Court Opinion

ID: 6471942
Source: CourtListenerOpinion
Date Created: 2022-06-26 14:20:53.900283+00
Date Added: 2024-06-11T09:11:35.984569
License: Public Domain

HARTZ, Judge (specially concurring). 15. I concur in the result. I agree that Plaintiffs attorney should receive his attorney’s fees in full and that Lovelace should receive the amount of the judgment remaining after payment of attorney’s fees and costs. I write separately, however, because my understanding of how to handle attorney’s fees under the hospital-lien statute differs from the majority’s. 16. I base my understanding of the hospital-lien statute on a consideration of what would happen in the absence of such a statute. In that event a hospital could sue a patient for the unpaid medical bills and obtain a judgment for that amount. As a judgment creditor of the patient, the hospital could then garnish any judgment the patient obtained from a third-party tortfeasor. See Hardwick v. Harris, 22 N.M. 394, 163 P. 253 (1917); 6 Am.Jur.2d Attachment and Garnishment § 135 (1963).1 The hospital would be entitled to its attorney’s fees in the garnishment action. See NMSA 1978, § 35-12-16(A) (Repl.Supp.1988). 17. The hospital-lien statute accomplishes essentially the same purpose, but it provides three advantages to the hospital. First, rather than filing suit against a patient and obtaining judgment, the hospital need only file a lien with the county clerk and give proper notice. See NMSA 1978, § 48-8-2 (Repl.Pamp.1995). This procedure obviously saves the hospital some attorney’s fees that would be incurred in suing the patient, although it is quite possible that the patient would ultimately have to pay those fees to the hospital anyway (perhaps pursuant to a contract between the patient and the hospital or perhaps if the hospital bill was on open account, see NMSA 1978, § 39-2-2.1 (Repl. Pamp.1991)). Second, the lien gives the hospital priority over other creditors of the patient, who may also wish to be paid out of the judgment proceeds. Third, the hospital does not need to wait for the patient to obtain a judgment against the third-party tortfeasor before it files its lien. I am not certain whether an ordinary creditor could garnish or attach its debtor’s chose in action prior to the debtor’s obtaining judgment. See generally Annotation, Unliquidated Claims of Damage in Tort as Subject of Garnishment, 93 A.L.R. 1088 (1934). 18. Given the obvious purpose of the hospital-lien statute to expedite collection of bills owed to hospitals, it would be remarkable if it permitted the patient to pay less of the judgment to the hospital pursuant to a lien than the patient would have to pay if the hospital garnished the judgment. Yet that is what Plaintiff appears to be seeking here. If the hospital garnished the judgment, I know of no legal doctrine that would allow the patient to keep any of the proceeds of the judgment before the hospital is paid in full. See City & County of San Francisco v. Sweet, 12 Cal.4th 105, 48 Cal.Rptr.2d 42, 47-49, 906 P.2d 1196, 1202-03 (1995). For example, if the patient won a judgment for breach of contract on a cause of action totally unrelated to the accident leading to the hospitalization, the hospital could garnish as much of the judgment as necessary to pay the bill in full. (Of course, the patient could challenge the amount of the bill, but that could be done under the hospital-lien statute also.) 19. In the present case, if the Plaintiff were permitted to keep a portion of the judgment, the hospital could sue to collect that sum (and any additional amount necessary to pay the debt in full). The hospital would be able to collect the sum unless the Plaintiff spent the money, converted the money into assets exempt from creditors, or declared bankruptcy. I am aware of no principle of equity that would suggest that failure to collect for such reasons would be preferable to simply letting the hospital collect the sum at the outset. 20. Thus, I would conclude that Lovelace has the first claim on the $1505.85. CHAMPUS does not have a lien, so it, like Plaintiff, has rights inferior to Lovelace’s. There is no question regarding the fairness of compensation to Plaintiffs attorney, because he receives just what he would have if there had been no lien; the hospital-lien statute gives attorney’s fees priority over the hospital lien. 21. As for concern about the hospital’s paying its fair share of the attorney’s fees, I would note that the attorney here has been paid in full and the hospital is collecting only about half of the amount it is owed. Perhaps the approach I am suggesting is contrary to some language in Martinez v. St. Joseph Healthcare System, 117 N.M. 357, 871 P.2d 1363 (1994). I would read Martinez, however, as turning on the Supreme Court’s view of the inequitable behavior of the hospital with respect to the settlement negotiations in that case. In particular, as I would read Martinez, when the plaintiffs attorney has not had to compromise his or her fee in order to effect a settlement, there would be no cause for reducing recovery under a hospital lien.2   . In her brief in support of her motion for rehearing, Plaintiff contends that the judgment could not be garnished because insurance proceeds (which presumably were the source of payment for the judgment) are exempt from creditors under NMSA 1978, Section 42-10-3. That statute, however, does not encompass proceeds from liability insurance policies. It is restricted to life, accident, and health insurance. Accident insurance should not be confused with liability insurance. Accident insurance pays the insured when the insured suffers injury as the result of an accident. See American Fidelity Co. v. Bleakley, 157 Iowa 442, 138 N.W. 508, 509 (1912); 1 John A. Appleman & Jean Appleman, Insurance Law and Practice § 24 (rev. ed. 1981); 1 George J. Couch, Couch Cyclopedia of Insurance Law § 1:18 (2d ed. 1984); NMSA 1978, § 59-18-1 through -23 (former law governing "accident and health insurance"); cf. NMSA 1978, § 59A-7-3 (Repl.Pamp.1995) (accident insurance now encompassed by the term "health" insurance).   . In her brief in support of her motion for rehearing, Plaintiff contends that Martinez should not be read narrowly because our Supreme Court extended the "common fund” doctrine to encompass subrogated insurers in Amica Mutual Insurance Co. v. Maloney, 120 N.M. 523, 903 P.2d 834 (1995). The views expressed in this opinion, however, have no application to the Arnica context. Unlike the hospital in a hospital-lien case, a subrogated insurer has no claim against the plaintiff (the insured); it merely steps into the shoes of the insured with respect to the insured’s claim against the tortfeasor.