Personal injury law requires doctors, doctor reports, doctor testimony and medical treatment of the plaintiff-clients.  Clients rarely have the means to pay for medical treatment after an injury, yet need it.  Because of this need a system has developed in which plaintiff-clients go to medical providers, who provide medical treatment and file a "doctor’s lien." 

The lien is supposed to work like this:  client sues for the personal injury and if they win, the medical treatment is part of the damages, and then the attorney is supposed to pay off the lien.  Good?  Sure, but what happens when the case is settled 5 years later, and the file is a little confused, and the lien does not get paid?  What happens is that the attorney deducts his fee, the client gets the rest, and then years later, the doctor comes to the attorney for payment.  Naturally, the attorney does not want to pay the client’s medical costs from his own pocket, and litigation ensues.

Here in Complete Management Inc. v. Bader, 112683/08; Decided: October 13, 2009; Justice Emily Jane Goodman , Supreme Court, New York County we see one outcome:

"On April 25, 2005, AR Synergy LLC (ARS), an escrow and collection agent for CMI, mailed listings of reported open liens to Defendants to begin the collection of the outstanding GMMS receivables. Id., ¶23. A spreadsheet listing such liens or GMMS receivables is annexed as "Exhibit B" to the complaint. CMI alleges that, in the ensuing months following the mailing, ARS received no cooperation from Defendants, who have failed to make "subsequent payments of any owed GMMS Receivables to ARS or CMI." Id., ¶24. CMI brings this action against Defendants for "refusing to remit proceeds of liens owed to Plaintiff, or to provide Plaintiff with a more detailed accounting of the status of many of Defendants’ [personal injury] cases."
 

"In Leon v. Martinez (193 AD2d 788 [2d Dept 1993]), the defendant attorney who drafted and notarized a document that gave plaintiffs a lien on the proceeds of his client’s personal injury action was sued by the plaintiffs, after he disbursed proceeds from the settlement of the action to his client in disregard of the lien or assignment. The trial court granted the attorney’s CPLR 3211 motion to dismiss, reasoning that his preparation of the document did not create a personal liability on his part. The Appellate Division reversed, and held that "[w]here attorneys have notice of an assignment or [sic] a portion of their client’s claim for personal injuries and pay out money in disregard of the assignment, they may be liable to the assignees." Id. at 789 (citations omitted). The appellate court’s decision was affirmed by the Court of Appeals. Leon, 84 NY2d 83, supra (Court concluded that there were sufficient allegations in plaintiff’s complaint and supporting affidavit to withstand the motion to dismiss); see also Stanger, D.C., P.C. v. Panzella, 13 Misc 3d 130(A), 2006 NY Slip Op 51842(U) (App Term, 1st Dept 2006) (affirming small claim court’s award of damages to plaintiff chiropractor because, in disregard of assignment, defendant attorney failed to make direct payment of medical fees to plaintiff upon attorney’s receipt of client’s personal injury action settlement proceeds); Williamsburg South Medical v. Maloney, NYLJ, Feb. 10, 2003, at 20, col 6 (Civ Ct, NY County 2003) (court denied defendant lawyer’s motion to dismiss plaintiff doctor’s claims based on breach of contract and breach of fiduciary duty, because complaint contained sufficient facts to support allegation that defendant failed to pay plaintiff with funds from settlement proceeds in which plaintiff has a lien).

In the instant case, the complaint alleges that Defendants knew of the liens in favor of CMI-GMMS, but disregarded such liens by refusing to remit to CMI the settlement or judgment proceeds of their clients. Complaint, ¶¶41-43, 47-52, 58-59. The supporting affidavit submitted by CMI’s agent, Ray Rowney, Jr., also stated, inter alia, that Defendants knew of these liens because (1) they compensated CMI on some of the liens over a period of eight years; (2) CMI communicated with Defendants about payment of the liens and status of the personal injury cases for a 10-year period; and (3) CMI sent the executed lien documents to Defendants. Rowney Affidavit, ¶¶11-12; Exhibit 3. This court may "freely consider affidavits submitted by the plaintiff to remedy any defects in the complaint." Leon, 84 NY2d at 88."