IN THE COURT OF APPEALS
STATE OF GEORGIA
JOHN R. CONSTANTINE and EILEEN
M. CONSTANTINE, Individually and as Parents and Next Friends of
NICOLE CONSTANTINE, A Minor,
CASE NO. A05A0895
Appellants,
v.
MCG HEALTH, INC.
Appellee.

AMICUS CURIAE BRIEF
OF THE GEORGIA TRIAL LAWYERS ASSOCIATION
BRIEF PREPARED BY:
DOFFERMYRE SHIELDS CANFIELD KNOWLES & DEVINE, LLC
David S. Hagy
Ga. Bar No. 317010
1355 Peachtree Street, N.E.
The Peachtree, Suite 1600
Atlanta, Georgia 30309-3238
(404) 881-8900

STATEMENT OF INTEREST

The Georgia Trial Lawyers Association (GTLA) is a voluntary organization comprised of
approximately 3000 members of the State Bar of Georgia. GTLA is committed to the
preservation of the jury system and the notion of full compensation for those injured by the
wrongdoing of others. In the past years, GTLA has consistently appeared as Amicus Curiae in
various matters presented before the appellate courts of Georgia. The intent of the GTLA is not
to support the Appellant or Appellee as Amicus Curiae. Rather, GTLA desires and attempts to
aid the Court to a proper resolution of this case by seeing that the law is correctly followed and
the public policies of this State, as expressed by the General Assembly and the courts, are
advanced.

INTRODUCTION

The trial court erred in its interpretation of the contract between MCG Health and the
Constantine’s health insurer, Aetna, in two distinct ways. First, the trial court erred in allowing
MCG Health to seek fees in addition to those specified in the Hospital Services Agreement.
That agreement was plain and unequivocal in specifying the exact “fees” which may be charged
for services rendered “to Members.” The agreement contains no exception allowing the hospital
to charge substantially larger fees if it seeks to recover from a source other than the insurer, such
as by placing a hospital lien on a Member’s cause of action. On this basis alone, the trial court’s
order should be reversed.

Second, the “Hospital Services Agreement” does not allow the hospital, MCG Health, to
seek recovery from a “Member”, such as the Constantines. The trial court erred again here by
relying on the hospital lien statute, O.C.G.A. 44-14-470, to conclude that MCG Health can
nonetheless seek recovery from the Constantine’s assets, specifically their cause of action
against a third-party tortfeasor. The controlling provision here is not the statute, but the terms of
agreement between MCG Health and Aetna. In particular, the issue presented is this: does the
agreement’s limitation on seeking recovery from a “Member” prevent the hospital from seeking
recovery from any assets of that member, including specifically that Member’s cause of action
against a third-party? Amicus GTLA contends that the plain language of the term “Member”
should be interpreted to include that person as well as any assets. To conclude otherwise would
upend basic principles of contract construction and introduce unnecessary confusion into the
health insurance field.

GTLA is particularly interested in the construction of the Hospital Services Agreement as
described above because any opinion upholding the trial court’s construction could be seen to
create a rule applicable to other insureds and other cases that would be contrary to Georgia
public policy. Specifically, if upheld, the trial court’s construction of the agreement may create a
rule whereby hospitals in Georgia could reject tendered payments from health insurers in favor
of pursuing greater fees out of the damages recoverable in the insured’s cause of action against
third-party tortfeasors. Patients who had believed they were well-covered for medical expenses
by responsibly obtaining health insurance will find they are nonetheless liable for potentially
large medical bills. And while, admittedly, no insured would be responsible to pay a hospital
lien except from any recovery obtained from the third-party, the hospital would be able to collect
its full (or exaggerated even) medical expenses through the lien regardless of whether the
recovery was also intended to compensate for other damages and regardless of whether the
insured had been completely compensated. Such a result would be in direct violation of Georgia
public policy regarding complete compensation and would distort the carefully constructed
system currently in place for the provision of medical care.

ARGUMENT AND CITATION OF AUTHORITIES

I. Payment of the Agreed Fees Under The Hospital Services Agreement Was Payment
In Full And Extinguished Any Hospital Lien

The trial court erred in interpreting the Hospital Services Agreement to allow MCG to
collect greater fees than those agreed upon between MCG Health and the Constantine’s insurer,
Aetna. The agreement between Aetna and MCG Health specified the exact fees that were to be
charged to Aetna members, such as Nicole Constantine. In particular, the Hospital Services
Agreement provides that “[t]he fees to be charged by Hospital for Hospital Services rendered
to Members shall be as described in Schedules, “B”, “B-1”, “B-2”, “B-3”, and “B-4”, attached
hereto and by reference made a part of this agreement.” (R.Vol I, 149)(emphasis added). The
plain language of that contractual provision, to which the insured is undoubtedly a beneficiary,
establishes the particular fees that may be charged.

“Where the language of a contract is plain and unambiguous, no construction is required
or permissible and the terms of the contract must be given an interpretation of ordinary
significance.” Ferandes v. Manugistics Atlanta, Inc., 261 Ga.App. 429, 433 (2003). Further,
“the language used is given its literal meaning, and common ordinary words are given their usual
significance.” Eastside Gardens of Snellville, LLC v. Sims, 248 Ga.App. 797, 799 (2001).
GTLA submits that the Hospital Services Agreement clause quoted above is plain and
unambiguous. The trial court’s determination that “additional fees” could charged if the
recovery was sought by way of hospital lien rather than by direct action against Aetna or the
“Member” – the Constantines – was in error. As a result, payment by Aetna constituted full
payment for the fees incurred by the Constantines such that any hospital lien was discharged.

Furthermore, to allow a hospital to charge more for services rendered to an insured if
recovering by way of lien rather than from the insurance itself is impermissible and illogical.
Specifically, O.C.G.A. § 44-14-470(b) provides that a hospital “shall have a lien for the
reasonable charges for hospital . . . care and treatment of an injured person.” To hold that a
hospital may collect more than the contracted rates under a hospital lien would mean that the
fees which the hospital voluntarily agreed to accept from the insurer were less than reasonable.
Such a contorted reading of the hospital lien statute should not be permitted especially where, as
here, the Hospital Services Agreement does not allow those additional fees to be charged.

II. The Hospital’s Agreement To Not Seek Additional Sums From “Members” And To
Waive “Any Recourse” Against Members Means That MCG Health May Not Seek
Recovery By Asserting A Lien On A Member’s Cause of Action

In the Hospital Services Agreement, MCG Health specifically agreed to forego collection
of any “additional charge” from either the “HMO or its Members” above and beyond the fees
outlined in the Schedules. (R. Vol. I, 149). The Agreement further limits attempts to collect
from a Member as follows:

Hospital agrees that in no event, including, but not limited to non-payment
by the HMO, insolvency or breach of this Agreement, shall Hospital bill,
charge, collect a deposit from, seek renumeration or reimbursement from, or
have any recourse against Member or persons other than HMO acting on
their behalf for services listed in this Agreement.

Id. Appellee MCG Health now asserts the legal fiction that an attempt to collect additional fees
by way of hospital lien on the Constantines’ “cause of action” is not the same thing as attempting
to collect from a Member. That reading is completely inconsistent with the broad prohibitions
quoted above.

The interpretation urged by MCG Health is also inconsistent with the principal that a
cause of action is an asset or property right no different than a bank account, personal property,
or real property. See, e.g., Gingold v. Allen, -- S.E.2d -- , WL 767829 (Ga.App. April 6,
2005)(noting that legal malpractice claim was asset and property of bankruptcy estate). Indeed,
the hospital lien statute specifically recognizes the cause of action as being property or asset:
“[t]he lien provided for in this subsection is only a lien against such causes of action and shall
not be a lien against injured person, such legal representative, or any other property or assets of
such persons. . .” O.C.G.A. § 44-14-470(b)(emphasis added). Thus, seeking to enforce a lien
against a cause of action is no different than seeking to enforce a lien against the person
themselves or any other assets they may own.

The only distinction is created for the limited purpose of the hospital lien statute. But,
while O.C.G.A. § 44-14-470(b) does provide for a lien against the cause of action (but not
against the patient or his other assets directly), that statute does not control the issue before the
Court. Rather, the question is whether the Hospital Services Agreement’s restriction on
seeking recovery from “the Member” necessarily prevents the Hospital from seeking recovery
from the Member’s assets, including any causes of action. The answer to the question must
certainly be “yes.”

Again, as above, this is an issue of contract interpretation in which the plain and
unambiguous language of the contract should be given effect. Fernandes, supra; Eastside
Gardens, supra. A contractual provision precluding the hospital from seeking recovery from the
Member must certainly mean that hospital may not seek to recover that Member’s assets. And
the hospital’s own agreement that it should not “have any recourse against Member” must
certainly mean that it cannot place a lien on the Member’s assets. Any other conclusion would
be inconsistent with the plain language.

MCG Health implicitly attempts to avoid this conclusion by contending that it is seeking
recovery from the third-party or that party’s insurer, not the member. See Brief of Appellee at 6.
But, while any funds recoverable come from the third-party or their insurer, the hospital lien
does not provide for a direct action against those entities unless they settle a cause of action
without satisfying the lien. See O.C.G.A. § 44-14-473(a). The lien is against the “cause of
action”, see O.C.G.A. § 44-14-470(b), which is indisputably an asset of “the Member.”

Two hypothetical examples assist in further illustrating that the Hospital Services
Agreement controls this issue and prohibits MCG Health from seeking to enforce its lien on a
Member’s cause of action. For instance, let us assume that the hospital lien statute also allowed
the lien to be placed on any real property owned by the patient. Would it then follow that –
under the terms of the Hospital Services Agreement – the hospital, although barred from
seeking recovery or recourse from “the Member”, could seek to enforce a lien on the Member’s
house? Going one step further, let us assume that the hospital lien statute also allowed the
hospital to recover directly by filing a civil action against the patient. Would it then follow that
the limitation in the Hospital Services Agreement on seeking recovery from “the Member” was
without effect? Of course not. The point here is simply to emphasize that the language of the
Hospital Services Agreement controls the resolution of this issue, not the language of O.C.G.A.
§ 44-14-470(b). And where, as here, the Hospital Services Agreement agreed to by MCG Health
prevents the hospital from seeking recovery or recourse against “the Member”, the logical
contractual interpretation of that provision means that the Hospital cannot seek recovery against
that person or any of that person’s assets, including any cause of action they might have.

This Court’s comments almost fifty years ago in Dawson v. Hospital Authority of
Augusta, 98 Ga.App. 792 (1958) do not change this conclusion. In that case, the Court
commented that the fact that a married woman was not legally liable to pay for hospital expenses
did not affect the right of the hospital to place a lien on her cause of action. But Dawson dealt
simply with the language of the hospital lien statute; the result did not depend on the language
of any other agreement. While the hospital lien statute may allow the legal fiction that a claim
against a person’s cause of action is not the same as a claim against the person (in that very
limited circumstances), that conclusion does not compel a holding that the Hospital Services
Agreement maintains such a fiction.

III. The Trial Court’s Ruling Also Violates Georgia Public Policy On Complete
Compensation
Georgia has a long-standing public policy in favor of complete compensation of injured
persons, such that a subrogated health insurer cannot seek reimbursement out of any recovery
from a third party unless the injured insured has been completely compensated. See, e.g. Davis
v. Kaiser Foundation Health Plan of Georgia, Inc., 271 Ga. 508 (1999); and see O.C.G.A. 33-
24-56.1. In the normal circumstance, an injured insured’s medical bills will be paid by his health
insurance carrier who then will be subrogated to any recovery from a third-party. That
subrogation interest may then be enforced, but only provided that the insured is completely
compensated by the settlement or judgment. In other words, the insurer may not seek to obtain
reimbursement for medical bills paid on the insured’s behalf unless and until the insured has
been completely compensated for other damages, such as lost earnings, past and future pain and
suffering, emotional distress, etc. The process urged by Appellee MCG Health and upheld by
the trial court would defeat Georgia public policy in this regard.
Any rule supporting the result reached by the trial court may allow hospitals, in future
cases, to return the tendered payment from the health insurer and instead seek recovery by filing
a lien on the cause of action against the third party. The hospital’s lien is not limited by the
complete compensation rule applicable to insurer’s subrogation rights. Holland v. State Farm
Mutual Automobile Ins. Co., 236 Ga.App. 832 (1999). If a hospital is allowed to forego

insurance proceeds in favor of a hospital lien, an insured who is not completely compensated by
the settlement or judgment would nonetheless be required to pay the full amount of medical bills
(or, as here, inflated medical bills), even if that means that sums recovered as a result of
permanent injury, disfigurement, lost wages, or lost capacity to earn must be used to pay the
medical bills. Regardless of how characterized (i.e. seeking to recover from the Member or
seeking to recover against the Member’s cause of action), the result urged by MCG Health takes
money out of the insured’s pocket, a result inconsistent with the plain language and intent of the
contract as well as Georgia public policy as set forth in Davis, supra and O.C.G.A. § 33-24-56.1.
Georgia law directs that plain and unambiguous contract provisions are to be given their
literal meaning. The trial court’s ruling contravenes this law and policy by ignoring the plain
language of the contract in search of a contrary interpretation allowing recovery of additional
fees against the Constantines’ assets. The result obtained by the trial court is inconsistent with
the expectations of the parties to that contract and with the expectations of all reasonable
insureds in Georgia who believe that by obtaining health insurance they will not have to pay for
covered medical bills out of their own pockets. Moreover, a holding affirming the trial court’s
conclusion may result in the contravention of Georgia public policy regarding complete
compensation in future cases. This Court should not uphold the contractual construction urged
by MCG Health, especially where it is in direct conflict with Georgia public policy.
CONCLUSION
For the foregoing reasons, Amicus GTLA respectfully requests that this Court reverse the
trial court and conclude that the offer or tender of payment by Aetna extinguished any hospital
lien asserted by MCG Heath and, further, that MCG Heath was prohibited by the Hospital

Services Agreement from seeking to enforce a hospital lien against Appellee’s cause of action.
This __ day of May, 2005.
__________________________________
David S. Hagy
Georgia Bar No. 317010
DOFFERMYRE SHIELDS CANFIELD
KNOWLES & DEVINE, LLC
1355 Peachtree Street, N.E., Suite 1600
Atlanta, Georgia 30309-3238
404-881-8900