Can hospital liens give rise to tort claims after being released? S.S. v. IHC Health Services Explained

In S.S. v. IHC Health Services, the Utah Supreme Court addressed whether hospital liens that are later released can support claims for intentional infliction of emotional distress, tortious interference, and breach of the implied covenant of good faith and fair dealing. The court’s analysis provides important guidance for practitioners handling personal injury cases involving medical liens.

Background and Facts

A child was seriously injured in a car accident and received extensive medical treatment at Primary Children’s Hospital, an IHC facility. IHC’s collection vendor, Cardon, asserted hospital liens against the child’s potential tort recovery. The first lien was released after three months, and a second lien was asserted in March 2015. After the lawsuit was filed, defendants released the second lien, and plaintiffs eventually settled their claims against the tortfeasor. The child and his mother sued IHC and Cardon, asserting eleven claims, though most were dismissed as moot after the liens were released.

Key Legal Issues

The remaining claims centered on whether asserting and later releasing hospital liens could support tort claims. The court examined whether such conduct constituted outrageous and intolerable behavior for intentional infliction of emotional distress, interference with economic relations for tortious interference, and whether adequate damages existed for the breach of good faith and fair dealing claim.

Court’s Analysis and Holding

The Utah Supreme Court affirmed the summary judgment, finding each remaining claim failed as a matter of law. For the intentional infliction claim, the court held that asserting statutorily authorized liens “without more, cannot constitute outrageous and intolerable conduct.” The tortious interference claim failed because plaintiffs abandoned their theory of damages on appeal. The good faith and fair dealing claim failed because plaintiffs produced no evidence they could have settled sooner but for the liens.

Practice Implications

This decision establishes that asserting hospital liens, even if improper under Medicaid law, does not automatically create tort liability. Practitioners challenging hospital liens must develop concrete evidence of specific damages and avoid relying solely on the lien assertion as proof of tortious conduct. The court’s reluctance to wade into complex Medicaid law when simpler grounds for dismissal exist also suggests focusing on fundamental legal elements rather than statutory interpretation arguments when possible.