Judge: Gregory Keosian, Case: 21STCV23857, Date: 2024-01-04 Tentative Ruling

Case Number: 21STCV23857    Hearing Date: March 19, 2024    Dept: 61

Plaintiffs Yvette Villalba, Jade Chan, Yoel Chan, Richard Cuevas, and Zachary Cuevas’ Motion to Expunge Notice of Lien is DENIED.

I.                   MOTION TO EXPUNGE LIEN

Plaintiffs Yvette Villalba, Jade Chan, Yoel Chan, Richard Cuevas, and Zachary Cuevas (Plaintiffs) move to expunge a lien filed in this action by the State of California/California Victim Compensation Board (Board) on January 18, 2022. The notice of lien is for $5,394.32, with the Board now seeking $6,852.32, representing $1,966.32 in funeral/burial expenses, $2,000.00 in relocation costs, and $2,886.00 for mental health treatment, resulting from the crime that is the subject of the present action.

“The board shall also be entitled to a lien on any judgment, award, or settlement in favor of or on behalf of the recipient for losses suffered as a direct result of the crime that was the basis for receipt of compensation in the amount of the compensation granted by the board. The board may recover this amount in a separate action, or may intervene in an action brought by or on behalf of the recipient.” (Gov. Code § 13963, subd. (b).)

Plaintiffs argue that the above statute permits the Board to recover funds paid to Plaintiffs that formed part of the basis for the compensation that Plaintiffs received in the action in which the lien was filed. (Motion at p. 3.) In other words, because the Board paid Plaintiff for a number of items, of which the only item compensable in this wrongful death action was funeral/cremation expenses, the Board can only seek a lien in an amount equal to the funeral/cremation expenses. (Motion at pp. 3–4.) Plaintiffs further argue that the amount of the lien should be reduced by 25% pursuant to Government Code § 13963, subd. (b). (Motion at pp. 4–6.)

The Board in opposition argues, meanwhile, that this court lacks jurisdiction to hear the motion, as governing statute sets up an administrative remedy which Plaintiffs have not pursued. (Opposition at p. 6.)

This court possesses jurisdiction to hear Plaintiff’s challenge to the lien. The jurisdiction to determine the validity of the lien is the same that permits the Board to seek to enforce the lien “in a separate action” or “an action brought by or on behalf of the recipient.” (Gov. Code § 13963, subd. (b).) The Board cites Government Code § 13960, which says: “Judicial review of a final decision made pursuant to this chapter may be had by filing a petition for a writ of mandate in accordance with Section 1094.5 of the Code of Civil Procedure.” (Gov. Code § 13960, subd. (a).) The “decision” referenced above refers to “the board’s decision on the application for compensation.” (Gov. Code §13960.) Plaintiffs’ request for the Board to reduce its lien is not an application for compensation from the Board, but a request for the Board to forego compensation to itself.

However, Plaintiffs’ arguments concerning the excessive nature of the lien are not in keeping with statute. Plaintiffs argue that the Board can only claim reimbursement on a recovery for “losses suffered” that were “the basis for the receipt of the Judgment,, award, or settlement.” (Motion at p. 3.) But Plaintiffs’ interpretation of the statute is unreasonable. The Board may obtain a lien on any “settlement in favor of. . . . the recipient for losses suffered as a direct result of the crime which was the basis for the receipt of compensation.” (Gov. Code § 13963, subd. (b).) Per the plain language of the statute, if Plaintiffs received a “settlement for losses suffered as a direct result” of a crime, and that crime “was the basis for receipt of compensation” from the Board, then the Board is “entitled to a lien” on that settlement.

Nor are Plaintiffs’ entitled to a 25% reduction of the lien, or a reduction based on the common fund doctrine. (Motion at pp. 4–6.) Plaintiffs rely on the second half of subdivision (b) of Government Code § 13963, which states:

If a claim is filed within one year of the date of recovery, the board shall pay 25 percent of the amount of the recovery that is subject to a lien on the judgment, award, or settlement, to the recipient responsible for recovery if the recipient notified the board of the action prior to receiving any recovery. The remaining amount, and any amount not claimed within one year pursuant to this section, shall be deposited in the Restitution Fund.

Plaintiffs argue that they’ve requested a 25% reduction on the lien, and are entitled to one under the above statute. (Motion at pp. 4–6.) The Board, meanwhile, argues that because Plaintiff’s initial request for compensation following the crime was more than a year before receiving the settlement recovery, no 25% reduction is necessary. (Opposition at p. 8.)

The Attorney General opinion cited by Defendant in its opposition suggests an interpretation of the statute at odds with both parties’ arguments: that Plaintiffs are not entitled to a reduction of the lien, but may be entitled to a 25% rebate, once they make a claim after the lien is paid in full. (Opinion No. 81-208, 64 Cal. Op. Att'y Gen. 540 (1981).) The subject of the opinion was weather the Board was required to bear “an equitable apportionment of attorneys’ fees” in proportion to the amount it claimed on the total recovery. (Id. at p. 4.) The opinion states that such equitable apportionment is not applicable under the statutory scheme for victim’s compensation, in part because “[t]he statute does provide . . . for 25 percent of the state's lien recovery to be paid to a victim/litigant (when the full lien is recovered).” (Id. at p. 4.) The opinion elsewhere states: “The current version of section 13966, supra, as amended in 1980 (Stats. 1980, ch. 1370, § 5) requires that the victim/litigant's 25 percent of the state's recovery be returned only if claimed and then will be paid only if the state has recovered the entire amount of its lien.” [1] Thus the statutory scheme does not entitle Plaintiff to a lien reduction, but to a 25 percent refund after the board obtains recovery on its lien.

The motion to expunge is therefore DENIED.