MEMBERS MUT. INS. CO. v. HERMANN HOSP. No. C-2581.
664 S.W.2d 325 (1984)
MEMBERS MUTUAL INSURANCE COMPANY, Petitioner, v. HERMANN HOSPITAL, Respondent.
Supreme Court of Texas.
February 15, 1984.
Sullins, Johnston, Rohrbach & Magers, Mark A. McLean, Houston, for respondent.
The issue in this case is whether the insurance proceeds from uninsured/underinsured motorists coverage are subject to a statutory hospital lien. The trial court held that the proceeds were subject to the lien and granted summary judgment in favor of the hospital. A divided panel of the court of appeals affirmed.
The facts are not disputed. Dorothy Jean Hall had an automobile liability insurance policy issued by petitioner, Members Mutual Insurance Company. The insurance policy included uninsured/underinsured motorists coverage obligating Members Mutual "to pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured or underinsured motor vehicle because of bodily injury or property damage ...." On August 26, 1978, Hall was involved in an automobile accident with William Landry, an uninsured motorist. George Walker, a passenger in Hall's car, suffered injuries and was hospitalized at Hermann Hospital.
Respondent, Hermann Hospital, charged over $60,000.00 for services to Walker and filed notice of its hospital lien with the county clerk as provided by Art. 5506a, § 4.
Both parties moved for summary judgment, agreeing that the sole issue of law was whether a hospital lien attaches to the settlement proceeds of uninsured motorists insurance. The lower courts held that a lien in favor of Hermann Hospital did attach to the payments and that Members was liable to the hospital for the $7,000 paid to Walker's heir.
We must determine whether the proceeds of uninsured motorists coverage are within the scope of art. 5506a. Article 5506a was enacted in 1933 to provide for liens in favor of hospitals. The purpose of the act was to encourage hospitals to provide immediate care and treatment to persons injured in accidents, and to compensate hospitals for the vast sums of money being lost when treating patients who were unable to pay. Hospital Lien Act, ch. 85, § 5, 1933 Tex. Gen.Laws 182, 185; Baylor University Medical Center v. Borders,
The legislature specifically exempted from the statutory lien "the proceeds of any insurance policy in favor of the injured party, his beneficiaries, or legal representatives." A lien does attach, however, to "public liability insurance carried by the insured to protect him against loss or damage as a result of any accident or collision
The term "public liability insurance" has been defined as: "[i]nsurance liability protection against claims arising out of the insured's property, conduct or the conduct of his agent," Black's Law Dictionary 724 (rev. 5th ed. 1979); "general liability insurance, or insurance such as protects a person against loss or liability by reason of personal injuries to other than employees," 1 G. Couch, Couch on Insurance § 1:93 (Rev.2d. Ed. 1984); and "insurance ... to indemnify the insured against loss by reason of legal liability...," 2 R. Long, The Law of Liability Insurance § 10.01 (1983).
The common element of these definitions is the focus on the insured's liability. A public liability policy does not protect the insured against injuries suffered by the insured himself in an accident; rather, it insures against damage claims for which the insured might become liable. Cain v. American Policyholders Ins. Co., 120 Conn. 645, 183 A. 403, 407 (1936).
These definitions are in accord with Texas decisions defining and discussing the term "liability insurance." The court in Brightwell v. Rabeck,
This definition of "liability insurance" — insurance covering damage the insured does to others — is not a new one. In the years immediately preceding and following 1933, when the legislature chose the term "public liability insurance" to describe the type of insurance subject to a hospital lien, courts in several jurisdictions had defined liability insurance in this manner. See Pageway Coaches, Inc. v. Bransford, 71 S.W.2d 561, 562 (Tex.Civ.App. - Eastland 1934), aff'd 129 Tex. 327, 104 S.W.2d 471 (1937); State ex rel. Travelers'n Indemnity Co. v. Knott, 114 Fla. 820, 153 So. 304 (1934); Zieman v. U.S. Fidelity & Guaranty Co., 214 Iowa 468, 238 N.W. 100, 102 (1931); Twichell v. Hertzel, 145 Kan. 139, 64 P.2d 557, 559 (1937); Dunn v. Jones, 143 Kan. 218, 53 P.2d 918, 921 (1936); Globe Indemnity Co. v. Sulpho Saline Bath Co., 299 F. 219, 221 (8th Cir. 1924); Employers' Liability Assurance Corp. v. C.E. Carnes & Co.,
In contrast to liability insurance, uninsured motorists coverage protects insureds against negligent, financially irresponsible motorists. Francis v. International Service Insurance Co.,
Hermann Hospital argues that uninsured motorists coverage must be a type of liability insurance because art. 5.06-1 of the Insurance Code mandates that uninsured motorists coverage be provided in every liability insurance policy. We disagree. The inclusion of other coverages within a liability insurance policy does not compel the conclusion that the other coverages are also liability insurance.
Hermann Hospital further contends that a lien should attach to uninsured motorists coverage in order to further the statutory aim of compensating hospitals. The lien granted by the statute, however, is not to be extended without limit. The legislature expressly excluded all insurance proceeds other than "public liability insurance." "When construing a statute, the courts must read words according to their ordinary meaning unless a contrary intention is apparent from the context." Taylor v. Fireman's & Policeman's Civil Service Commission,
The judgments of the courts below are reversed. In the trial court, the only issue presented was a question of law, and both parties moved for summary judgment. In this situation, the proper disposition is for this court to render judgment for the party whose motion should have been granted. TEX.R.CIV.P. 434, 505, Tobin v. Garcia, 159 Tex. 58,
WALLACE, J., not sitting.
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