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Plaintiffs Claim Injury from Lead Exposure, New York Appellate Court Discusses Medicaid Lien


The infant plaintiffs, by their natural guardian, and the guardian individually, commenced an action against the defendants Corporation and private individual by the filing of summons and complaint in the office of the County Clerk of Westchester County on 11 October 1995. The complaint alleges, among other things, that the Corporation and the private individual were responsible for the operation and maintenance of certain apartments located in Westchester County, including the apartment in which the infant plaintiffs resided. The complaint alleges that the infant plaintiffs were each “caused to ingest, consume and/or be exposed to lead paint and/or dust which was upon and/or caused, allowed and permitted to chip, peel, fall and/or permeate the premises from the interior walls and portions of said apartment”; that as a result of the infants’ ingestion of these noxious substances, they were severely injured (head injury, deafness, paralysis and the like) and suffered “great physical pain”; that each of the infants “incurred and in the future would necessarily incur further hospital and/or medical expenses in an effort to be cured”; and that the natural guardian had, on account of the injuries to the two infants, “been required to expend various sums of money for extraordinary medical care, consultation, advice, therapy, education, management and treatment of the infants.”

A New York Injury Lawyer said that by virtue of a “notice of lien” dated 2 November 1998, the guardian, as well as the attorneys representing him and the infant plaintiffs, the defendants, and the defendants’ attorneys, were notified that the Commissioner of the Westchester County Department of Social Services (hereinafter the DSS) was asserting a lien in the sum of $132,204.73 to be satisfied out of the proceeds of the settlement noted above. The defendants assert that this was their first notice of any such lien.

The issue here is whether or not the representatives of an infant plaintiff, on whose behalf a settlement of a personal injury action has been reached, may completely defeat enforcement of the Medicaid lien by the simple expedient of declaring that the settlement related solely to the infant’s claim for pain and suffering?

There can be no dispute as to the validity of the general principle that a Medicaid lien may be satisfied from all of the proceeds of the settlement of a personal injury action brought by the recipient of Medicaid benefits, and that the proceeds available for the satisfaction of such a lien are not limited to the portion of such settlement specifically allocated to past medical expenses. Whether this general rule applies in the case of a Medicaid recipient who is under the age of 21 must remain an open question on this appeal mainly because such argument it has been abandoned which was based on the contention that this general rule does apply, even in the case of an infant plaintiff. Now, on appeal, said a Brooklyn Personal Injury Lawyer, the DSS seems to accept without dispute that, when a Medicaid recipient is under the age of 21, only that portion of a settlement attributable to past medical expenses is properly subject to a Medicaid lien.

Here, the appellant DSS has chosen to narrow the scope of its argument on a right to impose a lien only on that portion of the settlement as relates to medical expenses.

The court agrees with DSS. A Bronx Personal Injury Lawyer said the papers submitted by the defendants in the personal injury action establish very clearly that their intent, in agreeing to pay $1.3 million, was to obtain, in return, a release from all possible future claims relating to the injuries incurred by the two infant plaintiffs, including any claim based on the past medical expenses incurred by them. The assertion made by the plaintiffs’ counsel that the only causes of action which have been compromised are those for pain and suffering leaves it unclear as to whether the infant plaintiffs themselves, or the private individual as their guardian, or the DSS as subrogee, may continue to pursue a claim based on past medical expenses.

The cases decided by the court holds that the determination as to the extent to which a personal injury settlement relates to the claim for past medical expenses “is to be made by the court and is not foreclosed by the form of the settlement documents or the language used by the attorneys in the settlement stipulation, if that form and language do not truly reflect the consideration of the settlement, or are chosen merely as a means to defeat DSS’ recovery”. While there may have been cases where the record on appeal conclusively established the proposition that, for some legitimate reason, a settlement of a personal injury action included no compromise of the claim based on past medical expenses, we do not believe that such a proposition may be considered as having been conclusively established by mere ipse dixit of the plaintiffs’ attorney. For these reasons, the court agrees with the central argument, that is, that a Medicaid lien may not be effectively nullified by the mere expedient of the plaintiffs’ attorney announcing that the settlement relates to pain and suffering only.

On the larger question of whether the Medicaid lien under review is in fact enforceable against all of the proceeds of the settlement, irrespective of how they are allocated, again, it must be noted that the court was not called upon to decide on that matter. It is always better for an appeals court, as it is for a trial court, to pass upon only those issues which the litigants have had a fair opportunity to address.

However, the ruling is not to preclude the DSS from reasserting its original argument (abandoned on this appeal) during the course of the further proceedings in the Supreme Court which are, in any event, necessary in light of our determination. The DSS should be granted leave to renew its opposition to the plaintiffs’ motion to vacate the lien, and to advance once again its original argument, this time with the support of the recent case laws which neither party had an opportunity to brief on during the appeal. The plaintiffs should have a fair opportunity to identify any factors which might render those cases distinguishable from the one at hand before the effect of those cases on the present litigation is passed upon, either by the Supreme Court or by this Court.

Consequently, the motion to vacate the DSS lien is granted solely to the extent of directing a hearing to determine the portion of the settlement related to the claims for past pain and suffering. When a settlement of a personal injury action has been reached, it may not completely defeat enforcement of the Medicaid lien by the simple expedient of declaring that the settlement related solely to the infant’s claim for pain and suffering. The court rules that further proceedings are necessary in any event, and that the appellant should be granted leave to renew its opposition to the motion to vacate the Medicaid lien in light of the recent caselaw which neither party had an opportunity to brief on during the appeal.

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