2018 New Mexico Statutes
Chapter 48 - Liens and Mortgages
Article 8 - Hospital Liens
Section 48-8-1 - Liens upon personal injury damages recovered by patients; creation; exception.

A. Every hospital located within the state that furnishes emergency, medical or other service to any patient injured by reason of an accident not covered by the state workmen's compensation laws is entitled to assert a lien upon that part of the judgment, settlement or compromise going, or belonging to such patient, less the amount paid for attorneys' fees, court costs and other expenses necessary thereto in obtaining the judgment, settlement or compromise, based upon injuries suffered by the patient or a claim maintained by the heirs or personal representatives of the injured party in the case of the patient's death.

B. A hospital lien may be filed upon damages recovered, or to be recovered, either as a result of a judgment, or upon a contract of settlement or compromise, for the amount of the reasonable, usual and necessary hospital charges for treatment, care and maintenance of the injured party in the hospital and to the date of payment of the damages.

History: 1953 Comp., § 61-9-1, enacted by Laws 1961, ch. 227, § 1.

Lien upon proceeds of uninsured motorist policy is permitted. Storey v. Univ. of N.M. Hosp./BCMC, 1986-NMSC-096, 105 N.M. 205, 730 P.2d 1187.

The New Mexico Constitution does not prohibit a state hospital from reducing an obligation owed by a patient-debtor. — The first clause of N.M. Const. Art. IV, Sec. 32 restricts only the legislature from diminishing obligations owed to the state; a state hospital is not constitutionally prohibited from reducing a hospital lien. Hem v. Toyota Motor Corp., 2015-NMSC-024, overruling in part Gutierrez v. Gutierrez, 1983-NMSC-016, 99 N.M. 333, 657 P.2d 1182.

In interpleader proceeding, where plaintiff's first attorney agreed to give up his statutory priority over settlement funds, so the university of New Mexico hospital (UNMH) would be paid first, in exchange for the hospital agreeing to accept a lesser amount for plaintiff's outstanding medical bills, the New Mexico supreme court held that the first clause of N.M. Const. Art. IV, Sec. 32 is strictly a limitation on the legislature, and UNMH, as a state hospital, is not constitutionally prohibited from compromising undisputed obligations with patient-debtors. Hem v. Toyota Motor Corp., 2015-NMSC-024, overruling in part Gutierrez v. Gutierrez, 1983-NMSC-016, 99 N.M. 333, 657 P.2d 1182.

Court lacks authority to void or reduce liens. — The district court lacks equitable or discretionary power to void or reduce the public hospital liens which are created pursuant to this article. Gutierrez v. Gutierrez, 1983-NMSC-016, 99 N.M. 333, 657 P.2d 1182.

Hospital cannot accept part payment as satisfaction. — The New Mexico constitution prohibits a public hospital from accepting payment of less than the full amount of an undisputed legal obligation as a satisfaction. The state cannot compromise the amount owed to it for providing medical services unless a good faith dispute exists as to the amount of indebtedness or liability. Gutierrez v. Gutierrez, 1983-NMSC-016, 99 N.M. 333, 657 P.2d 1182.

Section governs hospitals' assertions of liens over wrongful death proceeds. — The Wrongful Death Act was enacted in 1882; the Hospital Lien Act was enacted in 1961. The relevant provisions of the two acts have not been amended. Therefore, in view of the inconsistency between Section 41-2-3 NMSA 1978 and this section, the relevant provision of Section 41-2-3 NMSA 1978 of the Wrongful Death Act is implicitly repealed to the extent it would prevent a hospital from asserting a lien against the proceeds of a wrongful death action. Moreover, the Hospital Lien Act specifically allows satisfaction of the decedent's hospital debt out of proceeds of an action brought by the decedent's personal representative, and this specific provision qualifies the general prohibition in the Wrongful Death Act against using proceeds from a wrongful death action to satisfy the debts of the deceased. Hall v. Regents of Univ. of N.M., 1987-NMSC-069, 106 N.M. 167, 740 P.2d 1151.

Hospital liable for proportion of attorneys' fees. — In hospital lien cases the "common-fund" doctrine most appropriately defines the duties and liabilities of the parties and provides the most fundamental fairness. Under this doctrine, an attorney who creates a pool of funds for a group has the right to seek payment from the pool or seek proportional contribution from those who accept the benefits of the attorney's efforts. In hospital lien cases, the hospital's right to assert a lien, and its right to recovery based on that lien, depend by statute on the obtaining of a judgment or settlement. The proceeds of that judgment or settlement operate as a fund, and, without the fund, the hospital has nothing upon which to assert a lien under the act. By seeking payment from the fund in reliance on the lien, the hospital directly receives the benefits of the work done by the patient's attorney. Martinez v. St. Joseph Healthcare Sys., 1994-NMSC-030, 117 N.M. 357, 871 P.2d 1363.

Where a private hospital seeks recovery from a common-fund or asserts a lien under the Hospital Lien Act, and plaintiff's recovery is insufficient to pay attorneys' fees and the hospital bill in full, the hospital must pay a proportionate share of the attorneys' fees incurred in obtaining the judgment settlement or compromise that created the common-fund. Wright v. First Nat'l Bank, 1997-NMSC-026, 123 N.M. 417, 941 P.2d 498.

Hospital not liable for fees when award sufficient. — When a public hospital held liens to be paid from the proceeds of the patients' personal injury claims, since the claim proceeds were sufficient to pay attorney's fees and costs and the hospital liens in full, the hospital could not be held liable for the proportionate share of attorneys fees and costs incurred by patients in pursuing personal injury claims, on the basis of quantum meruit, implied contract, or unjust enrichment. Eaton, Martinez & Hart v. Univ. of N.M. Hosp., 1997-NMSC-015, 123 N.M. 76, 934 P.2d 270; Schroeder v. Mem'l Med. Ctr., 1997-NMSC-046, 123 N.M. 719, 945 P.2d 449.

Insured's liability when hospital reimbursed by insurer. — Where a hospital has a contract with plaintiff's insurer under which reimbursement by the insurer constitutes payment in full by the insured, the only amount the hospital is entitled to collect from the insured is any co-pay or cost-share payment due, and, under these circumstances, a hospital may not file a lien under the Hospital Lien Act for any amounts disallowed by the insurer. Wright v. First Nat'l Bank, 1997-NMSC-026, 123 N.M. 417, 941 P.2d 498.

Post-common-fund distribution deficiencies. — Where it was found that plaintiff's obligation to the hospital was satisfied by the net proceeds of the settlement, the hospital could not proceed against plaintiff for any "deficiency" arising after the proceeds from a common-fund were distributed. Wright v. First Nat'l Bank, 1997-NMSC-026, 123 N.M. 417, 941 P.2d 498.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 40 Am. Jur. 2d Hospitals and Asylums § 5.

Construction, operation, and effect of statute giving hospital lien against recovery from tortfeasor causing patient's injuries, 16 A.L.R.5th 262.

Physicians' and surgeons' liens, 39 A.L.R.5th 787.

Limitation to quantum meruit recovery, where attorney employed under contingent-fee contract is discharged without cause, 56 A.L.R.5th 1.

Method of calculating attorneys' fees awarded in common-fund or common-benefit cases - state cases, 56 A.L.R.5th 107.

41 C.J.S. Hospitals § 15.