State of Arizona ex rel. David Raber v. Hongliang Wang – 9/6/2012

September 10, 2012

Arizona Court of Appeals Division One Holds Attorneys’ Fees and Costs Are Not Subject to Apportionment In State’s Claim For Reimbursement Under A.R.S. § 12-962.

While riding his bicycle, Hongliang Wang was hit and injured by a vehicle.  State-sponsored health insurance paid for his medical care, and Wang later settled his claim against the driver of the vehicle.  He incurred attorneys’ fees and costs in obtaining that settlement.  The State sought reimbursement of the medical care payments under A.R.S. § 12-962(A), which allows for the State to recover the reasonable value of medical care it has provided to a person injured from a third party’s tortious conduct.  The trial court granted the State’s motion for summary judgment for the full amount of its reimbursement claim and declined to apportion Wang’s attorneys’ fees and costs against the claim.  Wang appealed from that judgment.

On appeal, Wang argued that the common fund doctrine required the apportionment of the attorneys’ fees and costs he incurred in obtaining settlement against the reimbursement amount.  He conceded the State was entitled to reimbursement under A.R.S. § 12-962.  The common fund doctrine is an equitable rule which provides that a person who hires an attorney for the preservation of a common fund may be entitled to have his attorneys’ fees paid out of that fund.  The appellate court held that the common fund doctrine did not apply to § 12-962.  Under that section, the State is limited to seek reimbursement from the amount of money “received” by the person.  Here, the court held, Wang did not “receive” the attorneys’ fees and costs, because that amount was deducted from the settlement before any funds were disbursed to him.  Thus, the fees were not available to the State for recovery from Wang.  Accordingly, the appellate court affirmed the trial court’s summary judgment award in favor of the State.

Randall Howe authored the opinion, Presiding Judge Brown and Judge Downie concurred.