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Alfa Mutual Insurance Co. v. University of South Alabama

Alabama Court of Civil Appeals

July 17, 2015

Alfa Mutual Insurance Company
University of South Alabama d/b/a University of South Alabama Medical Center Hospital

Appeal from Mobile Circuit Court (CV-14-901532).

MOORE, Judge.

Alfa Mutual Insurance Company ("Alfa") appeals from a judgment of the Mobile Circuit Court ("the trial court") in favor of the University of South Alabama d/b/a University of South Alabama Medical Center Hospital ("South"). We affirm in part, reverse in part, and remand the case with instructions.

Procedural History

On May 27, 2014, the South filed a complaint against Alfa and a number of fictitiously named defendants, asserting that Alfa had impaired South's hospital lien, which it attached as an exhibit to the complaint. Alfa filed an answer to the complaint. On August 11, 2014, the parties filed a stipulation of facts, which stated, in pertinent part, that Abaney T. Wright had been admitted to a hospital operated by South in Mobile County on May 21, 2013, for hospital care, treatment, and maintenance for injuries she had received in an automobile accident less than one week before her admission; that Wright died on account of her injuries on May 21, 2013, at South's hospital; that Wright incurred reasonable medical charges for her necessary care, treatment, and maintenance totaling $36, 438.50; that, at the time of her injury, treatment, and death, Wright was covered under a contract of insurance issued by Alfa to Wright's father and that that policy provided that Alfa would provide a medical-payment benefit of $2, 000, the policy limit, for necessary medical and funeral services because of bodily injury caused by an automobile accident for covered persons, which included Wright; that South had perfected a hospital lien in the amount of $30, 900.50 by filing a notice thereof on May 30, 2013, pursuant to Ala. Code 1975, § 35-11-370 et seq., with the Mobile Probate Court; that Alfa had issued a draft in the amount of $2, 000 to Wright's parents for the payment of funeral expenses on July 23, 2013; that, on August 22, 2013, South had filed an amended hospital lien in the amount of $36, 438.50 with the Mobile Probate Court; and that, on August 27, 2013, Alfa had issued a draft to South's counsel in the amount of $2, 000, that South had not negotiated the draft, and that the draft was voided by its terms on August 27, 2014.

On August 12, 2014, South filed a motion for a summary judgment on its claims against Alfa. Alfa filed a cross-motion for a summary judgment on August 13, 2014. Following a hearing, the trial court entered a judgment on December 29, 2014, which stated:

"Upon consideration of the pleadings, Stipulation of Facts, and arguments of counsel, the Court finds it is controlled by Progressive Specialty Ins. Co. v. University of Alabama Hosp., 953 So.2d 413 (Ala. Civ. App. 2006), and therefore enters Judgment in favor of [South] for the reasonable medical charges in the amount of $36, 438.50 (stipulation number four). The Court additionally enters Judgment in the amount of $5, 166.69 representing costs and attorney's fees based upon the conditional stipulation of [Alfa] that, should Judgment be entered in favor of [South], this is a reasonable sum for costs and attorney's fees."

Alfa timely filed its notice of appeal to this court on February 3, 2015.


Section 35-11-370, Ala. Code 1975 ("the hospital-lien statute"), states:

"Any person, firm, hospital authority, or corporation operating a hospital in this state shall have a lien for all reasonable charges for hospital care, treatment, and maintenance of an injured person who entered such hospital within one week after receiving such injuries, upon any and all actions, claims, counterclaims, and demands accruing to the person to whom such care, treatment, or maintenance was furnished, or accruing to the legal representatives of such person, and upon all judgments, settlements, and settlement agreements entered into by virtue thereof on account of injuries giving rise to such actions, claims, counterclaims, demands, judgments, settlements, or settlement agreements and which necessitated such hospital care, subject, however, to any attorney's lien."

Alfa first argues on appeal that this court should overrule its opinion in Progressive Specialty Insurance Co. v. University of Alabama Hospital, 953 So.2d 413 (Ala. Civ. App. 2006), on which the trial court relied in its judgment. Specifically, Alfa asserts that the lien "should attach only to actions, claims, or counterclaims that a patient has against a tortfeasor -- the person that caused the patient/insured to require hospital treatment." This court determined in Progressive, however, that the language of the hospital-lien statute "does not confine itself solely to tort claims and does not limit the right of a hospital to assert a lien on moneys realized only from tort settlements or actions." 953 So.2d at 415. Specifically, this court affirmed "that the hospital-lien statute does apply to moneys due a patient by virtue of a contractual undertaking such as an insurance policy." 953 So.2d at 416.

Alfa argues that, in Progressive, the appellant argued only that the hospital-lien statute should be construed in light of another statute that is part of the Workers' Compensation Act, § 25-5-1 et seq., Ala. Code 1975, and that the appellant did not argue that the principles of statutory construction should apply to the hospital-lien statute itself. Although this court noted in Progressive that the appellant had limited its argument to a comparison of the workers' compensation statute, this court proceeded to consider the rules of statutory construction, as well as additional authority, requiring that the hospital-lien statute was to be construed broadly by this court in reaching its decision. 953 So.2d 414-16. Alfa argues that this court's construction in Progressive "ignores the wording of the statute as a whole" and, instead, "hinges completely on the definitions of 'claim' and 'demand' in isolation." This court noted in Progressive, however, that, "'"'[w]hen ascertaining legislative intent, statutes which are in pari materia ... must be interpreted as a whole in light of the general purpose of the statute.'"'" 953 So.2d 414-15 (quoting Blackmon v. Brazil, 895 So.2d 900, 907 (Ala. 2004), quoting in turn Ex parte Berryhill, 801 So.2d 7, 10 (Ala. 2001), quoting in turn Kirkland v. State, 529 So.2d 1036, 1038 (Ala.Crim.App.1988)). Alfa's arguments that a reading of the statutes speaking to perfection of a hospital lien, § 35-11-371, Ala. Code 1975; release or satisfaction thereof, § 35-11-372, Ala. Code 1975; and the limitation of a hospital's right to bring an independent action to determine liability for injuries sustained by a person or firm, § 35-11-375, Ala. Code 1975, attempt to circumvent the specificity of the language used in the hospital-lien statute, which this court determined in Progressive was not confined to tort claims. Although § 35-11-371(a) requires a hospital, in order to perfect its lien, to file a verified statement identifying, among other things, the names and addresses of all persons claimed to be "liable for damages arising from" the injured person's injuries, Alfa does not explain how that requirement is mutually exclusive of payments by an insurer held by this court in Progressive to be subject to § 35-11-370. Section 35-11-371(a) goes on to state that "[t]he filing of such claim or lien shall be notice thereof to all persons, firms, or corporations liable for such damages whether or not they are named in such claim or lien." "Liable" is defined as "[r]esponsible or answerable in law; legally obligated." Black's Law Dictionary 1055 (10th ed. 2014). We cannot say that an insurance company is not legally obligated to make payments for damages resulting from the bodily harm of its insured. The remaining statutes cited by Alfa use language similar to that in § 35-11-370, which this court has already interpreted in Progressive.

Alfa also attacks Mitchell v. Huntsville Hospital, 598 So.2d 1358 (Ala. 1992), and Guin v. Carraway Methodist Medical Center, 583 So.2d 1317 (Ala. 1991), two Alabama Supreme Court cases cited as support for this court's decision in Progressive, because, it says, those cases were not directly on point. This court already noted in Progressive, however, that those cases indicated that our supreme court had "at least implicitly held that hospital liens can attach to moneys owed a patient by virtue of a contractual obligation." 953 So.2d at 415. Alfa's arguments that any reference to the hospital-lien statute in those cases was merely dicta or that the argument as to whether the hospital-lien statute was applicable to payments made by insurers was never made before our supreme court in those cases does not cast doubt on whether we appropriately cited those cases as support for our decision in Progressive. Those cases were merely instructive in reaching our decision ...

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