Judge: Christopher K. Lui, Case: 21STCV24779, Date: 2022-09-29 Tentative Ruling

Case Number: 21STCV24779    Hearing Date: September 29, 2022    Dept: 76

            Plaintiff filed this action pursuant to Insurance Code §  1871 et seq. (the “California Fraud Prevention Act”) on her own behalf and on behalf of the State of California to recover damages sustained by, and penalties owed to  California against Defendants as a result of Defendants’ billing for services not rendered to the patients or the private insurance companies who ultimately paid for those services. When the insurance companies reimbursed patients directly for these inappropriate claims, Defendants aggressively and relentlessly contacted patients so that the patients would forward these funds not to the insurance companies, but to Defendants. Additionally, Defendants billed under the name of other doctors when Defendant Feder did not have the appropriate in network agreement with certain insurers.  

Plaintiff Bridgitte Embry moves for an order approving and allocating settlement proceeds in this action in accordance with California Insurance Code Section 1871.7 and the parties’ settlement agreement dated July 14, 2022.

TENTATIVE RULING

The hearing on Plaintiff Bridgitte Embry’s motion for an order approving and allocating settlement proceeds is CONTINUED to October 28, 2022 at 8:30 AM. Plaintiff is to submit a supplemental brief and declaration addressing the above-identified deficiencies by October 18, 2022.

ANALYSIS

Motion to Allocate Settlement Proceeds

Plaintiff Bridgitte Embry moves for an order approving and allocating settlement proceeds in this action in accordance with California Insurance Code Section 1871.7(g)(2)(A) and the parties’ settlement agreement dated July 14, 2022.

On September 14, 2022, the Court entered an order permanently sealing the parties’ Amended and Restated Settlement Agreement dated July 14, 2022.

(2)

(A) If the district attorney or commissioner does not proceed with an action under this section, the person bringing the action or settling the claim shall receive an amount that the court decides is reasonable for collecting the civil penalty and damages. Except as provided in subparagraph (B), the amount shall not be less than 40 percent and not more than 50 percent of the proceeds of the action or settlement and shall be paid out of the proceeds. That person shall also receive an amount for reasonable expenses that the court finds to have been necessarily incurred, plus reasonable attorney’s fees and costs. All of those attorney’s fees and costs shall be imposed against the defendant. The parties shall serve the commissioner and the local district attorney with complete copies of any and all settlement agreements, and terms and conditions, for actions brought under this article at least 10 days prior to filing any motion for allocation with the court under this paragraph. The court may allocate the funds pursuant to the settlement agreement if, after the court’s ruling on objection by the commissioner or the local district attorney, if any, the court finds it is in the interests of justice to follow the settlement agreement.

(B) If the person bringing the action, as a result of a violation of this section has paid money to the defendant or to an attorney acting on behalf of the defendant in the underlying claim, then he or she shall be entitled to up to double the amount paid to the defendant or the attorney if that amount is greater than 50 percent of the proceeds. That person shall also receive an amount for reasonable expenses that the court finds to have been necessarily incurred, plus reasonable attorney’s fees and costs. All of those expenses, fees, and costs shall be awarded against the defendant.

(Ins. Code § 1871.7(g)(2)(A).)

            Here, it appears that the amount which Plaintiff is to recover is below the mandatory minimum 40 percent of the proceeds of the action or settlement.

Moreover, Plaintiff has not presented enough evidence whereby the Court can determine whether the amounts to be paid as attorney’s fees and expenses are reasonable.

As such, the hearing on the motion for an order approving and allocating settlement proceeds is CONTINUED to October 28, 2022 at 8:30 AM. Plaintiff is to submit a supplemental brief and declaration addressing the above-identified deficiencies by October 18, 2022.