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Ackre v. Chapman & Chapman

August 31, 2010

ROBERT ACKRE, PLAINTIFF AND APPELLANT
v.
CHAPMAN & CHAPMAN, P.C., DEFENDANT AND APPELLEE



Appeal from the District Court of Rolette County, Northeast Judicial District, the Honorable Michael G. Sturdevant, Judge.

The opinion of the court was delivered by: Kapsner, Justice.

AFFIRMED.

[¶1] Robert Ackre appeals from a summary judgment dismissing his action alleging Chapman and Chapman, P.C., committed an unlawful practice under N.D.C.C. ch. 51-15 and attorney misconduct under N.D.C.C. § 27-13-08. We hold Ackre does not have standing to sue Chapman and Chapman for attorney misconduct and Ackre has not raised a factual issue regarding his unlawful practice claim. We affirm.

I.

[¶2] Ackre, a licensed North Dakota attorney, sued the law firm of Chapman and Chapman, alleging both he and Chapman and Chapman directly compete to represent enrolled members of federally recognized American Indian Tribes as plaintiffs in personal injury litigation involving motor vehicle accidents. Ackre claims federal and state statutes, see 42 U.S.C. §§ 2651-2653 and N.D.C.C. § 35-18-01, require Native American clients to use proceeds from personal injury settlements to satisfy hospital liens and to reimburse the United States Department of Health and Human Services for government paid medical expenses for treatment for injuries sustained by Native Americans in motor vehicle accidents. Ackre asserts Chapman and Chapman's failure to advise its Native American clients about the mandatory statutory requirements to use settlement proceeds to satisfy hospital liens and to reimburse the federal government for government paid medical expenses constitutes attorney misconduct under N.D.C.C. § 27-13-08 and an unlawful practice under N.D.C.C. ch. 51-15. Ackre asserts Chapman and Chapman's conduct damaged his law practice, and he sought treble damages in excess of $50,000 and attorney fees under those statutes.

[¶3] Chapman and Chapman moved to dismiss Ackre's complaint under N.D.R.Civ.P. 12(b)(6), arguing neither federal nor state statutes require Native American clients or their lawyers to use settlement proceeds to reimburse the federal government for medical expenses paid by the government. Chapman and Chapman argued federal law gives the federal government a right to recover medical expenses from a tortfeasor who is liable for a Native American client's injury, but the federal government may not directly sue a Native American client to recover proceeds received from the responsible tortfeasor. Chapman and Chapman argued the hospital lien statute, N.D.C.C. § 35-18-01, was not applicable because it was up to the hospital, not the client's attorney, to enforce the hospital lien. Chapman and Chapman claimed Ackre was not an injured party under N.D.C.C. § 27-13-08 and its alleged conduct was not an unlawful practice under N.D.C.C. ch. 51-15.

[¶4] Ackre resisted Chapman and Chapman's motion to dismiss and submitted documents from a settlement procured by Chapman and Chapman for a Native American client in which the client received $50,000 from the tortfeasors' motor vehicle insurance carrier. Those documents included a hospital bill with $46,481 in total hospital charges with "IHS-Belcourt ND" identified as the client's insurance company, a letter from the United States Department of Health and Human Services stating it had paid $30,861 for medical care and treatment furnished by or at the expense of Indian Health Services for that client, and a February 4, 2004, cover letter from the tortfeasors' insurance company to an attorney with Chapman and Chapman, which stated:

[L]et this confirm settlement of your client's bodily injury claim for our insured's policy limit of $50,000.00. This amount is contingent upon signed release of all claims with indemnity from your client and inclusive of all medical bills incurred. This will also confirm that you will honor any and all outstanding liens. Ackre provided the district court with a copy of a "full release of all claims," which was signed by an attorney with Chapman and Chapman and by the Native American client and stated:

The undersigned acknowledge(s) that certain liens and subrogation interests may have been presented in connection with this action and, as a condition of this settlement, the undersigned agree(s) to satisfy all unpaid liens and/or subrogation interests out of the proceeds of the aforesaid settlement. The undersigned do(es) further expressly stipulate(s) and agree(s) in consideration of the aforesaid payment to them to indemnify and hold forever harmless [the tortfeasors and their insurance company] against loss from any claims, demands or actions that may hereafter be made against them or either of them, or their agents or representatives, as a result of any medical liens, or subrogation interests that may exist with regard to the undersigned's accident and resulting injuries and damages.

The undersigned further agree(s) to indemnify and hold harmless [the tortfeasors and their insurance company] from any and all claims for indemnity, contribution and equitable subrogation which may be made against them by reason of the aforementioned incident. Such agreement to indemnify and hold forever harmless the aforesaid [tortfeasors and their insurance company] shall include defending them from any and all such claims presented against them, and reimbursing all attorney fees, litigation expenses and court costs, taxable or otherwise, incurred by them in connection with any such claim. Ackre also provided the court with Chapman and Chapman's responses to requests for admission in which Chapman and Chapman stated it had no duty to contact its clients' treating hospital, Indian Health Services, or the federal government about payment of its clients' medical bills and admitted it had not contacted those entities, informed them about the settlement, or paid its clients' medical expenses.

[¶5] The district court considered Ackre's submitted materials and granted Chapman and Chapman summary judgment, concluding Ackre was not entitled to recovery under either N.D.C.C. ch. 51-15 or N.D.C.C. § 27-13-08. The court said the federal government, as the provider of medical care for Native Americans through Indian Health Services or other providers, has a right of subrogation against a tortfeasor under federal statute, but the federal government does not have a direct claim against an injured Native American for government paid medical care. The court explained injured Native Americans who receive treatment at hospitals that are not part of Indian Health Services do not have individual responsibility to pay for the treatment because the treating hospitals have agreed to full payment at a reduced rate from the federal government. The court did recognize, however, that Chapman and Chapman may be subject to a claim for estoppel or indemnification by an appropriate entity because of the language of the proffered settlement agreement. The court decided Ackre was not entitled to recover for Chapman and Chapman's alleged misconduct under N.D.C.C. § 27-13-08, because Ackre was not the "party injured." The court also concluded Chapman and Chapman's conduct did not constitute an unlawful practice under N.D.C.C. § 51-15-02, because that conduct was not deceptive or fraudulent under the procedures for payment for an injured Native American client's medical treatment. The court also said Ackre's claimed damages were speculative.

II.

[¶6] The district court decided this case by summary judgment, which is a procedural device for promptly resolving a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that reasonably can be drawn from undisputed facts, or if the only issues to be resolved are questions of law. Kappenman v. Klipfel, 2009 ND 89, ¶ 7, 765 N.W.2d 716. Whether the district court properly granted summary judgment is a question of law that we review de novo on the record. Id. Summary judgment is appropriate if reasonable minds could reach only one conclusion on the evidence submitted to the district court. Zimprich v. Broekel, 519 N.W.2d 588, 592-93 (N.D. 1994).

III.

[¶7] Ackre provides an extensive explanation about the priority of a treating hospital's statutory lien for the full value of its medical services provided to Native Americans injured by tortfeasors under N.D.C.C. § 35-18-01 and the federal government's right to subrogation against tortfeasors for medical care paid for by the federal government for injured Native Americans under 42 U.S.C. §§ 2651-2653. Chapman and Chapman does not dispute Ackre's characterization of the federal and state statutes, and we accept that characterization for purposes of this decision.

[ΒΆ8] The gist of Ackre's argument is that attorneys representing Native American clients, who have received medical treatment paid for by the federal government and who have received settlement proceeds from tortfeasors or their insurers, have an obligation to use the settlement proceeds to satisfy the full amount of a treating hospital's hospital lien and to reimburse the federal government for medical expenses paid by the government on behalf of the Native American client. Ackre claims he complies with those obligations and argues Chapman and Chapman's failure to satisfy those obligations constitutes attorney misconduct and an unlawful practice. Ackre asserts Chapman and Chapman knowingly engages in deceptive acts and practices by leading the general public to believe Chapman and Chapman can successfully evade enforcement of the statutory liens and subrogation interests. Ackre asserts he has a civil claim for damages against Chapman and Chapman under N.D.C.C. ...


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