A state appeals panel has ruled a woman may continue to pursue her suit, which alleges a health care provider wrongly assigned a lien against her to a billing company, saying the lien assignment deprived the woman of funds obtained in a personal injury case.
The ruling was issued Feb. 26 by Appellate Justice Mary Mikva, with concurrence from Justices Sheldon Harris and Sharon Oden Johnson, of the Illinois First District Appellate Court in Chicago. The decision favored Polyxeni Constantinou in her action against Athletico and Global Financial Credit.
Global, based in White Plains, N.Y., runs the billing company MedChex, and Athletico is a physical therapy service based in Oak Brook with 500 locations in a dozen states.
Constantinou was treated by Athletico for injuries she suffered in a 2016 traffic accident, wracking up a $11,943 bill. Constantinou also received a settlement in a personal injury lawsuit arising from the accident. Athletico placed a lien for the bill against money from this settlement, with the lien later assigned to MedChex for collection. As a consequence, Constantinou's attorney placed $11,943 from the settlement in escrow, specifically in what is known as an Interest on Lawyers Trust Account (IOLTA)
Constantinou filed suit in 2018 in Cook County Circuit Court against the companies, claiming Athletico improperly assigned the lien in violation of the Illinois Health Care Services Lien Act. According to Constantinou, the Act said "payments under liens shall be made directly to the health care professionals and health care providers."
Constantinou alleged Athletico and MedChex engaged in consumer fraud and deceptive business practices. She wanted her suit to be a class action, covering anyone since 2013 who had a lien assigned to MedChex. Constantinou said she and others like her lost money, because their money was withheld from them and couldn't be invested.
Circuit Judge Anna Loftus threw out the case, finding Contantinou was not harmed by the lien assignment, because she owes the money, regardless whether or not the lien was wrongfully assigned.
On appeal, Justice Mikva concluded Loftus may have been confused.
"What got lost in the extensive briefing and argument in the circuit court is that the question underlying Ms. Constantinou’s claims has never been who is ultimately entitled to all or part of the $12,000 now held in her attorney’s IOLTA account," Mikva wrote.
Mikva continued: "MedChex may well be entitled to this money because it purchased the debt that Ms. Constantinou incurred to Athletico. Rather, the question is who is entitled to the present use of those funds pending resolution of the debt. If neither MedChex nor Athletico has a valid lien, then regardless of whether Ms. Constantinou still owes money for her care, her settlement funds should not be kept from her."
Mikva rejected Loftus' suggestion Constantinou could embark on a lien adjudication procedure, instead of pressing a lawsuit, saying the procedure would not recoup the "time value" or interest lost on the encumbered money.
Mikva upheld the part of Constantinou's case that seeks an injunction to bar defendants from such lien assignments and to order them to release all such liens. Mikva also allowed Contantinou to continue seeking a declaration the lien had been improperly assigned and her settlement proceeds were wrongfully impaired, without reference to liability on defendants' part.
However, Mikva affirmed the dismissal of her claims for consumer fraud, unjust enrichment, negligence and negligent misrepresentation.
Constantinou had alleged Athletico should have told her, before she used Athletico's service, the company might assign any lien against her to a third party. However, Mikva pointed out, quoting from a 1996 state appellate decision, notification of a possible lien assignment was not "the type of information upon which a buyer would be expected to rely in making a decision whether to purchase" services.
Mikva observed Constantinou could reintroduce one or more of the dismissed claims, depending on what Constantinou learns through discovery later in the process.
Constantinou has been represented by attorneys Larry D. Drury and Thomas Rebholz, of Larry D. Drury Ltd., as well as by John H. Alexander, of John H. Alexander & Associates.
Global Financial and Athletico have been defended by attorney Christine Skoczylas, of Barnes & Thornburg, as well as by E. King Poor and John Aramanda, of Quarles & Brady.
All the firms are from Chicago.