{ "id": 2563588, "name": "NORTH CAROLINA BAPTIST HOSPITALS, INC. v. BEVERLY R. MITCHELL", "name_abbreviation": "North Carolina Baptist Hospitals, Inc. v. Mitchell", "decision_date": "1988-12-08", "docket_number": "No. 34PA88", "first_page": "528", "last_page": "543", "citations": [ { "type": "official", "cite": "323 N.C. 528" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "362 S.E. 2d 841", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1987, "opinion_index": -1 }, { "cite": "88 N.C. App. 263", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8358084 ], "year": 1987, "opinion_index": -1, "case_paths": [ "/nc-app/88/0263-01" ] }, { "cite": "214 S.E. 2d 233", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1975, "opinion_index": 0 }, { "cite": "25 N.C. App. 491", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8554985 ], "year": 1975, "opinion_index": 0, "case_paths": [ "/nc-app/25/0491-01" ] }, { "cite": "111 S.E. 857", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1922, "opinion_index": 0 }, { "cite": "183 N.C. 485", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8656918 ], "year": 1922, "opinion_index": 0, "case_paths": [ "/nc/183/0485-01" ] }, { "cite": "244 S.E. 2d 386", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1978, "pin_cites": [ { "page": "388-89" }, { "page": "389" } ], "opinion_index": 0 }, { "cite": "295 N.C. 236", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8562180 ], "weight": 2, "year": 1978, "pin_cites": [ { "page": "239" }, { "page": "240" } ], "opinion_index": 0, "case_paths": [ "/nc/295/0236-01" ] }, { "cite": "213 S.E. 2d 291", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1975, "pin_cites": [ { "page": "295" } ], "opinion_index": 0 }, { "cite": "287 N.C. 76", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8561054 ], "weight": 2, "year": 1975, "pin_cites": [ { "page": "80" } ], "opinion_index": 0, "case_paths": [ "/nc/287/0076-01" ] }, { "cite": "739 P. 2d 1101", "category": "reporters:state_regional", "reporter": "P.2d", "case_ids": [ 10412847 ], "year": 1987, "opinion_index": 1, "case_paths": [ "/p2d/739/1101-01" ] }, { "cite": "104 Idaho 234", "category": "reporters:state", "reporter": "Idaho", "case_ids": [ 4404833 ], "weight": 3, "year": 1983, "pin_cites": [ { "page": "237" } ], "opinion_index": 1, "case_paths": [ "/idaho/104/0234-01" ] }, { "cite": "238 N.Y.S. 2d 876", "category": "reporters:state", "reporter": "N.Y.S.2d", "year": 1962, "opinion_index": 1 }, { "cite": "38 Misc. 2d 950", "category": "reporters:state", "reporter": "Misc. 2d", "case_ids": [ 1124598 ], "year": 1962, "opinion_index": 1, "case_paths": [ "/misc2d/38/0950-01" ] }, { "cite": "11 N.Y.S. 2d 88", "category": "reporters:state", "reporter": "N.Y.S.2d", "year": 1939, "opinion_index": 1 }, { "cite": "171 Misc. 69", "category": "reporters:state", "reporter": "Misc.", "case_ids": [ 885431 ], "year": 1939, "opinion_index": 1, "case_paths": [ "/misc/171/0069-01" ] }, { "cite": "27 N.Y.S. 2d 463", "category": "reporters:state", "reporter": "N.Y.S.2d", "year": 1941, "opinion_index": 1 }, { "cite": "261 A.D. 1056", "category": "reporters:state", "reporter": "A.D.", "case_ids": [ 2648833, 2654598, 2651560, 2654767, 2653585, 2648339, 2652756, 2650677, 2652246, 2650135, 2654136 ], "year": 1941, "opinion_index": 1, "case_paths": [ "/ad/261/1056-09", "/ad/261/1056-10", "/ad/261/1056-05", "/ad/261/1056-11", "/ad/261/1056-01", "/ad/261/1056-06", "/ad/261/1056-04", "/ad/261/1056-07", "/ad/261/1056-08", "/ad/261/1056-02", "/ad/261/1056-03" ] }, { "cite": "25 N.Y.S. 2d 84", "category": "reporters:state", "reporter": "N.Y.S.2d", "year": 1941, "opinion_index": 1 }, { "cite": "261 A.D. 226", "category": "reporters:state", "reporter": "A.D.", "case_ids": [ 2615164 ], "year": 1941, "opinion_index": 1, "case_paths": [ "/ad/261/0226-01" ] }, { "cite": "53 Cal. Rptr. 51", "category": "reporters:state", "reporter": "Cal. Rptr.", "weight": 2, "year": 1966, "pin_cites": [ { "page": "52" } ], "opinion_index": 1 }, { "cite": "244 Cal. App. 2d 266", "category": "reporters:state", "reporter": "Cal. App. 2d", "case_ids": [ 2189758 ], "year": 1966, "opinion_index": 1, "case_paths": [ "/cal-app-2d/244/0266-01" ] }, { "cite": "209 S.E. 2d 280", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1974, "opinion_index": 1 }, { "cite": "285 N.C. 756", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8569984, 8570097, 8570068, 8570011, 8570044 ], "year": 1974, "opinion_index": 1, "case_paths": [ "/nc/285/0756-01", "/nc/285/0756-05", "/nc/285/0756-04", "/nc/285/0756-02", "/nc/285/0756-03" ] }, { "cite": "207 S.E. 2d 394", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1974, "opinion_index": 1 }, { "cite": "22 N.C. App. 745", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11313746 ], "year": 1974, "opinion_index": 1, "case_paths": [ "/nc-app/22/0745-01" ] }, { "cite": "193 S.E. 2d 782", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1973, "pin_cites": [ { "parenthetical": "superseded as to subrogation provisions by statute" } ], "opinion_index": 1 }, { "cite": "213 Va. 540", "category": "reporters:state", "reporter": "Va.", "case_ids": [ 2118154 ], "year": 1973, "pin_cites": [ { "parenthetical": "superseded as to subrogation provisions by statute" } ], "opinion_index": 1, "case_paths": [ "/va/213/0540-01" ] }, { "cite": "33 A.L.R. 4th 82", "category": "reporters:specialty", "reporter": "A.L.R. 4th", "weight": 2, "year": 1984, "pin_cites": [ { "page": "88" }, { "page": "100" } ], "opinion_index": 1 }, { "cite": "40 A.L.R. 2d 500", "category": "reporters:specialty", "reporter": "A.L.R. 2d", "weight": 2, "year": 1955, "pin_cites": [ { "page": "502", "parenthetical": "emphasis added" }, { "page": "512" } ], "opinion_index": 1 }, { "cite": "362 S.E. 2d 841", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1987, "pin_cites": [ { "page": "843" } ], "opinion_index": 1 }, { "cite": "88 N.C. App. 263", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8358084 ], "year": 1987, "pin_cites": [ { "page": "266" } ], "opinion_index": 1, "case_paths": [ "/nc-app/88/0263-01" ] }, { "cite": "188 S.E. 2d 281", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1972, "pin_cites": [ { "page": "283" } ], "opinion_index": 2 }, { "cite": "281 N.C. 300", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8574896 ], "year": 1972, "pin_cites": [ { "page": "303" } ], "opinion_index": 2, "case_paths": [ "/nc/281/0300-01" ] }, { "cite": "331 S.E. 2d 717", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "pin_cites": [ { "page": "720" } ], "opinion_index": 2 }, { "cite": "76 N.C. App. 30", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526547 ], "year": 1985, "pin_cites": [ { "page": "34" } ], "opinion_index": 2, "case_paths": [ "/nc-app/76/0030-01" ] }, { "cite": "12 S.E. 2d 269", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1940, "pin_cites": [ { "page": "272" } ], "opinion_index": 2 }, { "cite": "218 N.C. 718", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8624205 ], "year": 1940, "pin_cites": [ { "page": "722" } ], "opinion_index": 2, "case_paths": [ "/nc/218/0718-01" ] }, { "cite": "193 S.E. 657", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1937, "pin_cites": [ { "page": "659", "parenthetical": "emphasis added" } ], "opinion_index": 2 }, { "cite": "212 N.C. 300", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8607840 ], "year": 1937, "pin_cites": [ { "page": "303", "parenthetical": "emphasis added" } ], "opinion_index": 2, "case_paths": [ "/nc/212/0300-01" ] }, { "cite": "112 S.E. 2d 528", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1960, "pin_cites": [ { "page": "533", "parenthetical": "quoting State v. Whitehurst, 212 N.C. 300, 303, 193 S.E. 657, 659 (1937) (emphasis added). See also Harrison v. Guilford County, 218 N.C. 718, 722, 12 S.E. 2d 269, 272 (1940); Biddix v. Henredon Furniture Industries, 76 N.C. App. 30, 34, 331 S.E. 2d 717, 720 (1985" }, { "page": "533" } ], "opinion_index": 2 }, { "cite": "251 N.C. 775", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8627484 ], "weight": 2, "year": 1960, "pin_cites": [ { "page": "782", "parenthetical": "quoting State v. Whitehurst, 212 N.C. 300, 303, 193 S.E. 657, 659 (1937) (emphasis added). See also Harrison v. Guilford County, 218 N.C. 718, 722, 12 S.E. 2d 269, 272 (1940" }, { "page": "782" } ], "opinion_index": 2, "case_paths": [ "/nc/251/0775-01" ] }, { "cite": "86 S.E. 2d 925", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1955, "pin_cites": [ { "page": "927" }, { "page": "927" } ], "opinion_index": 2 }, { "cite": "242 N.C. 159", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8611253 ], "weight": 2, "year": 1955, "pin_cites": [ { "page": "162" }, { "page": "162" } ], "opinion_index": 2, "case_paths": [ "/nc/242/0159-01" ] }, { "cite": "72 S.E. 2d 759", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1952, "pin_cites": [ { "page": "761" }, { "parenthetical": "citations omitted" } ], "opinion_index": 2 }, { "cite": "236 N.C. 328", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8625408 ], "year": 1952, "pin_cites": [ { "page": "331" } ], "opinion_index": 2, "case_paths": [ "/nc/236/0328-01" ] }, { "cite": "185 S.E. 471", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1936, "opinion_index": 2 }, { "cite": "210 N.C. 9", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8622479 ], "year": 1936, "opinion_index": 2, "case_paths": [ "/nc/210/0009-01" ] }, { "cite": "104 Idaho 234", "category": "reporters:state", "reporter": "Idaho", "case_ids": [ 4404833 ], "weight": 2, "year": 1983, "pin_cites": [ { "parenthetical": "law firm liable to client's creditor for funds relinquished to client in violation of assignment to creditor" }, { "parenthetical": "law firm liable to client's creditor for funds relinquished to client in violation of assignment to creditor" } ], "opinion_index": 2, "case_paths": [ "/idaho/104/0234-01" ] }, { "cite": "238 N.Y.S. 2d 876", "category": "reporters:state", "reporter": "N.Y.S.2d", "year": 1962, "pin_cites": [ { "parenthetical": "attorney with notice of assignment to plaintiff, for medical services rendered, of a portion of proceeds of client's claim for personal injuries, liable to plaintiff health care provider for loss resulting from payment of sums in disregard of assignment" } ], "opinion_index": 2 }, { "cite": "38 Misc. 2d 950", "category": "reporters:state", "reporter": "Misc. 2d", "case_ids": [ 1124598 ], "year": 1962, "pin_cites": [ { "parenthetical": "attorney with notice of assignment to plaintiff, for medical services rendered, of a portion of proceeds of client's claim for personal injuries, liable to plaintiff health care provider for loss resulting from payment of sums in disregard of assignment" } ], "opinion_index": 2, "case_paths": [ "/misc2d/38/0950-01" ] }, { "cite": "33 A.L.R. 4th 82", "category": "reporters:specialty", "reporter": "A.L.R. 4th", "year": 1984, "opinion_index": 2 }, { "cite": "362 S.E. 2d 841", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1987, "pin_cites": [ { "page": "843" } ], "opinion_index": 2 }, { "cite": "88 N.C. App. 263", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8358084 ], "year": 1987, "pin_cites": [ { "page": "266" } ], "opinion_index": 2, "case_paths": [ "/nc-app/88/0263-01" ] } ], "analysis": { "cardinality": 1249, "char_count": 34920, "ocr_confidence": 0.829, "pagerank": { "raw": 4.851398821203675e-07, "percentile": 0.9325750265749084 }, "sha256": "aef2190ec0dd5cf753b3d5ae9bae341029d7ae19d26dc5cc31b13fba78c421f6", "simhash": "1:be25e7577433d66a", "word_count": 5769 }, "last_updated": "2023-07-14T15:25:25.148086+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Justices WEBB and WHICHARD join in this dissenting opinion.", "Justices Meyer and WEBB join in this dissenting opinion." ], "parties": [ "NORTH CAROLINA BAPTIST HOSPITALS, INC. v. BEVERLY R. MITCHELL" ], "opinions": [ { "text": "MITCHELL, Justice.\nThe facts are essentially undisputed in this case. The record reveals that Henry L. Clark was treated at North Carolina Baptist Hospitals, Inc. (hereinafter \u201cthe hospital\u201d) for injuries he sustained in an automobile accident. Total charges for the medical services he received from the hospital amounted to $27,579.69. Clark executed an assignment to the hospital of all amounts he had \u201creceived or shall receive as a result of\u2019 his injuries, up to the amount necessary to satisfy his indebtedness to the hospital.\nClark retained the defendant, Beverly R. Mitchell, Esq., as counsel to represent him in his personal injury claim against the driver of the other automobile involved in the accident which caused his injury. The defendant Mitchell received copies of Clark\u2019s assignment in favor of the hospital. Thereafter, she settled Clark\u2019s claim for $25,000.00, the limit of the other driver\u2019s liability insurance policy.\nPursuant to N.C.G.S. \u00a7 44-50, Mitchell caused the funds she had received to be distributed as follows: $6,250.00 to herself for legal fees, $5,812.50 to the hospital for medical bills, $3,562.50 for other medical bills, $45.00 to David Martin for investigative work, and the balance of $9,330.00 to Clark. The hospital later obtained a default judgment against Clark for the entire amount of its medical charges plus costs and interest. The hospital received the $5,812.50 paid to it from the funds the defendant had received on behalf of her client Clark, but the balance of the judgment against Clark remained unsatisfied. Consequently, the plaintiff hospital brought this action against the defendant Mitchell seeking damages for her failure to honor the assignment executed by Clark.\nUpon timely motion by the defendant pursuant to N.C.G.S. \u00a7 1A-1, Rule 41(b), the trial court entered judgment dismissing the plaintiffs action. The plaintiff appealed to the Court of Appeals which affirmed the judgment of the trial court. We allowed discretionary review by order entered on 6 April 1988.\nThe only issue before us is whether an attorney who follows the disbursement provisions of N.C.G.S. \u00a7 44-50 when disbursing a client\u2019s funds from a personal injury settlement can be held liable for the client\u2019s unpaid debt to a medical service provider whom the attorney knew had obtained the client\u2019s assignment of all such funds up to the full amount of the client\u2019s debt for medical services. Although the dissenters discuss other interesting questions, we consider that issue only and conclude that an attorney cannot be held liable for following the statute in such situations. Accordingly, we affirm the decision of the Court of Appeals.\nNoting that a purported assignment of a claim for relief for personal injury is invalid as contrary to public policy, the Court of Appeals focused on the question of whether there is a difference between the assignment of such a claim and the assignment of proceeds resulting from the claim. That court concluded that any distinction drawn between the assignment of a claim and the assignment of the proceeds of the claim is a mere fiction; therefore, such an assignment of proceeds is a violation of public policy and invalid. After concluding that the assignment was invalid, the Court of Appeals went on to hold that the defendant had complied with the provisions of N.C.G.S. \u00a7 44-50 in disbursing the funds she received in settlement of her client\u2019s personal injury claim and could not be held liable to the plaintiff hospital. We affirm the decision of the Court of Appeals, but for different reasons.\nThe plaintiff contends that the Court of Appeals erred in concluding that Clark\u2019s assignment of the proceeds of his personal injury claim was invalid. The plaintiff maintains that neither N.C.G.S. \u00a7 44-50 nor its companion, N.C.G.S. \u00a7 44-49, contains any language which suggests that they provide the exclusive means of recovery of medical expenses where a personal injury claim is involved. Furthermore, argues the plaintiff, these statutes do not contain any language which suggests the invalidity of an assignment made independently of the statutes.\nThe defendant concedes that a hospital may be able to recover from its own patient for the cost of medical services, independent of the lien statutes. The defendant argues, however, that while the lien statutes may not provide the exclusive method for recovery of medical expenses from an injured party where a personal injury claim or the proceeds of such a claim are involved, N.C.G.S. \u00a7 44-50 provides the only mechanism by which to obtain funds from an attorney who has received them for a client in satisfaction of a personal injury claim. We agree.\nWe conclude that in this case Clark\u2019s attorney cannot be held liable to the hospital for failing to honor the assignment. The intent of the legislature controls the interpretation of a statute. State v. Hart, 287 N.C. 76, 213 S.E. 2d 291 (1975). When the language of a statute is clear and unambiguous, the courts must give the statute its plain and definite meaning; but where a statute is ambiguous or unclear in its meaning, the courts must interpret the language to give effect to the legislative intent. In Re Banks, 295 N.C. 236, 239, 244 S.E. 2d 386, 388-89 (1978). A construction of a statute which operates to defeat or impair the object of the statute must be avoided if that can reasonably be done without doing violence to the legislative language. State v. Hart, 287 N.C. at 80, 213 S.E. 2d at 295.\nA pertinent part of N.C.G.S. \u00a7 44-50 reads as follows:\n[I]t shall be the duty of any person receiving . . . [funds paid for another as satisfaction of a claim for personal injuries] before disbursement thereof to retain out of any recovery or any compensation so received a sufficient amount to pay the just and bona fide claims for such drugs, medical supplies, ambulance service and medical attention and/or hospital service, after having received and accepted notice thereof . . . Provided, further, that the lien hereinbefore provided for shall in no case, exclusive of attorneys\u2019 fees, exceed fifty percent (50%) of the amount of damages recovered.\n(Emphasis added.) This portion of the statute defines the duty of \u201cany person receiving\u201d the funds paid in settlement or compensation of a personal injury claim of another. Although the statute does not make it clear, we conclude that by directing third parties as to how to disburse funds received for personal injury claims and limiting the percentage of the balance of the recovery \u2014 after deducting attorneys\u2019 fees \u2014to be paid to those benefitted by the statute, the legislature intended that such third parties pay no more than fifty percent of any such balance to service providers.\nOur interpretation of the statute comports with the well established public policy of this state favoring settlements of claims. See Fisher v. Lumber Co., 183 N.C. 485, 111 S.E. 857 (1922); Carding Specialists v. Gunter and Cooke, 25 N.C. App. 491, 214 S.E. 2d 233 (1975). An injured party\u2019s right to actually take a share of settlement proceeds from a third party who receives them on his behalf provides at least some incentive for him to settle his claim. If an injured party knows that he will never receive any money in compensation, however, he very well may refuse to settle or simply lose interest and fail to exert any effort to do so. In such a situation the hospital and other health care providers will often find themselves left without any compensation for their services. We believe that our interpretation of N.C.G.S. \u00a7 44-50 increases the likelihood that such health care providers will receive at least some compensation as a result of their patient having prevailed in an action for the personal injury for which the care was provided.\nThe plaintiffs argument that the plain language of N.C.G.S. \u00a7 44-50 does not prevent an assignment of proceeds of a personal injury claim received by a third party is not unreasonable. When read quite literally, the statute may be so construed. However, where a literal interpretation of the language of a statute would contravene the manifest purpose of the statute, the reason and purpose of the law will be given effect and the strict letter of the statute disregarded. In Re Banks, 295 N.C. at 240, 244 S.E. 2d at 389. Here, a strictly literal interpretation would contravene the intent of the legislature which we believe was, in part, to provide that the injured party receive some part of the amount recovered for his injury by requiring third parties receiving funds paid for a personal injury claim to pay no more than fifty percent of the amount recovered, exclusive of attorneys\u2019 fees, to service providers.\nThe defendant in this case received the funds from the settlement on behalf of her client Clark and disbursed them according to the statute. Therefore, she is not liable to the plaintiff hospital for failing to pay the hospital in accord with the terms of her client\u2019s assignment, because her obligation was to follow the statutory formula for distribution of such funds.\nFor the foregoing reasons, which differ from those given by the Court of Appeals, we conclude that the Court of Appeals was correct in affirming the trial court\u2019s judgment dismissing the plaintiffs claim. The decision of the Court of Appeals is, therefore, affirmed, t\u00ed\nAffirmed.\n. The assignment read as follows:\nIn consideration of services 'rendered and/or services to be rendered by North Carolina Baptist Hospitals, Inc. (\u201cHospital\u201d) to Henry Clark (\u201cPatient\u201d), the undersigned hereby assign to the Hospital all right, title and interest in and to any compensation or payment in any form that (I, -we-) have received or shall receive as a result of or arising out of the injuries sustained by the Patient resulting in (his, -her-) hospitalization, up to the amount necessary to discharge all indebtedness to the Hospital for medical services rendered to the Patient, whenever and wherever rendered. (I, -We-) agree that this Assignment shall not relieve (me, -us-) of any such indebtedness until actually paid. This Assignment is irrevocable and made without prejudice to any rights that (I, -we-) might have to compensation for injuries incurred by the Patient, but (I, -we-) hereby authorize and direct any person or corporation having notice of this Assignment to pay to the Hospital directly the amount of the indebtedness owed to the Hospital in connection with services rendered to the Patient. (I, -We-) further authorize and direct any person or corporation making such payments to the Hospital to accept and rely upon a written statement from the Hospital as to the amount of such indebtedness.\n. N.C.G.S. \u00a7 44-50 states:\nSuch a lien as provided for in G.S. 44-49 shall also attach upon all funds paid to any person in compensation for or settlement of the said injuries, whether in litigation or otherwise: and it shall be the duty of any person receiving the same before disbursement thereof to retain out of any recovery or any compensation so received a sufficient amount to pay the just and bona fide claims for such drugs, medical supplies, ambulance service and medical attention and/or hospital service, after having received and accepted notice thereof: Provided, that evidence as to the amount of such charges shall be competent in the trial of any such action: Provided, further, that nothing herein contained shall be construed so as to interfere with any amount due for attorney\u2019s services: Provided further, that the lien hereinbefore provided for shall in no case, exclusive of attorneys\u2019 fees, exceed fifty percent (50%) of the amount of damages recovered.", "type": "majority", "author": "MITCHELL, Justice." }, { "text": "Justice Meyer\ndissenting.\nWhile it is clear that we have done so implicitly, this Court should very explicitly disavow the holding of the Court of Appeals in this case to the effect that any distinction drawn between the assignment of a claim of personal injuries and the assignment of the proceeds of such a claim is a \u201cmere fiction,\u201d and therefore an assignment of proceeds is a violation of public policy and thus invalid.\nThe Court of Appeals was quite correct in holding that a raw claim or the cause of action itself is not assignable. \u201cIt seems that few legal principles are as well settled, and as universally agreed upon, as the rule that the common law does not permit assignments of causes of action to recover for personal injuries.\u201d Annot. \u201cAssignability of claim for personal injury or death,\u201d 40 A.L.R. 2d 500, 502 (1955) (emphasis added). However, courts have drawn a distinction between an assignment of the claim or cause of action itself and an assignment of the proceeds of whatever recovery is had from a settlement or an action by the claimant against the tort-feasor. Id. at 512; Annot. \u201cAssignability of proceeds of claim for personal injury or death,\u201d 33 A.L.R. 4th 82, 88 (1984).\nThere are very substantial differences between an assignment of a raw claim or cause of action for a personal injury action and the assignment of the proceeds which might be derived from the claim by settlement or by judgment. In an assignment of a raw claim or cause of action for personal injuries, the claimant loses all control of the conduct of settlement negotiations, the right to bring an action against the tort-feasor in his own name, the right to control the litigation, and the right to control the settlement of the lawsuit. This is not true if only the proceeds of a claim are assigned.\nThe important differences between the assignment of the claim and an assignment of the proceeds simply cannot be reasonably adjudged \u201cmere fiction.\u201d\nWe should particularly disavow the statement of the panel below to the effect that the \u201cmore reasoned view is that [proceeds of a personal injury claim] are not assignable before judgment,\u201d 88 N.C. App. 263, 266, 362 S.E. 2d 841, 843, because the assignment of proceeds is virtually always executed \u201cbefore judgment.\u201d\nThe majority also errs in concluding that the manifest purpose of the statute is to provide that the claimant shall receive at least a part of any recovery for his injuries. The manifest purpose of the statute in question is to create a lien on the proceeds of the personal injury recovery in the hands of a third person. The statute in no way addresses the public policy question of the right of a person to contract for the disposition of proceeds for the purpose of securing (or reimbursing for) badly needed medical care. Had the legislature chosen to address this public policy question, it would no doubt have specifically authorized such an assignment of proceeds in order to assist injured people in obtaining immediate medical treatment for their personal injuries. If the law did not permit such assignments, we would no doubt see injured parties turned away or at least shuttled out to other treatment facilities, as we now see in the case of indigents. Public policy favors the assignment of proceeds to medical care providers. For a review of numerous cases approving assignments of proceeds to pay hospitals and doctors for medical services, see Annot. \u201cAssignability of proceeds of claim for personal injury or death,\u201d 33 A.L.R. 4th 82, 100 (1984).\nThe United States District Court for the Western District of Virginia, applying Virginia law, examined and upheld as valid an assignment virtually identical to the one in this case. In re Musser, 24 Bankr. 913 (W.D. Va. 1982), involved an assignment to a hospital of proceeds which might arise resulting from personal injuries leading to the hospitalization. The court held that this constituted an equitable assignment of a future right which was fully enforceable. In determining that the proceeds of a personal injury action were assignable (at least to the medical care provider), the court relied heavily on the reasoning in Collins v. Blue Cross of Virginia, 213 Va. 540, 193 S.E. 2d 782 (1973) (superseded as to subrogation provisions by statute), which, like Carver v. Mills, 22 N.C. App. 745, 207 S.E. 2d 394, cert. denied, 285 N.C. 756, 209 S.E. 2d 280 (1974), held that insurers were entitled to assert subrogation claims against subsequent personal injury recoveries. The court noted that the reasons underlying the common law rule against assignment of the cause of action, e.g., the prevention of champerty and maintenance, are absent in the assignment of proceeds. The court observed that the assignment of proceeds differs significantly from an assignment of a cause of action in that the assignment of proceeds is valid only to the extent of the charges for services provided, gives the assignee rights only to proceeds, leaves the debtor in complete control over his personal injury claim, gives the assignee no right to proceed directly against the tort-feasor even if the debtor chooses not to proceed, and gives the assignee no right to force the debtor to proceed against the tort-feasor.\nBlock v. California Physicians \u2019 Service, 244 Cal. App. 2d 266, 53 Cal. Rptr. 51 (1966), addressed the same issues in the context of a health insurer\u2019s suit for reimbursement out of funds received by its insured through a personal injury action. It is important to note that the insured in that case agreed to reimburse his medical carrier, but the standard \u201csubrogation\u201d language was not used. The agreement merely provided that the insured would \u201creimburse CPS [California Physicians\u2019 Service] to the extent of benefits provided, immediately upon collection of damages by him.\u201d Id. at 268, 53 Cal. Rptr. at 52. The language is strikingly similar to the assignment in the case at bar.\nThe law should encourage such assignments rather than discourage them, as the majority has done.\nIn Goldwater v. Fisch, 261 A.D. 226, 25 N.Y.S. 2d 84, reh\u2019g and appeal denied, 261 A.D. 1056, 27 N.Y.S. 2d 463 (1941), the hospital brought an action against the attorney based upon his client\u2019s assignment of the proceeds of a settlement to cover charges for medical and surgical services. The court held that when the proceeds of the settlement were paid over to the attorney, the equitable title of the hospital for the amount of its claim ripened into legal title, and the attorney, having full knowledge of the hospital\u2019s interest, was obligated to pay to the hospital the sum to which it was entitled. If the recipient of the settlement fund is notified of the assignment, the fact that the recipient has already paid out the funds to the injured party is of no consequence. See Reddy v. Zurich General Accident & Liability Ins. Co., 171 Misc. 69, 11 N.Y.S. 2d 88 (Sup. Ct. 1939).\nIn Brinkman v. Moskowitz, 38 Misc. 2d 950, 238 N.Y.S. 2d 876 (Sup. Ct. 1962), the court held that an attorney who had notice of an assignment to a physician, for medical services rendered, of a portion of the proceeds of his client\u2019s claim for personal injuries, was liable to the physician for paying out the moneys in disregard of the assignment.\nAnother case addressing the identical issues as in the case sub judice is Bonanza Motors, Inc. v. Webb, 104 Idaho 234, 657 P. 2d 1102 (Ct. App. 1983), which held that personal injury proceeds held by the successful plaintiffs attorney were subject to the assignment previously executed by the plaintiff to an unrelated third party. The court relied in part upon Brinkman. Bonanza Motors also addressed the ethical responsibilities of an attorney in such a situation. The pertinent portions of the Code of Professional Responsibility in effect in Idaho at the time were identical to those in effect in North Carolina at the time of the transaction at issue in this case. Idaho Code of Professional Responsibility DR 9-102(B)(4) provided that an attorney should \u201cpromptly pay [to the client] ... as requested . . . the funds ... in the possession of the lawyer which the client is entitled to receive.\u201d The court in Bonanza Motors held that this ethical provision did not act to prevent the attorney from honoring the assignment, since the client in that case was not \u201centitled to receive\u201d the funds which he had already assigned. Bonanza Motors, 104 Idaho at 237, 265 P. 2d at 1105. See also Topik v. Thurber, 739 P. 2d 1101 (Utah 1987).\nIn the case sub judice, copies of the assignment were mailed to the defendant on two different occasions, long before the defendant disbursed any funds. The defendant admitted receiving the two packages containing the assignment and admitted having a copy of the assignment in her files. She was thus charged with the duty of paying funds of her client, up to the amount of the hospital charges, to the hospital-assignee according to the terms of the assignment.\nNeither N.C.G.S. \u00a7 44-50 nor its companion, N.C.G.S. \u00a7 44-49, contains any language which suggests that they provide the ex-elusive remedy for recovery of medical expenses where a personal injury claim is involved. Nor do they contain any language which suggests the invalidity of an assignment made independently of the statutes.\nHad the legislature intended to limit recovery of a medical care provider, as opposed to simply providing a limited lien, it could have done so. There is no doubt that the legislature knows how to draft such language when it chooses to do so. For example, just such a limitation has been imposed upon recovery by a medical care provider out of wrongful death proceeds. That statute unambiguously states that a wrongful death recovery \u201cis not liable to be applied as assets . . . except as to . . . reasonable hospital and medical expenses not exceeding one thousand five hundred dollars ($1,500) incident to the injury resulting in death.\u201d N.C.G.S. \u00a7 28A-18-2(a) (Cum. Supp. 1988). The statutory sections at issue in this case provide no such limitations nor any basis for the inference of such a limitation.\nThe majority opinion impacts upon governmental programs as well as medical service suppliers in the private sector. The amici, North Carolina Memorial Hospital, the Division of Vocational Rehabilitation Services, and the Division of Medical Assistance (Medicare), will be very severely hampered in their attempts to recoup funds expended from the public treasury. In any personal injury case involving medical expenses, the amount of the bills is taken into account in both settlements and jury verdicts. Because of the collateral source rule, whether or not the bill has been paid is irrelevant in determining the patient\u2019s damages. It is patently inequitable for a patient-plaintiff to collect all or a portion of his medical expenses in a personal injury claim and not be required to pay that money to the medical use provider. While the Court of Appeals in the case sub judice found a violation of public policy in assigning proceeds of a cause of action, the court failed to note competing public policy considerations regarding a patient\u2019s paying his bill or having the rest of society pay it for him. When the patient has money to pay, it is the better public policy to require the patient to do so. Assignment to a health care provider of the proceeds of a personal injury claim prior to recovery is a good and rational public policy to ensure payment of the medical costs and, in the case of a public medical care provider, to prevent the taxpayer from directly paying for medical services even though the patient-plaintiff has recovered from third parties.\nI believe the majority also errs in its conclusion that being able to retain a part of the settlement for himself is the claimant\u2019s only incentive to pursue his claim against the tort-feasor. The overwhelming majority of our citizens want to pay their debts for medical care. Even those who do not are motivated to escape lawsuits and judgments against themselves and the subsequent adverse effect on their credit ratings. It is only a small percentage of our citizens who absolutely do not care that have no incentive other than the lien statute to pursue the tort-feasor, even though all the proceeds would go to pay medical bills.\nIf an attorney for a patient-plaintiff cannot disburse his client\u2019s funds by agreement of the parties and does not wish to choose between the lien statute and his client\u2019s valid assignment to the medical care provider, he or she can simply deduct his fees and pay the balance into the court or clerk\u2019s office.\nAdmittedly, the attorney in this case acted completely innocently and in good faith. This Court should not, however, permit these \u201cbad facts\u201d to lure it into making \u201cbad law.\u201d I vote to find the assignment valid and enforceable against the defendant-attorney who disbursed the funds with full notice and knowledge of the assignment.\nJustices WEBB and WHICHARD join in this dissenting opinion.", "type": "dissent", "author": "Justice Meyer" }, { "text": "Justice WHICHARD\ndissenting.\nUnder the common law governing assignments, a litigant may, while an action is pending, assign any recovery he may obtain. The assignee becomes the equitable owner of the claim and is entitled to an assignment of the judgment when it is entered. Fertilizer Works v. Newbern, 210 N.C. 9, 185 S.E. 471 (1936). A debtor with notice of an assignment has a duty to make payment to the assignee. Lipe v. Bank, 236 N.C. 328, 331, 72 S.E. 2d 759, 761 (1952).\nA valid assignment may be made by any contract between the assignor and the assignee which manifests an intention to make the assignee the present owner of the debt. . . . The assignment operates as a binding transfer of the title to the debt as between the assignor and the assignee regardless of whether notice of the transfer is given to the debtor. . . . Notice to the debtor is necessary, however, to charge him with the duty of making payments to the assignee. . . . This duty arises whenever the debtor receives notice of the assignment, irrespective of who gives it.\nId. (citations omitted) (emphasis added).\nThe record here establishes the following undisputed facts:\nFor a valuable consideration recited in the document, defendant\u2019s client assigned to plaintiff, a health care provider, all sums he might receive as a result of the injuries that caused his hospitalization, up to the full amount necessary to discharge his indebtedness. The assignment \u201cauthorize[d] and directe[df any person with notice of it to pay such sums directly to plaintiff. (Emphasis added.) When defendant received proceeds from her client\u2019s claim for personal injuries that were less than the client\u2019s indebtedness to plaintiff, she had notice of the assignment.\nApplying the foregoing common law principles governing assignments to these undisputed facts, defendant had a duty to pay the funds in question to plaintiff, and plaintiff is entitled to recover from defendant any loss it has incurred on account of plaintiffs breach of this duty. See Brinkman v. Moskowitz, 38 Misc. 2d 950, 238 N.Y.S. 2d 876 (Sup. Ct. 1962) (attorney with notice of assignment to plaintiff, for medical services rendered, of a portion of proceeds of client\u2019s claim for personal injuries, liable to plaintiff health care provider for loss resulting from payment of sums in disregard of assignment); Bonanza Motors, Inc. v. Webb, 104 Idaho 234, 657 P. 2d 1102 (Ct. App. 1983) (law firm liable to client\u2019s creditor for funds relinquished to client in violation of assignment to creditor).\nThe Court of Appeals opinion, in effect, subordinates the foregoing common law principles governing assignments to the principle that rights of action for torts causing personal injuries are not assignable. See 6 Am. Jur. 2d Assignments \u00a7 37 (1963). The Court of Appeals \u201cbelieve[d] that the more reasoned view is that such proceeds are not assignable before judgment.\u201d N.C. Baptist Hospitals, Inc. v. Mitchell, 88 N.C. App. 263, 266, 362 S.E. 2d 841, 843 (1987). I disagree. I believe the more reasoned view distinguishes an assignment of the cause of action itself from an assignment of the proceeds of whatever recovery is obtained in an action, and holds the latter enforceable. See Annot. \u201cAssign-ability of Proceeds of Claim for Personal Injury or Death,\u201d 33 A.L.R. 4th 82 (1984), and cases collected therein. An assignment of settlement proceeds is an assignment of future property, not an assignment of an existing cause of action. The reasons underlying the common law rule against assignment of tort claims \u2014viz, the prevention of champerty and maintenance, or \u201ctrafficking in litigation,\u201d and the desirability of allowing the injured party to retain control of the lawsuit and any settlement thereof \u2014 thus are not implicated. See In Re Musser, 24 Bankr. 913 (W.D. Va. 1982). Nothing else appearing, I would reverse the Court of Appeals for these reasons.\nThe majority here affirms the Court of Appeals, not on the basis of the common law principle against assignment of tort claims, but on the basis of N.C.G.S. \u00a7 44-50. This statute limits the lien established for health care providers in N.C.G.S. \u00a7 44-49 to fifty percent of the damages recovered in the settlement of a claim for personal injuries, exclusive of attorneys\u2019 fees. N.C.G.S. \u00a7 44-50 (1984). The majority bases its decision on the speculative assumption that the manifest purpose of this statute is to insure consumers of health care services a sufficient portion of tort claim recoveries that they will retain the incentive to pursue their claims. I again disagree.\n\u201c[N.C.G.S. \u00a7 44-49, 50] provide rather extraordinary remedies in derogation of the common law, and, therefore, they must be strictly construed.\u201d Ellington v. Bradford, 242 N.C. 159, 162, 86 S.E. 2d 925, 927 (1955). \u201cBy the rule of strict construction ... is not meant that the statute shall be stintingly or evenly narrowly construed . . . but it means that everything shall be excluded from its operation which does not clearly come within the scope of the language used. \u201d Seminary, Inc. v. Wake County, 251 N.C. 775, 782, 112 S.E. 2d 528, 533 (1960) (quoting State v. Whitehurst, 212 N.C. 300, 303, 193 S.E. 657, 659 (1937) (emphasis added). See also Harrison v. Guilford County, 218 N.C. 718, 722, 12 S.E. 2d 269, 272 (1940); Biddix v. Henredon Furniture Industries, 76 N.C. App. 30, 34, 331 S.E. 2d 717, 720 (1985). N.C.G.S. \u00a7 44-50 does not, by its express terms, require its application to the exclusion of more extensive common law contractual rights of assignment. By holding, in effect, that it does, the majority reads into the statute a prohibition that does not \u201cclearly come within the scope of the language used.\u201d Seminary, Inc., 251 N.C. at 782, 112 S.E. 2d at 533. This is a marked departure from the strict construction of the statute this Court has mandated. Ellington v. Bradford, 242 N.C. at 162, 86 S.E. 2d at 927.\nFurther, while the majority correctly asserts that \u201c[t]he intent of the legislature controls the interpretation of a statute,\u201d I am convinced that its interpretation of N.C.G.S. \u00a7 44-50 is contrary to the actual legislative intent. \u201cIn seeking to discover [legislative] intent, the courts should consider the language of the statute, the spirit of the act, and what the act seeks to accomplish.\u201d Stevenson v. City of Durham, 281 N.C. 300, 303, 188 S.E. 2d 281, 283 (1972). The statute in question was a Depression Era enactment, passed in 1935. It was entitled \u201cAn Act To Create A Lien Upon Recoveries In Civil Actions For Personal Injuries In Favor Of Sums Due For Medical Attention And/Or Hospitalization.\u201d 1935 N.C. Sess. Laws ch. 121 (emphasis added). The words \u201cin favor of\u2019 strongly suggest that the intent of the General Assembly was to provide a new remedy to aid health care providers engaged in the then difficult task of collecting their accounts, not to remove an existing common law right that offered benefits more extensive than those established by the statute. Health care providers almost certainly sought the legislation to establish a floor \u2014 not a ceiling \u2014 on their recovery from settlement or litigation proceeds in personal injury claims.\nI thus am unpersuaded by the reasoning of either the Court of Appeals or the majority here. Because the statute does not expressly abrogate' the common law principles governing assignments, I would hold that those principles apply. Those principles, applied to the undisputed facts here, entitle plaintiff to a judgment against defendant as a matter of law. N.C.G.S. \u00a7 1A-1, Rule 56 (1983). I thus would reverse the Court of Appeals and remand the case to that court for further remand to the District Court, Forsyth County, for entry of judgment for plaintiff.\nI am not unsympathetic with the plight of an attorney caught between the conflicting demands of a client and the client\u2019s creditor. When a holder of funds is in doubt as to the validity of conflicting claims on those funds, however, the interpleader remedy is available. N.C.G.S. \u00a7 1A-1, Rule 22 (1983).\nFor the reasons expressed, I respectfully dissent.\nJustices Meyer and WEBB join in this dissenting opinion.", "type": "dissent", "author": "Justice WHICHARD" } ], "attorneys": [ "Turner, Enochs, Sparrow, Boone & Falk, P.A., by Wendell H. Ott and Thomas E. Cone, for the plaintiff appellant.", "Henson, Henson, Bayliss & Coates, by Paul D. Coates and Perry C. Henson, for the defendant appellee.", "Lacy H. Thornburg, Attorney General, by John R. Come, Henry T. Rosser, and J. Charles Waldmp, Assistant Attorneys General, for The Division of Vocational Rehabilitation Services and Division of Medical Assistance of the North Carolina Department of Human Resources and The North Carolina Memorial Hospital, amici curiae." ], "corrections": "", "head_matter": "NORTH CAROLINA BAPTIST HOSPITALS, INC. v. BEVERLY R. MITCHELL\nNo. 34PA88\n(Filed 8 December 1988)\nAttorneys at Law 8 3.1; Hospitals 8 1; Physicians, Surgeons and Allied Professions 8 10\u2014 medical services \u2014 assignment of personal injury settlement \u2014 disbursement of funds \u2014 attorney\u2019s failure to honor assignment\nAn attorney who follows the disbursement provisions of N.C.G.S. \u00a7 44-50 when disbursing a client\u2019s funds from a personal injury settlement cannot be held liable for the client\u2019s unpaid debt to a medical service provider who the attorney knew had obtained the client\u2019s assignment of all such funds up to the full amount of the client\u2019s debt for medical services. In order to ensure that injured parties will retain the incentive to pursue their claims, the legislature intended to provide in N.C.G.S. \u00a7 44-50 that the injured party receive some part of the amount recovered for his injury by requiring third parties receiving funds for a personal injury claim to pay no more than 50 percent of the amount recovered, exclusive of attorneys\u2019 fees, to service providers.\nJustice Meyer dissenting.\nJustices Webb and Whichard join in this dissenting opinion.\nJustice Whichard dissenting.\nJustices Meyer and Webb join in this dissenting opinion.\nOn discretionary review of the decision of the Court of Appeals, 88 N.C. App. 263, 362 S.E. 2d 841 (1987), which affirmed judgment dismissing the plaintiffs action entered by Harrill, J., on 16 January 1987, in District Court, FORSYTH County. Heard in the Supreme Court on 13 October 1988.\nTurner, Enochs, Sparrow, Boone & Falk, P.A., by Wendell H. Ott and Thomas E. Cone, for the plaintiff appellant.\nHenson, Henson, Bayliss & Coates, by Paul D. Coates and Perry C. Henson, for the defendant appellee.\nLacy H. Thornburg, Attorney General, by John R. Come, Henry T. Rosser, and J. Charles Waldmp, Assistant Attorneys General, for The Division of Vocational Rehabilitation Services and Division of Medical Assistance of the North Carolina Department of Human Resources and The North Carolina Memorial Hospital, amici curiae." }, "file_name": "0528-01", "first_page_order": 560, "last_page_order": 575 }