Chiropractor’s Lien Can Be Adjudicated by Court Without Obtaining Personal Jurisdiction Over Chiropractor

Illinois’ Healthcare Services Lien Act, 770 ILCS 23/1 (the Act), allows a health care provider to impress a lien on a patient’s claim for personal injuries up to the amount of the provider’s services.  So, if I give medical services to an injured patient worth $2,000, that patient doesn’t pay me, and he later settles a personal injury suit for $10,000, I will have a claim to $2,000 of that settlement amount.  I would then ask the court – through a written petition – to validate (or “adjudicate”) the lien.

Smith v. Hammel, 2014 IL App (5th) 130227, examines the elements of a statutory healthcare service lien and the court’s expansive jurisdictional power to assess the validity and amount of a lien in the context of a personal injury claim.

The defendant lien claimant was a chiropractor who rendered about $3,000 worth of services to a patient who was injured in a car crash.  The chiropractor served notice of his healthcare services lien under the Act.  That patient later settled with the other driver before filing a personal injury suit.  The patient’s attorney (who negotiated the settlement with the other driver) filed a petition to adjudicate the chiropractor’s lien and served it by certified mail on the chiropractor.  When the chiropractor failed to show up on the petition date, the Court entered a default against the chiropractor and deemed the lien “void and discharged.”  About 18 months later, the chiropractor moved to vacate the order nullifying his lien on the basis that he was never personally served and so the Court lacked personal jurisdiction over him.  The court denied his motion.

Result: Affirmed

Reasons:

To perfect a healthcare services lien, the medical provider must serve notice of his lien by certified mail or in person upon (a) the injured party  and (b) the person against whom the claim exists.  770 ILCS 23/10(b).  To have the lien adjudicated by the court, either the injured party or the lien claimant may file a petition to adjudicate the lien and serve the petition by personal service, substitute service, registered or certified mail.  770 ILCS 23/30.

The Court found that the plaintiff’s counsel’s certified mail service of his petition to adjudicate the lien was sufficient to confer jurisdiction over the settlement proceeds.  The chiropractor argued that the Court lacked jurisdiction over him since he wasn’t personally served with a summons or the petition to adjudicate.

Personal jurisdiction means a court’s authority to determine the rights and duties of a litigant.  Firmly entrenched alternatives to personal jurisdiction are in rem jurisdiction and quasi in rem (“power against a thing”) jurisdiction – which involve jurisdiction based on the relationship between the defendant and a state with respect to specific property in the state.  (So, if I live in Florida but have a bank account in IL, a lawsuit seeking control over my IL bank account would implicate in rem jurisdiction.)  In rem jurisdiction rests exclusively on the site of the res (or “thing”).  A state has jurisdiction over property located within its borders and the settlement funds – here, the “res” – don’t have to be deposited into court for the court to exercise jurisdiction over them.

Since the litigation involved the settlement proceeds (the “thing” or “res”) paid to the plaintiff, he didn’t have to serve a summons on the chiropractor and the court didn’t have to have personal jurisdiction over him in order to adjudicate his lien.  By serving notice of the petition to adjudicate by certified mail in compliance with the statute, the plaintiff satisfied the predicate for the court to exercise in rem jurisdiction over the settlement funds.  (¶¶ 26-27).

Take-aways:

If you receive a notice of a petition to adjudicate a healthcare services lien, you should show up – even  if you’re not personally served.  The case is also noteworthy for its illustration of a court’s expansive jurisdictional power over property – even where claimants to that property haven’t been personally served with summons.  To adjudicate a lien, all that’s required is the court to have jurisdiction over the settlement funds.  It doesn’t have to have personal jurisdiction over the individual parties claiming an interest in the funds.

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PaulP

Litigation attorney at Bielski Chapman, Ltd. representing businesses and individuals in business litigation, post-judgment enforcement, collections and real estate litigation.