Victory Adds up to Loss in High Court Case

7/1/1997 - Chicago Lawyer

Emergency medical personnel are called to the scene of a head-on automobile accident. A driven is taken to a hospital emergency room. The person's injuries are so severe he requires hospitalization, then physical therapy.

The plaintiff decides to sue the driver of the other car who crossed into his lane. He settles for $9,000. Assume further that the plaintiff incurred a hospital bill for $3,000, a doctor's bill for $3,000, and a physical therapist's bill for $3,000. He should these liens be adjudicated?

This is akin to the scenario presented by Illinois Supreme Court Justice Moses Harrison in his dissent in the recent case of Burrell v. Southern Truss, 1997 WL 1987382 (decided April 24, 1997). Under the majority's decision in that case, the plaintiff stands to walk away with nothing from that settlement, despite being innocently injured and hiring an attorney to pursue a cause of action.

The majority of the Illinois Supreme Court has illogically held that each of the medical provider lien acts may not individually amount to more than one-third of a settlement, but collectively they may, even if the lienholders' total recovery exceeds one-third of the settlement.

Under the facts presented above, that could mean that after an attorney is paid a one-third fee of $3,000, the physical therapist would receive $3,000, the hospital would receive $3,000 and the doctor would receive nothing from this settlement. The plaintiff also would recover nothing. What would this plaintiff have to lose by proceeding to trial instead?

In so holding, the Supreme Court reversed the Fifth District Appellate Court in Burrell, 281 Ill.App.3d 553, 667 N.E.2d 172 (5th Dist. 1996), where the court held that the total of all of the liens asserted by all health care providers under the various statutes authorizing liens may not exceed one-third of the patient's recovery.

In liberally construing the statute to effectuate the intent of the General Assembly, the appellate court found that such an interpretation would guarantee the plaintiff to walk away with at least a third of the settlement, after paying the health care providers and the attorney who obtained the settlement.

Illinois currently has seven classes of health care providers that are endowed with lien rights: the Physicians Lien Act (770 ILCS 80/6 et. seq.), the Dentists Lien Act (770 ILCS 20/6 et. seq.), the Physical Therapist Lien Act (770 ILCS 75/7 et. seq.), the Clinical Psychologists Lien Act (770 ILCS 10/6 et. seq.), the Emergency Medical Services Personnel Lien Act (770 ILCS 22/30 et. seq.), the Hospital Lien Act (770 ILCS 35/0.01 et. seq.) and the Home Health Care Agency Lien Act (770 ILCS 10/0.01 et. seq.).

All of these acts contain the language that the total amount of all liens hereunder" shall not exceed one-third of the sum paid or due to the injured person on the claim or right of action. That phrase arguably can refer to all liens governed under Chapter 770 of the Illinois Compiled Statutes. The appellate court was quick to point out that it is proper for the court to compare statutes on related subjects, even though not strictly in pari materia. Given this, any other interpretation would result in confusion as well as consequences which the legislature may not have contemplated . . . . . . ," the appellate court wrote. 667 N.E.2d at 175.

It is significant that even if a health care provider were not fully compensated under this statute, the plaintiff's debt is not extinguished. The plaintiff still remains legally obligated for the balance of any bill that remains after satisfaction of the lien. Therefore, the lienholder may attempt to collect any balance due from the plaintiff after a settlement is effectuated.

A lien is a charge upon property, either real or personal, for the payment or discharge of a particular debt or duty in priority to the general debts or duties of the owner. The health care provider liens are creatures of statute designed to secure the payment of debts and other obligations.

Therefore, when such a provider perfects its lien, it becomes a secured creditor under the laws of the state. The advantage is that a discharge in bankruptcy, being personal of the bankrupt entity, does not act as a release of liens in property owed to him.

Justice Harrison also raises the disparate result that if two doctors were to assert a lien under the facts above, the majority's approach would insure that the therapist would receive the full $3,000, yet the physicians would have to accept a reduced amount.

In doing so, it sets the stage for inequities that the legislature could not have intended and failed to recognize when it debated and enacted the law," Justice Harrison writes. A practice and equitable application of the statute must be enforced. I agree.

Perhaps the legislature will see the injustice that a strict interpretation of the law creates and will more specifically spell out its intent in amendments to these lien statutes. To do so would be the only fair thing to do for the injured.