Id. at ¶¶ 9, 11. She further claims that the Hospital filed the
lien in order "to extort payment" on the double billings, knowing
that the lien claims "impede and impair settlement." Id. at ¶
Plaintiff's first amended complaint states eight claims for
relief: (1) conversion; (2) fraudulent concealment; (3) unfair
business practices; (4) breach of contract; (5) violation of
public policy; (6) interference with contract; (7) abuse of
process; and (8) violation of civil RICO. Plaintiff seeks
declaratory and injunctive relief as well as treble damages.
Plaintiff also seeks to certify a class consisting of "all other
patients of defendants' facilities who are insured by private
insurance and to whom treatment is rendered on account of
accidental injury and who make claim against third party
tortfeasors for recovery." FAC at ¶ 13.*fn4
Defendants removed the action to federal court because it
involves RICO allegations and is "related to" an ERISA plan.
Defendants maintain that the HLA authorizes a hospital that
provides services to any person injured in an accident to file a
lien, in the amount of the hospital's "reasonable and necessary
charges," against any damages recovered by the injured person.
They point out that a lien can be placed on damages recovered by
"judgment, settlement or compromise." Defendants contend that
they are not double billing plaintiff; instead they seek
"additional compensation from the third party tortfeasor
responsible for the patient's injuries, not from the patient."
Summary judgment should be granted if "there is no genuine
issue as to any material fact and . . . the moving party is
entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c).
"Where the record taken as a whole could not lead a rational
trier of fact to find for the non-moving party, there is no
`genuine issue for trial.'" Matsushita Elec. Industrial Co. v.
Zenith Radio, 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538
(1986) (citing First National Bank of Arizona v. Cities Service
Co., 391 U.S. 253, 289, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968)).
"At the summary judgment stage, the district court is not to
weigh the evidence or determine the truth of the matter but
should only decide whether there is a genuine issue for trial."
Washington v. Garrett, 10 F.3d 1421, 1428 (9th Cir. 1993)
(citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106
S.Ct. 2505, 91 L.Ed.2d 202 (1986)).
The moving party bears the initial responsibility of "informing
the district court of the basis for its motion, and identifying
those portions of `the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any,' which it believes demonstrate the absence of
a genuine issue of material fact." Celotex Corp. v. Catrett,
477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quoting
When the nonmoving party will bear the burden of proof at trial
on a dispositive issue, the nonmoving party must then "go beyond
the pleadings and by her own affidavits, or by the `depositions,
answers to interrogatories and admissions on file,' designate
`specific facts showing that there is a genuine issue for
trial.'" Id. at 324, 106 S.Ct. 2548 (quoting Fed.R.Civ.P. 56(c)
& (e)). The court views all facts and draws all inferences
therefrom in the light most favorable to the nonmoving party.
United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct.
993, 8 L.Ed.2d 176 (1962). If, however, the nonmoving party's
evidence is "merely colorable" or "not significantly probative,"
summary judgment may be granted. Anderson, 477 U.S. at 249-50,
106 S.Ct. 2505.
Defendants' argument in support of summary judgment is
three-fold: (1) the HLA authorizes the Hospital to impose a lien
against the Holden settlement; (2) the Hospital's contract with
Blue Shield to provide benefits to Blue Shield members does not
limit the Hospital's lien rights; and (3) the Hospital's lien
rights exist independently of any debt owed by plaintiff to the
In addition, defendants argue that plaintiff should not be
permitted to question the amount of the Hospital's full charges
(and by extension the validity of the lien) because Grauberger
relied on those figures to secure the settlement in the Holden
litigation. However, the authority cited by defendants is
inapposite. In American Title Ins. Co. v. Lacelaw, 861 F.2d 224
(9th Cir. 1988), the court merely held that a statement in a
trial brief could constitute a judicial admission at a later
stage in the same litigation. Since the plaintiff in Lacelaw
"did not introduce the statement into evidence or object to the
introduction of contradictory testimony," however, the court
decided it was not an abuse of discretion to refuse to treat the
statement as a binding admission after trial. Id. at 227.
First National Ins. Co. v. Federal Deposit Ins. Corp.,
977 F. Supp. 1051 (S.D.Cal. 1997) is also not on point. That case
addressed whether a party could be judicially estopped from
asserting a position when: (1) the position was adopted in a
prior litigation; but (2) the judgment was reversed by the Ninth
Circuit. See id. at 1058. In First National the court
explained that judicial estoppel "bars a party from taking
inconsistent positions in the same proceeding." Id. at 1057
(emphasis added). Furthermore, the court explained that the Ninth
Circuit follows the rule allowing judicial estoppel only when the
inconsistent position was "actually adopted by the first court."
Id. (quoting Masayesva for and on Behalf of Hopi Indian Tribe
v. Hale, 118 F.3d 1371, 1381-82 (9th Cir. 1997)). In the present
case, Grauberger's settlement with Holden can hardly be construed
as a judicial adoption of Grauberger's position, regardless of
the consistency or inconsistency of that position with the claims
she is now asserting. This court therefore rejects defendants'
argument concerning judicial admissions.
Plaintiff argues that the Hospital's lien is based on an
underlying debt owed by plaintiff to the Hospital, which debt had
already been discharged by the payments plaintiff and Blue Shield
made to the Hospital. In essence, plaintiff is pointing out that
the money the Hospital seeks from the settlement proceeds
ultimately comes out of plaintiff's recovery, and not out of
the tortfeasor's assets or the tortfeasor's insurance company. In
other words, since tortfeasor cares only about being released
from liability and not about who receives the proceeds from the
settlement, the Hospital's lien actually impacts the plaintiff
and not the tortfeasor. In plaintiff's view, by seeking
additional proceeds from the settlement, the Hospital is charging
her the maximum rates for its services, when her health plan had
negotiated discounted rates that have been paid in full.
Defendants persistently contend that the Hospital's lien is
independent of the debt that plaintiff owed the Hospital for her
medical treatments, or the payments made by plaintiff or her
insurer. According to defendants, the lien runs against the
tortfeasor, whereas the prior payments came
from plaintiff and her insurer. In defendant's view, the two are
independent such that the Hospital can pursue its lien against
the tortfeasor even though payments were made by plaintiff and
her insurer. In other words, defendants assert that the lien does
not secure a debt owed by plaintiff to the Hospital; rather,
the lien applies to a recovery from the tortfeasor, as a separate
statutory right of the Hospital. To support this argument,
defendants cite a number of statutory liens — including Worker's
Compensation liens, Medi-Cal Hospital liens, AIDS Vaccine Victims
Fund liens, and Asbestos Workers' Account liens — that
purportedly exist even in the absence of an underlying debt.
Defendants also cite to three brief California trial court
decisions that apparently accepted defendants' argument. Finally,
defendants argue that the legislative history of a recently
enacted statute, SB 1471 codified as California Civil Code
section 3040, which limits the lien rights of health plans,
medical groups and independent practice associations to the
amount actually paid for health care, conclusively shows that
hospital liens are not limited to the negotiated rate paid by
the patient or her insurer.
The Hospital Lien Act states in relevant part:
Every person, partnership, association, corporation,
public entity, or other institution or body
maintaining a hospital licensed under the laws of
this state which furnishes emergency and ongoing
medical or other services to any person injured by
reason of an accident or negligent or other wrongful
act not covered by Division 4 (commencing with
Section 3201) or Division 4.5 (commencing with
Section 6100) of the Labor Code, shall, if the
person has a claim against another for damages on
account of his or her injuries, have a lien upon the
damages recovered, or to be recovered, by the
person, or by his or her heirs or personal
representative in case of his or her death to the
extent of the amount of the reasonable and necessary
charges of the hospital and any hospital affiliated
health facility, as defined in Section 1250 of the
Health and Safety Code, in which services are
provided for the treatment, care, and maintenance of
the person in the hospital or health facility
affiliated with the hospital resulting from that
accident or negligent or other wrongful act.
Cal.Civ.C. § 3045.1 (emphasis added). The HLA further specifies
that the lien "shall apply whether the damages are recovered, or
are to be recovered, by judgment, settlement, or compromise."
Cal. Civ.C. § 3045.2. Finally, the Act requires notice to the
alleged tortfeasor and his insurer that a lien is being asserted,
see Cal.Civ.C. § 3045.3, and imposes liability if the
tortfeasor or his insurer make payment to the injured party
without first paying as much of the lien as can be satisfied by
"50 percent of the moneys due under any final judgment,
compromise, or settlement agreement after paying any prior
liens." Cal.Civ.C. § 3045.4.
The California Supreme Court has concisely restated the
essential features of the HLA:
In California, when a hospital provides care for a
patient, the hospital has a statutory lien against
any judgment, compromise, or settlement received by
the patient from a third person responsible for his
or her injuries, or the third person's insurer, if
the hospital has notified the third person or insurer
of the lien. If the hospital is paid at the time the
judgment, compromise, or settlement is disbursed, it
is entitled to receive as much of its lien as can be
satisfied out of 50 percent of the recovery.
Mercy Hospital and Medical Center v. Farmers Insurance Group of