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Alegent Health v. American Family Insurance2/21/2003
NATURE OF CASE
American Family Insurance, Inc. (American Family), appeals from a judgment of the Douglas County District Court, which found that a hospital lien filed by Alegent Health (Alegent) was valid and enforceable against American Family. Alegent was awarded $10,120.32 in damages.
SCOPE OF REVIEW
When reviewing questions of law, an appellate court has an obligation to resolve the questions independently of the conclusion reached by the trial court. Eyl v. Ciba-Geigy Corp., 264 Neb. 582, 650 N.W.2d 744 (2002).
FACTS
On May 22, 1997, Alegent notified American Family and James Coran that Alegent claimed a statutory hospital lien for expenses totaling $10,120.32 which were incurred in the treatment of Coran. Coran's injuries resulted from an automobile collision on September 24, 1996, and he was treated at Alegent from April 1 through November 6, 1997. The other party involved in the collision was insured by American Family. An amended notice of a hospital lien was sent to Coran, his attorney, and American Family on November 20.
Patty Vana, patient account representative for Alegent, stated in an affidavit that on November 20, 1997, she was told by Kimberly Nash at American Family that the company was negotiating with Coran and his attorney and that Nash had informed the attorney of the hospital lien. The attorney indicated to Nash that he would honor Alegent's lien.
Vana discussed Alegent's lien with Coran's attorney on December 8, 1997. Vana did not receive any further information from the attorney concerning settlement of Coran's claim.
Subsequent to perfection of the lien, American Family settled Coran's claim through his counsel. A check payable to Coran and his attorney for the policy limit of $100,000 was issued by American Family, and it was cashed on December 24, 1997. American Family did not include Alegent on the check because it had been assured by Coran's attorney that he would "work out" all liens.
On February 9, 1998, Coran's attorney told Vana that Alegent needed to bill Medicaid because Coran's bills would exceed the limits of American Family's policy. The attorney also indicated that Coran might file for bankruptcy . On that same day, Nash told Vana that American Family had settled the claim on November 25, 1997, and paid the policy limits to Coran and his attorney.
On February 11, 1998, Alegent contacted the Nebraska Department of Health and Human Services (DHHS), and DHHS indicated that pursuant to 471 Neb. Admin. Code, ch. 3, ยง 004.01 (1982), Medicaid would not pay medical expenses unless all funds from a settlement had been exhausted, and that Medicaid was the payor of last resort. Alegent was also told that Coran did not become eligible for Medicaid until November 1, 1996, and that, therefore, his original medical bills from the accident were not Medicaid eligible. In addition, Coran was required as a condition of eligibility to disclose a pending third-party liability situation and to cooperate in securing payment of related bills. Neither Coran nor his attorney furnished DHHS with such information.
On April 15, 1998, Alegent filed a petition alleging that American Family had not protected Alegent's lien because American Family did not note the existence of the lien on the check which disbursed the insurance proceeds. Alegent claimed that Coran received the proceeds and subsequently filed for bankruptcy relief under chapter 7 of the federal bankruptcy statutes. Alegent asserted that as a result, any remedy it had against Coran had been legally foreclosed, and that Alegent was therefore entitled to enforce its hospital lien against Americ
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