On June 11, 2013, the California Court of Appeal (Fourth Appellate District, Division One) reversed a trial court’s judgment which held that a hospital had met its burden to establish an enforceable claim under the Hospital Lien Act. The Court of Appeal’s decision in State Farm Mutual Automobile Insurance Co. v. Huff is available at www.courts.ca.gov
Michael Huff was injured in a motor vehicle collision involving Steven and Matthew Wilkins. Huff was treated at a hospital operated by the Pioneers Memorial Healthcare District. At the time of his discharge, Huff owed the District $34,320.86 for medical services. The District was not paid for these services.
Huff sued the Wilkinses. After a jury trial, Huff obtained a judgment against the Wilkinses for $356,587.92. The District sent the Wilkenses’ insurer, State Farm, a notice that pursuant to the Hospital Lien Act it was claiming a lien in the amount of $34,320.86 on any damages that State Farm might pay to Huff. Faced with the conflicting claims of Huff and the District, State Farm sought direction from the trial court.
At the trial on the conflicting claims, the hospital District presented general testimony from members of its staff. The trial court held that the hospital District met its burden to establish an enforceable claim under the Hospital Lien Act, concluding that the Act “does not require that a detailed description of the services, much less an expert declaration of reasonableness and necessity. That would gravely impair the utility of the statutory lien as a low[-]cost, simpler, and speedier alternative to litigation.” The trial court entered judgment in favor of the District for $34,320.86.
The Court of Appeal reversed the trial court’s judgment. The Court of Appeal ruled that the Hospital Lien Act requires the hospital to prove that its claimed charges are reasonable and necessary and that in this case the District failed to meet its burden of proof.
The Court of Appeal acknowledged that the District had presented general testimony that Huff was in an accident and circumstantial evidence that Huff needed some medical treatment as a result of the treatment, however the court noted that “there was no testimony or other evidence that any specific services itemized in Huff’s bill were reasonably required as a result of the collision.” The Court of Appeal concluded that without specific evidence of the necessity and reasonable value of any of the services for which Huff was billed, the District was not entitled to enforce a lien under the Hospital Lien Act. The Court of Appeal observed, “We do not believe that imposing this burden on a hospital will, as the trial court feared, impair the utility of the statutory lien remedy.”