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Ex parte Alfa Mutual Insurance Co.

Supreme Court of Alabama

April 28, 2017

Ex parte Alfa Mutual Insurance Company
v.
University of South Alabama d/b/a University of South Alabama Medical Center Hospital In re: Alfa Mutual Insurance Company

         PETITION FOR WRIT OF CERTIORARI TO THE COURT OF CIVIL APPEALS

         Mobile Circuit Court, CV-14-901532; Court of Civil Appeals, 2140366

          MURDOCK, Justice.

         Alfa Mutual Insurance Company ("Alfa") appealed to the Alabama Court of Civil Appeals from a summary judgment in favor of University of South Alabama d/b/a/ University of South Alabama Medical Center Hospital ("USA"). The Court of Civil Appeals affirmed in part, reversed in part, and remanded with instructions. Alfa Mut. Ins. Co. v. University of S. Alabama, [Ms. 2140366, July 17, 2015] So.3d (Ala. Civ. App. 2015) ("Alfa"). We granted Alfa's petition for a writ of certiorari with respect to the issue whether USA's hospital lien was impaired and the amount of damages recoverable by USA from Alfa for that impairment. For the reasons set forth below, we reverse the judgment of the Court of Civil Appeals insofar as it affirmed the circuit court's ruling that the amount of damages recoverable from Alfa was an amount equal to the entirety of USA's reasonable charges, irrespective of the amount that was otherwise owed by Alfa under the terms of its policy, and we remand the case for further proceedings.

         I. Facts and Procedural History

         USA filed a complaint against Alfa alleging impairment of its hospital lien imposed pursuant to Ala. Code 1975, §§ 35-11-370 through -372, with respect to expenses incurred by USA in its treatment of Abaney T. Wright, who was injured in an automobile accident less than one week before her admission to USA's hospital and later died as a result of her injuries. USA alleged that Alfa impaired its lien by making a $2, 000 payment to Wright's parents for funeral expenses under a medical-payment-benefit provision in the parents' automobile-insurance policy.[1] Approximately one month later, Alfa issued a draft to USA's counsel in the amount of $2, 000; USA did not negotiate the draft.

         The case was tried on stipulated facts, briefs, and arguments of counsel. The circuit court entered a summary judgment in favor of USA in the amount of its amended lien, $36, 438.50, plus attorney fees in the amount of $5, 166.69. That is, the circuit court awarded damages based on the entirety of the hospital's charges, without respect to the amount otherwise owed by Alfa under its policy. Alfa appealed to the Court of Civil Appeals.

         On appeal, Alfa argued (1) that the hospital lien attached only to tort claims and not to the contract claim at issue here, [2] (2) that USA's lien was not impaired because there had been no release, satisfaction, or settlement of any covered claim, and (3) that the damages awarded against Alfa are not owed by it under a proper reading of the lien-impairment statute. Alfa did not challenge the perfection of the lien, the reasonableness of USA's charges, or the amount of the attorney-fee award (assuming that attorney fees were payable at all).

         The Court of Civil Appeals issued an opinion affirming the judgment in part, specifically concluding that, under the rationale of University of South Alabama v. Progressive Insurance Co., 904 So.2d 1242 (Ala. 2004), the circuit court correctly ruled that the amount of damages awarded against Alfa should be based on the entirety of USA's reasonable charges secured by its perfected lien.[3] Presiding Judge Thompson concurred specially, noting that the result was inequitable and not intended by the legislature when it enacted §§ 35-11-370 through -372 but concluding that he was "compelled" by caselaw to agree with the disposition of the case. Alfa, So.3d at (Thompson, P.J., concurring specially).

         Alfa petitioned this Court for a writ of certiorari. We granted the petition for a writ of certiorari with respect to the issue whether USA's lien was impaired and the proper measure of damages.

         II. Standard of Review

         Our standard of review on an appeal of a summary judgment is well settled.

"'"We review a summary judgment de novo. We apply the same standard of review as the trial court in determining whether the evidence presented to the trial court demonstrated the existence of a genuine issue of material fact. A summary judgment is proper where 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'"'"

Tanner v. State Farm Fire & Cas. Co., 874 So.2d 1058, 1063 (Ala. 2003) (quoting Slay v. Keller Indus., Inc., 823 So.2d 623, 624-25 (Ala. 2001) (citations omitted), quoting in turn Northwest Florida Truss, Inc. v. Baldwin Cty. ...


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