McAllen Hospitals, L.P. v. State Farm County Mutual Insurance Co.
433 S.W.3d 575
Tex. App.2012Background
- MMC holds valid hospital liens under Tex. Prop. Code Ann. §55.005(a).
- Hernandez and Gil received hospital services at MMC after a car wreck in Hidalgo County; liens amounts were $1,281.00 and $53,564.00, respectively.
- Settlements with State Farm totaled $2,100.00 for Hernandez and $5,200.00 for Gil; State Farm knew of MMC’s liens at settlement.
- Settlement drafts were issued: $1,281.00 payable to Hernandez and MMC jointly; $5,200.00 payable to Gil, Balderas, and MMC jointly.
- Hernandez and Gil endorsed and deposited the checks without MMC endorsement; banks cashed the checks.
- MMC sued State Farm and others for violation of the hospital lien statutes; the trial court granted State Farm summary judgment, MMC’s cross-motion was denied, and MMC appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does naming MMC as a joint payee satisfy the hospital lien statutes? | MMC contends co-payee naming defeats the lien's purpose and is not allowed. | State Farm argues co-payee designation complies with the statutes to obtain a valid release. | Yes; naming MMC as co-payee complies and discharges State Farm duties. |
Key Cases Cited
- Richards v. American Nat. Prop. & Cas. Co., 195 S.W.3d 758 (Tex.App.-Beaumont 2006) (co-payee on settlement to obtain valid release; lien attaches to settlement proceeds)
- Benchmark Bank v. State Farm Lloyds, 893 S.W.2d 649 (Tex.App.-Dallas 1994) (payment to joint payee constitutes discharge of obligations under policy; possession by one joint payee suffices)
- Provident Life & Acc. Ins. Co. v. Knott, 128 S.W.3d 211 (Tex.2003) (standard for reviewing summary judgments)