Opinion
Case Number: 116209
07-24-2019
OLIVER DALE DALLAS, Plaintiff/Appellee, v. GEICO INSURANCE COMPANY, Defendant/Appellee, and THE PAIN MANAGEMENT SOLUTION, PLLC, Claimant/Appellant, and STOVER PHYSICAL THERAPY, PC; OCOMS IMAGING, LLC and OLIVER A. CVITANIC, M.D., P.C., Claimants.
Chris Sloan, SLOAN LAW OFFICE, P.C., Oklahoma City, Oklahoma, for Plaintiff/Appellee R. Robyn Assaf, Alia Al-Assaf, Oklahoma City, Oklahoma, for Claimant/Appellant Gerald F. Pignato, Benjamin M. McCaslin, PIGNATO, COOPER, KOLKER & ROBERSON, P.C., Oklahoma City, Oklahoma, for GEICO
APPEAL FROM THE DISTRICT COURT OF
OKLAHOMA COUNTY, OKLAHOMA
HONORABLE RICHARD C. OGDEN, TRIAL JUDGE
AFFIRMED IN PART , REVERSED IN PART AND REMANDED WITH INSTRUCTIONS
Chris Sloan, SLOAN LAW OFFICE, P.C., Oklahoma City, Oklahoma, for Plaintiff/Appellee
R. Robyn Assaf, Alia Al-Assaf, Oklahoma City, Oklahoma, for Claimant/Appellant
Gerald F. Pignato, Benjamin M. McCaslin, PIGNATO, COOPER, KOLKER & ROBERSON, P.C., Oklahoma City, Oklahoma, for GEICO
KEITH RAPP, JUDGE:
¶1 The defendant, The Pain Management Solution, PLLC (Pain Management), appeals a judgment adjudicating claims in an action brought by the plaintiff Oliver Dale Dallas (Dallas). The remaining defendants, except Geico Insurance Company (Geico), either did not object to the judgment or did not appear.1 Geico provided the money which is the subject of this action.2
BACKGROUND
¶2 Dallas alleged that he sustained injury as a passenger when his wife, the driver, applied the brakes to avoid a collision. The other vehicle left the scene and that driver has not been identified. Dallas received medical treatments from all of the medical provider defendants.
¶3 Dallas retained his attorney. The attorney pursued an uninsured motorist (UM) claim against Dallas's insurer, Geico. After negotiations, and without a lawsuit, the UM claim was settled for the sum of $60,614.78. This sum was insufficient to pay the attorney fee and the medical providers' charges.
¶4 Dallas's attorney filed this action to adjudicate medical liens and claims and to apportion the fund. The petition set out the source of the funds and the statement that counsel and Dallas had a fifty percent contingency fee contract. Counsel endorsed "Attorney's Lien Claimed" on the petition.3 The petition listed the medical providers and their claims and liens.
¶5 The trial court conducted a hearing. During the hearing, the trial court inquired of Dallas's attorney if he had a fifty percent, written fee contract, and counsel affirmed that he did have the contract. The trial court clearly accepted the statement without having the contract admitted into evidence. Counsel also explained that the reason for the amount of the contingency was due to the complex case circumstances of no collision, no other driver, and a criminal matter against Mrs. Dallas, which is apparently related to the traffic incident.4
¶6 During the course of the hearing, counsel for Pain Management offered into evidence a letter purporting to be a $52,000.00 settlement offer from Geico. Dallas's attorney objected, and the trial court sustained the objection.
¶7 Dallas's attorney presented a proposed division of proceeds. The proposal awarded counsel the full attorney fee and costs and divided, proportionately, the balance among the participating medical claimants. Only Pain Management objected, and it now appeals. As briefed, Pain Management asserts error regarding evidentiary issues and error regarding whether Dallas's counsel has a lien and any legal right to priority.
STANDARD OF REVIEW
¶8 The principle issues in this case do not involve factual questions, but rather interpretations of statutes, rules and prior case law. Thus, the appeal presents questions of law which are reviewed de novo.Kluver v. Weatherford Hosp. Auth., 1993 OK 85, ¶ 14, 859 P.2d 1081, 1084. "Issues of law are reviewable by a de novo standard and an appellate court claims for itself plenary independent and non-deferential authority to reexamine a trial court's legal rulings." Id.
¶9 "[A] judgment will not be reversed based on a trial judge's ruling to admit or exclude evidence absent a clear abuse of discretion." Myers v. Missouri Pacific R.R., 2002 OK 60, ¶ 36, 52 P.3d 1014, 1032-33. "An abuse of discretion takes place when the decision is based on an erroneous interpretation of the law, on factual findings that are unsupported by proof, or represents an unreasonable judgment in weighing relevant factors." Oklahoma City Zoological Trust v. State ex rel. Public Employees Relations Bd., 2007 OK 21, ¶ 5, 158 P.3d 461, 463-64.
ANALYSIS AND REVIEW
A. Procedural Issues
¶10 The complaint about not requiring the written attorney contingent fee contract does not show error. The trial court specifically inquired and was told by the attorney that there is a contract. The trial court was satisfied as to its existence, and the critical point was the amount of the contingency. Pain Management has not demonstrated any abuse of discretion or absence of critical information for the trial court. Moreover, the Pain Management argument here is addressed more to the propriety of a fifty percent contingency than the existence of the fee contract.
¶11 Pain Management argues that its representative should have been allowed to testify that its bill was for the subject of the accident injuries. Dallas's attorney had mentioned that Pain Management had treated Dallas for unrelated matters. However, counsel further stated that the bills submitted in this case were for the auto injuries. Moreover, the adjudication proposed by Dallas's attorney included all of the charges from Pain Management, without challenge or deduction. No error has been demonstrated.
¶12 Pain Management claims that there was a $52,000.00 settlement offer from Geico and that it would be unethical for Dallas's attorney to claim a contingency on that part of the settlement. The trial court declined to admit the letter into evidence on the ground of hearsay and relevance.
¶13 A review of the letter, Exhibit 1, shows that it is not literally as represented by Pain Management in its argument. The letter appears to be handwritten from Dallas to the physician and asks him to accept a $52,000.00 settlement. Pain Management claims $64,795.62. The source basis of the $52,000.00 is not mentioned in the letter. No effort appears to have been made to call Dallas to identify and authenticate the document. Thus, interpreting the letter to mean that Geico offered to settle is an interpretation which cannot be made under the Record. No error has been demonstrated.5
B. Legal Issues
¶14 There are two questions.
¶15 First, does Dallas's attorney have a lien?6 This question arises because Dallas did not file a UM lawsuit or tort action. Thus, there is no "lien claimed" endorsement or notice of lien based upon a prior UM or tort lawsuit.
¶16 Second, Dallas's attorney did endorse the interpleader action petition with "lien claimed." Does this endorsement establish a priority, or has counsel merely perfected a current lien on the settlement proceeds which is of equal priority with the established medical provider liens?
¶17 In what might be considered a typical case, an injured party files an action against the tortfeasor and recovers a judgment or settlement. The injured party's attorney perfects an attorney's lien by giving notice or endorsing the pleading "Lien Claimed." 5 O.S. Supp. 2018, § 6(A).7 The medical providers perfect liens. 42 O.S. Supp. 2017, § 46(A). Here, there are physicians' liens which were filed between 2012 and 2017. 42 O.S. Supp. 2017, § 468 (amended by 2018 Okla. Sess. Laws, ch. 195, § 2.)9
¶18 Thus, under the hypothetical case, the physician perfects a lien against recovery pursuant to Subsection A when the injured party "maintains a claim" against the tortfeasor. This lien is junior to the perfected attorney's lien according to Subsection A.10
¶19 However, the Subsection A scenario is not what transpired here. This case comes under Subsection B. Subsection B gives the physicians a lien against the Geico settlement proceeds because Dallas asserted and maintained a claim against Geico. It is noted that Subsection B does not provide for the superiority of the attorney's lien as does Subsection A. The reason for this difference is not apparent. However, there is here no prior legal action against the tortfeasor for Dallas's attorney to give notice or to endorse "lien claimed."
¶20 The facts are clear that there was no attorney's lien at the point in time when Dallas first asserted and maintained the UM claim against the insurer, Geico. Moreover, according to the Record, Dallas's attorney did not follow the Section 6 alternative to the "lien claimed" endorsement by sending a notice to the physicians.
¶21 Therefore, the answer to the first question is: Prior to the filing of the interpleader, Dallas's attorney did not have an attorney's lien. Dallas's attorney has an attorney's lien only after filing the interpleader. That lien attached to the interpleader cause of action. 5 O.S. 2011, § 6(A). "The attorney's lien attaches to the client's cause of action, and any recovery thereon, albeit the recovery is effected in an action other than the action in which the services were rendered." Edwards v. Andrews, Davis, Legg, Bixter, Millsten & Murrah, 1982 OK 72, ¶ 18, 650 P.2d 857, 862.
¶22 Dallas relies upon Edwards to argue that the interpleader is a logical extension of the UM claim and settlement. There are significant differences between the facts in Edwards and the facts here. In Edwards, the attorney's lien had been established in the original litigation. The parties settled the litigation. The matter on appeal in Edwards resulted from an action to enforce the settlement. The Supreme Court ruled that this enforcement action was a continuation of the original action for purposes of the attorney's lien. Here, there is no prior action where an attorney's lien was perfected.
¶23 In addition, Dallas's interpleader is not a continuation of the UM claim or enforcement of the settlement of the UM claim. The UM claim against Geico is a contract claim, not a tort claim. Uptegraft v. Home Ins. Co., 1983 OK 41, 662 P.2d 681.
An action is one ex contractu when it is derived from (a) an express promise, (b) a promise implied in fact or (c) a promise implied in law. The uninsured motorist coverage constitutes a carrier's direct promise to the insured to pay indemnity for a specified loss. Because it is a promise by the insurer to pay its own insured, rather than a promise to its insured to pay some third party, the uninsured motorist coverage is understood, in insurance parlance, as "first-party coverage"--much like collision, comprehensive, medical payments or personal injury protection--and not as "third-party coverage," such as personal injury or property damage coverage of public liability insurance. In short, we are dealing here with an agreement to indemnify the insured for injuries caused by another--who was uninsured or underinsured--based on a showing that the other motorist was guilty of negligence resulting in injury to the insured. A suit founded upon the insured's allegations (a) that he is entitled to payment under one of the first-party coverage clauses in the contract and (b) that the carrier has refused payment thereby breaching its promise, is clearly a contract action. The circumstances of the uninsured motorist's culpability and of the insured's damages are matters which the insured must prove in order to recover from the insurer, but these are really conditions of the insurer's promise. The recovery of the insured is based ultimately upon the policy without which no liability could be imposed upon the insurer for the tort of another.Uptegraft,¶ 7, at 684-85 (citations omitted).
¶24 The statute specifically provides for priority of the attorney's lien in tort actions. 42 O.S. Supp. 2018, § 46(A). The statute is silent about priority when the injured party's claim is against the insurer. 42 O.S. Supp. 2018, § 46(B). The claim made by Dallas is a contract claim against his insurer, Geico.
¶25 Statutes are construed to carry out legislative intent. Estes v. ConocoPhillips Co., 2008 OK 21, ¶ 16, 184 P.3d 518, 526. "We presume that the Legislature expressed its intent and intended what it expressed, and statutes are interpreted to attain that purpose and end, championing the broad public policy purposes underlying them." Id. Thus, the Legislature has clearly distinguished tort claims from contract claims for purposes of the priority of liens.
¶26 Last, examination of the underlying purposes for the attorney's lien and the physician's lien reveals no basis for preferring one or the other for priority purposes in the absence of statutory authority. Both liens serve the same purpose for the benefit of the covered profession. "The attorney's charging lien is based upon the equitable doctrine that an attorney should be paid out of the proceeds of the judgment secured by that attorney." Edwards, 1982 OK 72 ¶ 18, 650 P.2d at 862. The physician's lien is designed to ensure that physicians are paid for their services once their patients are compensated for their injuries. Broadway Clinic v. Liberty Mutual Ins. Co., 2006 OK 29, ¶ 15, 139 P.3d 873, 877 (citations omitted).
¶27 Pain Management has not demonstrated any legal reasons to deny payment from the settlement to Dallas's attorney. However, the trial court erred by ruling that the attorney's lien for the attorney fee had priority. It must be noted that some claimants did not appear and some conceded the priority and did not object. Those claimants are now barred from re-litigating their priority.
¶28 Dallas's attorney and Pain Management each has a lien on the settlement proceeds. However, neither has priority. Moreover, the reason for providing a lien is the same for each profession. Thus, there are no statutory (or equitable) bases for priority.
¶29 The deductions from the settlement, for costs and two other claimants, leave a net fund of $58,038.83. Therefore, the judgment is reversed and the case is remanded with instructions to equitably divide this sum between Dallas's attorney and Pain Management.
CONCLUSION
¶30 This is a lien priority cause where the contestants are an attorney and a physician. The attorney pursued a UM claim on behalf of his client, but did not file any lawsuit against the tortfeasor. He settled the UM claim with the insurance company, Geico. The physician provided medical services and perfected a lien. The settlement was insufficient to pay all medical providers' claims and the attorney's fee. The attorney has filed an interpleader and included endorsement of "lien claimed" on the interpleader petition. This is the first, and only, occasion for the establishment of the attorney's lien.
¶31 The physician's lien statute provides that the attorney's lien has priority when a case has been filed against the tortfeasor. The statute does not provide priority when the claim is against the insurance company under the UM clause of the policy, as is the case here. However, the purposes of the two lien statutes are the same, that is, to see that the covered professional is compensated.
¶32 Under the facts of this case, both Dallas's attorney and Pain Management have liens against the UM insurance settlement proceeds. However, neither has priority. Two medical provider's claimants did not appear and received no award. Two other medical providers have accepted the judgment without objection. Therefore, the cause is reversed as to Pain Management and remanded for the trial court to award costs to Dallas's attorney and then equitably divide the balance between Dallas's attorney and Pain Management, after deduction of payments to the two claimants who have accepted the judgment. The judgment as to the two remaining claimants is undisturbed because they either did not file an answer or did not appear at the hearing.
¶33 AFFIRMED IN PART, REVERSED IN PART, AND REMANDED WITH INSTRUCTIONS.
BARNES, P.J., concurs, and WISEMAN, V.C.J., concurs specially.
WISEMAN, V.C.J., concurring specially:
I concur in the Majority's Opinion, but I write separately to suggest that when, as here, the attorney bases his claim on a written contingency fee contract, the better practice is to require the production and admission of the contract, particularly when the contractual fee is at the outside allowable limit (50%) for contingent fees, and the injured party (Dallas) receives no award in this settlement under the trial court's allocation.
This appeal was assigned to this Judge and this Panel on April 4, 2019.
GEICO was dismissed as a party on July 19, 2018.
The trial and appellate records show that Geico has retained possession of the fund pending the outcome of the case.
Tr., p. 4.
Therefore, the parties' argument about whether the exhibit is a part of the appeal record is of no consequence. Moreover, Pain Management's contention that Dallas's attorney is ethically limited to the difference between the actual settlement and the $52,000.00 becomes moot.