Florida District Court of Appeal Finds Statute Allowing Hospital Lien in Car Accident Case Unconstitutional

In a recently issued Florida car accident decision (Case No. 2D14-5925), the Second District Court of Appeal affirmed a Florida circuit court ruling that found Chapter 2000-439, section 18, Laws of Florida to be unconstitutional. This ruling stemmed from a serious car accident case that resulted in two periods of multi-day treatment at a publicly funded hospital system. These stays cost a total of $84,199.99. Claims were filed against the driver and the owner of the car, who had insurance policies with separate insurers.

After each stay, the hospital recorded a claim of lien. Soon after the accident, the driver’s insurer offered the injured person to pay the limits of the driver’s bodily injury coverage as a “full and final settlement,” based upon the amount shown in the hospital lien. This was communicated by the injured person’s attorney to the hospital, who asked the hospital to write off the balance of the amount due. The hospital declined and proposed a counter offer of $6,666.66.  The injured person then signed and delivered a release to the defendant driver’s insurer. The auto insurer provided a $10,000 check to the attorney representing the injured person for the bodily harm, a separate check to the attorney for property damage, and $10,000 worth of Personal Injury Protection (PIP) directly to the hospital. The owner’s insurer paid the bodily injury limit of $10,000 directly to the hospital.

The hospital then filed a lawsuit against both insurers of the defendants, alleging that each had impaired the liens the hospital recorded against the injured person and that the entire amount of the two liens over $84,000 remained unpaid. The owner’s insurer was dismissed from the lawsuit by joint stipulation, and the driver’s insurer filed a motion for summary judgment, claiming Chapter 2000-439, section 18, Laws of Florida is not permitted by Article III, §11(a)(9) of the Florida Constitution. The special act in question created the public health care system in Lee County, setting forth duties and powers for its maintenance and operation, including the enforcement and execution of liens. Article III of the Florida Constitution specifically states there can be no special law or general law of local application pertaining to the creation, enforcement, impairment, or extension of liens for clients based on private contracts.

The hospital system argued that since it was a public facility, the contracts are public contracts, rather than private contracts, and therefore they are not subject to the Constitutional article. The appellate court rejected this argument, stating there was no legal basis for the hospital assignment of the term “public contract” to its contract to pay. The court distinguished a public contract, in which bids are taken by government agencies to get the lowest price for a qualifying service in the interest of saving public money, from a private contract. The court looked at a similar decision in the First District appellate court, which found a similar lien based on an admissions contract did not attach to the public’s assets but to the assets of the patient. The appellate court in this case held that an admissions contract, regardless of whether it is between a public or private hospital and its patient, is a private contract.

The court concluded the special law allowed the hospital system to sue the insurer for the full amount of its charges, which exposes any insurer to potential losses greater than what it contracted between itself and its insured. The court found this goes against well-established case law that an insurer’s liability is limited to its policy limits, absent bad faith. The court also noted this would hamper the ability of an insurer working with an injured party to settle a claim. The appellate court found the special law in violation of the Florida Constitution, affirming the final summary judgment in favor of the insurance company.

The Florida car accident attorneys at Donaldson & Weston will aggressively pursue all avenues of financial relief. For a free, confidential consultation, contact us today at 772-266-5555 or 561-299-3999.

More Blog Posts:

Florida District Appellate Court Reviews Future Medical Expenses in Multi-Car Accident Case, Florida Injury Lawyer Blog, November 28, 2016

Federal Circuit Court of Appeal Declines to Find Equitable Tolling in Slip and Fall Case, Florida Injury Lawyer Blog, October 21, 2016

Florida Court of Appeal Allows Injured Motorist to Pursue Additional PIP Payments to Medical Providers, Florida Injury Lawyer Blog, May 18, 2017