UCC Lien Law – How Cases Like Adan v. Allstate Ins. Co. (Jan. 6, 2014) Are Transforming the Way Personal Injury Cases Are Handled, Processed and Resolved
In Adan v. Allstate Ins. Co, (Jan. 6, 2014), Allstate argues in favor of keeping the name of the health care provider on the liability settlement check which it had sent to the attorney … and wins. The case raises the question – why would a liability payer take this kind of stance in court? More importantly, what can be done to improve the situation?
On Wednesday, October 23, 2013, an historic event occurred.
It appears that Allstate Insurance Company made arguments to the Minnesota Appellate Court in favor of keeping a health care provider’s name as co-payee on the liability settlement check which it had sent to the patient’s attorney. The health care provider in question had filed for a UCC Lien in that case and had notified the payer of the lien.
In my 15 years as an attorney who focuses on assignment and lien issues (i.e., the law of secured interests), this is the first time I recall an automobile liability payer making arguments to an appellate court favoring a health care provider’s rights in this arena.
This is not to say it’s never happened before. It’s just the first time I’ve become aware of it happening in this particular fashion.
Which raises the issue – why might a liability payer take this kind of a stance in court?
Why would a liability payer make arguments to a court in favor of keeping a provider’s name on the settlement check which it had sent to the attorney?
The case in question is Adan v. Allstate Insurance Company (January 6, 2014) – a case decided just yesterday by the Minnesota Appellate Court.
In yesterday’s decision, the Minnesota Appellate Court upheld the right of Allstate to keep the name of the health care provider on the liability settlement check which it had sent to the attorney despite the attorney’s strong protests and objections … and ultimately the attorney’s lawsuit to have the provider’s name removed.
What’s particularly notable about the Minnesota case, however, isn’t even the Minnesota case.
What’s particularly notable about this case is that it follows another important UCC Lien case decided by the Colorado Appellate Court only seven months before – a case in which Allstate Insurance Company was, again, the defendant – Medical Lien Management, LLC v. Allstate Insurance Co. (June 6, 2013).
In the Medical Lien Management case, a slightly different set of facts emerge. In Medical Lien Management, the Colorado Appellate Court held that Allstate – again, a liability payer in this instance – was obligated to pay a lienholder when it did not place the name of the lienholder on the check which it appears to have sent to the attorney (note: the Court cited to the Colorado’s UCC Lien Law in partial support of its decision).
In other words, in Medical Lien Management, the Colorado Court appears to have held Allstate responsible for paying twice when it didn’t place the name of the lienholder on the liability check which it apparently had sent to the attorney and when the lienholder subsequently never received payment.
So let’s quickly summarize:
Two UCC Lien cases. Both involving Allstate as defendant. Both involving liability settlement proceeds being sent to the attorneys.
In the first case, it appears that Allstate did not put the name of the lienholder on the check which it had apparently sent to the attorney. Lienholder never receives payment. Lienholder sues Allstate. Court holds in favor of lienholder. Allstate has to pay twice.
In the second case, Allstate changes course. Upon receiving notice of the UCC lien, Allstate places the name of the health care provider as co-payee on the check and sends the check to the attorney. The attorney for the patient then files suit to have the name of the provider removed. Allstate stands firm, arguing in favor of keeping the lienholder’s name on check. Court holds in favor of Allstate and the health care practitioner. Allstate pays once.
Which brings me back to my original question – what is it that would possibly cause a liability payer to argue in favor of keeping the name of the provider on the check?
More importantly, what can be done to improve this situation?
My guess is that the UCC Lien Law will go through a period of challenge, perhaps mostly by attorneys. In the end, I believe that the UCC Lien Law – a non-discriminatory law based on fundamental and deeply-rooted principles – will remain intact and will survive.
Rather than continuing to fight it, I believe what’s more likely to happen, increasingly, is that we will see more and more instances of attorneys and providers simply working with it – and increasingly with each other – shifting attention to the real issues relating to the way accident injury cases are being collectively handled, processed and resolved.
What are the real issues in the way injury cases are being handled, processed, and resolved?
THAT is what should be the focus of our discussion, and not the UCC Lien Law.
▪ Keith Pendleton, JD is a health care attorney and staff writer for Injury+. His most recent achievements include launching Injury+, the Free Forms Library for health care practitioners, and also the “Injury Resource Initiative,” an alliance of industry stakeholders committing to advancing the state-of-the-art in injury diagnosis and care. Keith can be reached at (855) 224–3295.
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