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Sherry D. Wendling v. Southern Illinois Hospital Services

March 24, 2011

SHERRY D. WENDLING,
APPELLEE,
v.
SOUTHERN ILLINOIS HOSPITAL SERVICES, D/B/A ST. JOSEPH MEMORIAL HOSPITAL AND MEMORIAL HOSPITAL OF CARBONDALE, APPELLANT.--NANCY J. HOWELL, APPELLEE, V. SOUTHERN ILLINOIS HOSPITAL SERVICES, D/B/A HERRIN HOSPITAL,
APPELLANT.



The opinion of the court was delivered by: Justice Burke

cons.

JUSTICE BURKE delivered the judgment of the court, with opinion.

Justices Freeman, Thomas, Garman, and Theis concurred in the judgment and opinion.

Chief Justice Kilbride and Justice Karmeier took no part in the decision.

OPINION

The plaintiffs in these consolidated cases were injured in automobile accidents and subsequently filed personal injury lawsuits against the drivers responsible for their injuries. The hospitals who treated the plaintiffs asserted liens against the proceeds of the lawsuits, pursuant to the Health Care Services Lien Act (770 ILCS 23/1 et seq. (West 2008)). The circuit court held, based on the "common fund doctrine," that the lien-holding hospitals were responsible for their proportionate share of the plaintiffs' attorney fees. The appellate court affirmed. 398 Ill. App. 3d 1078. We reverse and hold that the common fund doctrine is not applicable to health care liens under the Act.

Background

The Health Care Services Lien Act provides that a health care professional or provider who renders treatment to an injured plaintiff "shall have a lien upon all claims and causes of action of the injured person for the amount of the health care professional's or health care provider's reasonable charges." 770 ILCS 23/10(a) (West 2008). The total amount of all health care liens filed with respect to an individual plaintiff is limited to 40% of the judgment or settlement. 770 ILCS 23/10(a) (West 2008). Health care professionals and providers have the right to seek payment of the amount of their reasonable charges that remain not paid after the satisfaction of their liens under the Act. 770 ILCS 23/45 (West 2008). Where the total liens filed under the Act amount to 40% of the judgment or settlement, the total amount of attorneys' liens under the Attorneys Lien Act (770 ILCS 5/0.01 et seq. (West 2008)) is limited to 30% of the judgment or settlement. 770 ILCS 23/10(c)(2) (West 2008). The statute is silent as to whether a health care professional or provider holding a lien under the Act is responsible for attorney fees pursuant to the common fund doctrine.

Plaintiffs Sherry D. Wendling and Nancy J. Howell were injured in separate automobile accidents and treated at hospitals owned by Southern Illinois Hospital Services (Hospitals). The Hospitals filed statutory liens pursuant to the Health Care Services Lien Act (770 ILCS 23/1 et seq. (West 2008)) against the proceeds of the plaintiffs' lawsuits against their tortfeasors.

Both plaintiffs reached settlement agreements with the individual defendants and filed petitions to adjudicate the Hospitals' liens. The petitions alleged that, under the common fund doctrine, plaintiffs' counsel were entitled to additional attorney fees equal to one-third of the amount of the Hospitals' liens.

The circuit court granted the petitions, finding that plaintiffs' attorneys were entitled to 30% of the total settlement proceeds, plus one-third of the amount of the Hospitals' liens. Accordingly, the court ordered that the Hospitals have their share of the settlement proceeds reduced by one-third, to reflect their share of the legal fees incurred by plaintiffs. The Hospitals appealed.

The appellate court affirmed. 398 Ill. App. 3d 1078. The court held that the Hospitals directly benefitted from the work done by plaintiffs' attorneys in creating the fund and, thus, were responsible for their prorated share of the plaintiffs' legal expenses. Id. at 1085. We allowed the Hospitals' petition for leave to appeal (Ill. S. Ct. R. 315(a) (eff. Feb. 26, 2010)). We granted leave to the County of Cook and the Illinois Trial Lawyers Association to submit amicus curiae briefs in support of the Hospitals and the plaintiffs, respectively.

Analysis

The common fund doctrine is an exception to the general American rule that, absent a statutory provision or an agreement between the parties, each party to litigation bears its own attorney fees and may not recover those fees from an adversary. Morris B. Chapman & Associates, Ltd. v. Kitzman, 193 Ill. 2d 560, 572 (2000). The doctrine provides that " 'a litigant or a lawyer who recovers a common fund for the benefit of persons other than himself or his client is entitled to a reasonable attorney's fee from the fund as a whole.' " Scholtens v. Schneider, 173 Ill. 2d 375, 385 (1996) (quoting Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980)). Underlying the doctrine is the equitable concept that the beneficiaries of a fund will be unjustly enriched by the attorney's services unless they contribute to the costs of the litigation. Baier v. State Farm Insurance Co., 66 Ill. 2d 119, 124 (1977); Scholtens, 173 Ill. 2d at 385. Courts ...


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