Judge Mark H. Epstein, Case Number: 21SMCV01196, Date: 2023-12-21 Tentative Ruling

Judge: Mark H. Epstein, Case: 21SMCV01196, Date: 2023-12-21 Tentative Ruling

Case Number: 21SMCV01196 Hearing Date: December 21, 2023 Dept: I

This is a motion to enforce the settlement. There is a mediator’s proposal that directs defendants to pay $145,000 (less an offset) and Farmers to pay $145,000 within 14 days. Plaintiff to be responsible for any liens. That was reduced to a written contract. Plaintiff signed the written contract in June 2023. Defendant has paid its share, but Farmers has not. Plaintiff seeks to compel the payment.

Farmers defends stating that the contract expressly states that payment is not due until it receives appropriate documentation from Medicare that there is no lien on the judgment. The concern, according to Farmers, is that if Medicare has a lien or right of reimbursement and Farmers pays plaintiff directly, then Farmers may be liable for the lien, leading to a double payment. Plaintiff contends that Medicare has nothing to do with anything because this is a property damage issue and that as a result they cannot get a no lien letter from Medicare.

Generally, the answer to this is to look to the signed contract. The contract states that they payment will be due 14 days from signing, but subject to receipt of a statement of ineligibility from Medicare or a lien release. Farmers states (and plaintiff does not dispute) that it has not received either. Plaintiff, for its part, is willing to state that there is no Medicare issue. But that is not sufficient for the defense. Plaintiff’s response to that point in the untimely reply was hard to follow, but it ignored the legal argument. Plaintiff seems to argue that the problem is that the lawyer is taking direction from the carrier. But a lawyer is not acting unethically when it takes direction from the client, nor is there any evidence the court has seen that the lawyer has adopted the carrier’s position even though the lawyer believes that the position is meritless. What plaintiff does not address is the language in the agreement.

To be more precise, the contract provides that Farmers will pay $145,000. It goes on to say that “Subject to the provisions of Paragraphs 4-5, the SETTLEMENT PAYMENT by Farmers Insurance . . . will be paid within fourteen (14) days of DEFENDANTS’ receipt of the completely executed AGREEMENT.” (The parties agree that the agreement has been received.) Section 4, in turn, states in relevant part “If PLAINTIFFS are eligible for Medicare, Medicaid, and/or Medi-Cal, each of them shall obtain a statement of no lien, a lien release, or other documentation all in a form satisfactory to DEFENDANTS showing conclusively that Medicare, Medicaid, and/or Medi-Cal do not have a claim or lien on the proceeds of the SETTLEMENT PAYMENT. Payment of the SETTLEMENT PAYMENT pursuant to this AGREEMENT shall not be made until DEFENDANTS receive . . . the appropriate lien release/statement of no lien.” (Plaintiff can also satisfy this provision by stating that they are not eligible for Medicare benefits for any injuries sustained in connection with the action.)

Were this only a property case, it would be easy. There is no Medicare payment or eligibility for property damage. The problem is that plaintiff also alleged a physical injury, and Medicare might be on the hook for payments relating to that. Whether such is the case or not, it does not appear that plaintiff is “ineligible” for Medicare benefits as a matter of law based on the complaint’s allegations.

Plaintiff states that there is no lien, and that may well be the case. But the contract language seems clear to the court. Of course, plaintiff could have negotiated for different language, such as an indemnity, a representation, or something similar. But the contract reads as it reads and it was fully signed (and approved as to form by plaintiff’s counsel).

Unless plaintiff can explain why this language should be ignored or interpreted in a different way, the court must DENY the motion. If it is impossible to get the documentation from Medicare for some reason, then the parties ought to discuss what documentation would be appropriate or sufficient. The court does not believe that the clause can reasonably be interpreted as an escape hatch, freeing Farmers from paying the $145,000 ever. The parties need to have a rational conversation about what plaintiff can do that is in the realm of reality that will satisfy Farmers that it will not be on the hook for a double payment.