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Jose Tinoco, while employed by Fresh Express, injured Javier Escobar by negligently operating a vehicle. Escobar thereafter received treatment at Santa Clara Valley Medical Center, a hospital owned and operated by the County of Santa Clara. The reasonable value of the care provided by the County was alleged to be $1,249,545.38. Escobar sued Tinoco and Fresh Express in Monterey County Superior Court, where he eventually recovered a judgment for $5,689.624.87.

The County asserted a lien against the judgment pursuant to Government Code section 23004.1. Escobar’s attorney, who had stipulated at trial that County’s bill reflected reasonable and necessary charges, now contended that County was not entitled to the full amount of its bill but only to some lesser amount in accordance with schedules promulgated by the WCAB. Fresh Express did not pay the County, but instead delivered a check in the amount of $1,249,545.38 to Escobar’s attorney, Joseph Carcione, Jr., payable to both County and Carcione’s firm.

The County filed suit to recover the full amount, and the trial court sustained the Fresh Express demurer without leave to amend ruling that “the County can no longer pursue its own action against Fresh Express . . . , but must instead seek enforcement of the lien,” The court of appeal reversed in the published case of County of Santa Clara v Javier Escobar, and provided guidance on how lien rights are to be enforced.

The trial court concluded in essence that once a county’s lien has attached to a judgment, as it did here, the county’s independent right of action ceases to exist. The trial court took the language of Government Code section 23004.1 to mean in essence that a county’s right of action continues only as a lien. But the court of appeal disagreed noting that nothing in the language of the statute declares in definite language that the lien, once attached, is all that remains of the county’s original right of action. The manifest purpose of section 23004.1 is to provide counties with a source of recompense for the expenses incurred by them – and their taxpayers – in providing medical services necessitated by tortious conduct. “Obviously this purpose is ill served by permitting the tortfeasor to excuse itself from this obligation by turning control of the claimed funds over to the injured patient. The intent of the statute is best effectuated by providing counties with a straightforward remedy against the recalcitrant tortfeasor cum judgment creditor.”

The court agreed that Fresh Express should have been able to disentangle itself from any dispute between Escobar and County, and to obtain a satisfaction of judgment by paying the full amount of the judgment, but did not agree that it could accomplish these objectives by simply writing a check payable to both of the competing claimants. There were and are far more suitable remedies for one in Fresh Express’s situation. It has simply failed to avail itself of them. It could, for example, bring an action against the conflicting claimants to compel them to interplead and litigate their several claims.

“We conclude that County’s right of action under section 23004.1 survived the attachment of its lien and that County was entitled to revive it, as it sought to do here, when Fresh Express surrendered control of the liened funds to Escobar’s attorney. It follows that the trial court erred by sustaining Fresh Express’s demurrer and that the judgment predicated on that ruling must be reversed.”