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Angiulo: Personal Injury Claims, Liens, and the Supreme Court

Monday, January 25, 2016


Our legal system gives people who get hurt a way to get money in exchange for their injuries. When a plaintiff makes a personal injury claim, medical treatment is commonly a part of the case and with signficant medical treatment come significant medical bills. What many people do not know is that hospitals, insurance companies, and other organizations will place a lien against a personal injury claim for monies owed. Typically, before an injured person will receive any compensation they will first have to address that lien.

In Massachusetts, liens are a product of statute and subject to various requirements. Those requirements include, but are not limited to, proper service of notice, time restraints on enforcement, and proper itemization upon demand.  

While it is true that some liens can be negotiated down, paid and then released, the lien holders are usually holding all the cards. This is especially true because money will not typically be delivered to a client by an attorney until the liens are resolved. As mentioned above, the money associated with personal injury cases can go to help pay for all those things that come with a traumatic personal injury like modification of bathrooms or helping with grocery and utility bills.

A recent United States Supreme Court case dealing with a different kind of lien considers how complicated, and expensive, a fight with lien holders can become. In Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan, the plaintiff was seriously injured in a car accident resulting in more than $120,000 in medical bills. As a result of those injuries, the plaintiff received a $500,000 settlement. Those monies were carved up between the plaintiff, the attorney, and the Board of Trustees as a lien holder.  

According to the decision, after settlement a dispute arose between the plaintiff's attorney and the Board of Trustees who had a lien for medical bills that they had paid for the plaintiff. While there appears to have been some attempt to negotiate a settlement of that lien, it never came together.  Instead of sending any money to the lien holder, the plaintiff's attorney gave the money to their client after the Board failed to object before a deadline set by plaintiff's counsel.

The case started in Federal District Court after the Board sued to collect the lien amount. The problem was that the plaintiff had already spent most of the settlement funds. At trial, the argument was focused on whether, or not, the Board could go after the plaintiff's general assets even if the settlement assets were gone. The plaintiff lost at both the trial level and at the 11th Circuit Court of Appeals, but didn't get discouraged. Some might say they found victory at the Supreme Court who rejected the board's claim to general assets like all contents of bank accounts.

Victory is, however, a relative concept in the law because the Supreme Court did not say the plaintiff could keep the money.  What they said was: the board was only entitled to collect on assets from the settlment. The case was returned to the trial court so evidence could be produced about whether, or not, the settlement funds were kept seperate from the plaintiff's general assets or had all been spent on nontraceable assets. The Supreme Court essentially said if the settlement assets could be identified they were subject to the lien holder's claim.

As a result of this decision, the plaintiff now faces more court hearings, more litigation, and more costs in the form of various legal and documentation fees, not to mention the personal time that goes into fighting a case. From a practical perspective, some readers may wonder if the financial gain from avoiding the lien may be outweighed by the costs of fighting the lien holder.    

Leonardo Angiulo is an Attorney in the city of Worcester handling legal matters across the Commonwealth. He can be reached by email [email protected] and found on the web at www.angiulolaw.com


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