Opinion
76064.
Decided August 27, 2009.
Shannon S. Olivier, Esq., Williamsville, New York, For the Plaintiff.
Stephen Miller, Esq., Department of Social Services, Cattaraugus County, New York, For the Defendants.
On October 31, 2008, Lester Homan was driving his mother's motor vehicle south on Route 353 in the Town of Persia. Cory Durrance was driving a vehicle in the opposite direction when he crossed over the center line and hit Mr. Homan head-on, causing serious injuries to Mr. Homan. Durrance was operating his motor vehicle without insurance or registration. Therefore, the SUM carrier for the Homan vehicle was given notice of Mr. Homan's claim.
On January 12, 2009, the Cattaraugus County Department of Social Services (CCDSS or DSS) gave notice to all parties that it was claiming a lien on any potential recovery. Since then, the attorneys have sent correspondence back and forth, basically disagreeing about whether DSS has a lien or only a right of subrogation.
The SUM carrier ultimately settled the case for the $25,000 policy limits. The release states that the settlement is for "only bodily injury, [and] conscious pain and suffering" and preserves all subrogation rights. Plaintiff has now moved for an order declaring the DSS lien null and void under Arkansas Dept. of Health Human Services v. Ahlborn ( 547 US 268).
In Ahlborn, the plaintiff was seriously and permanently injured in a motor vehicle accident and the Arkansas Department of Health and Services(ADHS) provided substantial medical care for her. She sued the defendants and ADHS intervened to assert a lien on any recovery plaintiff might obtain. The case settled for $550,000 but the settlement was not allocated among damage categories. ADHS claimed its entire lien was recoverable under Arkansaslaw, whether the plaintiff's recovery was allocated for medical costs, lost wages, pain and suffering or anything else. The Supreme Court found that the federal anti-lien provisions under the Medicaid law limited the states to recovery from only that portion of a verdict or settlement that was attributable to past medical expenses. Ahlborn appears to have overruled a series of New York cases that held the entire recovery by a plaintiff was available to satisfy a Medicaid lien ( see Gold v. United Health Serv. Hosp., Inc, 95 NY2d 683, 723 NYS2d 117; Calvanese v. Calvanese, 93 NY2d 111, 688 NYS2d 479; Cricchio v. Pennisi, 90 NY2d 296, 660 NYS2d 679).
Theoretically, a plaintiff could seek to evade a DSS lien for medical expenses simply by attributing an entire settlement to pain and suffering, lost wages or anything that did not include past medical expenses. Simply calling a settlement "bodily injury" or "pain and suffering" does not necessarily make it so. In Ahlborn, the parties had stipulated to the full value of the case and the value of the claimed lien on a pro rata basis. Here, there was no stipulation and there is nothing before the court that would allow me to determine the full value of the case and compare the full value of the case to the lien.
That is the procedure Justice Schlessinger thoughtfully applied in Lugo v. Beth Israel Med. Center ( 13 Misc 3d 681 , 819 NYS2d 892 [Sup Ct, New York County 2006]). There, the $3.5 million settlement was unallocated and the court afforded the parties discovery to determine the "true value" of the case and how the settlement should be allocated. Ultimately, DSS received $31,000 of their lien of $47,349.58 ( Lubo, 2006 WL 6194821 [Trial Order]). Other cases have also applied this procedure in similar situations ( see Wright v. New York Hosp. Med. Ctr. of Queens, 2007 WL 4229216 [Sup Ct, New York County 2007 (Trial Order)]; Chambers ex rel Reeves v. Jain, 15 Misc 3d 1120 [A], 2007 WL 1118383, [Sup Ct, Queens County 2007]; Harris v. City of New York , 16 Misc 3d 674 , 837 NYS2d 486 [Sup. Ct, New York County 2007]).
This court adopts that procedure and will hold allocation hearings in cases where medical liens are at issue. Here, that is probably a Pyrrhic victory for DSS. If the full value of this was, for example, $1,000,000, DSS' lien amounts to roughly two percent of that figure. Two percent of the $20,000 lien comes to $400. That figure, of course, could go up or down depending on whether the full value of plaintiff's case is more or less than one million dollars. However, if DSS wishes a hearing, one will be scheduled.
Plaintiff contends that Ahlborn gives DSS only a right of subrogation, not a lien, although plaintiff does not explain why this is so. The court does not agree and neither do any of the cases cited above. Perhaps one could argue that, because the settlement proceeds in this case came from the vehicle owner's own SUM coverage, rather than from the tortfeasor's carrier, a different rule should apply. However, petitioner has not specifically raised that claim or cited any authority in support of that proposition.
Accordingly, the clerk is directed to schedule a hearing to determine the full value of this case. The hearing should be at least thirty days out so the parties can conduct any necessary discovery.