Court Opinion

ID: 2687311
Source: CourtListenerOpinion
Date Created: 2014-07-31 21:39:40.747194+00
Date Added: 2024-06-11T13:16:41.565598
License: Public Domain

FINAL COPY
294 Ga. 477

  S13G0900. HOSPITAL AUTHORITY OF CLARKE COUNTY et al. v.
            GEICO GENERAL INSURANCE COMPANY.

      MELTON, Justice.

      In Geico Gen. Ins. Co. v. Hosp. Auth. of Clarke County, 319 Ga. App. 741

(738 SE2d 325) (2013), the Court of Appeals held that, under OCGA § 44-14-

473 (a), the Hospital Authority of Clarke County and Athens Regional Medical

Center (collectively, “the Hospitals”) were barred by a one-year statute of

limitation from filing suit against Geico General Insurance Company to collect

on certain hospital liens. We granted certiorari to determine the propriety of this

holding. For the reasons set forth below, we reverse.

      As set forth by the Court of Appeals,

      [t]he facts in this case are undisputed. In March 2010, Justyna Kunz
      was involved in a car accident with Geico's insureds, Crystal A.
      Kalish, Joseph P. Kalish, and Elizabeth A. Kalish. Kunz, who was
      injured in the collision, received medical treatment at Athens
      Regional Medical Center, and the Hospitals filed three hospital liens
      totaling $66,999.22. Kunz subsequently filed suit against the
      Kalishes. On September 10, 2010, Kunz's attorney wrote a letter to
      the Kalishes' attorney accepting their $100,000 policy limit
      settlement offer. On September 23, 2010, the Kalishes' attorney sent
      a letter confirming the agreement and enclosing the settlement
     documents and a settlement check for $100,000. The settlement
     documents, which were signed on October 8, 2010, expressly
     required Kunz to satisfy the hospital liens out of the settlement fund
     and constituted a “general[ ] release ... from all legal and equitable
     claims of every kind and nature.” The liens, however, were never
     satisfied. On June 7, 2011, the Hospitals' attorney sent a letter to
     Julie Hubbard, a claims manager for Geico, in an attempt to obtain
     payment of the liens. The Hospitals' attorney acknowledged in the
     letter that “on September 22, 2010, Geico and [Kunz] entered into
     a settlement and release agreement.” When Geico did not satisfy the
     liens, the Hospitals filed suit on October 6, 2011. Geico moved for
     summary judgment, arguing that the Hospitals' action was not
     timely under OCGA § 44-14-473 (a). The trial court denied the
     motion, and [the Court of Appeals] granted Geico's application for
     interlocutory appeal. Geico argues that the trial court erred by
     denying its motion for summary judgment because the Hospitals
     failed to file their action to enforce their liens within one year of the
     September 10, 2010 settlement between Geico and Kunz as required
     by OCGA § 44-14-473 (a). The Hospitals, on the other hand,
     contend that their action to enforce the lien was timely because it
     was filed within one year of the October 8, 2010 execution of the
     release.

Geico, supra, 319 Ga. App. at 742.

     OCGA § 44-14-473 (a) provides:

            No release of the cause or causes of action or of any judgment
     thereon or any covenant not to bring an action thereon shall be valid
     or effectual against the lien created by Code Section 44-14-470
     unless the holder thereof shall join therein or execute a release of
     the lien; and the claimant or assignee of the lien may enforce the
     lien by an action against the person, firm, or corporation liable for
     the damages or such person, firm, or corporation's insurer. . . . The
     action shall be commenced against the person liable for the

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      damages or such person's insurer within one year after the date the
      liability is finally determined by a settlement, by a release, by a
      covenant not to bring an action, or by the judgment of a court of
      competent jurisdiction.

(Emphasis supplied.)

      In its decision, the Court of Appeals found that the letters exchanged by

the Kunz's and the Kalishes' lawyers evinced a verbal settlement agreement in

September 2010. The Court of Appeals held:

      The Hospitals' liens were against Kunz's cause of action against the
      Kalishes, and the settlement resolved liability in that action by
      virtue of Kunz's release of “all legal and equitable claims of every
      kind and nature” against the Kalishes. This agreement, of which the
      Hospitals were aware in June 2011, constituted a final
      determination of liability by a settlement contemplated by OCGA
      § 44-14-473 (a). To hold that the date the release was executed
      started the one-year clock would, under the circumstances of this
      case, render meaningless the term “settlement” in the statute, a
      result which is not permitted under law. Accordingly, the Hospitals'
      October 2011 action to enforce their liens was time-barred under the
      plain language of the Code section, and the trial court erred by
      denying Geico's motion for summary judgment.

(Footnotes omitted.) Geico, supra, 319 Ga. App. at 744. The Court of Appeals

based its conclusion on law indicating that, “[i]n the absence of a formal release,

such an agreement may be enforced based upon letters prepared by the

attorneys, which memorialize the terms of the agreement.” Id. at 743, citing

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Herring v. Dunning, 213 Ga. App. 695, 697 (446 SE2d 199) (1994).

      As the Court of Appeals recites, an agreement to settle may be enforced

in the absence of a formal release where there is evidence that the terms of the

agreement were sufficiently finalized and agreed upon. This law is necessary to

prevent a party from agreeing to a settlement and later renege on that agreement

prior to the signing of a formal release. That, of course, is not what happened in

this case. To the contrary, the parties negotiated a settlement agreement, and, as

is proper, moved forward to execute the settlement and sign a general release on

October 8, 2010.

      The plain wording of OCGA § 44-14-473 (a) must be applied to the facts

of this particular case, and the statute itself makes clear that the limitation period

begins to run one year from the date of, as is relevant to this case, liability being

finally determined by a settlement or release. In this case, because the settlement

agreement progressed into a final release, as explicitly contemplated by the

parties, we find that the statute of limitation began to run on the date that the

release was executed — October 8, 2010. There is no need to judicially

determine whether and on what date a settlement occurred based on earlier

correspondence, or how any such judicially-determined date factors into the

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requirements of OCGA § 44-14-473. That factual scenario is simply not present

here.

        Judgment reversed. All the Justices concur.

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      NAHMIAS, Justice, concurring.

      I join the Court’s opinion in full, because I believe it reaches the right

result in the particular circumstances of this case. I note, however, that the

statutory provision at issue — the last sentence of OCGA § 44-14-473 (a) — is

difficult to understand and apply. The four events that trigger the one-year

period in which a medical care lienholder can sue “the person liable for the

damages or such person’s insurer” — a “settlement,” a “release,” a “covenant

not to bring an action,” or “a judgment of a court” that “finally determine[s]”

such liability — are not clearly distinct, and indeed more than one of those

events may occur in a single case (like this case). In addition, as Judge Boggs

pointed out when this case was in the Court of Appeals, settlements, releases,

and covenants not to sue are generally means of avoiding rather than

determining legal liability, and the statute may also produce inequitable results

because it does not require anyone to notify the lienholder of the deadline-

triggering event. See Geico Gen. Ins. Co. v. Hosp. Auth. of Clarke County, 319

Ga. App. 741, 744-746 (738 SE2d 325) (2013) (Boggs, J., concurring fully and

specially). If the General Assembly wants OCGA § 44-14-473 (a) to be clearly
understood and correctly and fairly applied, the statute needs to be amended.

      I am authorized to state that Justices Hunstein and Blackwell join in this

concurrence.

                          Decided January 27, 2014.

            Certiorari to the Court of Appeals of Georgia — 319 Ga. App. 741.

            Fain, Major & Brennan, Thomas E. Brennan, James F. Taylor III,

Douglas T. Gibson, for appellants.

            Carlock, Copeland & Stair, Jason W. Hammer, Frederick M. Valz

III, Miles, Patterson, Hansford & Tallant, Jefferson M. Starr, for appellee.

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