In 2003, plaintiff Amy Stanton was a passenger in a car driven by the defendant, Carolyn Rea. Stanton was injured and hospitalized after the car crashed. The driver of the other vehicle in the accident was uninsured. In October 2007 the case proceeded to a jury trial. The trial judge entered a verdict on liability against Rea on the issue of liability. The case was then submitted to the jury on the issue of damages wherein a verdict in the amount of $13,506.80 was entered. The trial judge then entered an added judgment in the amount of $4,501.44 for out-of-pocket expenses related to the bringing of the case through trial.
The issue on appeal to the Illinois Appellate Court, Fifth District, was the adjudication of the health care providers’ liens. There was a total of $5,806.02 in medical liens. At the trial level, the judge applied the Illinois Health Care Services Lien Act (770 ILCS 23/1) as to the adjudication of the medical liens. It required that plaintiff’s counsel reduce attorney fees to 30% of the verdict. The Health Care Services Lien Act maximizes at 40% of the amount of the verdict to the payment of medical liens. This would allow a plaintiff to receive no less than 30% of the judgment or settlement.
The error in the case was that the trial judge, in an attempt to apply the Health Care Services Lien Act, did not consider the out-of-pocket expenses in making the calculation. That resulted in a zero recovery for the plaintiff after paying attorney fees, out-of-pocket expenses and the health care liens.
The Illinois Appellate Court reversed the trial judge finding that after first securing payment of the judgment, reduction of attorney fees and costs must be applied. After that reduction, the 40% calculation for the health care liens would be applied.
The court reasoned that the plaintiff would receive no less than 30% of the judgment, which was the intent of the Act. In this case, the attorney’s lien was reduced to 30%, down from a 1/3 contingency fee agreed to by the plaintiff. The lienholders under the Act were limited to 40% of the judgment. If the trial judge’s calculation of the lien had been affirmed, the plaintiff would have received nothing. The cost of the litigation wiped out the plaintiff’s 30%. After a careful reading of the Act, “We agree this was not the intention of our General Assembly. The intent of the law is clear that plaintiff should receive 30% of the amount of the settlement for her injuries after all liens, expenses, and medical bills have been paid.”
The Illinois Appellate Court also discussed Wendling v. Southern Illinois Hospital Services, 242 Ill.2d 261, 950 N.E. 2d 646 (2011) which held that the common fund doctrine is not applicable to health care liens under the Act. In Wendling, the Act “is silent as to whether a health care professional or provider holding a lien under the Act is responsible for attorney fees pursuant to the common fund doctrine.” Wendling, 242 Ill.2d at 264. The Wendling decision determined that lienholders are not responsible for a proportion and share of attorney fees under the common fund doctrine.
The court reversed and remanded this case for further disposition to the trial judge in accordance with its findings.
Amy Stanton v. Carolyn J. Rea, et al., 2012 IL App. (5th) 110187.
Kreisman Law Offices has been handling automobile accidents, truck crashes and bicycle accidents for individuals and families who have been harmed, injured or died as a result of the carelessness or negligence of another for more than 37 years in and around Chicago, Cook County and its surrounding areas, including Evergreen Park, Oak Forest, Dolton, Lansing, Chicago Heights, Glendale Heights, Carol Stream, Northbrook, Lake-in-the-Hills, St. Charles, Aurora and Hanover Park, Ill.
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