Wendling v. Southern Illinois Hospital Services
242 Ill. 2d 261
| Ill. | 2011Background
- Plaintiffs injured in auto accidents had liens filed by hospitals under the Health Care Services Lien Act against their tort settlements or judgments.
- Total liens under the Act are capped at 40% of the recovery; attorneys’ liens under the Attorneys Lien Act are limited to 30% when liens reach the 40% cap.
- Circuit court held that plaintiffs’ attorneys could recover 30% of the settlement plus one-third of the Hospitals’ liens under the common fund doctrine.
- Appellate court affirmed, holding Hospitals benefited from the plaintiffs’ attorney work and thus should contribute to fees.
- Supreme Court reverses, holding the common fund doctrine does not apply to health care liens under the Act, citing Maynard v. Parker.
- Key reasoning includes that Hospitals’ claims exist independently of the outcome of the personal injury action and Hospitals are not creditors sharing a fund created by the lawsuit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the common fund doctrine apply to health care liens under the Health Care Services Lien Act? | Wendling/Howell: doctrine should apply to apportion attorney fees. | Hospitals: doctrine does not apply; lien recovery is statutory and independent of fund creation. | No; common fund doctrine does not apply. |
Key Cases Cited
- Maynard v. Parker, 75 Ill.2d 73 (1979) (hospital lien not subject to common fund contributions)
- Bishop v. Burgard, 198 Ill.2d 495 (2002) (ERISA subrogation and fund creation; common fund applies where fund created by attorney actions)
- Scholtens v. Schneider, 173 Ill.2d 375 (1996) (common fund doctrine origin and scope)
- Boeing Co. v. Van Gemert, 444 U.S. 472 (1980) (support for common fund rationale)
- Morris B. Chapman & Associates, Ltd. v. Kitzman, 193 Ill.2d 560 (2000) (principles limiting attorney-fee apportionment)
- Baier v. State Farm Insurance Co., 66 Ill.2d 119 (1977) (equitable basis for sharing litigation costs)
