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Acupuncture Today
March, 2000, Vol. 01, Issue 03
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Out-of-Control Settlement Judges

By Michael J. Schroeder, Esq.

What Exactly Is a Personal Injury Acupuncture Lien?

A personal injury acupuncture lien is most commonly created by a signed written contract entered into among an acupuncturist, the acupuncturist's patient who has been injured in an accident, and the patient's attorney.

The patient has usually filed a personal injury lawsuit against the person who caused their injuries in order to be compensated for medical bills, lost wages and other damages. The patient is in need of treatment for his or her injuries suffered in an accident but does not have the money to pay for the services.

Many acupuncturists are willing to render treatment on credit so long as the acupuncturist is given a lien against any money received in the personal injury lawsuit. It is important to note that the acupuncturist is typically not a party to this lawsuit. This is significant because unless you are a party to the personal injury lawsuit, the judge in the personal injury lawsuit usually has no authority to issue orders regarding you.

Once signed, the personal injury lien gives the doctor a secured priority on the proceeds of the lawsuit so that the doctor must be paid in full first, before the patient or patient's attorney can receive any money. The U.S. Constitution specifically prohibits the government from impairing contracts that were validly entered into by private parties.

What Some Settlement Conference Judges Have Been Doing Lately

Recently, a number of settlement judges handling personal injury matters in California have begun engaging in the improper practice of unilaterally reducing personal injury liens, often with little or no notice or hearing. A recent decision by the California Court of Appeals (Lovett v. Caruso) described how this can happen.

In Lovett, the patient's attorney filed a motion for an order from the trial judge reducing the doctor's medical lien. A copy of this motion was mailed to the doctor. The doctor's attorney appeared in court and asked for an extension of time to respond to the motion. As will be discussed below, this was a tactical mistake. The trial judge granted the extension of time. When the matter was heard, the trial judge ruled against the doctor and reduced his lien.

The doctor appealed, claiming (among other things) that the trial judge did not have jurisdiction over him because he was not a party to the lawsuit. The Court of Appeals ruled against the doctor on this issue. The Court of Appeals found that while the trial court did not originally have jurisdiction over the doctor, when the doctor voluntarily showed up and agreed to participate in the hearing, he waived his objections and submitted to the trial court's jurisdiction. The Court of Appeals addressed the matter on its merits and ruled that it was improper for the settlement judge to have reduced the lien without a separate lawsuit testing the validity of the personal injury lawsuit. The doctor won, but only after incurring substantial legal fees at the trial court level and before the Court of Appeals.

What Should You Do?

What should the doctor's lawyer have done? A special procedure is available when one party wishes to contest a court's jurisdiction. The doctor's lawyer should have used this procedure. If this procedure is not followed meticulously, virtually any action will constitute a waiver of the objection to the court's jurisdiction.

A party objecting to a court's jurisdiction "specially appears" before the court. This is done by both stating the objection orally when appearing in court as well as putting the objection on all papers which are filed with the court. In addition, the only matter upon which you can specially appear without waiving jurisdiction is a motion to quash the service the court papers on you on the grounds that the court lacks jurisdiction over you.

There is another advantage to this approach. If a trial judge attempts to overreach by claiming to have jurisdiction when none exists, the doctor has the right to take an immediate appeal. This appeal stays the entire case until it is decided, which usually takes one to two years. During this entire time, the doctor's lien would usually continue to be in full force and effect, and the doctor would be entitled to collect upon it unless the person challenging the lien posted a cash bond in the amount of one and one-half times the lien. This bond would guarantee that there was a cash pool available for the doctor to collect on, plus interest, when the appeal is resolved. It seems extremely unlikely to this commentator that anyone who confronts this stout a defense of the doctor's lien will go to these lengths to try to get it set aside.

Michael Schroeder has formed more than 300 chiropractic-medical practices since 1982. He is the current vice president and general counsel for the American Acupuncture Council, and for the last twelve years has been the vice president of the National Association of Chiropractic Attorneys (NACA). In 1995, NACA honored Mr. Schroeder as their "Attorney of the Year."


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