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Trevino v. HHL Financial Services Inc.9/15/1997
EN BANC
JUSTICE KOURLIS delivered the Opinion of the Court.
JUSTICE SCOTT does not participate.
This case raises the question of whether a hospital enforcing its statutory lien for medical services upon proceeds of a personal injury settlement must contribute a proportionate share of the attorney fees incurred in obtaining the recovery. In Trevino v. HHL Financial Services, Inc., 928 P.2d 766 (Colo. App. 1996), the court of appeals held that neither the common fund doctrine nor a provision in section 38-27-101, 16A C.R.S. (1996 Supp.), giving an attorney's lien precedence over a hospital lien, requires the holder of the hospital lien to pay a share of the attorney fees. We agree, and accordingly affirm the court of appeals.
I.
Petitioner Abel Trevino was injured in a slip-and-fall accident at his apartment complex on December 31, 1992, and was admitted to University Hospital for treatment. Prior to receiving treatment, Trevino signed an "Admission Agreement" in which he agreed to pay all costs for his care and all costs, including attorney fees, necessitated by collection efforts.
University Hospital provided Trevino with medical care and billed him under several different accounts, the largest of which was for the principal amount of $13,703.97. Trevino retained an attorney and began pursuing a tort claim against the owner of the apartment complex where the accident occurred. The apartment owner was represented by the liability insurer, Hartford Insurance Company (Hartford).
University Hospital assigned Trevino's account in the amount of $13,703.97 to defendant HHL Financial Services, Inc. (HHL), for collection. On October 11, 1993, HHL filed a hospital lien pursuant to section 38-27-101, 16A C.R.S. (1996 Supp.), on behalf of University Hospital in the amount of $13,703.97 against any amount Trevino might recover from Hartford or any other person as damages arising out of his injuries.
On January 18, 1994, Hartford settled Trevino's tort claim by issuing two checks to Trevino totaling $80,000. One check was in the amount of the $13,703.97 hospital lien and was jointly payable to "HHL for University Hosp," Trevino, and Trevino's attorney. The other check, for the balance of the settlement amount, was jointly payable to Trevino and his attorney. Trevino's attorney received one-third of the latter check.
Trevino notified HHL of the settlement, but sought to reduce the amount payable on the hospital lien by a proportionate share of attorney fees and by the alleged amount of his comparative negligence, although that issue had never been litigated. Specifically, Trevino proposed to pay HHL $4,562.16 in full satisfaction of his outstanding obligations to University Hospital. HHL refused this offer and demanded payment of the hospital lien in full.
On April 29, 1994, Trevino filed suit in Denver District Court against HHL and University Hospital seeking a declaratory judgment as to the rights of the parties with respect to the check from Hartford in the amount of $13,703.97. Both defendants counterclaimed against Trevino seeking payment of the hospital lien plus interest and attorney fees. Trevino asserted various affirmative defenses to the counterclaims. On August 9, 1994, HHL filed a motion for partial summary judgment on one of those defenses, accord and satisfaction. On October 26, 1994, University Hospital filed a motion for summary judgment on all legal issues in the case.
The parties appeared before the district court for trial on November 4, 1994. After hearing arguments from both sides, the district court granted University Hospital's motion and dismissed Trev
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