Long Beach Memorial Medical Center v. Allstate Ins. Co. (Sept. 19, 2023, B321876) __ Cal.App.5th __ [2023 WL 6115891]
Long Beach Memorial Medical Center (Medical Center) treated Vernon Barnes for injuries he suffered in a car accident. Barnes submitted a personal injury claim to Allstate, which insured the driver who Barnes claimed was at fault for the accident. The Medical Center notified Allstate that it was asserting a $116,714.67 lien against Barnes’ recovery under the Hospital Lien Act (HLA). Barnes and Allstate settled the claim for $300,000. Allstate sent Barnes a check payable jointly to Barnes and the Medical Center for the entire lien amount, in addition to another check payable to Barnes and his attorney. The check payable to Barnes and the Medical Center for $116,714.67 was never deposited and eventually expired. The Medical Center sued Allstate, alleging that it violated the HLA (Civ. Code, §§ 3045.1–3045.6) by settling with Barnes without satisfying its lien. The trial court granted Allstate’s motion for summary judgment, ruling that Allstate’s tender of a check to Barnes payable to Barnes and the Medical Center satisfied its obligations under the HLA. The Medical Center appealed.
The Court of Appeal reversed, holding that Allstate’s delivery to Barnes of a check payable to Barnes and the Medical Center for the amount of the hospital lien failed to satisfy its duty under the HLA to satisfy the lien before settling with Barnes. The court noted that, while Allstate may have “constructively delivered” the check to the Medical Center, that did not mean that Allstate actually made a “payment” to the Medical Center as required under the HLA. The court rejected Allstate’s argument that the Medical Center suffered no harm. The court reasoned that “including Barnes as [a] co-payee [on the check] . . . empower[ed] him to negotiate keeping some portion of the amount of the Medical Center’s lien for himself. The HLA does not condition the hospital’s right to payment on the timing or resolution of a negotiation between the patient and the hospital.”
