Cronin v. McKim-Gray
Cronin v. McKim-Gray
Opinion of the Court
The opinion of the court was delivered by
Plaintiffs, Dr. Gerald Cronin, South Jersey Injury Center, Allied Health Rehab Associates, and Rehab Cab, appeal from the dismissal of their complaint pursuant to R. 4:6-2(e) against defendants, attorneys Issadore & Miller, Murray Issadore and Michael Miller. Plaintiffs claimed that the attorneys should have honored an assignment and paid outstanding medical bills owed them out of the proceeds of a personal injury case settlement the attorneys made on behalf of their client, plaintiffs’ patient.
Plaintiffs allege that they provided medical services to Regina McKim-Gray after she was involved in an automobile accident. They assert that in exchange for their medical services McKimGray agreed in writing to compensate the defendants. The writ
Defendants represented McKim-Gray in her personal injury claim and recovered a settlement. Plaintiffs alleged that Professional Management Specialists assisted them in the debt collection servicing and that Harvey Kazatsky of that entity was responsible for handling the books and records in the debt collection phase. Plaintiffs asserted that Kazatsky had a working relationship with the defendant attorneys and that Kazatsky personally hand delivered to defendants copies of MeKim-Gray’s medical records, medical bills and executed patient retainer agreement which specifically directed the defendant attorneys to pay plaintiffs out of any monies received by the attorneys on behalf of McKim-Gray in her negligence case. Plaintiffs allege that despite giving notice to these attorneys, they failed to pay the plaintiffs or hold any funds in escrow pending resolution of any unresolved dispute.
The Law Division Judge agreed with defendants and concluded that the defendants, as attorneys for McKim-Gray, had no contractual obligation or otherwise to disburse funds from the settlement to pay the medical bills of the plaintiffs. Defendants had asserted that they received no consideration for any agreement between them and the plaintiffs; no letter of protection was ever signed by them or sent by them to the plaintiffs; and there was no legal basis for such payment. They attempt to distinguish Berkowitz v. Haigood, 256 N.J.Super. 342, 346-347, 606 A.2d 1157 (Law Div. 1992), on the basis that the document signed by the patient in that ease specifically stated, “I hereby authorize and
We reject defendants’ argument and their attempt to distinguish the Berkowitz case. We note initially that the agreement in this case provides in pertinent part:
2. PATIENT hereby irrevocably directs his attorney, if any, to pay the full amount owing for services rendered by PHYSICIAN, or any balance thereof immediately upon receipt of an invoice from PHYSICIAN from monies received by PATIENT’S attorney(s) as a result of any compromise, settlement, arbitration, mediation, litigation or any other collection activities by PATIENT or PATIENT’S attomey(s). In any event, PATIENT understands that any unpaid PHYSICIAN bills in dispute will not be a part of the distribution process, but rather placed into the PATIENT’S attorney’s escrow account until such time as the issue under dispute is settled.
3. This agreement shall constitute an irrevocable assignment and lien on any monies collected or received as a result of the condition for which PHYSICIAN treats PATIENT.
We construe this language as a sufficient assignment by the patient (here, McKim-Gray) of her right to receive certain of the settlement proceeds to the plaintiffs in satisfaction of their bill for medical services.
Here, giving the benefit of the reasonable inferences to plaintiffs, as required on a motion to dismiss, those conditions had been met. There was a facially valid assignment and notice is alleged to have been given to the attorneys of this assignment. If the attorneys received notice, they cannot then close their eyes to the language of the assignment and decline to pay the medical bills out of the settlement proceeds, unless there was a bona fide dispute as to the amount of those bills that would require holding the funds in escrow until the dispute was resolved.
In light of our decision, we do not need to comment further on whether the allegations of the complaint are sufficient to state a cause of action or the necessity for amendment of the pleadings. We are satisfied that the pleadings gave sufficient notice of the claim to the defendants.
Accordingly, we reverse and remand for further proceedings consistent with this opinion.
Apparently, defendant Regina McKim-Gray, the plaintiff in the underlying personal injury negligence case, could not be found or served and plaintiffs’ complaint against her was eventually dismissed.
The record does not indicate whether the attorneys actually knew, either at the time of the settlement or the institution of plaintiffs' lawsuit, the address of McKim-Gray, or if she has been fully paid her share of the proceeds of the settlement.
We are not presented with and do not pass upon any ethical considerations with respect to the propriety of such an assignment.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.