Michigan's highest court decides a medical service provider's defense against an attorney's fee lien in a no-fault PIP recovery, leaving unanswered several procedural questions.

Facts & Ruling by Court:

A man was catastrophically injured in a car accident and was taken to the Detroit Medical Center for care.  The patient's medical expenses were covered by the No-Fault law.  Before the patient was discharged and before the DMC issued an itemization of charges to the patient's no-fault insurer, the patient's lawyer claimed an attorney's charging  lien (MCL 500.3148) against the charges incurred arguing that he facilitated in procuring coverage and payment.   The DMC refused to honor the lien arguing, in part, that there was no attorney-client relationship between it and the patient's attorney.  The Michigan Supreme Court ruled that the DMC was not liable to pay the patient's attorney fee.  That said, the Court was silent about whether the attorney fee lien was validly asserted against the DMC's charges recovered; ducking to answer this pressing question, the Court instead held that the DMC could pursue the balance of its charges directly against the patient.

What this case means for injured persons and medical service providers:

 

1. It reaffirms medical provider’s longstanding position that the relationship between the patient and provider is one of creditor (provider) and debtor (patient).  Thus, regrettably, it seemingly pits providers against patients instead of the liable auto no-fault insurance company.


2. The Court held that no common fund was created which seemingly overrules Aetna Cas & Surety Co , 116 Mich App 630 (1982), which has the effect of undercutting the entire basis that attorneys have relied upon in enforcing a lien against the funds recovered.


3. Regarding an attorney-client relationship between an attorney and a provider, the Court does say that there must be some kind of explicit waiver or “unequivocal acquiescence.”  This will like spur more litigation.  At worst, however, medical providers can argue that it reaffirms the meaning of ethics opinion C-226.  On that note, it is incumbent that medical providers be proactive when there is attorney contact: send the form letter making clear that there is no attorney-client relationship and they are not authorized to pursue the provider’s charges.


4. The ultimate quandary this Order creates is how does the medical provider now collect its bill that the attorney has retained?  The Order does not contain any remand language on procedure.  These important procedural questions remain unanswered.


 

Your can read the Supreme Court Opinion here.  Your can read the Court of Appeals Opinion, that led to this decision by the Supreme Court, here.

Authored by L. Page Graves