ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLE:
DANIEL S. TANKERSLEY CHRISTINE M. STACH
Winamac, Indiana SUSAN E. TRENT
DENNIS F. DYKHUIZEN
Rothberg Logan & Warsco LLP
Fort Wayne, Indiana
IN THE
SUPREME COURT OF INDIANA
KEVIN C. TANKERSLEY, )
)
Appellant (Defendant below), ) Supreme Court Cause No.
) 02S03-0207-CV-00396
v. )
) Court of Appeals Cause No.
PARKVIEW HOSPITAL, INC., ) 02A03-0106-CV-184
)
Appellee (Plaintiff below). )
APPEAL FROM THE ALLEN SUPERIOR COURT
The Honorable Daniel G. Heath, Judge
Cause No. 02D01-0002-CP-318
June 30, 2003
SHEPARD, Chief Justice.
The Hospital Lien Act requires hospitals to place an attorney on
notice that a lien has been filed for services rendered. This case
presents the question whether such a lien, perfected as to a patient’s
original lawyer, is effective against a subsequent lawyer who did not
receive actual notice of it and distributes settlement funds without paying
the hospital. We find that it is.
Facts and Procedural History
Walter Phillips was injured in an automobile accident and received
treatment at Parkview Hospital from May 16, 1998, to June 4, 1998. While
hospitalized, Phillips hired the law firm of Glaser & Ebbs where Tim Isaacs
handled the personal injury claim. Isaacs later informed Phillips that he
might not be able to handle the case because of a conflict of interest.
Phillips incurred some $39,000 in medical expenses while at Parkview.
Parkview filed a claim for payment with Sagamore Insurance Company, which
was denied outright.[1] On July 2, 1998, Parkview Hospital then filed a
hospital lien in the Allen County Recorder’s Office against Phillips for
outstanding unpaid bills. Parkview served Phillips, his wife, another
person involved in the accident, the tortfeasor and his insurance company,
and attorney Isaacs, and it mailed a copy of the lien to the insurance
company, all on July 6th. (Appellant App. at 119, 150-51.)
Unbeknownst to Parkview, Phillips had changed lawyers in the meantime.
He signed a fee agreement with attorney Kevin Tankersley on July 1, 1998.
By July 27th, Parkview’s attorneys had notice that Isaacs was no longer
Phillips’ lawyer.
Tankersley requested a copy of Phillips’ personal injury file from
Isaacs. Tankersley later sent a second request for Phillips’ file and
learned that Isaacs was no longer employed at Glaser and Ebbs. Another
attorney, Gregg Smith, agreed to forward the file to Tankersley. Smith
sent portions of the file and later informed Tankersley that he was still
collecting information to send, but never sent the complete file.
Despite repeated attempts, Tankersley never recovered the entire file.
The portion of the file that Tankersley received did not contain a notice
of the lien. Since he asserted that he did not know of the hospital lien
statute, Tankersley did not research the Allen County Recorder’s Office for
any outstanding liens.
On July 23, 1999, Tankersley settled Phillips’ personal injury claim
against the tortfeasor with Mid-Century Insurance Company for $35,000. The
proceeds went to Tankersley, who retained his contingency fee of $8,000 and
distributed the remainder to Phillips.
The hospital lien was not paid, and Phillips had outstanding medical
bills that exceeded $80,000. At the time of remittance, Tankersley did not
have actual knowledge of the hospital lien. Parkview initiated suit
against Tankersley, Phillips, and the insurance company. Phillips
eventually discharged his debt through bankruptcy.
Mid-Century settled with Parkview for $15,000 and was dismissed from
the action. The trial court subsequently granted Parkview’s motion for
partial summary judgment against attorney Tankersley on the issue of
liability. The Court of Appeals reversed. It held that Parkview failed to
perfect its lien, and Tankersley did not have actual or constructive notice
of the lien. See Tankersley v. Parkview Hospital, 761 N.E.2d 886, 890-91
(Ind. Ct. App. 2002). It reasoned the hospital lien places the burden and
the risk of loss on the hospital, not the attorney, to ensure the lien is
perfected. See id. at 890. We granted transfer.
Standard of Review. When reviewing a grant of summary judgment, we use
the same standard as the trial court: whether the pleadings and evidence
demonstrate that there are no genuine issues of material fact and that the
moving party is entitled to judgment as a matter of law. Ambassador Fin.
Servs. v. Indiana Nat’l Bank, 605 N.E.2d 746 (Ind. 1992); Ind. Trial R.
56(C). We construe the pleadings, affidavits, and designated materials in
a light most favorable to the non-movant, Miller by Miller v. Memorial
Hospital of South Bend, Inc., 679 N.E.2d 1329 (Ind. 1997), and give careful
scrutiny to assure that the losing party is not improperly prevented from
having its day in court. Landmark Health Care Assoc. L.P. v. Bradbury, 671
N.E.2d 113 (Ind. 1996). The party moving for summary judgment must
shoulder the burden of establishing the lack of a material factual issue.
Cowe v. Forum Group Inc., 575 N.E.2d 630 (Ind. 1991).
Indiana Hospital Liens and Personal Liability
The Hospital Lien Act affords a hospital the right to impose a lien
against any settlement paid to a patient or to cover charges for treatment
rendered to a patient. Ind. Code Ann. § 32-8-26-3 (Michie 1995).[2] To
perfect the lien, the hospital must file a statement containing the
patient’s name, dates of treatment, amount of the claim, and the names and
addresses of one who is claimed by the patient or the patient’s legal
representative who will be liable for damages that arise from the injury in
the county where the hospital is located. Ind. Code Ann. § 32-8-26-4(a)
(Michie 1995). The code further provides:
(b) Within ten (10) days from the filing of the statement, the
hospital shall
send a copy by registered mail, postage prepaid:
(1) to each person claimed to be liable because of the illness or
injury at the
address given in the statement;
(2) to the attorney representing the patient if the name of the
attorney is
known or with reasonable diligence could be discovered by the
hospital; and
(3) to the department of insurance as notice to insurance companies
doing
business in Indiana.
Ind. Code Ann. § 32-8-26-4(b) (emphasis added).
We properly subject a de novo analysis of review to questions of law
and owe no deference to the trial court’s determinations of such questions.
Anthem Insurance Companies, Inc. v. Tenet Healthcare Corporation, 730
N.E.2d 1227 (Ind. 2000). An unambiguous statute must be held to mean what
it plainly expresses, and its plain and obvious meaning may not be enlarged
or restricted. Indiana Department of State Revenue v. Horizon Bancorp, 644
N.E.2d 870 (Ind. 1994). Nothing may be read into the statute that is not
within manifest intention of the legislature as gathered from the statute
itself. Id.
The underlying purpose of the act is to “[e]nsure that hospitals are
compensated for their services.” National Insurance Association v.
Parkview Memorial Hospital, 590 N.E.2d 1141, 1144 (Ind. Ct. App. 1992).
Where the settlement is insufficient to pay all interested parties,
however, the statute provides that attorney fees will be paid first and the
liens “must be reduced on a pro rata basis to the extent that will permit
the patient to receive twenty percent (20%) of the original settlement
proceeds of the settlement amount.” Community Hospital v. Carlisle, 648
N.E.2d 363, 365 (Ind. Ct. App. 1995).
Another purpose of the Hospital Lien Act is to provide notice of the
lien to attorneys. Stephens v. Parkview, 745 N.E.2d 262, 266 (Ind. Ct.
App. 2001). Tankersley contends that an attorney could not be held
personally liable for violating the Hospital Lien Statute. He further
states that if an attorney is held liable, the hospital lien is inferior to
all claims for attorney fees under Ind. Code Ann. § 32-8-26-2, and the
patient must receive at least twenty percent (20%) of the settlement under
Ind. Code Ann. § 32-8-26-3. Tankersley supports this argument with
Carlisle, 648 N.E.2d at 365, in which the Court of Appeals observed that
the effort of a claimant’s lawyer frequently benefits the hospital. The
hospital in Carlisle had argued that it should be paid in full before the
lawyer received fees. The Court of Appeals held that the hospital’s lien
was subject to the share of the attorney’s fees.
Just as the hospital was wrong in contending that all of its debt got
paid first, Tankersley is wrong that a holder of the funds subject to a
hospital lien may dispense them without regard to the lien. As Phillips’
legal representative, Tankersley was responsible to pay the lien before
dispensing any funds to Phillips and himself.
Tankersley argues even if he is responsible for a portion of the
proceeds, attorneys’ fees precede the lien, and Phillips is entitled to at
least twenty percent (20%) of the settlement. We will direct the trial
court on remand to examine this contention in light of today’s decision.
Knowledge and Perfection of the Lien
The Court of Appeals held that the hospital failed to perfect its lien
under the Hospital Lien Act because Tankersley did not have notice of the
lien. See Parkview, 761 N.E.2d at 891.
A properly perfected hospital lien serves the world on notice of a
hospital’s direct right to settlement or judgment. Ind. Code Ann. § 32-8-
26-4(c) (Michie 1995). Indiana Code Ann. § 32-8-26-4(b)(2) requires the
hospital to send a copy of the lien by registered mail to the attorney
representing the patient if the name of the attorney is known or with
reasonable diligence could be discovered by the hospital. At the time the
hospital filed its lien and sent copies, it thought that Isaacs was the
attorney because he handled previous issues with Phillips on the personal
injury claim in dispute. Isaacs apparently had been Phillips’ attorney
until just the day before the filing. While other facts might suggest the
need for the hospital to search for a new attorney when it previously
corresponded with one attorney as the legal representative, we conclude
that Parkview perfected its lien for medical treatment rendered to
Phillips.[3]
Parkview’s lien was not rendered invalid because it did not later send
another copy to Tankersley when it became aware that Isaacs was no longer
Phillips’ attorney. The statute requires the hospital to give notice to
the current attorney, not subsequent or future legal representatives. To
place such a burden on the hospital exceeds the scope of the statute.
Moreover, the object of regimes for recording liens in a public office
is to provide notice to persons who did not receive an actual copy or who
enter the scene after the pertinent mechanical events have been completed.
As Judge Mattingly-May observed, attorneys representing personal injury
plaintiffs who have received medical treatment at a hospital would
customarily expect that the recorder’s office in the county where the
hospital is located will reflect the existence of a lien. Parkview, 761
N.E.2d at 892 (concurring opinion). We therefore find that Tankersley had
constructive knowledge and that the lien is effective against him.[4]
Conclusion
In sum, we reverse the trial court’s grant of summary judgment and
remand to the trial court to determine the distribution of funds between
Tankersley, Parkview Hospital and Phillips in compliance with Ind. Code
Ann. § 32-8-26-4.
SULLIVAN and BOEHM, JJ., concur.
DICKSON, J., dissents with separate opinion in which Rucker, J. concurs.
DICKSON, Justice, dissenting
I dissent, believing that the Court of Appeals was correct. See
Tankersley v. Parkview Hospital, Inc., 761 N.E.2d 886, 890-91 (Ind. Ct.
App. 2002).
The majority opinion today acknowledges that "[a]n unambiguous
statute must be held to mean what it plainly expresses, and its plain and
obvious meaning may not be enlarged or restricted." Maj. slip opin. at 6.
That is precisely what the Court of Appeals did.
The Hospital Lien Act applicable to this case provided that the
filing of a lien by a hospital:
is notice to all persons, firms, limited liability companies, or
corporations who may be liable because of the illness or injury if
those persons, firms, limited liability companies, or corporations:
(1) receive notice under subsection (b);
(2) reside or have offices in a county where the lien was
perfected or in a county where the lien was filed in the
recorder's office as notice under this subsection; or
(3) are insurance companies authorized to do business in Indiana
under IC 27-1-3-20.
Ind. Code § 32-8-26-4(c) (1998) (current version at I.C. § 32-33-4-
4(c)(Supp. 2002)). But Parkview did not send any notice to Tankersley, and
he did not receive any notice. Tankersley and his firm are located in
Pulaski County, not Allen County where the lien was filed, and Tankersley
is not an insurance company. As a result, Parkview's lien did not
constitute notice to Tankersley who had no actual knowledge of the lien.
Applying the plain language of the statute, Parkview's lien was not
effective as to Tankersley.
Because Parkview failed to perfect its lien as to Tankersley, I
believe that Parkview is not entitled to summary judgment.
RUCKER, J., concurs.
-----------------------
[1] The insurance company denied the claim because it stated the patient
was excluded from the insurance plan. At the time of the accident,
Phillips, categorized as a habitual traffic offender, had a lifetime
driver’s license suspension, and his blood alcohol level was twice the
legal limit. (Appellant Br. at 5; Appellant App. at 42.)
[2] The legislature recodified the Hospital Lien Act with P.L. 2-2002, Sec.
128. The new code referring to Hospital Lien statutes is Ind. Code Ann. §§
32-33-4-1 through 32-33-4-8 (West 2002).
[3] Had Parkview received notice that Tankersley was Phillips’ new legal
representative prior to sending the notice of the lien, for example, it
would have failed to meet the statutory requirement.
[4] The extent to which Tankersley, upon any payment to Parkview, may be
entitled to recoup from Phillips, Isaacs, or Glaser & Ebbs is, of course,
not presented by the case in its present posture.
Tankersley v. Parkview Hospital, Inc.
Combined Opinion