Rector of the University of Virginia v. Harris

387 S.E.2d 772, 239 Va. 119, 6 Va. Law Rep. 1070, 1990 Va. LEXIS 10
CourtSupreme Court of Virginia
DecidedJanuary 12, 1990
DocketRecord 881333
StatusPublished
Cited by24 cases

This text of 387 S.E.2d 772 (Rector of the University of Virginia v. Harris) is published on Counsel Stack Legal Research, covering Supreme Court of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rector of the University of Virginia v. Harris, 387 S.E.2d 772, 239 Va. 119, 6 Va. Law Rep. 1070, 1990 Va. LEXIS 10 (Va. 1990).

Opinions

JUSTICE RUSSELL

delivered the opinion of the Court.

Pursuant to Code § 8.01-66.9, a hospital asserted a lien for its services upon a patient’s claim against an alleged tort-feasor. The hospital also obtained a judgment against the patient. When the patient reached a settlement with the alleged tort-feasor, the court reduced the hospital’s lien pursuant to Code § 8.01-66.9, and apportioned the balance of the settlement between the patient, his attorney, and the hospital. The hospital thereafter sued out a summons in garnishment under its judgment, seeking to acquire that portion of the settlement which had been allocated to the patient. In this appeal, we must determine whether the action of the court in reducing the lien and apportioning the settlement under Code § 8.01-66.9, affected the hospital’s right to enforce its judgment against the patient’s share.

In 1981, Virgil Thomas Harris (the plaintiff) was injured in a motorcycle accident in Albemarle County. He alleged that his injuries resulted from the negligence of Gary Michael Campbell (the defendant). The plaintiff received treatment for his injuries at the University of Virginia Hospital, in Charlottesville, incurring a bill of $74,682.49. He made no payments on the bill and the hospital, in 1985, acquired a judgment against him for that amount.

In 1982, the plaintiff filed a motion for judgment against the defendant, claiming $500,000 compensatory damages and $150,000 punitive damages. The case remained essentially dormant on the docket until 1988, but during its pendency, the Rector and Visitors of the University of Virginia asserted a statutory lien, pursuant to Code § 8.01-66.9, in the amount of the hospital bill, upon the plaintiffs claim against the defendant.

The trial date set for the personal injury case was February 10, 1988. The defendant’s applicable insurance policy limit was [122]*122$50,000. Within 72 hours of the scheduled trial date, defense counsel offered $41,500 in settlement. Plaintiff’s counsel agreed to settle the case for that amount if the court would reduce the hospital’s lien and apportion the settlement. The court, after notice to the hospital and a hearing, entered an order on March 7, 1988, reducing the hospital’s lien to $5,000, fixing the plaintiffs attorney’s fee at $16,600, and apportioning the $19,900 balance to the plaintiff. None of the parties noted an objection.

The plaintiff deposited his share of the settlement proceeds in two accounts at the Jefferson National Bank. On March 18, 1988, the Rector and Visitors sued out a summons in garnishment under the hospital’s 1985 judgment, and obtained service on the bank. The bank thereupon paid the amount on deposit into court. On March 24, the court vacated the final judgment in the personal injury case and thereafter consolidated the personal injury case and the garnishment proceeding. The plaintiff moved the court to quash the garnishment. By letter opinion, the court ruled that the final sentence of Code § 8.01-66.9 gave the court the authority to “compromise and discharge” debts due the Commonwealth, even where a debt had been reduced to judgment, and that the apportionment of the settlement made by the court’s order of March 7 was binding on the Rector and Visitors. The court entered a final order on September 7, 1988, reinstating the apportionment made on March 7, and quashing the garnishment. We granted the Rector and Visitors an appeal.

The Rector and Visitors argue that the effect of the court’s ruling was to impair the hospital’s 1985 judgment, which was final and subject to modification only on the grounds set forth in Code § 8.01-428 (fraud, clerical mistakes, accord and satisfaction, and other grounds). They contend that, even though the court had the statutory authority to reduce their lien acquired under Code § 8.01-66.9, their 1985 judgment was still valid and enforceable against any of the plaintiffs assets, including his share of the apportioned settlement, subject to a credit for the. $5,000 apportioned to the hospital by the court. The Rector and Visitors argue that they have the same right to collect their judgment by garnishment proceedings as any other judgment creditor would have.

The plaintiff argues that the position taken by the Rector and Visitors would, if adopted by this Court, render the final sentence of Code § 8.01-66.9 useless and ineffectual. He points out that there would be no reason to seek judicial reduction of a lien and [123]*123apportionment of a settlement if the lien creditor could, immediately following settlement, seize the plaintiffs share to satisfy the remaining balance of the debt. In those circumstances, the plaintiff argues, a plaintiff would have no incentive to settle, but would, instead, be well-advised to go to trial in the hope of a larger recovery.

At the time of the trial court’s decision in the present case, the final sentence of Code § 8.01-66.9 provided that the court in which a suit by an injured person has been filed, after notice to the Commonwealth or the appropriate institution,

may reduce the amount of the lien, and apportion the recovery between the plaintiff, the plaintiffs attorney, and the Commonwealth or such . . . institution as the equities of the case may appear, where the first offer acceptable to the plaintiffs attorney is not made until seventy-two hours prior to the date for trial.

In Commonwealth v. Smith, 239 Va. 108, 387 S.E.2d 767 (this day decided), we discussed the purpose and effect of this provision. We concluded that its purpose was to “reduce expense and delay, to avoid litigation, and to promote settlements.” Id. at 112, 387 S.E.2d at 769. We held that where the provision is applicable, it vests in the trial judge the authority, otherwise vested by Code § 2.1-127 in the Attorney General, the Governor, and the appropriate department head, “to compromise and reduce the Commonwealth’s lien.” Id. at 112, 387 S.E.2d at 769. The question of the trial court’s authority over the Commonwealth’s underlying debt was not before us in Smith, and it comes to us now as a matter of first impression.

Code § 2.1-127 has, for many years, given authority to the Attorney General, with the approval of the head of the appropriate institution and, in the case of claims over a stated amount, with the approval of the Governor, to compromise, settle, and “discharge” disputes and claims involving the interests of the Commonwealth and its institutions. Id. (Emphasis added.) That section was in effect when the statutory predecessor of Code § 8.01-66.9 was originally enacted and it was clearly within the legislature’s contemplation during many amendments of § 8.01-66.9, which contain cross-references to § 2.1-127. It is, therefore, significant that the General Assembly, when adding the final sen[124]*124tence to § 8.01-66.9 in 1981 (Acts 1981, c. 562), chose not to use language parallel to that in § 2.1-127. The 1981 amendment to § 8.01-66.9 authorized the trial judge, in specified circumstances, to “reduce the amount of the lien.” It did not take the further step of authorizing the judge to “discharge” the Commonwealth’s claim, although § 2.1-127 vested that authority in the Attorney General, subject to the appropriate approvals.

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Cite This Page — Counsel Stack

Bluebook (online)
387 S.E.2d 772, 239 Va. 119, 6 Va. Law Rep. 1070, 1990 Va. LEXIS 10, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rector-of-the-university-of-virginia-v-harris-va-1990.