The COA states that the insurance company is not liable for more than the policy limit
A dispute between a Fort Wayne hospital and an insurance company over payment for medical care was referred to the Indiana Court of Appeals, which found that the insurer’s obligation under the Hospital The state’s Lien Act did not exceed the limits of its policy.
Parkview Hospital filed a lien under the Hospital Lien Act of Indiana, Ind. Code §§ 32-33-4-1-8 (2015), after providing $95,541.88 in medical care to Carl Willis. Although he was injured in a car accident in Ohio, Willis was treated at Parkview.
Willis filed a personal injury lawsuit in Ohio against the responsible parties, American Family and several other defendants. Eventually the lawsuit was settled but Parkview was not notified and his lien was not satisfied. The Ohio court then ordered American Family to issue the $50,000 settlement check payable to Willis and his wife and their attorney, Bolotin Law Offices.
Parkview responded by filing a lawsuit in Allen County against American Family and Willis. The hospital obtained a default judgment against Willis. When the trial court denied summary judgment motions filed separately by American Family and Parkview, the parties filed an interlocutory appeal.
In Parkview Hospital. Inc. v. Am.Fam. Ins. Co., 151 NE3d 1218 (Ind. Ct. App. 2020), the Court of Appeals found that the Ohio court order did not justify American Family’s breach of lien law and that the insurance company had violated the law when it paid the settlement proceeds to the Ohio plaintiffs and their attorney without satisfying Parkview’s lien. On whether American Family violated the law, the appeal panel found that Parkview was “entitled to a judgment in law.”
On remand, the trial court entered judgment for Parkview for the full amount of the lien or $95,541.88. The court added additional costs, including prejudgment interest of 8% per annum beginning April 2, 2018.
The case was again appealed to the Court of Appeal with American Family filing a cross-appeal, arguing that the trial court erred when it awarded Parkview the full amount of its hospital lien rather than to cap liability to the insurance policy limit of $50,000.
In Parkview Hospital, Inc. c. American Family Insurance Company, 21A-PL-1369, the Court of Appeals accepted and reversed the trial court’s judgment that American Family had to pay more than the policy’s $50,000 cap.
In reviewing the Hospital Lien Act, the Appeals Committee noted that the wording provides for “the release or settlement of a claim with a patient by a person found liable for damages suffered by the patient…”.
The Court of Appeals also recalled its first opinion in this case and Parkview incorrectly identified American Family as the insurer, Joseph Gregg and Michael Gregg, those responsible for the accident. American Family insured Willis and provided underinsured motorist coverage while State Farm Insurance Co. insured the Greggs.
Initially, the appeals court noted that Parkview’s attempt to recover the full amount of its hospital lien from American Family was based on the erroneous premise that the insurance company provided liability coverage to liable parties. injuries.
“…We conclude that because American Family insured the patient and not ‘someone claiming liability for damages suffered by the patient’, American Family is not liable for the entire ‘reasonable cost of care, hospital treatment and maintenance “that Parkview provided to the patient,” wrote Judge Edward Najam Jr.
“If American Family had done what it should have done and included Parkview as a beneficiary of its proposed $50,000 settlement, Parkview would have received everything owed to it by American Family,” Najam continued. “When American Family broke the law, they assumed the risk of having to pay twice the $50,000 police limit, but that failure does not put Parkview in a better position than it would not have been if American Family had simply complied with the law in the first instance.