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March 23, 2021
In the unpublished decision of Christensen, PLLC v Pioneer State Mutual Ins Co and Hurley Medical Center, the Michigan Court of Appeals discussed the importance of a properly communicated attorney’s lien. Plaintiff law firm, David E. Christensen, PLLC, (Christensen) filed suit against Pioneer State Mutual Insurance Company (Pioneer) seeking personal injury protection (PIP) benefits on behalf of its client, Amelia Warren. Christensen represented Warren on a contingency basis.
Early on in their relationship, Christensen sent correspondence to Warren’s medical providers, including Hurley Medical Center, instructing them to bill Pioneer as the primary insurer. Christensen did not inform the providers that the firm was pursuing benefits from Pioneer, or another insurer, and did not assert any claim of lien on the payments for medical services. Later on, Christensen requested billing records from Warren’s providers, but again failed to assert any lien or mention pursuit of PIP benefits. Christensen also sent a letter of representation to Pioneer in which it asserted a “lien upon any and all settlements/judgements resulting from this occurrence”.
A few months later, Pioneer issued a check for $210,800.02 payable to Hurley alone, without any portion of the proceeds being reserved for the alleged lien that Christensen asserted. After receiving no payment for its claimed attorney-fee lien from either Pioneer or Hurley, Christensen sued Pioneer over their payments to the medical providers claiming it allegedly violated the attorney’s charging lien. Pioneer then filed a third-party complaint against Hurley, and Hurley filed a third-party complaint against Warren.
At the dispositive motion stage, Christensen contended that it clearly communicated a lien that Pioneer failed to respect, and was entitled to $71,568.75 to settle the lien. Pioneer argued that Christensen’s communication’s asserted a lien against a “settlement and/or judgement”, but Pioneer made a direct payment to Hurley for the services rendered so no settlement or judgment occurred. Additionally, Pioneer argued that Christensen provide no services with respect to the payment of Hurley’s bills and Hurley contended the same. The Washtenaw County Circuit Court granted Pioneer and Hurley’s Motions for Summary Disposition and dismissed Christensen’s complaint. Christensen appealed.
In affirming the trial court’s decision, the Michigan Court of Appeals noted the recovery of attorney fees is governed by the “American rule” which does not allow for recovery of attorney fees unless the prevailing party secures a “common fund” for the benefit of that party and others, and attorney liens are not enforceable against a third-party unless the third-party had actual notice of the lien or circumstances known to the third-party were such that it should have inquired as to the claims of the attorney. The Court found no evidence that Christensen asserted any lien to Hurley. Regarding Pioneer, the Court highlighted Christensen’s claim of lien against sums owed only by way of a judgement or settlement and noted that Christensen did not file Warren’s PIP complaint until two months after Pioneer paid Hurley. Thus there was no settlement or judgment, and in fact no evidence of any dispute that required Christensen’s efforts to recover the payment from Pioneer to Hurley. The Court noted that if Christensen expected Pioneer to apply the lien to any funds, Christensen could have indicated so to all parties involved but did not.
In her concurring opinion, Justice Elizabeth Gleicher found that Christensen did not provided proper notice of the law firm’s claim of lien, nor did they established that they provided sufficient efforts to allow the Court to conclude that Christensen convinced Pioneer to pay Warren’s medical bills. Without proper notice or record of sufficient work completed on the matter, Christensen failed to establish the two requisite ingredients for an equitable lien.