Fletcher Allen Health Care v. Clapp

Fletcher Allen Health Care v. Clapp, No. S1001-09 CnC (Toor, J., May 11, 2010)
[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the original. The accuracy of the text and the
accompanying data included in the Vermont trial court opinion database is not guaranteed.]
STATE OF VERMONT
CHITTENDEN COUNTY
│
FLETCHER ALLEN HEALTH CARE │
Plaintiff │
│ SUPERIOR COURT
v. │ Docket No. S1001-09 CnC
│
MICHAEL B. CLAPP, ESQ. │
Defendant │
│
RULING ON MOTION FOR SUMMARY JUDGMENT
This is a declaratory judgment action by which plaintiff Fletcher Allen seeks
recovery of roughly $16,000 on a medical lien against a personal injury recovery.
Defendant Clapp was litigation counsel for the patient, and is holding the disputed funds.
He asserts entitlement to them as a portion of his attorney’s fees and costs in the personal
injury action. Fletcher Allen has filed a motion for summary judgment. Clapp has filed no
response to the motion. Thus, all fact alleged in the Statement of Undisputed Material
Facts are deemed admitted. V.R.C.P. 56(c)(2).1
The facts are as follows. In 2003, Clapp’s client, David Deldebbio, was injured in
a car accident for which he received medical treatment at Fletcher Allen. He did not pay
all the medical bills. As a result, Fletcher Allen perfected a lien against the proceeds of
any future recovery of damages or settlement procured by Deldebbio in connection with
the accident. At the time the lien was perfected, the amount of the outstanding medical
bills was $43,128.91.
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The court notes that the statement of material facts does not comply with Rule 56 because it is
unsupported by citations to admissible evidence. Had Clapp opposed the motion on that basis, it would
have been denied. However, the court construes his failure to respond as a waiver of any objection on that
ground.
Deldebbio subsequently recovered $478,471.32 in a lawsuit against the
responsible party in the car accident. Clapp was his attorney. Clapp sent Fletcher Allen
payment in the amount of $26,272.24, rather than the full amount of the outstanding bills.
He explained that he had deducted a $500 exemption under 18 V.S.A. § 2251; had
deducted what he calculated as Fletcher Allen’s pro rata share of his attorney’s fees; and
had deducted $1,881.91 for Fletcher Allen’s share of the litigation expenses.
The settlement amount of $478,471.32 was adequate to pay for all attorney’s fees
and expenses in that litigation.
Conclusions of Law
The statute pursuant to which Fletcher Allen asserts its lien is 18 V.S.A. § 2251. It
states that a hospital in Vermont that furnishes medical or other service “shall have a lien
upon any recovery for damages to be received by the patient … after the date of
services.” It further states that the lien “shall not attach to one-third of said recovery or
$500.00 whichever shall be the lesser,” and that the lien “shall be subordinate to an
attorney’s lien.”
The plain meaning of this language is that the $500 deduction claimed by Clapp is
correct, but his treatment of attorney’s fees and expenses is not. The language
“subordinate to” unambiguously says that the attorney’s lien gets deducted first, and the
hospital lien gets deducted second. Here, where there is enough (after the $500
deduction) for both liens to be paid, Fletcher Allen is entitled to payment in full.
The court does not find support for a contrary conclusion in the common fund
doctrine. That doctrine “permits a prevailing party--whose lawsuit has created a fund that
is intended to benefit not only that party but others as well--to recover, either from the
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fund itself or directly from those others enjoying the benefit, a proportional share of the
attorney’s fees and costs incurred in the lawsuit.” Guiel v. Allstate Insurance Co, 170 Vt.
464, 468 (2000). In Guiel, the Court held that the doctrine can be applied to an insurer’s
subrogation rights, so that the insurer contributes a portion of the insured’s attorney’s fees
in obtaining the recovery.2 The doctrine is “grounded on equitable principles and applied
on a case-by-case basis.” Id. at 783.
The common fund doctrine has not been extended beyond the insurance arena in
Vermont. Daniels v. Vermont Center for Crime Victim Services, 173 Vt. 521, 524
(2001)(“we need not decide whether we will extend the common fund doctrine beyond
the insurance context”). Moreover, there is no basis for applying the equitable doctrine
here because there is a statute expressly declaring the parties’ relative rights with regard
to the attorney’s fees. As the Supreme Court noted in a case following Guiel, “if the
statute at issue require[s] full reimbursement, we [will] not apply the common fund
doctrine.” In re Butson, 2006 VT 10, ¶ 6, 179 Vt. 599.
Order
The motion for summary judgment is granted. Fletcher Allen is directed to submit
a proposed judgment within ten days, to which Clapp shall have five days to object
pursuant to V.R.C.P. 58(d).
Dated at Burlington this day of May, 2010.
_____________________________
Helen M. Toor
Superior Court Judge
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Even then, the doctrine “should be applied only after the trial court determines that it is equitable
to do so because of the facts of the particular case at hand.” Id. at 470.
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