobile accident, the court found that if Perry's negligence action had gone to trial, Perry would have been awarded $4.85 million. Therefore, in order to arrive at a pro rata distribution of the $100,000 settlement fund, the court divided $100,000 by the amount of the hypothetical award, $4.85 million, resulting in a factor of .020618 applied to the amount of each claim asserted in the interpleader action. On that basis, the court ordered the following distributions: McCord$33,333; DSS$6,030; LGH$2,399; and Perry $58,238, the balance of the $100,000 settlement fund after distributions to McCord, DSS, and LGH. Finally, the court concluded that, as the result of Perry's assignment of payments by a third party, DSS was entitled to Perry's distributive share of the $100,000 deposited in court, i.e., $58,238, in addition to DSS' share outright, $6,030.