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David E Christensen, PLLC v Pioneer State Mut Ins Co, et al (COA – UNP 3/4/2021; RB #4229)


Michigan Court of Appeals; Docket # 351737; Unpublished
Judges Gleicher, Kelly and Riordan; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion

Not Applicable

Attorney Fee Liens

In this unanimous unpublished per curiam opinion, the Court of Appeals affirmed the trial court’s grant of summary disposition to defendant Pioneer and third-party defendant Hurley Medical Center on the issue of whether either was liable to plaintiff David E. Christensen, P.L.L.C. for its alleged attorney’s lien. In doing so, the Court held that neither defendant Pioneer or third-party defendant Hurley had actual notice of the lien, and that the funds due to Hurley were not part of a common fund generated by Christensen’s services.

This case arose from an accident in which third-party defendant, Amelia Warren, was injured while riding as a passenger in an automobile. Following the accident, Warren received medical treatment from several medical providers, including third-party defendant Hurley Medical Center. Warren retained plaintiff David E. Christensen, P.L.L.C., a law firm (“Christensen”), to seek PIP benefits under the no-fault act. Christensen represented Warren on a contingency basis when defendant Pioneer did not timely pay no-fault benefits to Warren. Under the contingency agreement, Warren agreed that Christensen was entitled to a fee of one-third of “the value of all past and future benefits [it] recover[ed] for” Warren. One of Christensen’s ’s attorneys testified by affidavit that Christensen’s firm contacted defendant Pioneer to “set up Ms. Warren’s claim” for PIP benefits, and that defendant Pioneer informed Christensen it was still conducting its investigation. One the same day, Christensen contacted several of Warren’s medical providers, including Hurley medical center, and instructed them to bill defendant Pioneer as the primary insurer. An employee for Christensen did not assert that Christensen plaintiff informed Hurley that it was pursuing benefits from defendant Pioneer of anyone else, or that Christensen was asserting any claim to a lien on any payments. However, Christensen did send a letter of representation to defendant Pioneer, asserting a “lien upon any and all settlements and/or judgments resulting from this occurrence,” in order to secure payment of the contingency fee Warren agreed to pay Christensen. Similarly, when Christensen sent a letter to Warren’s medical providers, including Hurley, requesting billing records for Warren’s treatment, the letters did not claim that Christensen had any lien or was pursuing and PIP benefits. Shortly after, defendant Pioneer issued two checks payable to Hurley alone. No potion of these proceeds were reserved in accordance with the lien plaintiff asserted. Shortly after receiving another request from Christensen for medical records, third-party defendant Hurley sent plaintiff a lterrer stating that it did not wish to retain Christensen’s s services in obtaining payment for Warren’s bills from defendant Pioneer. After receiving no payment for its attorney fee lien from either defendant Pioneer or Hurley, Christensen bought suit alleging a violation of its attorney charging lien.

Christensen, third-party defendant Hurley Medical Center, and defendant Pioneer all filed motions for summary disposition. Christensen argued that it had a lien that defendant Pioneer failed to respect, making defendant Pioneer liable to satisfy that lien. Conversely, defendant Pioneer argued that plaintiff’s letter asserted a lien against a “settlement and/or judgment” and Pioneer’s uncontested direct payments to Hurley were not made in connection with any such settlement or judgment, and that, further, Christensen had provided no services with respect to the payment of Hurley’s bills. Hurley similarly argued that Christensen did not recover any payments, that there was no settlement or judgment, and that Hurley was never on notice of Christensen’s   claimed lien at any time before this suit. The trial court entered a written order granting summary disposition in favor of defendant Pioneer and Hurley.

On appeal, the Court noted that “[u]nder the American rule, attorney fees are generally not allowed, as either costs or damages, unless recovery is expressly authorized by statute, court rule, or a recognized exception,” and that one such exception exists when “the party prevailing in an action secures a ‘common fund’ for the benefit of that party as well as others, such as medical providers who give care to a no-fault beneficiary.” The Court further noted that “[i]n addition, ‘[a]n attorney’s lien is not enforceable against a third party unless the third party had actual notice of the lien, or unless circumstances known to the third party are such that he should have inquired as to the claims of the attorney.” In applying these principles, the Court found that there was no evidence that plaintiff Christensen asserted any lien to Hurley, and “no evidence in the record that Hurley had any reason to know plaintiff’s services were necessary to obtain PIP benefits.” Similarly, the Court found that “plaintiff’s letter informed Pioneer that it had a lien against any sums owed only by way of a judgment or settlement. The injured person did not sue for PIP benefits until two months after Pioneer made the payment to Hurley that is at issue here, and there is no evidence at all that the payment was made pursuant to a settlement.”

Further, the Court found that the funds due to Hurley were not part of the “common fund” generated by Christensen’s services. In so holding, the Court stated:

"[T]here is no evidence that Hurley had notice of plaintiff’s intentions to seek PIP benefits and the record is devoid of any evidence that plaintiff’s services were even necessary to obtain, or had any impact upon, Pioneer’s decision to provide payment to Hurley. The record shows that Hurley billed Pioneer and Pioneer paid Hurley. No lawsuit or settlement negotiations were required. By plaintiff’s own affidavit evidence, its services in support of that payment were, at best, a phone call to 'set up the claim,' two or three other phone calls to Pioneer, and a letter or two to Hurley seeking medical and billing records. For a few phone calls and a few letters, plaintiff expects over $71,000—which presumably Warren would owe Hurley if plaintiff were to successfully enforce its lien. There is no evidence that plaintiff’s services had any impact on securing payment of Hurley’s bills, let alone that there were $71,000 worth of services or that plaintiff even put Hurley on notice of its intention to seek payment for Hurley from Pioneer. Therefore, plaintiff cannot establish entitlement to payment of its fees under the common-fund doctrine from Pioneer’s payment to Hurley."

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