in the Court of Appeals 15 November 2016
by Defendant from an order entered 15 February 2016 by Judge
Cy Grant in Nash County Superior Court No. 14-CVS-1152
Law Firm, P.A., by J. Christopher Dunn, for
Snow LLP, by Scott Lewis and Pamela L. Carter, for
appeal arises from a $757 hospital bill. It concerns an
insurance company's payment of a total settlement
directly to a pro se personal injury claimant by
check made payable jointly to the claimant and two of her
medical providers, each of which held valid liens on the
settlement funds. We affirm the trial court's ruling, in
granting summary judgment for a lienholder, that the
insurance company violated the North Carolina medical lien
statutes by failing to retain funds subject to medical liens
and committed an unfair or deceptive trade practice by
failing to pay directly to the lienholder its pro
rata share of funds for several months despite repeated
demands. Because the trial court miscalculated the statutory
amount required to satisfy the lien, however, we vacate that
portion of the judgment and remand for entry of judgment in
an amount consistent with the statute and this opinion.
Farm Mutual Automobile Insurance Company
("Defendant") appeals from an order granting
summary judgment in favor of Nash Hospitals, Inc.
("Plaintiff" or "Nash Hospitals") and
denying Defendant's motion for summary judgment.
Defendant argues that its issuance to a pro se
personal injury claimant of a check for a total
settlement-without retaining funds owed to medical
lienholders- did not violate N.C. Gen. Stat. §§
44-50 and 44-50.1 because the check was made payable jointly
to the claimant and the lienholders. Defendant also argues
that the trial court erred in concluding that Defendant
committed an unfair or deceptive trade practice, in part
because Nash Hospitals suffered no injury as a result of
Defendant's issuance of the multi-party check to the
claimant. After careful review, we affirm the trial
court's order in part and vacate and remand the trial
court's order in part.
and Procedural Background
undisputed facts are as follows:
April 2013, Jessica Whitaker ("Whitaker") was
injured in an automobile accident caused by Defendant's
insured, Christopher Helton ("Helton").
incurred $2, 272 in medical expenses following the accident.
The majority of these expenses-$1, 515-was for treatment at
Rocky Mount Chiropractic ("Rocky Mount"); the
remaining $757 was for treatment at Nash Hospitals.
May 2013, counsel for Nash Hospitals sent Defendant a notice
of medical lien pursuant to N.C. Gen. Stat. §§
44-49 and 44-50. A month later, Rocky Mount sent a similar
notice of medical lien to Defendant.
evaluated Whitaker's claims and questioned whether all
Whitaker's medical treatment was related to the accident.
Defendant negotiated with Whitaker and reached a settlement
on 28 October 2013 for $1, 943. The settlement amount was
insufficient to satisfy the medical liens in full.
December 2013, Defendant received Whitaker's signed
release for the settlement and sent her a check for $1, 943,
made payable to Whitaker, Nash Hospitals, and Rocky Mount.
Whitaker did not present the settlement check to Nash
Hospitals, nor did Defendant notify Nash Hospitals of the
February 2014, an employee of Nash Hospitals contacted
Defendant regarding Whitaker's claim and Nash
Hospitals' lien. Defendant's representative disclosed
that it had reached a settlement with Whitaker and had
delivered to her a check payable to Whitaker, Nash Hospitals,
and Rocky Mount. Defendant's representative said the
multi-party check protected Nash Hospitals' lien and told
Nash Hospitals' employee to contact Whitaker.
March 2014, counsel for Nash Hospitals sent a letter to
Defendant asserting that Defendant's issuance of the
multi-party check violated North Carolina law, noting that
N.C. Gen. Stat. § 44-50 "specifically requires the
liability insurer to retain out of any recovery, before
any disbursements, a sufficient sum to pay lien
holders." (emphasis in original). The letter also
asserted that "by issuing a check that can't be
cashed by the patient, State Farm is forcing the patient to
obtain an attorney and incur unnecessary expense."
Defendant did not respond.
April 2014, Nash Hospitals made a third unsuccessful attempt
to collect on its lien from Defendant.
August 2014, Nash Hospitals filed a verified complaint
against Defendant alleging violations of N.C. Gen. Stat.
§§ 44-49 and 44-50 and alleging that Defendant
engaged in an unfair or deceptive trade practice. On 19
September 2014, Defendant asked Whitaker to return the
uncashed multi-party check, and on 17 November 2014,
Defendant issued a check payable solely to Nash Hospitals for
$757, the total amount of Nash Hospitals' lien. Nash
Hospitals did not agree to accept the payment as satisfaction
of the lawsuit or the underlying lien. Both parties then
filed motions for summary judgment.
February 2016, the trial court issued an order granting Nash
Hospitals' motion for summary judgment and denying
Defendant's motion for summary judgment. The trial court
found damages in the full amount of the lien-$757-and awarded
Nash Hospitals treble damages pursuant to N.C. Gen. Stat.
§ 75-16 for a total award of $2, 271. Defendant timely
filed notice of appeal.
Standard of Review
standard of review for an appeal from summary judgment is
de novo. In re Will of Jones, 362 N.C. 569,
573, 669 S.E.2d 572, 576 (2008) (citation omitted). Summary
judgment is appropriate "only when the record shows that
'there is no genuine issue as to any material fact and
that any party is entitled to a judgment as a matter of
law.' " Id. at 573, 669 S.E.2d at 576
(quoting Forbis v. Neal, 361 N.C. 519, 523-24, 649
S.E.2d 382, 385 (2007)). "When considering a motion for
summary judgment, the trial judge must view the presented
evidence in a light most favorable to the nonmoving
party." Dalton v. Camp, 353 N.C. 647, 651, 548
S.E.2d 704, 707 (2001) (citation omitted). "Evidence
properly considered on a motion for summary judgment
'includes admissions in the pleadings, depositions on
file, answers to Rule 33 interrogatories, admissions on
file[, ] . . . affidavits, and any other material which would
be admissible in evidence or of which judicial notice may
properly be taken.' " Murray v. Nationwide Mut.
Ins. Co., 123 N.C.App. 1, 8, 472 S.E.2d 358, 362 (1996)
(alteration in original) (quoting Kessing v. Nat'l
Mortg. Corp., 278 N.C. 523, 533, 180 S.E.2d 823, 829
material facts are undisputed. Therefore, we examine the
applicable law to determine whether either party was entitled
to judgment as a matter of law.
Violation of N.C. Gen. Stat. §§ 44-50 and
Defendant received proper notice of Nash Hospitals' lien
and agreed to a negotiated settlement with Whitaker, Nash
Hospitals was entitled-under North Carolina's medical
lien statutes-to receive payment from Defendant for a pro
rata portion of its unpaid bill before Defendant
disbursed funds to Whitaker. Defendant argues that the
statutes do not prohibit an insurance company from issuing a
check payable jointly to a claimant and her medical
lienholders in lieu of directly paying the lienholders, and
that its issuance of the multi-party check did not amount to
a disbursement of funds. For the reasons explained below, we
44, Article 9 of the General Statutes contains a series of
statutes enacted by the General Assembly to help medical
providers recover payment for services rendered to patients
who later collect compensation for medical treatment
resulting from a personal injury incident. N.C. Gen. Stat.
§ 44-49 creates a lien "upon any sums recovered as
damages for ...