In an issue of first impression, the NC Court of Appeals recently ruled that the State Health Plan has a lien that must be paid out of any third party recovery and failure to so pay could result in the attorney having to personally reimburse the state. In other words, an injured party who has health insurance through the State of North Carolina as an employee of relative of a state employee must reimburse the Health Plan out of any injury claim and their attorney is charged by law with doing so. Failure of the attorney in paying the lien could result in the attorney having to pay the money. In The NC Health Plan v. Barnett, NC COA12-999, the Court held, N.C. Gen. Stat. § 44-50 (2011), places an affirmative duty on an attorney for an injured party to retain the full amount of a medical provider’s lien before disbursing settlement proceeds. NC Supreme Court has acknowledged that an attorney who violates this duty is subject to legal liability for the amount of the lien under the statute. N.C. Gen. Stat. § 135-45.15 similarly places a duty upon an injured party’s attorney to direct settlement funds recovered by an injured State Health Plan member to plaintiff in satisfaction of its statutory lien. The attorney mistakenly argued that his client ordered that the funds be disbursed in that manner. He cites North Carolina State Bar Ethics Opinion RPC 69, which states that “[a]lawyer is generally obliged . . . to disburse settlement proceeds in accordance with his client’s instructions. The only exception to this rule arises when the medical provider has managed to perfect a valid physician’s lien.” North Carolina State Bar RPC 69 (October 20, 1989). This opinion by the State Bar does not excuse the attorney’s actions. Instead, the opinion clearly acknowledges that, regardless of a client’s instructions, an attorney cannot ignore a valid statutory lien, a physician’s lien under N.C. Gen. Stat. § 44-50. An attorney likewise cannot ignore a valid State Health Plan lien under N.C. Gen. Stat. § 135-45.15 when disbursing settlement funds, regardless of his client’s wishes. The issues in lien disbursement have become unduly burdensome and difficult to properly follow. You may be better off hiring an attorney to assist you as they are responsible for properly disbursing disbursing the money after you settle or win a judgment. Call us today if you have any questions regarding your automobile injury claim. Personal Injury Attorney — Joe Tunstall
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