IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 99-30040
JOHNNY WADE HOWE,
Individually and on behalf of Courtney Howe,
Plaintiff-Intervenor Defendant-
Appellant
VERSUS
SCOTTSDALE INSURANCE CO.; ET AL.
Defendants
LOUISIANA STATE UNIVERSITY MEDICAL CENTER
Intervenor Plaintiff-Appellee
Appeal from the United States District Court
for the Western District of Louisiana
March 2, 2000
Before HIGGINBOTHAM and SMITH, Judge.*
Circuit Judges, and FALLON, District
1
ELDON E. FALLON, District Judge: On September 22, 1998, LSUMC moved
to intervene in Howe's suit because it
Johnny Wade Howe, on behalf of himself claimed an interest in the proceeds. The
and his daughter Courtney Howe (hereinafter district court granted the motion, and
collectively referred to as "Howe"), sued the LSUMC filed a complaint of intervention on
Louisiana State University Medical Center September 29, 1998 asserting its medical lien
("LSUMC") for a portion of their legal fees privilege over the deposited funds for the
and costs of recovering damages from the amount of Howe's medical bills.
defendants, Scottsdale Insurance Company On October 8, 1998, LSUMC filed a
("Scottsdale"), General Motors Corporation, motion for summary judgment seeking
and Gordon Ira Schlafman. LSUMC, which $22,035.49, the full amount of its medical
treated Howe for injuries suffered in an lien, without any pro-rata reduction for the
automobile accident with Mr. Schlafman, attorney's fees and costs incurred by the
argues that it is entitled to a full plaintiff. Howe opposed the motion arguing
reimbursement from any damage award for that LSUMC, as partial subrogee and/or co-
the services it rendered without any owner, is responsible for its share of the
reduction for a proportionate share of expenses incurred in securing damages from
Howe's legal fees and costs. Because the the defendants.
district court correctly granted summary On December 7, 1998, the district court
judgment for LSUMC, we affirm. granted LSUMC's motion for summary
judgment finding that LSUMC did not owe
I. any portion of attorney's fees or costs to the
Johnny Wade Howe and his young plaintiff and was entitled to recover the
daughter Courtney Howe were injured in an amount of its medical lien. Plaintiff
automobile accident with Gordon Ira subsequently appealed.
Schlafman on October 27, 1995. Following
the accident, they were taken to LSUMC in II.
Shreveport, Louisiana for treatment. The Louisiana provides two statutory
cost of treatment totaled $22,035.49. vehicles for its charity hospitals to recover
On February 26, 1996, Howe filed suit the costs of treating patients injured by third
against the defendants in the First Judicial parties.
District Court in Caddo Parish, Louisiana to First, the Louisiana legislature created a
recover damages suffered from the accident. medical lien privilege which provides:
The defendants removed the case on the
basis of diversity jurisdiction to the Western A health care provider, hospital, or
District of Louisiana on March 4, 1996. ambulance service that furnishes
On June 12, 1998, Scottsdale, services or supplies to any injured
Schlafman's insurer, deposited $100,000, the person shall have a privilege for the
limit of its insurance policy, into the Court's reasonable charges or fees of such
registry. health care provider, hospital, or
ambulance service on the net amount
payable to the injured person, his
*
District Judge of the Eastern heirs, or legal representatives, out of
District of Louisiana, sitting by designation. the total amount of any recovery or
2
sum had, collected, or to be share of Howe's legal costs.
collected, whether by judgment LSUMC insists that it did not exercise its
or by settlement or compromise, subrogation rights in this case. Rather,
from another person on account LSUMC asserted its medical lien privilege
of such injuries . . . . The pursuant to La. R.S. § 9:4752 and therefore
privilege of any attorney shall does not owe Howe for his legal costs.
have precedence over the
privilege created by this Section. III.
The substantive law of this case is the
La. Rev. Stat. Ann. § 9:4752 (West 1999). law of Louisiana. See Erie R. Co. v.
Tompkins, 304 U.S. 64 (1938). The issue is
A charity hospital such as the LSUMC whether Louisiana law requires an
may also intervene in suits brought by the apportionment of recovery costs between
patient/plaintiff it treats. LSUMC and the appellants. We review this
issue de novo. See Labiche v. Legal Sec.
Where a patient in any state Life Ins. Co., 31 F.3d 350, 351 (5th Cir.
supported or veterans administration 1994). To determine Louisiana law on the
hospital in the state has been injured apportionment of recovery costs, this Court
by the negligence of another person should first look to final decisions of the
other than his employer . . . and has a Louisiana Supreme Court. Id.
right of action for the recovery of If the Louisiana Supreme Court has not
compensatory damages against that ruled on this issue, then this Court must
person, the department . . . shall be make an "Erie guess" and "determine as best
subrogated to the right of action to it can" what the Louisiana Supreme Court
the extent of reasonable charges for would decide. Krieser v. Hobbs, 166 F.3d
services rendered to the patient, in 736, 738 (5th Cir. 1999); id. (quoting
accordance with like charges in other Transcontinental Gas Pipe Line Corp. v.
first class hospitals, including Transportation Ins. Co., 953 F.2d 985, 988
physicians' and surgeons' fees. (5th Cir. 1992)).
In making an Erie guess in the absence of
Id. § 46:7. The statute further explains that a ruling from the state's highest court, this
"[a]ll proceedings for the recovery of any Court may look to the decisions of
charges or fees due any charity hospital of intermediate appellate state courts for
this state . . . may be presented in any court guidance. See Matheny v. Glen Falls Ins.
of this state . . . in a direct action or by Co., 152 F.3d 348, 354 (5th Cir. 1998).
intervention, or by third opposition." Id. § Intermediate appellate courts of Louisiana
46:11. are "a datum for ascertaining state law which
Howe contends that this statutory is not to be disregarded by a federal court
framework makes LSUMC a legal subrogee unless it is convinced by other persuasive
or co-owner of the cause of action. Because data that the highest court of the state would
LSUMC could have acted directly or decide otherwise." Labiche, 31 F.3d at 351
indirectly as co-owner of a cause of action (quoting Commissioner v. Estate of Bosch,
under La. R.S. § 46:6, et seq., Howe argues 387 U.S. 456, 465 (1967)).
that LSUMC should be responsible for its
3
A. explains that this Court should extend the
With these principles in mind, we turn to co-ownership principles of Moody beyond
Louisiana jurisprudence. The Louisiana the worker's compensation arena because the
Supreme Court has not ruled on the issue of Louisiana Supreme Court has already applied
whether charity hospitals are required to Moody to the case of an insurer. See
contribute toward its patients' costs of Barreca v. Cobb, 668 So. 2d 1129 (La.
recovering damages from tortfeasors. The 1996) (holding health insurer responsible for
Court most closely addressed this issue of legal costs of plaintiff's recovery). Appellant
cost-sharing in Moody v. Arabie when it further contends that the principles of equity
considered the apportionment of legal costs and unjust enrichment require LSUMC to
in a workers' compensation suit. See 498 share in the costs of obtaining a recovery
So. 2d 1081 (La. 1986). because La. R.S. § 9:4752 provides LSUMC
In Moody, an injured worker who had with a right to claim a portion of Howe's
received worker's compensation benefits recovery.
brought suit against a third party tortfeasor. Appellee responds that Moody and its
See id. at 1083. The worker's compensation progeny are not applicable to LSUMC
carrier for the employer intervened to because it is not a co-owner of a cause of
recover the amount of compensation paid to action against a tortfeasor. Therefore, the
the worker. See id. The Court granted the co-ownership responsibilities of Moody
recoupment by the worker's compensation should not be applied to it.
carrier, but held that the carrier was Howe's reliance on Barreca is misplaced.
obligated to pay a portion of the injured In Barreca, the Louisiana Supreme Court
worker's recovery costs. See id. applied the rationale of Moody to a health
The Court concluded that the employer insurer because the insurer had a provision in
and worker held co-ownership over a its policy granting it "the right to assert the
property right to recover damages from a actions and rights of the plaintiff against the
third party. See id. at 1085. According to a tortfeasor." Id. at 1131. Because the Court
theory of co-ownership, "each co-owner is found that the insurer was contractually
responsible for his proportionate part of subrogated to the plaintiff and therefore a
reasonable and necessary expenses and legal co-owner of the cause of action, it held the
services that accrue to his benefit." Id. The insurer responsible for a proportionate share
costs of recovering from the third party of the recovery costs. See id. at 1132. In
tortfeasor, therefore, "are to apportioned the present case, however, no explicit
between the worker and the employer agreement or statute makes LSUMC the
according to their interests in the recovery." subrogee and/or co-owner of Howe's cause
Id. at 1086. of action.
Appellant argues that the cost-sharing Because the Louisiana Supreme Court
rationale of Moody should apply to the has not spoken directly on whether Moody
present case because La. R.S. 46-6, et seq. should be extended to require charity
makes LSUMC the co-owner of appellant's hospitals seeking compensation for medical
cause of action against a tortfeasor. As a co- services to pay a share of a plaintiff's
owner of a cause of action, LSUMC should attorney fees and costs, we must make our
be responsible under Moody for a portion of best Erie guess as to how the Louisiana
the appellant's costs of recovery. Howe Supreme Court would decide this issue. The
4
role of this court is not "to create or modify charity hospital which has no independent
state law, rather only to predict it." St. Paul right to seeks medical expenses from a
Fire & Marine v. Convalescent Services, tortfeasor), writ denied, Charity Hosp. of
193 F.3d 340, 345 (5th Cir. 1999). Because Louisiana v. Band, 600 So. 2d 645 (La.
there is no Louisiana Supreme Court 1992).
precedent on point, we seek guidance by We cannot disregard a plethora of
looking to the precedents established by precedent provided by the intermediate
intermediate state appellate courts. See appellate courts of Louisiana when the
Labiche, 31 F.3d at 351. appellant offers nothing to suggest why the
Louisiana Supreme Court would decide this
B. case differently. Accordingly, we make an
Four of the five intermediate appellate Erie guess that the charity hospitals of
courts in Louisiana have refused to extend Louisiana would not be required to
Moody to charity hospitals and have held contribute to the costs of recovering from a
that charity hospitals are not responsible for tortfeasor by the Louisiana Supreme Court.
the costs of recovering damages from third Therefore, we find that the district court
party tortfeasors. See Mena v. Muhleisen correctly granted summary judgment for
Properties, 652 So. 2d 65, 69 (La. Ct. App. LSUMC and affirm the judgement.
5 Cir. 1995) (holding that a charity hospital
seeking to enforce its medical lien privilege AFFIRMED.
pursuant to La. R.S. § 9:4752 is not required
to contribute to the costs of an injured
person's recovery), writ denied, Mena v.
Muhleisen Properties, 653 So. 2d 592 (La.
1995); Nicholes v. St. Helena Parish Police
Jury, 604 So. 2d 1023, 1034, (La. Ct. App.
1 Cir. 1992) (refusing to apply Moody
because specific statutes and not the general
law of co-ownership govern the relations of
a plaintiff and a charity hospital), writ
denied, Nicholes v. St. Helena Parish Police
Jury, 605 So. 2d 1378 (La. 1992); Moore v.
State for Louisiana State Univ. Medical
Ctr., 596 So. 2d 293, 296 (La. Ct. App. 3
Cir. 1992) (holding that LSUMC does not
co-own a cause of action against a tortfeasor
when it exercises its privilege under La. R.S.
§ 9:4752 and therefore is not obligated to
pay a portion of recovery costs), writ denied,
Moore v. State for Louisiana State Univ.
Medical Ctr., 600 So. 2d 667 (La. 1992);
Charity Hosp. of Louisiana v. Band 593 So.
2d 1392, 1394 (La. Ct. App. 4 Cir. 1992)
(distinguishing Moody from the case of a
5