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Martinez v. St. Joseph Healthcare System3/15/1994
RANSOM, Justice.
We issued a writ of certiorari to the Court of Appeals to review whether a hospital enforcing its statutory lien upon proceeds of a personal injury settlement must pay its proportionate share of attorney's fees and other costs incurred in the course of the patient's pursuit of her claim against the third party. The district court determined that a hospital should pay its proportionate share. The Court of Appeals summarily reversed. We reverse the Court of Appeals and affirm the district court.
Facts and proceedings. On August 11, 1991, Debbie D. Trujillo was admitted to St. Joseph Medical Center for treatment of injuries received in a hit-and-run automobile accident. She incurred hospital charges of $29,308.97 and made claim to benefits under the uninsured motorist coverage of her automobile insurance policy with CNA Insurance Company. St. Joseph Healthcare System ("the Hospital"), owner of the medical center, filed notice of a hospital lien pursuant to the Hospital Lien Act, NMSA 1978, §§ 48-8-1 to -7 (Repl. Pamp. 1987). Under the Act, the lien would attach to any judgment or settlement that Trujillo received from CNA. On February 5, 1992, Trujillo died of causes unrelated to the hospital care and Benina S. Martinez was appointed personal representative of Trujillo's estate. The Hospital then filed its claim against the estate.
After Trujillo's death, Martinez settled the uninsured motorist claim for $101,628.93. This equaled the full amount of Trujillo's coverage with CNA ($105,000) less the medical benefits that CNA had already paid ($3,371.07). The sum of $15,438 was withheld and placed in a structured settlement for Trujillo's minor daughter. Trujillo's medical costs, including the Hospital's lien, amounted to $63,346.56. The attorney's fees and costs, guardian ad litem fees, and administrative expenses amounted to $38,517.94. Finally, the estate incurred funeral expenses that amounted to $3,000. Knowing the settlement could not provide for the minor daughter and cover all of the costs, Martinez's attorney and Trujillo's primary health care providers reduced their fees to allow Martinez to settle. The Hospital, however, refused to reduce the amount of its claim.
Under protest, Martinez paid the Hospital the amount of its lien and filed this action for declaratory judgment to recover $10,606.04 as a proportionate share of the $35,824.20 in attorney's fees and $1,002.13 in costs and expenses. By stipulation, the only issue before the trial court was whether the Hospital should be held liable for a share of the fees. The trial court awarded Martinez a reduction of $7,748.56. The Hospital appealed and the Court of Appeals summarily reversed, holding that the Hospital Lien Act allows the Hospital to file a lien for the full amount of its "reasonable, usual and necessary hospital charges," see id., § 48-8-1(B), and that nothing in the Act requires the Hospital to subtract fees or any other costs of recovery from the amount of the lien.
The Hospital Lien Act is silent with respect to attorney's fees and other costs of litigation. Under the Hospital Lien Act, a hospital is entitled to assert a lien upon that part of a settlement going to the patient, less the amount paid for attorney's fees, court costs, and other expenses necessary to obtain the settlement. Section 48-8-1 of the Act states:
A. Every hospital located within the state that furnishes emergency, medical or other service to any patient injured by reason of an accident not covered by the state workmen's compe
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