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Angela Edwards v. Ardent Health Services, L.L.C.
Date: 10-22-2010
Case Number: 2010 OK CIV APP 113
Judge: Bay Mitchell
Court: Oklahoma Court of Civil Appeals on appeal from the District Court of Tulsa County
Plaintiff's Attorney: Michael N. Brown, ABOWITZ, TIMBERLAKE & DAHNKE, P.C., Oklahoma City, Oklahoma, and Ted Sherwood, SHERWOOD LAW FIRM, Tulsa, Oklahoma, for Plaintiff/Appellee
Defendant's Attorney: Ashley D. Williams, Lynn Rambo-Jones, Oklahoma City, Oklahoma, for Defendant/Appellant
Description:
¶1 This case arises from a medical negligence suit filed by Plaintiff/Appellee, Angela Edwards, individually, and on behalf of her husband, Johnny G. Edwards, an incapacitated person (Edwards). Ultimately, the underlying lawsuit was settled and Edwards sought court approval of the settlement. Defendant/Appellant, Oklahoma Health Care Authority (OHCA), objected to the settlement on the basis that Plaintiff's proposed distribution of settlement funds reduced the amount of OHCA's lien for reimbursement of medical bills paid by Medicaid. Subsequent to hearing, the trial court entered its Order Approving the Settlement, Apportionment of Damages and Distribution, which was filed on July 23, 2008.
¶2 On August 5, 2008, OHCA filed a Motion for New Hearing, asserting the trial court erred in reducing OHCA's lien amount. Plaintiff responded by asserting its untimeliness.1 Plaintiff additionally argued the underlying merits of the matter, asserting the correctness of the trial court's Order Approving Settlement. The trial court thereafter denied OHCA's Motion for New Hearing without noting any specific basis for its decision. OHCA appeals from the trial court's denial of its Motion for New Hearing.
¶3 First, we note the trial court properly regarded OHCA's Motion for New Hearing as the functional equivalent of a motion for new trial regardless of its title. See Horizons, Inc. v. Keo Leasing Co., 1984 OK 24, 681 P.2d 757. We review a denial of a motion for a new trial for an abuse of discretion. See Robinson v. Okla. Nephrology Assocs., Inc., 2007 OK 2, ¶6, 154 P.3d 1250, 1253 (denial of new-trial motion reviewed "for error of a pure question of law or for an abuse of discretion which is arbitrary, clearly against the evidence, and manifestly unreasonable"). Additionally, where a motion for "new trial is denied, the movant may not, on appeal, raise allegations of error which were available to him at the time of the filing of his motion for new trial, but were not therein asserted." Poteete v. MFA Mutual Ins. Co., 1974 OK 110, ¶23, 527 P.2d 18; 12 O.S. §991(b). To the extent OHCA's appellate brief contains new arguments on appeal, we will not address them.
¶4 Plaintiff received medical care and treatment for the injury associated with the underlying lawsuit as a Medicaid recipient. OHCA, the state agency designated to administer Oklahoma's Medicaid program, paid to the medical providers $381,917.20 of the $432,605.82 it was billed for Plaintiff's care and treatment. OHCA was neither a party to the underlying medical negligence action, nor invited to participate in the settlement negotiations.2 Upon the settlement of the underlying action for $1.5 million, Plaintiff sought the trial court's approval of apportionment of damages and payments in an attempt to distribute funds among Plaintiff's counsel for attorney fees, an ERISA health care provider with a medical lien, and OHCA with its Medicaid lien.
¶5 Although the record reflects OHCA's lien amount was $381,917.20 (the amount OHCA actually paid medical providers on behalf of Plaintiff), Plaintiff's "Application for Approval of Settlement, Order for Apportionment of Damages and Order Approving Distribution" proposed the payment of $119,526.353 to OHCA to fully satisfy OHCA's lien. Plaintiff arrived at this proposed number by using a formula which we understand to be:
$1,173,854.84 (asserted total medical expenses) ÷ $3,000,000 (total value of claim as asserted by Plaintiff) = .3913 or 39.13% (percentage of medical expense to total total asserted claim value)
Plaintiff then contends 60.87% of the $1.5 million settlement (after attorney fees and costs have been deducted) should go to Plaintiff's loss of consortium claims and 39.13% should be allocated to satisfy the medical liens.
$1,500,000 (settlement amount) less $671,072.97 (attorney fees and costs) = $828,927.10
$828,927 x 60.87% = $504,568 (allocated for loss of consortium claims)
$828,927 x 39.13% = $324,359 (allocated for payment of medical liens)
Of the $324,359 to be allocated for payment of medical liens, the first $200,000 was allocated to pay a previously settled ERISA lien (ERISA initially covered Plaintiff prior to his Medicaid eligibility4). The remainder of $124,359 was allocated for the OHCA lien.
¶6 A hearing was held to obtain court approval of the settlement and allocation. Plaintiff's counsel argued that all interested parties should reduce or compromise their claims or liens.5 Further, Plaintiff contends Arkansas Dep't of Health & Human Services v. Ahlborn, 547 U.S. 268 (2006), a recent U.S. Supreme Court case construing an Arkansas statute, contravenes 63 O.S. Supp. 2007 §5051.16 , the statutory lien authority relied upon by OHCA, and mandates the reduction of OHCA's lien. Ultimately, the trial court adopted Plaintiff's proposed apportionment.
¶7 OHCA contends the ordered reduction of its lien was contrary to statute and case law and there was no clear and convincing evidence that might permit a reduction. OHCA also contends the formula used for reducing its lien was seriously flawed. OHCA also distinguishes the U.S. Supreme Court Ahlborn case, arguing it is inapplicable to the facts here.
¶8 OHCA distinguishes Ahlborn on the basis that the Arkansas statute at issue there failed to limit the state's recovery/reimbursement from a Medicaid recipient's settlement to payments for medical care. The Oklahoma statute at issue here provides OHCA with a lien "to the extent of the amount so paid . . . up to the amount of the damages for the total medical expenses . . . unless a more limited allocation of damages to medical expenses is shown by clear and convincing evidence." 63 O.S. Supp. 2007 §5051.1(D)(1)(d). Unlike this Oklahoma statute that limits the lien recovery to the amount of damages for medical expenses and permits an evidentiary showing to justify a more limited or reduced allocation to OHCA, the Arkansas statute was broadly written so as to authorize the satisfaction of the state's lien from settlement proceeds attributable to damages for pain and suffering, lost wages, etc., and therefore ran afoul of the federal Medicaid anti-lien statute. Ahlborn, 547 U.S. at 280.7 In addition to the statutory language differences, OHCA further noted the circumstances in Ahlborn were materially different from the circumstances in this case. In Ahlborn, the parties entered into the following critical stipulations, which governed the allocation of the Medicaid recipient's settlement proceeds: (1) the value of the underlying claim; (2) that the settlement amounted to only one-sixth of the value of the claim; and (3) the specific amount representing compensation for medical expenses. Id. at 274. Such stipulations are absent here.
¶9 While Plaintiff reads the Ahlborn case in such a way as to wrap all parties in a pro rata blanket reduction rule, a closer inspection reveals the Supreme Court in Ahlborn merely decided that the state's Medicaid reimbursement extends no further than the portion of the settlement representing medical expenses (in that case, the precise amount stipulated by the parties). In contrast to Ahlborn, the parties here strenuously contest the value of the claim and the amount of the settlement that should be attributable to medical expenses. Further, no party here urges a construction of Oklahoma law, which would violate the pronouncement in Ahlborn because the parties agree the OHCA lien extends no further than the portion of the recovery representing medical costs.8
¶10 Because the stipulations present in Ahlborn are absent from the settlement here, a hearing to satisfy paragraph (D)(1)(d) of §5051.1 was required.9 Although there was a hearing of sorts, there was no showing "by clear and convincing evidence" to warrant a "more limited allocation" or reduction of OHCA's lien. Because the settlement amount is amply sufficient to pay the Plaintiff's attorney fee and satisfy the OHCA's lien in full, and, because there was no showing by clear and convincing evidence that OHCA's lien should be reduced, OHCA is entitled to recovery of the full amount of its lien.
¶11 OHCA additionally argues the trial court's reduction of its lien is contrary to 63 O.S. Supp. 2008 §5051.1(D) and twenty years of Oklahoma law including State ex rel. Dep't of Human Services v. Allstate Ins. Co., 1987 OK 91, 744 P.2d 186; Young v. Columbia Southwestern Medical Center, 1998 OK CIV APP 124, 964 P.2d 987. OHCA asserts its statutory entitlement to the full amount of its lien because the settlement amount of $1.5 million, and particularly the 39.13% attributed by the trial court to medical costs, is sufficient to discharge its $381,917.20 lien in full. We agree. The Oklahoma statute governing OHCA liens for the recovery of medical expenses expressly provides "damages for medical costs are considered a priority over all other damages and should be paid by the tortfeasor prior to other damages being allocated or paid." 63 O.S. §5051.1(A)(1). OHCA's lien is "inferior only to a lien or claim of the [Plaintiff's] attorney." Id. §(D)(1)(a).
¶12 OHCA's statutory lien is superior to Plaintiff's claim, of which settlement negotiations effectively established the value. It is also superior to the ERISA lien. From the settlement proceeds, after payment of Plaintiff's attorney fees and costs, OHCA is entitled to payment of $381,917.20, in full satisfaction of its lien. We find the reduction of OHCA's lien is contrary to Oklahoma law, unsupported by the necessary evidence and an abuse of the trial court's discretion. Upon remand, the trial court is instructed to enter judgment in favor of OHCA for the full amount of its lien.10
See: http://www.oscn.net/applications/oscn/deliverdocument.asp?cite=2010+OK+CIV+App+113
¶2 On August 5, 2008, OHCA filed a Motion for New Hearing, asserting the trial court erred in reducing OHCA's lien amount. Plaintiff responded by asserting its untimeliness.1 Plaintiff additionally argued the underlying merits of the matter, asserting the correctness of the trial court's Order Approving Settlement. The trial court thereafter denied OHCA's Motion for New Hearing without noting any specific basis for its decision. OHCA appeals from the trial court's denial of its Motion for New Hearing.
¶3 First, we note the trial court properly regarded OHCA's Motion for New Hearing as the functional equivalent of a motion for new trial regardless of its title. See Horizons, Inc. v. Keo Leasing Co., 1984 OK 24, 681 P.2d 757. We review a denial of a motion for a new trial for an abuse of discretion. See Robinson v. Okla. Nephrology Assocs., Inc., 2007 OK 2, ¶6, 154 P.3d 1250, 1253 (denial of new-trial motion reviewed "for error of a pure question of law or for an abuse of discretion which is arbitrary, clearly against the evidence, and manifestly unreasonable"). Additionally, where a motion for "new trial is denied, the movant may not, on appeal, raise allegations of error which were available to him at the time of the filing of his motion for new trial, but were not therein asserted." Poteete v. MFA Mutual Ins. Co., 1974 OK 110, ¶23, 527 P.2d 18; 12 O.S. §991(b). To the extent OHCA's appellate brief contains new arguments on appeal, we will not address them.
¶4 Plaintiff received medical care and treatment for the injury associated with the underlying lawsuit as a Medicaid recipient. OHCA, the state agency designated to administer Oklahoma's Medicaid program, paid to the medical providers $381,917.20 of the $432,605.82 it was billed for Plaintiff's care and treatment. OHCA was neither a party to the underlying medical negligence action, nor invited to participate in the settlement negotiations.2 Upon the settlement of the underlying action for $1.5 million, Plaintiff sought the trial court's approval of apportionment of damages and payments in an attempt to distribute funds among Plaintiff's counsel for attorney fees, an ERISA health care provider with a medical lien, and OHCA with its Medicaid lien.
¶5 Although the record reflects OHCA's lien amount was $381,917.20 (the amount OHCA actually paid medical providers on behalf of Plaintiff), Plaintiff's "Application for Approval of Settlement, Order for Apportionment of Damages and Order Approving Distribution" proposed the payment of $119,526.353 to OHCA to fully satisfy OHCA's lien. Plaintiff arrived at this proposed number by using a formula which we understand to be:
$1,173,854.84 (asserted total medical expenses) ÷ $3,000,000 (total value of claim as asserted by Plaintiff) = .3913 or 39.13% (percentage of medical expense to total total asserted claim value)
Plaintiff then contends 60.87% of the $1.5 million settlement (after attorney fees and costs have been deducted) should go to Plaintiff's loss of consortium claims and 39.13% should be allocated to satisfy the medical liens.
$1,500,000 (settlement amount) less $671,072.97 (attorney fees and costs) = $828,927.10
$828,927 x 60.87% = $504,568 (allocated for loss of consortium claims)
$828,927 x 39.13% = $324,359 (allocated for payment of medical liens)
Of the $324,359 to be allocated for payment of medical liens, the first $200,000 was allocated to pay a previously settled ERISA lien (ERISA initially covered Plaintiff prior to his Medicaid eligibility4). The remainder of $124,359 was allocated for the OHCA lien.
¶6 A hearing was held to obtain court approval of the settlement and allocation. Plaintiff's counsel argued that all interested parties should reduce or compromise their claims or liens.5 Further, Plaintiff contends Arkansas Dep't of Health & Human Services v. Ahlborn, 547 U.S. 268 (2006), a recent U.S. Supreme Court case construing an Arkansas statute, contravenes 63 O.S. Supp. 2007 §5051.16 , the statutory lien authority relied upon by OHCA, and mandates the reduction of OHCA's lien. Ultimately, the trial court adopted Plaintiff's proposed apportionment.
¶7 OHCA contends the ordered reduction of its lien was contrary to statute and case law and there was no clear and convincing evidence that might permit a reduction. OHCA also contends the formula used for reducing its lien was seriously flawed. OHCA also distinguishes the U.S. Supreme Court Ahlborn case, arguing it is inapplicable to the facts here.
¶8 OHCA distinguishes Ahlborn on the basis that the Arkansas statute at issue there failed to limit the state's recovery/reimbursement from a Medicaid recipient's settlement to payments for medical care. The Oklahoma statute at issue here provides OHCA with a lien "to the extent of the amount so paid . . . up to the amount of the damages for the total medical expenses . . . unless a more limited allocation of damages to medical expenses is shown by clear and convincing evidence." 63 O.S. Supp. 2007 §5051.1(D)(1)(d). Unlike this Oklahoma statute that limits the lien recovery to the amount of damages for medical expenses and permits an evidentiary showing to justify a more limited or reduced allocation to OHCA, the Arkansas statute was broadly written so as to authorize the satisfaction of the state's lien from settlement proceeds attributable to damages for pain and suffering, lost wages, etc., and therefore ran afoul of the federal Medicaid anti-lien statute. Ahlborn, 547 U.S. at 280.7 In addition to the statutory language differences, OHCA further noted the circumstances in Ahlborn were materially different from the circumstances in this case. In Ahlborn, the parties entered into the following critical stipulations, which governed the allocation of the Medicaid recipient's settlement proceeds: (1) the value of the underlying claim; (2) that the settlement amounted to only one-sixth of the value of the claim; and (3) the specific amount representing compensation for medical expenses. Id. at 274. Such stipulations are absent here.
¶9 While Plaintiff reads the Ahlborn case in such a way as to wrap all parties in a pro rata blanket reduction rule, a closer inspection reveals the Supreme Court in Ahlborn merely decided that the state's Medicaid reimbursement extends no further than the portion of the settlement representing medical expenses (in that case, the precise amount stipulated by the parties). In contrast to Ahlborn, the parties here strenuously contest the value of the claim and the amount of the settlement that should be attributable to medical expenses. Further, no party here urges a construction of Oklahoma law, which would violate the pronouncement in Ahlborn because the parties agree the OHCA lien extends no further than the portion of the recovery representing medical costs.8
¶10 Because the stipulations present in Ahlborn are absent from the settlement here, a hearing to satisfy paragraph (D)(1)(d) of §5051.1 was required.9 Although there was a hearing of sorts, there was no showing "by clear and convincing evidence" to warrant a "more limited allocation" or reduction of OHCA's lien. Because the settlement amount is amply sufficient to pay the Plaintiff's attorney fee and satisfy the OHCA's lien in full, and, because there was no showing by clear and convincing evidence that OHCA's lien should be reduced, OHCA is entitled to recovery of the full amount of its lien.
¶11 OHCA additionally argues the trial court's reduction of its lien is contrary to 63 O.S. Supp. 2008 §5051.1(D) and twenty years of Oklahoma law including State ex rel. Dep't of Human Services v. Allstate Ins. Co., 1987 OK 91, 744 P.2d 186; Young v. Columbia Southwestern Medical Center, 1998 OK CIV APP 124, 964 P.2d 987. OHCA asserts its statutory entitlement to the full amount of its lien because the settlement amount of $1.5 million, and particularly the 39.13% attributed by the trial court to medical costs, is sufficient to discharge its $381,917.20 lien in full. We agree. The Oklahoma statute governing OHCA liens for the recovery of medical expenses expressly provides "damages for medical costs are considered a priority over all other damages and should be paid by the tortfeasor prior to other damages being allocated or paid." 63 O.S. §5051.1(A)(1). OHCA's lien is "inferior only to a lien or claim of the [Plaintiff's] attorney." Id. §(D)(1)(a).
¶12 OHCA's statutory lien is superior to Plaintiff's claim, of which settlement negotiations effectively established the value. It is also superior to the ERISA lien. From the settlement proceeds, after payment of Plaintiff's attorney fees and costs, OHCA is entitled to payment of $381,917.20, in full satisfaction of its lien. We find the reduction of OHCA's lien is contrary to Oklahoma law, unsupported by the necessary evidence and an abuse of the trial court's discretion. Upon remand, the trial court is instructed to enter judgment in favor of OHCA for the full amount of its lien.10
See: http://www.oscn.net/applications/oscn/deliverdocument.asp?cite=2010+OK+CIV+App+113
Outcome:
¶13 REVERSED AND REMANDED.
Plaintiff's Experts:
Defendant's Experts:
Comments:
About This Case
What was the outcome of Angela Edwards v. Ardent Health Services, L.L.C.?
The outcome was: ¶13 REVERSED AND REMANDED.
Which court heard Angela Edwards v. Ardent Health Services, L.L.C.?
This case was heard in Oklahoma Court of Civil Appeals on appeal from the District Court of Tulsa County, OK. The presiding judge was Bay Mitchell.
Who were the attorneys in Angela Edwards v. Ardent Health Services, L.L.C.?
Plaintiff's attorney: Michael N. Brown, ABOWITZ, TIMBERLAKE & DAHNKE, P.C., Oklahoma City, Oklahoma, and Ted Sherwood, SHERWOOD LAW FIRM, Tulsa, Oklahoma, for Plaintiff/Appellee. Defendant's attorney: Ashley D. Williams, Lynn Rambo-Jones, Oklahoma City, Oklahoma, for Defendant/Appellant.
When was Angela Edwards v. Ardent Health Services, L.L.C. decided?
This case was decided on October 22, 2010.