McVey v. M.L.K. Enterprises, LLC ( 2015 )

2015 IL 118143
IN THE
SUPREME COURT
OF
THE STATE OF ILLINOIS
(Docket No. 118143)
ALMA McVEY, Appellee, v. M.L.K. ENTERPRISES, L.L.C. (Southern
Illinois Hospital Services, d/b/a Memorial Hospital of Carbondale,
Appellant).
Opinion filed May 21, 2015.
JUSTICE THEIS delivered the judgment of the court, with opinion.
Chief Justice Garman and Justices Freeman, Thomas, Kilbride, Karmeier, and
Burke concurred in the judgment and opinion.
OPINION
¶1 The sole issue in this health care lien adjudication case is whether under
section 10 of the Health Care Services Lien Act (Act) (770 ILCS 23/10 (West
2012)), attorney fees and costs must be deducted from a verdict, judgment, award,
settlement, or compromise prior to calculating the amount available for the
satisfaction of a health care lien. For the reasons that follow, we hold that under
section 10, attorney fees and costs should not be deducted from a plaintiff’s total
recovery prior to calculating the amount to be awarded for the payment of any
health care lien.
¶2 BACKGROUND
¶3 This case arose out of a personal injury lawsuit filed by plaintiff, Alma McVey,
in the circuit court of Jackson County for injuries she allegedly sustained on
October 9, 2010, after a waitress at a restaurant owned by defendant, M.L.K.
Enterprises, LLC, dropped a tray of drinks on her foot. Southern Illinois Hospital
Services, d/b/a Memorial Hospital of Carbondale, treated plaintiff for the injuries to
her foot. Plaintiff ultimately settled the lawsuit with defendant for $7,500.
¶4 On April 3, 2013, plaintiff filed a petition to adjudicate liens. The petition
identified three lienholders: the hospital, “CACI,” and Cape Radiology Group. The
hospital was the only one of the three lienholders that appeared at the hearing on the
petition. The trial court’s order provided that no liens other than the hospital’s lien
had been properly served upon plaintiff and submitted to the court. It was stipulated
that the amount of the hospital’s lien was $2,891.64. In addition to attorney fees,
plaintiff allegedly incurred litigation costs of $846.66 in securing the settlement. 1
¶5 On June 25, 2013, the trial court entered an order recognizing that under section
10(c) of the Act (770 ILCS 23/10(c) (West 2012)), no individual licensed category
of health care professional or health care providers may receive more than
one-third of the verdict, judgment, award, settlement, or compromise.
Consequently, the hospital in this case could recover no more than $2,500. The trial
court ultimately ordered the $7,500 settlement to be distributed as follows:
“(a) $2,250 to plaintiff’s attorney for attorney fees ($7,500 x 30%);
(b) $2,500 to Southern Illinois Hospital Services d/b/a Memorial Hospital
of Carbondale; and
(c) $2,750 to plaintiff.”
¶6 In making this determination, the trial court acknowledged in its order the Fifth
District’s decision in Stanton v. Rea, 2012 IL App (5th) 110187. The Stanton court
held that in order to ensure that a plaintiff receives 30% of the judgment as intended
by the Act, the computation of the amount available to health care providers should
not begin until costs associated with bringing the case to trial and securing payment
of the judgment have been deducted from the amount of the original verdict. Id.
1
Based upon the trial court’s ultimate holding, plaintiff’s claim regarding her litigation costs
was not considered. Plaintiff asserts in her brief, however, to have incurred $846.66 in total costs.
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¶¶ 17-18. The trial court found, however, that Stanton was in conflict with section
10 of the Act and this court’s decision in Wendling v. Southern Illinois Hospital
Services, 242 Ill. 2d 261 (2011). Consequently, the trial court refused to deduct the
attorney fees and costs prior to calculating the amount available to the hospital.
¶7 The appellate court reversed, reasserting and following its previous decision in
Stanton, holding that section 10 of the Act requires calculations for health care liens
to begin after the verdict, judgment, award, settlement, or compromise is reduced
by attorney fees and costs. 2014 IL App (5th) 130350-U, ¶ 11. Therefore, the
appellate court remanded the matter to the trial court with directions to deduct
attorney fees and costs prior to calculating the amount available to the hospital. Id.
¶¶ 16-17. The appellate court further directed the trial court to consider whether the
litigation costs claimed by plaintiff were proper and recoverable. Id. ¶ 16.
¶8 The hospital filed a petition for leave to appeal in this court under Supreme
Court Rule 315 (Ill. S. Ct. R. 315 (eff. July 1, 2013)), which we allowed. We also
allowed the County of Cook; the Illinois State Medical Society, Illinois Hospital
Association, Illinois Chiropractic Society; and OSF Healthcare System to file
briefs amici curiae on behalf of the hospital. Ill. S. Ct. R. 345 (eff. Sept. 20, 2010).
¶9 ANALYSIS
¶ 10 No issue is raised by the parties concerning the amount of the distribution of the
settlement to plaintiff’s attorney. Only the distribution to the hospital is at issue. We
are asked to consider whether, under section 10 of the Act, a lien by a health care
professional or provider must be calculated, as the hospital contends, based upon a
plaintiff’s total recovery, or whether, as plaintiff contends, attorney fees and costs
are deducted from the award prior to calculating the hospital’s lien.
¶ 11 Our framework is a familiar one. The construction of a statute is a question of
law, which we review de novo. First American Bank Corp. v. Henry, 239 Ill. 2d
511, 515 (2011). The primary objective of this court in construing a statute is to
ascertain and give effect to the legislature’s intent. In re Donald A.G., 221 Ill. 2d
234, 246 (2006). The plain language of a statute is the most reliable indication of
the legislature’s intent, and, when the language is clear, it must be applied as
written without resort to aids or tools of interpretation. DeLuna v. Burciaga, 223 Ill.
2d 49, 59 (2006).
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¶ 12 Section 10 of the Act provides, in pertinent part:
“(a) Every health care professional and health care provider that renders any
service in the treatment, care, or maintenance of an injured person, except
services rendered under the provisions of the Workers’ Compensation Act or
the Workers’ Occupational Diseases Act, shall have a lien upon all claims and
causes of action of the injured person for the amount of the health care
professional’s or health care provider’s reasonable charges up to the date of
payment of damages to the injured person. The total amount of all liens under
this Act, however, shall not exceed 40% of the verdict, judgment, award,
settlement, or compromise secured by or on behalf of the injured person on his
or her claim or right of action.
***
(c) All health care professionals and health care providers holding liens
under this Act with respect to a particular injured person shall share
proportionate amounts within the statutory limitation set forth in subsection (a).
The statutory limitations under this Section may be waived or otherwise
reduced only by the lienholder. No individual licensed category of health care
professional (such as physicians) or health care provider (such as hospitals) as
set forth in Section 5, however, may receive more than one-third of the verdict,
judgment, award, settlement, or compromise secured by or on behalf of the
injured person on his or her claim or right of action. If the total amount of all
liens under this Act meets or exceeds 40% of the verdict, judgment, award,
settlement, or compromise, then:
(1) all the liens of health care professionals shall not exceed 20% of the
verdict, judgment, award, settlement, or compromise; and
(2) all the liens of health care providers shall not exceed 20% of the
verdict, judgment, award, settlement, or compromise;
provided, however, that health care services liens shall be satisfied to the extent
possible for all health care professionals and health care providers by
reallocating the amount unused within the aggregate total limitation of 40% for
all health care services liens under this Act; and provided further that the
amounts of liens under paragraphs (1) and (2) are subject to the one-third
limitation under this subsection.
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If the total amount of all liens under this Act meets or exceeds 40% of the
verdict, judgment, award, settlement, or compromise, the total amount of all the
liens of attorneys under the Attorney Lien Act shall not exceed 30% of the
verdict, judgment, award, settlement, or compromise” (Emphases added.) 770
ILCS 23/10 (a), (c) (West 2012).
¶ 13 Under the plain language of the Act, a health care provider, such as the hospital
in this case, that renders any services in the treatment, care, or maintenance of an
injured person “shall have a lien upon all claims and causes of action of the injured
person for the amount of the *** health care provider’s reasonable charges up to the
date of payment of damages to the injured person.” 770 ILCS 23/10(a) (West
2012). It is undisputed that the total amount of liens under this section is limited,
and “shall not exceed 40% of the verdict, judgment, award, settlement, or
compromise secured by or on behalf of the injured person on his or her claim or
right of action.” Id. The Act further provides a structure to divide the liens between
health care professionals and health care providers. It also permits reallocating the
unused amount within the aggregate total limitation of 40% for all health care
service liens under the Act. In this case, the hospital was the only health care
provider or professional with a lien. Consequently, as the trial court correctly
recognized, the hospital could not “receive more than one-third of the verdict,
judgment, award, settlement, or compromise.” 770 ILCS 23/10(c) (West 2012). As
highlighted above, this one-third calculation, and all other calculations contained in
section 10, are to be based upon the “verdict, judgment, award, settlement or
compromise.”
¶ 14 Plaintiff urges us to interpret section 10 consistent with the reasoning of the
appellate court below so that attorney fees and costs are deducted before computing
the hospital lien. We decline to do so. Simply put, there is no language in section 10
that would allow the calculation of a health care lien to be based upon the total
“verdict, judgment, award, settlement or compromise” less attorney fees and costs.
On the contrary, every time the legislature sets forth a percentage limitation in
section 10, it refers back to and requires the calculation be based on the “verdict,
judgment, award, settlement or compromise.” No mention is made of a deduction
of any kind. Plaintiff’s counsel conceded as much during oral argument when he
admitted that there is no express language in section 10 that permits the deduction
of attorney fees and costs prior to calculating any health care lien. The Act further
provides that “[t]he statutory limitations under this Section may be waived or
otherwise reduced only by the lienholder,” which did not occur here. (Emphasis
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added.) 770 ILCS 23/10(c) (West 2012). We may not read into the Act, as urged by
plaintiff, limiting language that is not expressed by our legislature. See In re D.L.,
191 Ill. 2d 1, 9 (2000).
¶ 15 The appellate court opinion in Wolf v. Toolie, 2014 IL App (1st) 132243 is
instructive and consistent with our holding today. Wolf properly concluded that
there is nothing in the Act that allows a health care lien to be calculated from the net
amount of a plaintiff’s verdict, judgment, award, settlement, or compromise, after
costs and attorney fees have been deducted. Id. ¶ 22. In reaching this determination,
the Wolf court considered both section 10 of the Act and similar language found in
the Attorneys Lien Act. Id.
¶ 16 The Attorneys Lien Act provides, in pertinent part:
Ҥ 1. Attorneys at law shall have a lien upon all claims, demands and causes
of action *** for the amount of any fee which may have been agreed upon by
and between such attorneys and their clients, or, in the absence of such
agreement, for a reasonable fee, for the services of such suits, claims, demands
or causes of action, plus costs and expenses. In the case of a claim, demand, or
cause of action with respect to which the total amount of all liens under the
Health Care Services Lien Act [770 ILCS 23/1 et seq.] meets or exceeds 40% of
the sum paid or due the injured person, the total amount of all liens under this
[Attorneys Lien] Act shall not exceed 30% of the sum paid or due the injured
person.” (Emphasis added.) 770 ILCS 5/1 (West 2012).
¶ 17 The Wolf court properly recognized that both the Act and the Attorneys Lien
Act use the exact same language concerning the percentage limitations for both
health care liens and attorney liens. Wolf, 2014 IL App (1st) 132243, ¶ 22. If the
total amount of the liens under the Act exceeds 40% of the “ ‘verdict, judgment,
award, settlement, or compromise,’ ” then attorney liens “ ‘shall not exceed’ ” 30%
of the “ ‘verdict, judgment, award, settlement, or compromise.’ ” Id. (quoting 770
ILCS 5/1 (West 2012), and 770 ILCS 23/10(c) (West 2012)). The Wolf court
ultimately concluded correctly that “the consistent use of terminology shows that
the legislature intended health care liens and attorney liens to be calculated from the
same total [award].” Id.
¶ 18 Plaintiff’s suggested interpretation would also be inconsistent with our holding
in Wendling. There, we considered a matter involving hospitals that also filed a lien
under section 10 of the Act. Wendling, 242 Ill. 2d at 263. After the plaintiffs settled
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the matter, and filed petitions to adjudicate the liens, they asserted that under the
common fund doctrine, their attorneys were entitled to additional attorney fees
equal to one-third of the amount of the hospital’s liens. Id. at 264. The lower courts
agreed and concluded that the hospital’s share of the recovery should be reduced by
one-third to reflect the hospital’s share of the legal fees. Id. This court reversed and
held that the hospitals were not unjustly enriched by the attorneys’ services and
therefore were not required to contribute to the costs of litigation. Id. at 270. In
doing so, we recognized that the plaintiffs’ attorneys did not recover the settlement
for the benefit of a class but, rather, for the benefit of their clients and did so
regardless of the hospitals’ interest. Id. at 271. Similarly, in this case, plaintiff, by
seeking to have her attorney fees and costs subtracted from the total settlement
prior to the calculation of the healthcare services lien, is asking us to improperly
shift some of her attorney fees and litigation costs onto the hospital.
¶ 19 For the foregoing reasons, we hold that the statutory language in section 10 of
the Act is unambiguous and does not permit the deduction of attorney fees and
costs prior to calculating the amount to be paid to any health care lienholder. To the
extent that Stanton held otherwise, it is hereby overruled.
¶ 20 Appellate court judgment reversed.
¶ 21 Circuit court judgment affirmed.
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