Date: 02-15-2001

Case Style: Gold v. United Helath Services Hospitals

Case Number: 95 N.Y.2d 683

Judge: Rosenblatt

Court: New York Court of Appeals

Plaintiff's Attorney: James M. Hayes, for appellants.

Defendant's Attorney: Kathleen M. Treasure, for respondent State agency.

Howard Schultz, for respondent county department.

Case No. 19: Brian J. Farrell, for appellants.

Mordecai Newman, for respondent.

Description: Social Services Law § 104(2) limits the amount that a public welfare official may recoup from an infant who receives public assistance benefits. In these two cases, we must decide whether Medicaid's recoupment provisions are subject to this limitation. We conclude that they are not.

Kimberly Santiago

Kimberly Santiago, an infant, was allegedly poisoned by lead paint in her apartment. Benita Santiago, the child's mother, sued their landlord on behalf of herself and Kimberly, and the parties settled the case for $140,000. After subtracting attorneys' fees and expenses, the Santiagos netted $89,759, which they proposed to deposit in a supplemental needs trust.

Kimberly had received $12,877 in health care benefits under the Medicaid program. The New York City Department of Social Services asserted a lien on the settlement proceeds to recoup those benefits, and demanded that it be satisfied before the Santiagos funded the trust. The Santiagos moved in Supreme Court to vacate the lien, arguing that Social Services Law § 104(2) prevents the City from recovering from an infant. Agreeing with the Santiagos, Supreme Court vacated the lien. The City appealed, and the Appellate Division reversed, holding that the City may recoup fully notwithstanding Social Services Law § 104(2). The Appellate Division also granted the Santiagos leave to appeal to this Court.

Abraham Gold

Kathleen Gold suffered a grand mal seizure during her pregnancy and her baby, Abraham, was delivered prematurely by emergency Caesarean section. Abraham now suffers from spastic quadriplegic cerebral palsy. Kathleen Gold, on behalf of herself and her child, sued her doctor and the hospital, alleging that they negligently failed to treat the seizure. During jury deliberations the parties entered into a "high-low" agreement. They stipulated that if the verdict, reduced to present value, exceeded $5 million, the Golds would receive $5 million. If, on the other hand, there was a defense verdict, or one for less than $450,000, the Golds would receive $450,000. The jury's verdict significantly exceeded $5 million, so the high-low agreement capped the settlement payable at that amount.

Since his birth, Abraham has received Medicaid benefits for medical assistance and custodial care. To recoup their expenditures, the Broome County Department of Social Services and the New York Office of Mental Retardation and Developmental Disabilities asserted liens on the settlement proceeds in the amounts of $62,410 and $1,707,884, respectively. In Supreme Court, the Golds moved for an order reducing the liens proportionally, according to the ratio that the settlement bore to the jury's verdict. Thus, under the Golds' proposed formula, Supreme Court would have allocated $103,000 of the settlement toward the full satisfaction of the liens, and the remainder toward, among other things, attorneys' fees and disbursements and a supplemental needs trust for Abraham. The Medicaid agencies objected to the reduction of their liens.

Supreme Court denied the Golds' motion, and allocated the settlement proceeds as follows: $705,359 for attorneys' fees and disbursements, $1,784,680 for the Medicaid liens, $2,173,626 for a reserve to pay for Abraham's post-verdict medical and custodial care, and $336,335 for a supplemental needs trust for Abraham. The Golds appealed and the Appellate Division affirmed, holding that, notwithstanding Social Services Law § 104(2), the Medicaid liens must be fully satisfied, and that Supreme Court did not abuse its discretion by reserving $2,173,626 for Abraham's post-verdict medical and custodial care. We granted the Golds leave to appeal.

In each case, the appellant argues that the Appellate Division erred by allowing the Medicaid agencies to satisfy the full amount of their liens from the settlement proceeds. Appellants contend that because they are infants, the agencies were prohibited by Social Services Law § 104(2) from recouping their expenditures. We disagree.

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Click the case caption above for the full text of the Court's opinion.

Outcome: Affirmed as modified and matter remitted, and certified question answer in the affirmative.

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: Reported by Kent Morlan