February 23, 2010

The Alaska Supeme Court Rules That Personal Injury Claims Are Not Assignable

In a recent decision, Mat-Su Regional Medical Center, LLC v. Burkhead, the Alaska Supreme Court held that a patient could not assign their personal injury claim for recovery of her medical expenses to her health-care provider.

In Burkhead, a patient received medical services at a hospital after an automobile accident. During her treatment, she signed two “Consent: Authorization, Assignment, and Acknowledgment” forms in which she ostensibly assigned to the hospital “all rights to or claims for payment against third parties” for the reasonable value of medical services rendered. The hospital subsequently attempted to intervene in the patient’s personal injury lawsuit and filed its own suit against the tortfeasor. In both cases, the hospital sought to recover the expenses it incurred in treating the patient from the tortfeasor directly and pursuant to the patient’s purported assignment.

The Alaska Supreme Court held that the patient’s purported assignment of her personal injury claim to the hospital was not valid. The court explained that

the assignment of personal injury claims is socially problematic given the potential for overreaching when injured assignees bargain away some or all of their rights under the equivalent of at least economic, if not physical or mental, duress. Any benefits potentially derived by expanding the remedies available to mandatory providers of emergency services would seem to be outweighed by the risk that the routine collection of such assignments from emergency room patients would increase the potential for duress and decrease the likelihood of a fully informed assignment.

Id. at 5. As such, and because health-care providers had the ability under Alaska law to file a lien against any recovery by the patient from the tortfeasor, the court refused to recognize the assignment of the patient’s personal injury claim to the hospital:

Given that our legislature has provided an effective, albeit limited, lien remedy, the social ramifications of allowing such assignments, and health care providers' continued ability to collect from their own patients as creditors, we think it should be for the legislature to decide whether to recognize assignments of patients' personal injury claims.
Id. at 6.

The Alaska Supreme Court’s decision may have unintended consequences for the subrogation rights of insurers and health-care providers in Alaska. Litigants may attempt to rely on Burkhead to argue that unless a statute expressly assigns all or part of a personal injury claim to the insurer, employer or other entity, any contractual assignment of that right will not be valid.

The Burkhead ruling may also have an impact in legal malpractice cases. The Alaska Supreme Court has not squarely held that a legal malpractice claim may be assigned. It, however, did not disapprove of the practice in Continental Ins. Co. v. Bayless & Roberts, Inc., 608 P.2d 281, 286 (Alaska 1980) and Bohna v. Hughes, Thorsness, Gantz, Powell & Brundin, 828 P.2d 745, 758 (Alaska 1992) superseded by statute on a different issue as stated in Petrolane Inc. v. Robles, 154 P.3d 1014 (Alaska 2007).

In holding that a patient could not assign her personal injury claim to a health-care provider, the Burkhead court, however, noted that it has “long recognized a ‘general rule of non-assignability of claims for personal injury’ under Alaska law” and that [t]he majority of jurisdictions around the country have similarly declined to recognize the validity of assignments of tort claims for personal injury….” The court’s general disapproval of assignment of personal injury claims could support the argument that the assignment of a legal malpractice claims is not valid, given that a legal malpractice claim is a type of personal injury claim.

August 11, 2008

A Modest Proposal

People complain about the snail’s pace of civil litigation. It takes a minimum of a year for almost any case to get to trial. Bigger and more complex cases take even longer.

If you ask around, you find that many civil litigation lawyers blame the delay on all the family law cases. The trial courts are clogged with divorce, child custody, division of marital property, domestic violence, and child in need of aid proceedings. The judges spend so much time refereeing for all these angry people who for one reason or another can’t run their own lives that they have no time to deal with the “regular” civil lawsuits. (You know, the really important “regular” civil cases, like the ones involving a slip and fall in a grocery store, or a State of Alaska employee who is unfairly disciplined for being an impossible jerk who won’t do any real work.)

It used to be that the Anchorage Superior Court had one particular judge assigned to handle the family law cases. But that practice was never actually authorized by statute so it was abandoned a while back. Now, all the Superior Court judges on the civil side get a slice of the family law cases, whether they want them or not. The civil judges have to juggle all these prickly family law disputes where emotions run high with their “regular” caseload where usually only something unimportant like millions of dollars are at stake.

Some have suggested that Alaska set up its own family law court to handle these cases, as other states have done. But I’ve got another idea. (Notice, I did not say a better idea.) I think the State ought to set up a Judge Judy type program on cable TV. The State could hire some shrill or half-insane retired judge to act as the star of the show. (A few candidates come to mind.) And give the family law litigants the option of volunteering to submit their dispute to a TV judge rather than a real one. No doubt this will clear out a bunch of cases because I bet any number of star-struck dillweeds would jump at the chance to be on TV.

Of course, you would need a savvy TV production person to screen the cases. You would want to televise only the really juicy ones. Like ones involving infidelity, custody disputes over pets, or the misuse of duct tape. (“I tell you, your honor, since he didn’t pay child support, I had to restrain the kids and feed them bowls of paint chips for dinner!”) With good case screening, the State would have a hit TV show on its hands. It could even make some money from all the advertisers wanting to sponsor the show. (“The Alaska Justice Show, brought to you by your friends at VECO Corporation.”)

I have to admit that I question whether the family law TV show would really speed up the pace of “regular” civil litigation much. The civil litigation process, with all that discovery and whatnot, just takes awhile. Besides, you need to give the hard-working lawyers in those cases enough time to earn their fees. But at least the Alaska Justice Show will keep us entertained while waiting for our "regular" civil cases to come up on the docket.