Fletcher Allen Health Care v. Clapp, No. S1001-09 CnC (Toor, J., May 11, 2010)

[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the original. The accuracy of the text and the
accompanying data included in the Vermont trial court opinion database is not guaranteed.]

                                                     STATE OF VERMONT
                                                    CHITTENDEN COUNTY

                                                                    │
FLETCHER ALLEN HEALTH CARE                                          │
 Plaintiff                                                          │
                                                                    │           SUPERIOR COURT
    v.                                                              │           Docket No. S1001-09 CnC
                                                                    │
MICHAEL B. CLAPP, ESQ.                                              │
 Defendant                                                          │
                                                                    │


                        RULING ON MOTION FOR SUMMARY JUDGMENT

           This is a declaratory judgment action by which plaintiff Fletcher Allen seeks

recovery of roughly $16,000 on a medical lien against a personal injury recovery.

Defendant Clapp was litigation counsel for the patient, and is holding the disputed funds.

He asserts entitlement to them as a portion of his attorney’s fees and costs in the personal

injury action. Fletcher Allen has filed a motion for summary judgment. Clapp has filed no

response to the motion. Thus, all fact alleged in the Statement of Undisputed Material

Facts are deemed admitted. V.R.C.P. 56(c)(2).1

           The facts are as follows. In 2003, Clapp’s client, David Deldebbio, was injured in

a car accident for which he received medical treatment at Fletcher Allen. He did not pay

all the medical bills. As a result, Fletcher Allen perfected a lien against the proceeds of

any future recovery of damages or settlement procured by Deldebbio in connection with

the accident. At the time the lien was perfected, the amount of the outstanding medical

bills was $43,128.91.
1
  The court notes that the statement of material facts does not comply with Rule 56 because it is
unsupported by citations to admissible evidence. Had Clapp opposed the motion on that basis, it would
have been denied. However, the court construes his failure to respond as a waiver of any objection on that
ground.
       Deldebbio subsequently recovered $478,471.32 in a lawsuit against the

responsible party in the car accident. Clapp was his attorney. Clapp sent Fletcher Allen

payment in the amount of $26,272.24, rather than the full amount of the outstanding bills.

He explained that he had deducted a $500 exemption under 18 V.S.A. § 2251; had

deducted what he calculated as Fletcher Allen’s pro rata share of his attorney’s fees; and

had deducted $1,881.91 for Fletcher Allen’s share of the litigation expenses.

       The settlement amount of $478,471.32 was adequate to pay for all attorney’s fees

and expenses in that litigation.

                                    Conclusions of Law

       The statute pursuant to which Fletcher Allen asserts its lien is 18 V.S.A. § 2251. It

states that a hospital in Vermont that furnishes medical or other service “shall have a lien

upon any recovery for damages to be received by the patient … after the date of

services.” It further states that the lien “shall not attach to one-third of said recovery or

$500.00 whichever shall be the lesser,” and that the lien “shall be subordinate to an

attorney’s lien.”

       The plain meaning of this language is that the $500 deduction claimed by Clapp is

correct, but his treatment of attorney’s fees and expenses is not. The language

“subordinate to” unambiguously says that the attorney’s lien gets deducted first, and the

hospital lien gets deducted second. Here, where there is enough (after the $500

deduction) for both liens to be paid, Fletcher Allen is entitled to payment in full.

       The court does not find support for a contrary conclusion in the common fund

doctrine. That doctrine “permits a prevailing party--whose lawsuit has created a fund that

is intended to benefit not only that party but others as well--to recover, either from the



                                              2
fund itself or directly from those others enjoying the benefit, a proportional share of the

attorney’s fees and costs incurred in the lawsuit.” Guiel v. Allstate Insurance Co, 170 Vt.

464, 468 (2000). In Guiel, the Court held that the doctrine can be applied to an insurer’s

subrogation rights, so that the insurer contributes a portion of the insured’s attorney’s fees

in obtaining the recovery.2 The doctrine is “grounded on equitable principles and applied

on a case-by-case basis.” Id. at 783.

         The common fund doctrine has not been extended beyond the insurance arena in

Vermont. Daniels v. Vermont Center for Crime Victim Services, 173 Vt. 521, 524

(2001)(“we need not decide whether we will extend the common fund doctrine beyond

the insurance context”). Moreover, there is no basis for applying the equitable doctrine

here because there is a statute expressly declaring the parties’ relative rights with regard

to the attorney’s fees. As the Supreme Court noted in a case following Guiel, “if the

statute at issue require[s] full reimbursement, we [will] not apply the common fund

doctrine.” In re Butson, 2006 VT 10, ¶ 6, 179 Vt. 599.

                                                    Order

         The motion for summary judgment is granted. Fletcher Allen is directed to submit

a proposed judgment within ten days, to which Clapp shall have five days to object

pursuant to V.R.C.P. 58(d).

Dated at Burlington this                 day of May, 2010.

                                                                 _____________________________
                                                                 Helen M. Toor
                                                                 Superior Court Judge

         2
           Even then, the doctrine “should be applied only after the trial court determines that it is equitable
to do so because of the facts of the particular case at hand.” Id. at 470.




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