COA reverses in part for hospital in summary judgment dispute

The Indiana Court of Appeals has affirmed in part the denial of an insurance company’s motion for summary judgment against a hospital. But it reversed a denial of the hospital’s own motion after finding its was entitled to judgment as a matter of law.

While in Ohio, Carl Willis sustained injuries in a 2015 car crash that led him to be transferred to Parkview Hospital in Fort Wayne for treatment, where he incurred $95,541.88 in medical bills. American Family Insurance insured the parties responsible for the accident.

Parkview filed and recorded a hospital lien in 2016 and served a copy on the relevant parties, including American Family, Willis and Willis’ attorney. But after Willis filed a personal injury action in Ohio against the parties liabible for the accident — American Family and others — Willis settled his claim without informing Parkview, and Parkview’s lien was not satisfied from the settlement.

Willis then filed a motion to enforce the settlement agreement with the Ohio court, which ultimately ordered Willis to “execute a hold harmless agreement with respect to any remaining valid liens …,” however, the motion and order were not served on Parkview. The Ohio action was then dismissed with prejudice.

Parkview eventually filed a complaint in Allen County against American Family and Willis, and although it obtained a default judgment against Willis, the trial court denied American Family’s motion for summary judgment. It likewise denied Parkview’s motion for summary judgment.

In a consolidated interlocutory appeal, the appellate court noted American Family’s citation of Underwriters Nat. Assur. Co. v. N. Carolina Life & Acc. & Health Ins. Guar. Ass’n, 455 U.S. 691, 102 S. Ct. 1357(1982) and declined to find that Underwriters mandates a conclusion that the Ohio court’s order is entitled to full faith and credit by the Allen Superior Court.

Further noting that there was “no indication that ‘the Ohio court even considered the controlling Indiana statutes with regard to the Indiana Hospital Lien Act,’” the appellate court concluded that the subject matter jurisdiction issue was not fully and fairly considered by the Ohio court. It therefore found the Ohio court order to be “void ab initio and [has] no effect whatsoever.”

On the issue of justification as a defense, the appellate panel disagreed with the trial court that a genuine issue of material fact exists, observing, “the issue is a legal issue that the trial court was required to resolve.”

“American Family argues that Parkview is not entitled to damages under Indiana Code Section 32-33-4-6(b) after the settlement of Willis’ claim without obtaining a release of Parkview’s lien because American Family was required to follow the orders of the Ohio court. We have determined, however, that the Ohio court’s order is void ab initio,” Judge Elizabeth Tavitas wrote for the appellate court.

“Parkview established that the Ohio court’s order regarding Parkview’s Hospital Lien is void and that American Family violated the Hospital Lien Act when it paid settlement funds without satisfying Parkview’s lien. As such, the trial court properly denied American Family’s motion for summary judgment. With respect to Parkview’s motion for summary judgment, the trial court properly concluded that the Ohio court did not have subject matter jurisdiction,” it continued.

“The trial court, however, erred when it found genuine issues of material fact regarding American Family’s justification for paying the settlement proceeds without satisfying the Hospital Lien. Given the Ohio court’s lack of subject matter jurisdiction, there are no genuine issues of material fact, and Parkview was entitled to judgment as a matter of law,” the appellate court wrote.

It therefore affirmed in part the denial of American Family’s motion for summary judgment, reversed the trial court’s denial of Parkview’s motion for summary judgment, and remanded for proceedings consistent with its opinion.

The case is Parkview Hospital Inc v. American Family Insurance, 19A-PL-02201.