Plaintiff county appealed a decision from

Plaintiff county appealed a decision from the Court of Appeal (California), which affirmed a decision permitting a pro rata deduction of attorney fees on a debt owed by defendant to plaintiff’s hospital for medical provided to defendant for injuries he sustained in an automobile accident.

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Overview

Plaintiff county hospital rendered medical services to defendant for injuries sustained in an accident. When defendant successfully prosecuted its claim against tortfeasor, defendant reduced his payment of hospital’s lien by a proportionate share of his attorney’s fees. Both the trial court and appellate court agreed with defendant, based on the common fund doctrine. In reversing the decision, the court held that this was a case involving only a debtor-creditor relationship and the common fund doctrine was not applicable. The county had a right to recover the amount owed to it from any assets subsequently acquired by defendant, not just from moneys he received in the underlying litigation. Unlike the interest of other claimants to a common fund, the creditor’s right to payment was not contingent on litigation which created the fund. Thus, no equitable principles justified departure from the statutory command of Cal. Civ. Proc. Code § 1021 that each party to litigation bear the expense of its own attorney fees.

Outcome

The court reversed the decision apportioning attorney fees because plaintiff’s claim against defendant was that of creditor-debtor where the common fund doctrine was not applicable.