City and County of San Francisco v. Sweet

City and County of San Francisco v. Sweet (1995) 12 Cal. 4th 105, concerned litigation in which the plaintiff, Sweet, had been injured in an automobile accident and was subsequently treated in two San Francisco public hospitals at a cost of over $ 35,000 to the county. Sweet subsequently filed a tort action against the driver of the car which had struck him, an action which subsequently settled for over $ 100,000 after deducting attorney fees and costs. The City and County of San Francisco had, however, filed a hospital lien for the costs of its care of Sweet under Government Code section 23004.1 (section 23004.1), a provision giving "a county a first lien for the cost of medical care it has provided to an injured person against any judgment that person recovers from a third person who is responsible for the injury." (Sweet, at p. 108.) Sweet's attorney asked the county to reduce its lien, but the latter declined to do so. The attorney then set aside $ 22,000 for Sweet's net recovery to satisfy the lien, contending that the reduction was consistent with "what he believed to be the county's proportionate share of attorney fees incurred in creating the 'fund' from which the county sought to recover its expenses." ( Sweet, supra, 12 Cal. 4th at p. 109.) The county did not accept this amount and initiated an action against both Sweet and his attorney to recover the full amount of its lien. Both the trial court and another division of this court agreed with Sweet and his attorney that "the 'common fund' doctrine, under which fairness to the actual successful litigant requires that all who benefit from the creation of the fund share the burden of its recovery , was applicable." (Ibid.) Our Supreme Court unanimously reversed. In so doing, it held that the common fund doctrine was simply not applicable to a lien filed under section 23004.1, because in such a case the lien claimant is a creditor and the common fund doctrine should not be extended to claims arising in a creditor-debtor relationship. It held: "A personal injury action seeking to recover damages for injuries inflicted on the plaintiff by another is not an action taken for the benefit of the plaintiff's creditors. It is prosecuted for the benefit of the plaintiff. . . . In common fund cases the litigation has been undertaken in contemplation that a fund will be created that will confer a benefit on a class of beneficiaries with a common interest in the benefit obtained, but a personal injury tort action is undertaken for the benefit of the injured plaintiff. The plaintiff's creditors do not have an interest in the recovery in common with the plaintiff. That the creditors may benefit from any recovery is an incidental, not an intended, benefit of the litigation " ( Sweet, supra, 12 Cal. 4th at pp. 116-117.)