Well, no comments received on my earlier post entitled -
Therefore, I will post my initial comments and concerns regarding this decision which may well open up Pandora's Box of problems in Kentucky for the legal system, lawyers, and injured claimants. There was an old equity maxim of "Justice delayed is justice denied."
Kentucky Supreme Court has published an opinion addressing an issue of much concern to trial lawyers and medical care providers. I have my own thoughts on this decision, but I sincerely would appreciate comments (anonymous of course) on the thoughts of those who have read this decision. To highlight the seriousness of this decision and its potential adverse effects under the doctrine of “unintended consequences”, I've raise some issues below to start the discussion and debate.
Basically, an ethical violation was raised by a chiropractor against an attorney who settled a personal injury case after he had ACTUAL notice of a chiropractic lien (assignment?) against the recovery but did not pay off the lien or escrow the funds until the lien was resolved. The chiropractor placed the attorney on notice of the assignment against the recovery to cover his treatment charges and the attorney admitted he had received the notice. However, the attorney admitted that he subsequently failed to notify the client or 3rd parties with an interest of the receipt of some funds and to properly render an accounting to the client or 3rd party with an interest.
Here is an extract of this opinion that the Supreme Court deemed important enough to publish but redact the attorney's name.
In reading this opinion, I would appreciate any comments, legal authority, addressing the following:
- Is any assignment against the personal injury recovery legally valid?
Why do I ask?
- Liens are typically a creature of statute, and unlike medical liens in Indiana, there is no statutory provision creating a medical lien.
- Is it an assignment, and if so is it valid (in light of the fact that the Kentucky General Assembly removed the assignment of medical benefits provision in the Kentucky Motor Vehicle Reparations Act), not to mention that these putative assignments usually have no sum certain, are signed early during the treatment (if not the first visit and not properly explained or even understood by the patient) with the amounts being added later?
- what notice is required to perfect this putative lien or assignment? For example, certified mail, restricted mail, return receipt requested, written acknowledgment, etc.
- Is notice by fax to the attorney adequate in light of the strict notice provisions of other liens? Does the fax even constitute notice in light of the "mail box" rule?
- Is the "lien/assignment" valid by simply sandwiching this document in medical records?
- Is the denomination by the provider that he or she is entitled to a recovery sufficient in itself to hold the proceeds hostage pending settlement of the claim?
- Is the attorney for the patient conflicted and prohibited from filing a legal action to protect his client from the health care provider's claims against the proceeds?
- Does anyone think the ethical rule for safekeeping property constitute rendering the attorney nothing more than a bill collector subject to the whims of other's claims?
- Is the lien/assignment against a personal injury recovery even legally permissible and/or does it violate the Consumer Protection Act?
- If the "lien/assignment" contains language of irrevocability does it render the “lean/assignment” null and void? Can the patient revoke it? Can the attorne revoke it? Can it be revoked at all? Can the attorney on behalf of the client revoke it in futuro and/or legally challenge the services provided up to that point? Can the challenge begin immediately or must one wait until the case is settled>
- Does an attorney who advises a business client (medical provider) of the ethical rules commit an ethical violation when he or she knows or has reason to know the medical provider will use the claimed threat of an ethical violation as leverage in a threatened legal proceeding?
- What if the attorney had denied actual notice of the claimed link or assignment and the matter was then challenged in court by the provider? What effect do the rules of professional responsibility regarding privilege and confidentiality now play in the matter?
- Will this rule be extended to include health insurers who have expanded the rights of subrogation rights to reimbursement against the insured claimant?
As for this development, I am reminded of Lieutnenat Kaffee (played by Tom Cruise in a Few Good Men) who said "And the hits just keep on coming."
But as for the future, I refer you to Margo Channing (played by Bette Davis in "All About Eve") who said "Fasten your seatbelts, it's going to be a bumpy night!"
It just seems the efforts by the Supreme Court to create a lien where the law on liens in Kentucky in this area is not well-documented, hold the attorney accountable without explaining the notice required, and delineating ethically what can be done by the attorney in response to the so-called lien has the net effect of reducing the legal profession to that of a debt collector and a potential functionary to those who could potentially abuse the process.
SCOKY by assuming the putative lien's legal validity (or at least ignoring the possiblity of the invalidity of the underlying document) has our own Supreme Court ventured down the lane of rendering an advisory opinion prematurely rather than waiting for an actual case or controversey?
Questions, questions, questions.
AN UNNAMED ATTORNEY V. KENTUCKY BAR ASSOCIATION
2011-SC-000333-KB
TO BE PUBLISHED
ORDER PRIVATELY REPRIMANDED MOVANT WITH CONDITIONS.
ALL SITTING. ALL CONCUR.
Here is an extract of the decision. You click on here to obtain a copy of the actual decision posted at the Supreme Court's website.
Movant was charged by the Inquiry Commission with a violation of former SCR 3.130-1.15(b) 2which required a lawyer to notify the client or third parties with an interest of the receipt of settlement funds and to promptly render an accounting to the client or third party with an interest.
The facts which give rise to the charge stem from the Movant's representation of a client in a personal injury matter resulting from an automobile accident. The Movant received a document entitled "Assignment of Proceeds, Lien, and Authorization" from a chiropractor who treated the client. Upon subsequent settlement of the case for $4,000.00, Movant deducted his fee and distributed the remaining $2,600.00 to his client without notifying the chiropractor of the settlement or distribution.
Movant admits he violated the above rule by not notifying the chiropractor of the settlement, and in not escrowing the balance of the settlement (after deducting his fee) for distribution to the client and the chiropractor, according to their interests. In negotiating a penalty, the Respondent was agreeable to a private reprimand if the Movant agreed to a publication by the Court and the KBA of the Order of Private Reprimand, redacting the Movant's name and any fact-specific identifying information in a published opinion. The KBA's purpose in publication of a redacted private reprimand is to educate members of the public and the bar concerning this type of conduct and the ramifications therefrom. The Respondent also requested the Movant attend the Ethics and Professionalism Enhancement Program offered by the Office of Bar Counsel, and not receive any CLE credits for this program. Movant is agreeable to the conditions. This Court does not publish private reprimands but does enter confidential orders. The KBA places a copy in the KBA member's file with all pertinent information, which remains in the file for future reference, such as in subsequent disciplinary actions. However, the Court is agreeable to publishing a redacted copy of the private reprimand, and the Court is of the opinion that a private reprimand with conditions is sufficient in this case. Therefore:
IT IS HEREBY ORDERED that the Movant, An Unnamed Attorney, is adjudicated guilty of one count of violating former SCR 3.130-1.15(b), and that he be issued a Private Reprimand with these conditions:
1. Movant shall attend the next Ethics and Professionalism Enhancement Program offered by the Office of Bar Counsel, separate and apart from his fulfillment of any other continuing legal education requirements;
2 Movant will not apply for any CLE credit for attending said program, and shall furnish a release and waiver to the Office of Bar Counsel to review his records with the Continuing Legal Education Commission, such release to continue in effect until one year after he completes said program, in order to allow the OBC to verify that Movant has not reported said program for any type of CLE credit;
3. Movant agrees to publication by this Court and the Kentucky Bar Association of this Private Reprimand With Conditions, redacting the Movant's name and any fact-identifying information of Movant; and
4. Movant shall pay the costs of these proceedings, as certified by the Disciplinary Clerk, for which execution may issue upon finality of this Order.
All sitting. All concur.
ENTERED: August 25, 2011.
