Blankenbaker v. Jonovich

SUPREME COURT OF ARIZONA
En Banc

THOMAS E. BLANKENBAKER, D.C., ) Arizona Supreme Court
dba VAX-D MEDICAL CENTERS, an ) No. CV-02-0340-PR
Arizona sole proprietorship, )
) Court of Appeals
Plaintiff- ) Division One
Counterdefendant, Appellant, ) No. 1 CA-CV 01-0379
)
v. ) Maricopa County Superior
) Court
TOMMY JONOVICH, an individual, ) No. CV 01-090180
)
Defendant- ) O P I N I O N
Counterclaimant, Appellee. )
)
__________________________________)

Appeal from the Superior Court of Maricopa County
The Honorable Robert D. Myers, Judge

AFFIRMED IN PART, REVERSED IN PART, REMANDED

Opinion of the Court of Appeals, Division One
203 Ariz. 226, 52 P.2d 795

VACATED

Sanders & Parks, P.C. Phoenix
By Rick N. Bryson
Brett M. Hager
Attorneys for Defendant-Counterclaimant, Appellee

Thomas E. Blankenbaker, D.C. Mesa
In propria persona
Plaintiff-Counterdefendant, Appellant

Law Offices of Raymond J. Slomski, P.C. Phoenix
By Amy G. Langerman
Attorneys for Amicus Curiae Arizona Trial Lawyers Association
Humphrey Law Firm, P.C. Tucson
By Andrew J. Peterson
Marshall Humphrey, III
Ryan S. Andrus
Attorneys for Amicus Curiae Arizona Association of Defense
Counsel

The Cavanagh Law Firm Phoenix
By Joel DeCiancio
Christopher Robbins
Attorneys for Amicus Curiae State Farm Mutual Automobile
Insurance Company
________________________________________________________________

H U R W I T Z, Justice

¶1 We granted review to determine whether the failure to

perfect a health care provider lien pursuant to Arizona Revised

Statutes (“A.R.S.”) section 33-932 (2000) bars an action to

enforce the lien against a patient who has notice of the

provider’s claim. The court of appeals held that the failure to

follow the statutory perfection procedures did not affect the

enforceability of a health care provider lien against a patient,

but rather was relevant only to priority among multiple

lienholders. We today hold that A.R.S. § 33-934 (2000) allows

an action to enforce a health care provider lien only against

those liable to an injured person, not against the injured

person. We further hold that A.R.S. § 33-934 requires, as a

prerequisite to such an enforcement action, that the lien be

perfected in accordance with A.R.S. § 33-932.

2
 I.

¶2 Petitioner Tommy Jonovich was injured in an automobile

accident. In August 1998, he was referred to Thomas E.

Blankenbaker, D.C., by a chiropractor who had previously treated

him unsuccessfully for injuries arising out of the accident.

¶3 Shortly after being referred to Dr. Blankenbaker,

Jonovich and the attorney representing him in the automobile

accident claim signed a form provided by Dr. Blankenbaker

entitled “Medical Records and Doctor’s Lien” (hereafter referred

to as the “Agreement”).1 In the Agreement, Jonovich directed his

1
The Agreement provides, in relevant part:

I do hereby authorize Thomas E. Blankenbaker, D.C. to
furnish you, my attorney, with a full report of his
examination, diagnosis, treatment, prognosis, etc., of
myself in regard to the accident in which I was
involved.

I hereby authorize and direct you, my attorney, to pay
directly to said doctor such sums as may be due and
owing him for medical service rendered me both by
reason of this office and to withhold such sums from
any settlement, judgment, or verdict as may be
necessary to adequately protect said doctor. And I
hereby further give a lien on my case to said doctor
against any and all proceeds of my settlement,
judgment or verdict which may be paid to you, my
attorney, or myself as the result of the injuries for
therewith.

I fully understand that I am directly and fully
responsible to said doctor for all medical bills
submitted by him for services rendered to me and that
this agreement is made solely for said doctor’s
additional protection and in consideration of his
awaiting payment. And I further understand that such

3
attorney to pay Dr. Blankenbaker “such sums as may be due and

owing him for medical service rendered me . . . and to withhold

such sums from any settlement, judgment, or verdict as may be

necessary and adequate to protect said doctor.” The attorney in

turn agreed to “withhold such sums form [sic] any settlement,

judgment, or verdict as may be necessary to adequately protect”

Dr. Blankenbaker. Jonovich also agreed to “give a lien on my

case to said doctor against any and all proceeds of my

settlement.” The Agreement acknowledged that Jonovich was

“directly and fully responsible to said doctor for all medical

bills submitted by him for services rendered to me and that this

agreement is made solely for said doctor’s additional protection

and in consideration of his awaiting payment” and that “such

payment is not contingent on any settlement, judgment, or

verdict by which I may eventually recover said fee.”

¶4 After Jonovich settled his tort claim, Dr.

Blankenbaker demanded payment of $4,161.82. Jonovich disputed

____________________
payment is not contingent on any settlement, judgment,
or verdict by which I may eventually recover said fee.

Dated:_______ Patient Signature ______________________

The undersigned being attorney of record for the above
and agrees to withhold such sums form [sic] any
settlement, judgment, or verdict as may be necessary
to adequately protect said doctor named above.

Dated:_______ Attorney Signature _____________________

4
both the debt and the claimed amount. Dr. Blankenbaker then

filed a complaint in justice court. The one-sentence statement

of the claim in the complaint was simply that Jonovich “has

failed to pay his medical bills”; the complaint sought judgment

in the claimed amount. Jonovich answered, denying any

liability, and also filed a counterclaim seeking a declaratory

judgment that the Agreement was unenforceable because Dr.

Blankenbaker had not complied with the perfection provisions of

the health care provider lien statutes, A.R.S. §§ 33-931 to -936

(2000). Lacking jurisdiction to issue declaratory judgments,

the justice court transferred the action to superior court.

¶5 Jonovich moved for partial summary judgment in the

superior court as to the validity of the Agreement. In

response, Dr. Blankenbaker contended that the Agreement was not

intended to be a statutory health care provider lien, but rather

only an “attorney guarantee contract,” under which he could

recover his medical fees in an action against his patient.

¶6 The superior court granted Jonovich’s motion and

entered judgment pursuant to Arizona Rule of Civil Procedure

54(b) declaring that the “Medical Records and Doctor’s Lien

dated September 1, 1998 and September 8, 1998 is invalid, of no

effect, and unenforceable as a matter of law.” The superior

court also awarded attorneys’ fees to Jonovich under A.R.S. §

5
12-341.01(A) (Supp. 2001).2 The court of appeals reversed,

holding that an unperfected health care provider lien is valid

against a patient who has actual notice of the lien’s existence

and amount. Blankenbaker v. Jonovich, 203 Ariz. 226, 227 ¶ 1,

52 P.3d 795, 796 (App. 2002).

¶7 We granted the petition for review because the proper

interpretation of the health care provider lien statutes is a

matter of statewide importance.3 We have jurisdiction pursuant

to Article 6, Section 5(3) of the Arizona Constitution, Arizona

Rule of Civil Appellate Procedure 23, and A.R.S. § 12-120.24

(2003). Because this case turns on the interpretation of a

statute, we review the court of appeals’ decision de novo. See

Canon Sch. Dist. No. 50 v. W.E.S. Constr. Co., 177 Ariz. 526,

529, 869 P.2d 500, 503 (1994).

2
The superior court also awarded double costs to
Jonovich under Arizona Rule of Civil Procedure 68(d), despite
the fact that its partial summary judgment did not entirely
dispose of Dr. Blankenbaker’s claim against Jonovich.
3
We have received briefs amicus curiae from the Arizona
Trial Lawyers Association, the Arizona Association of Defense
Counsel, and State Farm Mutual Automobile Insurance Company,
urging reversal of the court of appeals’ opinion. Each amicus
argues that the issue presented by this case, and the proper
interpretation of the health care provider lien statutes in
general, has important implications for the settlement of
personal injury cases and the disbursement of the resultant
proceeds.

6
 II.

¶8 Arizona’s statutory scheme for health care provider

liens is set forth in A.R.S. §§ 33-931 through -936. The

starting point is A.R.S. § 33-931(A), which provides, in

relevant part, that

[e]very individual . . . maintaining and operating a
health care institution or providing health care
services in this state . . . is entitled to a lien for
the customary charges for care and treatment or
transportation of an injured person, on all claims of
liability or indemnity . . . accruing to the person to
whom the services are rendered, or to that person’s
legal representative, on account of the injuries that
gave rise to the claims and that required the
services.

¶9 Arizona Revised Statutes § 33-932 governs perfection

of the lien and requires that “[i]n order to perfect a lien

granted by § 33-931,” the health care provider must record a

verified statement with the county recorder in the county where

the provider is located. A.R.S. § 33-932. This statement must

detail, inter alia, the dates of services received, the amounts

claimed for those services, and the names and addresses of all

persons or insurers claimed to be liable for the injuries

necessitating the health care. Id. The filing must occur within

thirty days after the patient has received the services, and

must be served on all persons and insurers named in the

statement. If the statement indicates that the patient’s

7
treatment will be continued, “[b]ills incurred during the

continued period are also subject to the lien.” Id.

¶10 It is uncontested in this case that Dr. Blankenbaker

never recorded the required statement in the office of the

Maricopa County Recorder. The issues before us are whether that

failure to record affects the existence of a statutory lien and,

if such a lien exists, whether Dr. Blankenbaker may enforce the

lien against Jonovich.

III.

¶11 The court of appeals concluded that an unperfected

health care provider lien is valid and enforceable against a

patient with actual notice of the lien. In so holding, the

court relied heavily on its prior opinion in Andrews v.

Samaritan Health System, 201 Ariz. 379, 36 P.3d 57 (App. 2001).

¶12 In Andrews, patients who had received treatment at

various hospitals brought a class action against the hospitals

for a declaratory judgment that the medical liens asserted

against their claims were invalid because the hospitals failed

to perfect the liens in the thirty-day period set forth in

A.R.S. § 33-932. The court of appeals affirmed a summary

judgment in favor of the hospitals. Its opinion relied

primarily on A.R.S. § 33-931(A), which states that a health care

provider “is entitled to a lien,” and § 33-932, which refers to

the “lien granted by § 33-931.” See Andrews, 201 Ariz. at 383 ¶

8
13, 36 P.3d at 61. This language led the court of appeals to

conclude that once the relevant care is provided, no further

action by the health care provider is necessary to create the

lien. Id. at 383 ¶ 14, 36 P.3d at 61 (“We hold that a medical

lien is automatically granted by A.R.S. § 33-931 upon the care

and treatment of a person injured by the negligence of a third

party.”).

¶13 Andrews further concluded that any delay by the

hospitals in recording the liens did not affect the hospitals’

rights to enforce the liens against the patients. Rather,

Andrews held that the recording provisions of A.R.S. § 33-932

were designed “to give notice of medical lien rights and to

determine priority among medical liens.” Andrews, 201 Ariz. at

386 ¶ 33, 36 P.3d at 65. Because there were no competing

creditors in Andrews, and any recovery from the patients’

personal injury claims would therefore either go “to the

plaintiffs or the hospitals,” the court of appeals concluded

that the patients, who had actual notice of the hospitals’

charges, were not prejudiced by the untimely perfection. Id. at

386-87 ¶¶ 36-37, 36 P.3d at 65-66.

¶14 The holding in Andrews that a medical lien arises when

treatment is provided is consistent with the language of A.R.S.

§§ 33-931 and -932 and with decisions in other jurisdictions

interpreting similar health care provider lien statutes. See

9
Andrews, 201 Ariz. at 383 ¶ 13, 36 P.3d at 61 (citing cases);

see also A.R.S. § 33-934 (referring to a lien “given by § 33-

931”). But even if §§ 33-931 and –932 dictate when the lien

arises, they do not address what is required to enforce the

lien. Nor do these two statutory provisions determine against

whom a lien may be enforced.

¶15 These issues are addressed, however, in another

portion of the health care provider lien statutes, A.R.S. § 33-

934. Section 33-934, which was not discussed either in Andrews

or the opinion below, provides, in relevant part, that

[i]f any amount has been or is to be collected by the
injured person or that person’s legal representative
from or on account of the person, firm or corporation
liable for damages by reason of a judgment, settlement
or compromise, the claimant or assignee of the lien or
assignment may enforce the lien or assignment by
action against the person, firm, or corporation liable
for damages. This action shall be commenced and tried
in the county in which the lien or assignment is
filed, unless ordered by the court to be removed to
another county for cause.

(Emphasis added.)

¶16 The section heading to A.R.S. § 33-934 indicates that

the statute governs an “action to enforce [a health care

provider] lien.” See Florez v. Sargeant, 185 Ariz. 521, 524,

917 P.2d 250, 253 (1996) (while section headings are not law,

they may be of use in interpreting statute). Consistent with

its title, § 33-934 sets forth the requirements for an

enforcement action. It provides expressly that such an action

10
must be brought “in the county in which the lien or assignment

is filed.” A.R.S. § 33-934 (emphasis added). Implicit in this

condition is a requirement that the lien be filed with a county

recorder pursuant to the perfection provisions of A.R.S. § 33-

932. Any other interpretation of § 33-934 would effectively

read the relevant language out of the statute. See Champlin v.

Sargeant in and for County of Maricopa, 192 Ariz. 371, 374 ¶ 16,

965 P.2d 763, 766 (1998) (interpreting statutory language

requires that the court give meaning “to each word, phrase,

clause, and sentence within a statute so that no part will be

superfluous, void, contradictory or insignificant”); see also 53

C.J.S. Liens § 31 (1987) (when a statutory remedy is pursued,

all of the provisions of the statute must be strictly complied

with as to the form, time, and manner of the lien’s enforcement)

(citing cases).4

¶17 Moreover, § 33-934 expressly delineates the parties

against whom an enforcement action may be brought: “the

claimant or assignee of the lien or assignment may enforce the

4
While it is possible at first blush to read the
relevant language in A.R.S. § 33-934 as simply a venue
provision, such an interpretation would lead to an anomalous
result. The venue provision would apply only to those who
followed the statutory perfection requirement of § 33-932; those
who failed to do so would not be limited to the county of
recording in filing their suit. See Mail Boxes, etc., U.S.A. v.
Indus. Comm’n of Ariz., 181 Ariz. 119, 122, 888 P.2d 777, 780
(1995) (courts should interpret statutes so as to avoid absurd
results).

11
lien or assignment by action against the person, firm, or

corporation liable for damages.” (Emphasis added.) The

legislature thus did not make the lien enforceable against an

“injured person” (a term used elsewhere in § 33-934), but rather

only against those “liable for damages” on the patient’s

underlying damages claim.5 See Hosp. Auth. of the City of

Augusta v. Boyd, 101 S.E.2d 207, 210 (Ga. Ct. App. 1957)

(holding that a medical lien statute providing that the

lienholder “may enforce said lien by an action against the

person, firm, or corporation liable for such damages,” gave no

right of action to proceed against the patient to whom services

were rendered “but only against those liable to pay the patient

damages”).

¶18 In short, the statute governing enforcement of the

lien provides for an action only against those “liable for

damages,” and only after the lien is “filed” in the county where

suit is to be brought. In the case at hand, Dr. Blankenbaker

brought suit only against the “injured person” — Jonovich — not

against those liable for Jonovich’s claimed damages. And since

5
Of course, a health care provider must establish the
patient’s underlying obligation in order to collect on its lien.
See Matlow v. Matlow, 89 Ariz. 293, 298, 361 P.2d 648, 651
(1961) (“In the absence of an obligation to be secured there can
be no lien.”). Thus, in those cases in which the patient
disputes his obligation to pay the provider, one seeking to
foreclose a lien may also have to proceed against the patient to
establish the existence and amount of any obligation.

12
Dr. Blankenbaker never filed the statement of claim required by

A.R.S. § 33-932, the suit was plainly not brought in the county

in which a lien was “filed.”6 It therefore follows that the

court of appeals erred in concluding that Dr. Blankenbaker could

enforce a health care provider lien against Jonovich in this

action.7 When, as here, a statute “creates a right and also

provides a complete and valid remedy for the right created, the

remedy thereby given is exclusive.” See Valley Drive-In Theatre

Corp. v. Superior Court, 79 Ariz. 396, 400, 291 P.2d 213, 215

(1955); see also Nationwide Mut. Ins. Co. v. Arizona Health Care

Cost Containment Sys., 166 Ariz. 514, 517, 803 P.2d 925, 928

(App. 1990) (“Although Arizona lien statutes are remedial and

are to be liberally construed, their provisions must be strictly

followed.”); HCZ Constr., Inc. v. First Franklin Fin. Corp., 199

Ariz. 361, 18 P.3d 155 (App. 2001) (mechanics’ lien statutes,

which create a right not existing at common law, must be

strictly complied with).

6
Because Dr. Blankenbaker never recorded a lien, we do
not today face the issue of whether “substantial compliance”
with the perfection statute is sufficient to allow enforcement
of a health care provider’s lien. See Andrews, 201 Ariz. at 386
¶ 35, 36 P.3d at 64.
7
We also disapprove of Andrews to the extent that it
holds that a health care provider may enforce its lien directly
against the injured patient.

13
 IV.

¶19 While we base our decision today on the language of

A.R.S. § 33-934, we also note that our holding is quite

consistent with the underlying purpose of the health care

provider lien statutes, which are designed to “lessen the burden

on hospitals and other medical providers imposed by non-paying

accident cases.” LaBombard v. Samaritan Health Servs., 195

Ariz. 543, 548 ¶ 18, 991 P.2d 246, 251 (App. 1998) (internal

citation omitted). The statutes do this by affording providers

a remedy not available in the common law — a lien against “all

claims of liability or indemnity.” The provider can always

proceed, even in the absence of a lien, against the patient for

the value of the services rendered. See Johnson v. Health Care

Auth. of the City of Huntsville, 660 So. 2d 1017, 1019 (Ala. Ct.

Civ. App. 1995) (hospital may sue for recovery of medical fees

in a direct contract action against patient in absence of valid

statutory medical lien); cf. Palmer v. Apperson, 70 Ariz. 35,

40, 215 P.2d 1020, 1023 (1950) (materialman may pursue property

owner in contract action notwithstanding lack of statutory

lien). Thus, there was no pressing need for the legislature to

provide for a statutory lien to be enforced against the patient.8

8
Our legislature did not provide that the lien is
against either the proceeds of the patient’s claim or against
the “recovery,” but rather simply against the “claim” itself.
Compare A.R.S. § 33-931(A) with, e.g., Iowa Code § 582.1 (1992)

14
¶20 Moreover, as a practical matter, the remedy bestowed

on a provider under our statutes makes unnecessary any extension

of the lien to the patient. Under A.R.S. § 33-934, the lien

extends to any amount that “has been or is to be collected by

the injured person.” Thus, as long as a lien has been

appropriately recorded, the “person, firm or corporation liable

for damages by reason of judgment, settlement or compromise” can

be pursued for the charges, even if the liable person has

already transferred funds to the injured person in derogation of

the lien. A.R.S. § 33-934. Those liable to the injured person

are protected by the recording requirements of A.R.S. § 33-932;

under that statute, they will either have actual notice of a

lien because they have been mailed a copy of the statement of

claim, or constructive notice by virtue of the filing in the

office of the county recorder. See A.R.S. § 33-932 (requiring

for all providers other than hospitals that a copy of the

statement of claim be sent by certified mail to all those

“claimed by the injured person . . . to be liable for damages,”

and providing that a recording of a lien by a hospital “shall be

notice to all . . . liable for damages, whether or not they are

named in the claim or lien”).

____________________
(lien on “any recovery or sum had or collected or to be
collected by . . . patient”), and Okla. Stat. tit. 42, § 43
(2001) (lien on “any recovery or sum had or collected or to be
collected by . . . patient”).

15
 V.

¶21 The superior court therefore correctly held that the

Agreement at issue in this case did not create a statutory

health care provider lien enforceable against Jonovich.

However, the judgment of the superior court also broadly

declared that the “Medical Records and Doctor’s Lien dated

September 1, 1998 and September 8, 1998 is invalid, of no

effect, and unenforceable as a matter of law.” To the extent

that this declaratory judgment held the Agreement invalid as a

contract between Dr. Blankenbaker, Jonovich, and Jonovich’s

attorney, we find no support for such a conclusion in the health

care provider lien statutes.

¶22 As we have emphasized above, the lien statutes extend

to health care providers a remedy not available under the common

law — the ability to enforce a lien against those liable to the

patient for damages in order to secure the providers’ customary

charges for care and treatment of an injured person. But

nothing in the statutes suggests that the legislature thereby

intended to restrict any remedy that the provider might have

directly against the patient. See generally Marana Unified Sch.

Dist. No. 6 v. Aetna Cas. & Sur. Co., 144 Ariz. 159, 162, 696

P.2d 711, 714 (App. 1984) (long-standing common law remedies are

not abrogated by statutes unless legislature expresses clear

intention to do so). Nor is there anything in the lien statutes

16
suggesting that the legislature thereby intended to restrict a

provider’s ability to enter into contracts with a patient under

which either the patient or someone other than those “liable for

damages” — such as a lawyer representing the patient — provides

for guarantees or other security with respect to payment of the

providers’ claims. To the extent that the declaratory judgment

in the superior court held that the Agreement here was invalid

simply because it did not create a statutory lien, that judgment

was in error.9

VI.

¶23 For the foregoing reasons, we vacate the opinion of

the court of appeals. We affirm the judgment of the superior

court insofar as it declared that Dr. Blankenbaker does not have

an enforceable statutory health care provider lien against

Jonovich. We reverse the judgment of the superior court to the

extent that it held the Agreement invalid and unenforceable on

other grounds, and to the extent that it awarded attorneys’ fees

and costs to Jonovich. Because Jonovich is not the prevailing

party in this Court, we deny his request for attorneys’ fees.

9
Jonovich does not argue that the Agreement or any of
its provisions are invalid or unenforceable for any other
reason. Neither did Dr. Blankenbaker’s complaint seek to
enforce the Agreement against Jonovich’s attorney, nor seek to
enforce a lien or security interest against the proceeds of the
settlement in the hands of the attorney or Jonovich.

17
This case is remanded to the superior court for further

proceedings consistent with this opinion.

____
Andrew D. Hurwitz, Justice

CONCURRING:

_
Charles E. Jones, Chief Justice

_
Ruth V. McGregor, Vice Chief Justice

_
Rebecca White Berch, Justice

_
Michael D. Ryan, Justice

18