Larry Benton v. Vanderbilt University

This is a case of first impression regarding the enforceability of an arbitration agreement against a third party. The plaintiff was a passenger in an automobile accident and was treated at the defendant hospital. The hospital filed a statutory hospital lien against any proceeds the plaintiff might recover in any lawsuit arising out of the car accident. The plaintiff later successfully sued the tortfeasor for the injuries he sustained in the accident. Thereafter, the hospital sought to recover under its lien for the balance of the plaintiff's medical bills that were not paid to the hospital by the plaintiff's insurance carrier. The plaintiff filed this action against the hospital, claiming that the hospital's practice of balance billing violates the institution agreement between the hospital and the plaintiff's insurance carrier. The hospital filed a motion in the trial court to compel arbitration, pursuant to an arbitration provision contained in the institution agreement. The trial court denied that motion. The hospital now appeals the denial of its motion to compel arbitration. We reverse, concluding that the plaintiff, a third-party beneficiary to the institution agreement seeking to enforce his rights under that agreement, is bound by the arbitration provision contained within that agreement.