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
Blankenbaker v. Jonovich
Court: Arizona Supreme Court
Date filed: 2003-07-02
Citations: 71 P.3d 910, 205 Ariz. 383
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