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Alaska Native Tribal Health Consortium v. Settlement Funds Held for or to Be Paid ex rel E.R.1/30/2004
I. INTRODUCTION
In this consolidated appeal we address whether the Alaska Native Tribal Health Consortium (the Consortium) can enforce a health care provider lien on settlement proceeds received by Alaska Native patients from third-party tortfeasors. If we determine that such a lien can be enforced, the principal question that follows is whether the lien must be reduced by a pro rata share of the patients' attorney's fees. These questions arise in two cases that share similar factual backgrounds. Each case involves an Alaska Native who was treated as a patient at the Alaska Native Medical Center (ANMC) for injuries caused by third-party tortfeasors. ANMC, run by the Consortium, treats Alaska Natives for free. The Consortium recorded hospital liens on the settlements that two patients, Warden and E.R., obtained from their respective tortfeasors. Both patients' attorneys disputed the validity of the liens. In both cases, the superior court concluded that the health care provider lien is valid and should be paid in full, less a pro rata share of the patient's attorney's fees and costs incurred in obtaining the recovery. Because the Consortium has a federal right to enforce a statutory health care provider lien, and because it would be unjustly enriched if it did not pay a pro rata share of attorney's fees, we affirm the superior court's determination in both cases. We hold that the Consortium's statutory health care provider lien is enforceable and is subject to a pro rata reduction for attorney's fees and costs.
II. FACTS AND PROCEEDINGS
A. The Consortium's Claim to Settlement Funds Obtained on Behalf of David W. Warden
On February 15, 2000, David Warden, an Alaska Native, was injured in a motor vehicle accident with Mary Copley, who was insured by Allstate Insurance Company. Warden received medical treatment from ANMC for injuries to his back and neck between February 15, 2000 and March 8, 2001.
Shortly after the accident, Warden engaged counsel Robert Rehbock and entered into a contingency fee agreement entitling Rehbock to a percentage of any recovery. Allstate entered into negotiations with Warden, seeking to minimize its obligation by emphasizing Warden's pre- and co-existing conditions. Allstate declined to enter any settlement agreement unless there was full and final release of all parts of the claim. The Consortium did not respond to Allstate's efforts to obtain medical records and information concerning the care Warden received, only providing such documentation after further efforts by Warden and Rehbock.
On May 3, 2001, the Consortium recorded a health care provider's lien pursuant to AS 34.35.450-.482 for $8,947.22, the alleged value of services provided to Warden. Copies of the recorded lien were forwarded by certified mail to Allstate and its insured, Mary Copley. The transmittal letter to Allstate included a request that ANMC be named as the payee on any check issued arising out of the accident. The Consortium provided a copy of the lien to Warden, who apprised Allstate of the lien claim and continued to seek recovery for all claims.
On August 3, 2001, Allstate settled with Warden for $24,947.22 to cover all losses and to release all claims against Copley and Allstate. Out of this amount, Allstate issued a separate settlement check on the same day for $8,947.22 made payable to "Rehbock Rehbock & Wittenbrader In Trust for David Warden, and ALASKA Native Medical Center." The same day, Rehbock informed the Consortium that he proposed to "turn over two-thirds of the total check for that lien and receive the remaining one-third" for his fees but that he would "not disburse any of the disputed lien to my
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