Kratz v. Kratz

SIMMS, Justice.

Title 42 O.S.1991 § 43 provides that a hospital which furnishes medical care to a peiv son injured in an accident shall have a lien for the amount of its charges on the proceeds of the patient’s recovery from a claim asserted “against another for damages” suffered.1 The question presented in this case is whether the lien can be enforced against uninsured motorist proceeds paid by the patient’s own insurer. We find it cannot.

Dollie Kratz was seriously injured while she was a passenger in an automobile driven by her husband, James. She received care and treatment from Appellee Jane Phillips Memorial Medical Center and incurred expenses of $17,775 for that treatment. The hospital filed its lien for that amount and gave the required notice pursuant to 42 O.S. 1991, §§ 43, 44.

Plaintiff filed a claim with her own insurer, Prudential General, but the parties were unable to reach a settlement. Plaintiff then filed suit against Prudential and James Kratz seeking to recover under her liability coverage, but she was prohibited from doing so because of a household exclusion clause. Plaintiff’s recovery was limited to the uninsured motorist portion of the policy and she and Prudential settled for $30,000, the policy limits of the uninsured motorist coverage.

The trial court enforced the hospital’s lien" against the settlement proceeds, rejecting appellant’s arguments that the statute was intended to apply only to damages recovered from a tortfeasor or his insurer and did not extend to her uninsured motorist payment which was a benefit of her private contractual arrangement with her insurer obtained in an action which sounds in contract, not tort.

The Court of Appeals, over a vigorous and well-reasoned dissent, affirmed the ruling of the trial court in favor of the hospital. The court found the statutory language was clear and unambiguous and would apply to funds received by an injured party from a source other than the tortfeasor, even her own insurer. We agree with appellant and the view of the dissenting opinion that the statute is not clear regarding who is meant to be included as “another”. It is uncertain and ambiguous as to whether uninsured motorist benefits received from a party’s own insurer are “damages” recovered from a “claim against another”.

Appellee hospital concedes that appellant’s recovery was a benefit of her contract, but it contends that there is no basis in § 43 to infer that appellant’s uninsured motorist pro*755ceeds should be treated any differently than if that same amount had been recovered under the liability portion of her policy which was appellant’s initial claim. Hospital’s argument that the statute is not ambiguous and that “damages” explicitly includes these contractual benefits in “any recovery or sum had or collected to be collected by [a] patient” only underscores the ambiguity on this point. Title 28 O.S.1991 § 3 sets out the right to damages and the definition of damages as follows:

“Any person who suffers detriment from the unlawful act or omission of another, may recover from the person in fault a compensation therefor in money, which is called damages.”

Benefit in an insurance context is defined in Black’s Law Dictionary, Fifth Edition, as “[fjinancial assistance received in time of sickness, disability, unemployment, etc., either from insurance or public programs ...”

We have recognized that uninsured motorist coverage is a carrier’s direct promise to its insured to pay the insured for a loss, rather than a promise to its insured to pay a third party; it is “first-party coverage” like collision insurance, not “third-party coverage” like public liability insurance. The recovery of the insured is based on the terms of the policy and the action is one in contract. Uptegraft v. Home Ins. Co., 662 P.2d 681 (Okl.1983).

The parties believe this is a case of first impression in Oklahoma. They have called our attention to several decisions from other jurisdictions and rely on them as supportive of their respective positions. We do not find them so, however, because the statutory language involved in those cases is significantly different from the language before us in § 43.

In Storey v. University of New Mexico Hospital, 105 N.M. 205, 730 P.2d 1187 (1986), the court found that a hospital lien could be enforced against the proceeds of an uninsured motorist policy but the language of that statute specifically included “[a]ny person, firm or corporation, including an insurance carrier, making any payment to a patient ...” Likewise in Dade County v. Pavon, 266 So.2d 94 (Fla.App.D3, 1972), the court held that a hospital would be entitled to a lien on uninsured motorist proceeds under a statute which provided a hen “upon any and all causes of action, suits, claims ...” In Members Mut. Ins. Co. v. Hermann Hosp., 664 S.W.2d 325 (Tex.1984), a statute which expressly excluded all insurance proceeds other than “public liability insurance” was held not to subject uninsured motorist proceeds to a hospital hen.

This is not a case of first impression in Oklahoma, however. There is an unpublished opinion, Hillcrest Medical Center, Inc. & Okmulgee Memorial Hospital Authority v. Webber, (OM.App.1983), No. 57,169,2 in which a hospital hen was enforced against uninsured motorist proceeds. The Court of Appeals, Division No. 1, found it would be “illogical” to allow a hospital hen to attach to liability insurance funds but not uninsured motorist funds because the insurance coverages were, in the court’s opinion, intended to protect against the same risks. This Court granted certiorari to the Court of Appeals to review the opinion but certiorari was subsequently recalled as improvidently granted and this Court ordered the Court of Appeals opinion withdrawn from pubhcation. 55 OBJ 2256. There is also a recent pubhshed decision of the Court of Appeals, Woods v. Baptist Medical Center of Okl., 890 P.2d 1367 (Okl.App.1995), enforcing a hospital hen against funds recovered from uninsured motorist coverage which was based in large part on the court’s behef in the soundness of the reasoning in Hillcrest Medical Center and Okmulgee Memorial Hospital v. Webber, supra.

When words and phrases of a statute are not exphcit, the Court must determine their meaning in a way that produces a reasonable result and promotes the general purpose for which they were enacted. AMF Tubescope Company v. Hatchet, 547 P.2d 374 (Okl.1974). It is axiomatic that the cardinal rule of statutory construction is to ascertain the intent of the legislature and if possible to give effect to ah its provisions.

*756The obvious purpose of the hospital hen statute is to encourage hospitals to care for accident victims who might otherwise be non-paying patients. We recognized in Vinzant v. Hillcrest Med. Center, 609 P.2d 1274 (Okl.1989) that the legislatures of several states have enacted hospital lien statutes in an attempt to lessen the burden imposed on hospitals by non-paying patients by giving hospitals hens on any recovery a patient might obtain from a tortfeasor. See also, Annot. Construction, Operation and Effect of Statute Giving Hospital Lien Against Recovery from Tortfeasor Causing Patients Injury. 16 ALR 5th 262.

Although the purpose of the statute is to assure hospitals of compensation for their treatment of emergency patients, we are not free to “read in” the inclusion of funds which are not fairly embraced by the terms of the statute. We have recognized that there is no basis for a hospital hen in the absence of statute. Vinzant v. Hillcrest Med. Center, supra.

This Court must strictly construe statutes creating hens. Liens are property rights and it is not the function of the courts to create them from a sense of justice in a particular ease. Young v. J.A. Young Mach. & Supply Co., 224 P.2d 971 (Okl.1950). Liens can be created either by contract or by law. 42 O.S.1991 § 6. A statutory Hen such as the hospital hen at issue stands in derogation of the common law and must be strictly construed. A hen that is not provided by the clear language of the statute cannot be created by judicial fiat, for the words of the statute are the measure of the right and the remedy. A court cannot create a hen out of a sense of fairness if the terms of the statute are found too narrow and have not been met. Riffe Petroleum C. v. Great Nat. Corp., Inc., 614 P.2d 576 (Okl.1980); Harriss v. Parks, 71 Okl. 197, 187 P. 470 (1920); Interurban Construction Co. v. Central State Bank of Kiefer, 76 Okl. 281, 184 P. 905 (1909).

The title to an Act is a valuable aid in its construction and may be considered in determining legislative intent. The Title of the Act, Laws 1969 C. 231, provides:

“An Act relating to hens; creating hen against judgment in personal injury actions in favor of hospital rendering services to injured party; providing for exceptions; making hen effective only upon filing of notice; and declaring an emergency.” (Emphasis added)

The title explicitly restricts the reach of the statutory hen to proceeds recovered in a personal injury action from a tortfeasor or his insurer. This narrowed scope of the people who comprise the class of “another” is determinative of the question before us because the constitution has made the title of an act, as restricted by the legislature, the index to the legislature’s intention governing operation of the provision of the act. In view of Art. 5, § 57, Okl. Const., which requires the subject of a legislative act to be clearly expressed in its title, the legislature is bound by its selection of a restrictive title and it has the effect of limiting the text of an act. Caywood v. Caywood, 541 P.2d 188 (Okl.1915); Poafpybitty v. Skelly Oil Co., 394 P.2d 515 (Okl.1964).

The notice requirements of § 44 3 which provide for notice only to a tortfeasor and his insurer reflect that legislative intention. So too, does the attorney’s hen and its established superiority over the hospital hen set out in § 43. The court noted in Vinzant v. Hillcrest Med. Center, supra, that superiority was legislative recognition that it is the skill and effort of the lawyer in a personal injury case which results in there being a recovery for the patient and the hospital, and rests on *757the fact that for lawyers a contingent fee is the “customary arrangement in negligence cases.” At 1277.

The decision in Hillcrest Medical Center and Okmulgee Memorial Hospital Trust v. Webber, No. 57,169 and Woods v. Baptist Medical Center of Okl., 890 P.2d 1367 (Okl.App.1995) are expressly overruled.

The opinion of the Court of Appeals in the instant matter is vacated. The decision of the trial court is reversed and remanded with instructions to enter judgment denying the lien claim of Jane Phillips Memorial Medical Center.

ALMA WILSON, C.J., KAUGER, V.C.J., and SIMMS, HARGRAVE, SUMMERS and WATT, JJ., concur. OPALA, J., dissents. HODGES and LAVENDER, JJ., dissent and join OPAL A, J.

. The statute provides: "Every hospital in the State of Oklahoma, which shall furnish emergency medical or other service to any patient injured by reason of an accident not covered by the Workers' Compensation Act, shall, if such injured party shall assert or maintain a claim against another for damages on account of such injuries, have a lien upon that part going or belonging to such patient of any recovery or sum had or collected or to be collected by such patient, or by his heirs, personal representatives or next of kin in the case of his death, whether by judgment or by settlement or compromise to the amount of the reasonable and necessary charges of such hospital for the treatment, care and maintenance of such patient in such hospital up to the date of payment of such damages: Provided, however, that this lien shall be inferior to any lien or claim of any attorney or attorneys for handling the claim on behalf of such patient, his heirs or personal representatives; provided further, that the lien herein set forth shall not be applied or considered valid against any claim for amounts due under the Workers’ Compensation Act in this state.”

. A discussion of the decision appears at Annot. 16 ALR 5 303,305,389.

. The relevant portions of § 44, supra, provide: “No such lien shall be effective unless a written notice containing an itemized statement of the amount claimed, the name and address of the injured person, ... and the name of the person or persons, firm or firms, corporation or corporations alleged to be liable to the injured party for the injuries received, shall be filed ...; nor unless the hospital shall also send by registered or certified mail postage prepaid, a copy of such notice with a statement of the date of filing thereof to the person or persons, firm or firms, corporation or corporations alleged to be liable to the injured party for the injuries sustained ... his attorneys or legal representatives ... Such hospital shall mail a copy of such notice to any insurance carrier which has insured such person, firm or corporation against such liability, if the name and address shall be known ..."