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Martinez v. St. Joseph Healthcare System3/15/1994
ttorney to prosecute the subrogated claim and then pays its utilities with the proceeds, the utility company would be bound to pay the attorney for services because it received a benefit from the attorney's labor. Id. at 283. The problem with these and similar examples is that the mortgage holder or utility receive only an indirect benefit from the attorney's work. In this case, however, the common fund is meant to compensate providers that have contract assignment, subrogation, or statutory lien rights. These providers have a recognized interest in the accumulation of a fund
from a specific source and receive a direct benefit from the attorney's labor; thus, the extension of the proration argument to others who may incidentally benefit is inappropriate.
The lien is satisfied by the net proceeds of the settlement. Citing Mitchell, 598 So. 2d at 1360-61, the Hospital argues that if patients are allowed to deduct attorney's fees from the lien, the lien would be unsatisfied and remain in effect as to the balance due. The Hospital's argument, however, is based on the false premise that the lien is not paid in full. The lien is satisfied from the net proceeds of the settlement or judgment pursuant to the Act. Under our holding today, the Hospital then has a responsibility to pay its proportionate amount of attorney's fees incurred in obtaining the net proceeds, either out of the net proceeds or from some collateral source. In essence, it is as if the Hospital employed an attorney to secure payment from the patient; the Hospital might recover the full amount of the payment but its net benefit would be reduced by legal fees that would not be reimbursed absent a statutory or contractual right to those fees. Thus, there is no deficiency and the lien would not remain in effect.
Conclusion. Applying principles of fundamental fairness, we hold that, in the action brought by Martinez on behalf of the estate to secure uninsured motorist benefits, the Hospital should be held liable for its portion of the legal expenses. The Court of Appeals is reversed and the judgment of the trial court is reinstated.
IT IS SO ORDERED.
RICHARD E. RANSOM, Justice
WE CONCUR:
GENE E. FRANCHINI, Justice
STANLEY F. FROST, Justice
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