DennisBeaverOctober 20, 2012 (Original publish date) • By Dennis Beaver

Last week we began our look at medical liens — the way in which M.D., chiropractic or other health care services can be obtained where the patient has been injured in an accident, but has no health or auto medical pay insurance.

As we explained, a lien is a contract signed by the doctor, the patient and the patient’s lawyer where the doctor agrees to treat and wait for payment until the case is settled. The document typically contains language which irrevocably instructs the attorney to pay the doctor first, before disbursing settlement funds to the client. Professional conduct rules require lawyers to make prompt payment unless there is a valid dispute about what is owed.

Medical liens are different from most other contracts and this difference historically — but not anymore — gave doctors piece of mind that they would be paid. That difference is summed up in these two words: fiduciary relationship.

When lawyer Christine signs that lien form, she has become a fiduciary — a trustee — for the client and doctor. She owes them both the same, high degree of honesty, good faith and not running away with their money. When that happens and the State Bar is notified, loss of the license to practice law has been a reality.

Note: For some great Halloween reading which will have you wearing garlic the next time you walk into a lawyer’s office, just Google “Steal Client Funds California.”

Lien and mean

If a lawyer got cute with a doctor’s money, refusing to pay or demanding an unjustified reduction in the bill, once this was brought to the attention of the California Bar, an investigation would normally be started. This would perhaps prompt a “friendly” phone call from an investigator or letter. In either case, a call from the State Bar is about as welcome as seeing the Grim Reaper standing outside your office.

But now, if you are a doctor being jerked around by an attorney who — without justification — refuses to pay your bill, and you call the Bar, they will tell you:

“We don’t get involved in civil disputes. You can file a complaint with us, but we will do nothing with it. You’ll have to go to court and sue the attorney.”

After discussing these issues with California State Bar Communications Director Laura Ernde and asking if it is true that the Bar is now taking a hands-off position, she sent an email with permission to “use what you like of this.” Here is the California Bar’s position:

“We don’t condone an attorney not paying his/her debts; however, sorting out such disputes is a matter for the courts, not the State Bar … which enforces specific rules that govern attorney conduct. Fraud and moral turpitude are misconduct violations. Intent to deceive must be proven by clear and convincing evidence. Absent this, there is no basis for the State Bar to act … Debtor/creditor issues are addressed in civil actions, where the terms of the debt obligation are the issue, not the licensing status of the individual.”

‘This makes no sense at all and is simply wrong’

We ran that statement by two attorneys, Rose Safarian, who teaches legal ethics and professional responsibility at San Joaquin College of Law in Fresno, and Robert L. Kehr, recognized as one of California’s leading experts on legal ethics and professional responsibility.

Both agree that the Bar should investigate these matters.

“That the Bar will not get involved makes no sense at all and is simply wrong. I cannot understand why they refuse. It goes to the core of the attorney’s relationship with both parties. Breaching an ethical duty is misconduct and can also be moral turpitude.

“This is not a creditor/debtor issue. It isn’t a debt of the lawyer. The lawyer has a legal obligation to pay the doctor. The public does not think that we are honorable people, and this does not help our image,” Safarian emphatically stated.

Kehr believes that, “When the bill has not been disputed, for a lawyer to either not pay it or attempt to force an unjustified reduction by threatening not to pay, can be seen as dishonesty and moral turpitude, violating the lawyer’s duties under the California Rules of Professional Conduct, and is a proper subject for investigation and possible discipline. If there is a good faith dispute, then the lawyer should pay the undisputed portion without delay. I can’t understand the Bar’s position.”

Nor could Bakersfield attorney Jim Duncan, a partner with the law firm of Klein, DeNatale and Goldner.

“By refusing to become part of the solution — refusing to help a doctor be paid what is owed — the California State Bar needs to ask itself a question: What kind of message are we sending? What kind of behavior are we encouraging?”

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.