Judge: Teresa A. Beaudet, Case: BC453870, Date: 2024-05-20 Tentative Ruling

Case Number: BC453870    Hearing Date: May 20, 2024    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

On January 27, 2011, Plaintiff Rohayent Gomez Eriza, a minor, by and through his Guardian Ad Litem, Maria de Jesus Eriza Duque (“Plaintiff”) filed this action against Defendants City of Los Angeles and Victor Abarca. The Complaint alleges causes of action for (1) assault and battery, (2) violation of Civil Code section 52.1, and (3) negligence.

In the Complaint, Plaintiff alleges that on December 16, 2010, Plaintiff was present at or/near 2011 N. Verdugo Road, Los Angeles. (Compl., ¶ 11.) He was playing in front of his house with two other children from the neighborhood. (Compl., ¶ 11.) At the same time, LAPD officer Victor Abarca was traveling south-bound on Verdugo Road in a police car. (Compl., ¶ 12.) Plaintiff alleges that he “stood on the sidewalk on the west side of Verdugo Road as defendant ABARCA ran up to him. Defendant ABARCA got to within a few feet of PLAINTIFF and then discharged his firearm once at PLAINTIFF as PLAINTIFF stood on the sidewalk.” (Compl., ¶ 12.) “PLAINTIFF suffered a gunshot injury to his upper torso which damaged Plaintiff’s left lung, and which required PLAINTIFF to undergo surgery for the removal of a portion of the lung. The bullet also caused damage to PLAINTIFF’s spinal cord, permanently rendering him a paraplegic at approximately T5.” (Compl., ¶ 13.)

On January 16, 2013, a Judgment on Special Verdict After Trial by Jury was entered in this action. The Judgment provides, inter alia, that “[t]his action came on regularly for trial on November 26, 2012 in Department 50 of the Los Angeles Superior Court, Central District of California before the Honorable Joseph Kalin.” The January 16, 2013 Judgment further provides, inter alia, that “IT IS THEREFORE ORDERED, ADJUDED AND DECREED that judgment be, and hereby is, entered in favor of Plaintiff ROHAYENT GOMEZ ERIZA and against Defendants, CITY OF LOS ANGELES and VICTOR ABARCA in the amount of $22,000,000 with interest at the rate of seven (7) percent per annum from the date of judgment until paid. Additionally, Plaintiff may recover his costs of suit herein.”

Third-Party Michelle Baass, as Director of the Department of Health Care Services (the “Department”) now moves “for an order re-opening this matter and compelling plaintiff Rohayent Gomez Eriza, Maria de Jesus Eriza Duque, counsel Arnoldo Casillas, Esq., and the City of Los Angeles to pay the Department’s $206,503.71 lien with interest thereon as well as the costs and attorney’s fees involved to recover this lien.” Arnoldo Casillas filed a “Declaration of Arnoldo Casillas in Opposition to Special Motion to Reopen Matter and Enforce Lien.”[1]

Discussion

As set forth above, the Department moves “for an order re-opening this matter and compelling plaintiff Rohayent Gomez Eriza, Maria de Jesus Eriza Duque, counsel Arnoldo Casillas, Esq., and the City of Los Angeles to pay the Department’s $206,503.71 lien with interest thereon as well as the costs and attorney’s fees involved to recover this lien.” (Notice of Motion at p. 2:1-4.)

In support of the instant motion, the Department cites to Welfare and Institutions Code section 14124.76, subdivision (a), which provides as follows:

“No settlement, judgment, or award in any action or claim by a beneficiary to recover damages for injuries, where the director has an interest, shall be deemed final or satisfied without first giving the director notice and a reasonable opportunity to perfect and to satisfy the director’s lien. Recovery of the director’s lien from an injured beneficiary’s action or claim is limited to that portion of a settlement, judgment, or award that represents payment for medical expenses, or medical care, provided on behalf of the beneficiary. All reasonable efforts shall be made to obtain the director’s advance agreement to a determination as to what portion of a settlement, judgment, or award that represents payment for medical expenses, or medical care, provided of behalf on the beneficiary. Absent the director’s advance agreement as to what portion of a settlement, judgment, or award represents payment for medical expenses, or medical care, provided on behalf of the beneficiary, the matter shall be submitted to a court for decision. Either the director or the beneficiary may seek resolution of the dispute by filing a motion, which shall be subject to regular law and motion procedures. In determining what portion of a settlement, judgment, or award represents payment for medical expenses, or medical care, provided on behalf of the beneficiary and as to what the appropriate reimbursement amount to the director should be, the court shall be guided by the United States Supreme Court decision in Arkansas Department of Health and Human Services v. Ahlborn (2006) 547 U.S. 268 and other relevant statutory and case law.” (Emphasis added.)

Pursuant to Welfare and Institutions Code section 14124.76, subdivision (b), “[i]f the beneficiary has filed a third-party action or claim, the court where the action or claim was filed shall have jurisdiction over a dispute between the director and the beneficiary regarding the amount of a lien asserted pursuant to this section that is based upon an allocation of damages contained in a settlement or compromise of the third-party action or claim. If no third-party action or claim has been filed, any superior court in California where venue would have been proper had a claim or action been filed shall have jurisdiction over the motion. The motion may be filed as a special motion and treated as an ordinary law and motion proceeding and subject to regular motion fees. The reimbursement determination motion shall be treated as a special proceeding of a civil nature pursuant to Part 3 (commencing with Section 1063) of the Code of Civil Procedure.”

In addition, pursuant Welfare and Institutions Code section 14124.76, subdivision (c), “[t]he court shall issue its findings, decision, or order, which shall be considered the final determination of the parties’ rights and obligations with respect to the director’s lien, unless the settlement is contingent on an acceptable allocation of the settlement proceeds, in which case, the court’s findings, decision, or order shall be considered a tentative determination. If the beneficiary does not serve notice of a rejection of the tentative determination, which shall be based solely upon a rejection of the contingent settlement, within 30 days of the notice of entry of the court’s tentative determination, subject to further consideration by the court pursuant to subdivision (d), the tentative determination shall become final. Notwithstanding Section 1064 of the Code of Civil Procedure, either the beneficiary or the director may appeal the final findings, decision, or order.”

The Department asserts that here, its lien has not been satisfied. The Department submits the Declaration of Rhonda Wyatt, who has been employed by the California Department of Health Care Services (the “Department”) since February 2004. (Wyatt Decl., ¶ 1.) Ms. Wyatt indicates that on September 6, 2012, the Department sent a notice to Plaintiff’s counsel, Mr. Casillas, stating, inter alia, that “YOU ARE HEREBY NOTIFIED that your client is a Medi-Cal program beneficiary and has received health care benefits,” and that “PURSUANT TO SECTION 14124.70 et. seq. of the W&I Code, the Department of Health Care Services claims a lien upon the proceeds or satisfaction of any judgment, or any settlements negotiated with or without suit, in favor of the beneficiary.” (Wyatt Decl., ¶ 5, Ex. 2.)

In addition, on June 4, 2013, the Department sent a letter to Mr. Casillas with the “DHCS Case Name” “ROHAYENT GOMEZ.” (Wyatt Decl., ¶ 7, Ex. 11.) The June 4, 2013 letter stated, inter alia, that “[t]he Medi-Cal program has advanced the sum of $275,338.28 for medical services. This person has been a Medi-Cal recipient and the State has the right of reimbursement pursuant to Welfare and Institutions Code, Sections 14124.70 through 14124.795, or Section 14024. Reimbursement in the amount of $206,503.71 will satisfy our lien.” (Wyatt Decl., ¶ 7, Ex. 11.) Ms. Wyatt states that “[t]he Department reduced the lien amount of $275,338.28 to $206.503.71 to account for its reasonable share of attorney’s fees pursuant to Welfare and Institutions Code, section 14124.72, subdivision (d).” (Wyatt Decl., ¶ 7.)[2]

Ms. Wyatt states that “[o]n June 4, 2013, Mr. Casillas notified the Department that plaintiff received a significant award, but the case was on appeal and would likely resolve in 16 to 18 months.” (Wyatt Decl., ¶ 6.) Ms. Wyatt states that “[b]etween January 21, 2014, and July 30, 2021, the Department sent multiple letters and made numerous calls to Mr. Casillas’ office requesting status of the appeal, the signed settlement release, and status of payment with no response…On July 30, 2021, the Department learned of the settlement through a telephone conversation with a secretary in Mr. Casillas’s office, who stated ‘[t]he case has been settled for a while now.’” (Wyatt Decl., ¶¶ 10-11.) In addition, Exhibit “7” to the Department’s counsel’s declaration is a document titled “Report Re: Status of Liability Accounts as of March 31, 2016,” which the Department states is a public record of the City of Los Angeles. (Schreiber Decl., ¶ 6, Ex. 7.) The document provides, inter alia, that “[a]n additional $56.1 million was added to the account to cover payouts associated with these four extraordinary cases:…Eriza Rohayent Gomez - $15 million (LAPD/wrongful shooting)…” (Schreiber Decl., ¶ 6, Ex. 7.)

Ms. Wyatt states that “[b]etween August 30, 2021, and April 6, 2022, the Department sent multiple letters and made numerous calls to Mr. Casillas’s office requesting status of the appeal, the signed settlement release, and status of payment but did not receive any response…On April 6, 2022, the Department spoke with Mr. Casillas’s co-counsel, Gerald Peters, who stated he only represented the plaintiff on the appeal, and it had been dropped…Between June 3, 2022, and February 15, 2023, the Department sent multiple letters and made numerous calls to Mr. Casillas’s office requesting for the signed settlement release and status of payment but did not receive any response.” (Wyatt Decl., ¶¶ 12-14.)

Ms. Wyatt states that on March 6, 2023, the Department sent an email to Mr. Casillas stating that the Department had not received payment for Plaintiff’s lien. (Wyatt Decl., ¶ 15.) Ms. Wyatt states that “[t]o date, the Department has not received any payments towards satisfying its Medi-Cal lien in this matter.” (Wyatt Decl., ¶ 15.)

The Department asserts it has a “statutory right to recover its lien from Plaintiff and his Guardian Ad Litem.” (Mot. at p. 11:13-14.) The Department also asserts that it “has a statutory right to recovery [sic] its lien from the City of Los Angeles.” (Mot. at p. 14:7-8.) Pursuant to Welfare and Institutions Code section 14124.71, subdivision (a), “[w]hen benefits are provided or will be provided to a beneficiary under this chapter because of an injury for which another party is liable, or for which a carrier is liable in accordance with the provisions of any policy of insurance issued pursuant to Section 11580.2 of the Insurance Code, the director shall have a right to recover from such a party or carrier the reasonable value of benefits so provided. The Attorney General, or counsel for the fiscal intermediary under the Medi-Cal program with the permission of the Attorney General, or a contractor pursuant to Section 14124.80, or a county through its civil legal adviser, may, to enforce such right, institute and prosecute legal proceedings against the third a party or carrier who may be liable for the injury in an appropriate court, either in the name of the director or in the name of the injured person, his guardian, conservator, personal representative, estate, or survivors.”

In Kain v. State Dep't of Health Servs. (2001) 91 Cal.App.4th 325, 329, cited by the Department, the Court of Appeal noted that “California has enacted several statutes allowing DHS to recover Medi-Cal funds from responsible third parties. Welfare and Institutions Code section 14124.71 authorizes DHS to bring an action for the reasonable value of Medi-Cal benefits paid ‘because of an injury for which another person [or entity] is liable…Welfare and Institutions Code section 14124.74 allows DHS a first lien against a ‘judgment or award in a suit or claim’ obtained by a Medi-Cal beneficiary ‘against a third party or [insurance] carrier.’ By operation of law, the recipient of Medi-Cal services assigns to DHS the right to recover medical expenses from a third party who is liable to pay for those expenses. (Welf. & Inst. Code, § 14008.6, subd. (a).).”

As set forth above, Arnoldo Casillas filed a “Declaration of Arnoldo Casillas in Opposition to Special Motion to Reopen Matter and Enforce Lien.” In his declaration, Mr. Casillas states that “[t]he verdict in the matter does not include an amount for past medical costs related to the amounts paid by the State of California.” (Casillas Decl., ¶ 3.) As set forth above, on January 16, 2023, the Court entered a Judgment on Special Verdict After Trial by Jury. Question No. 9 of the Special Verdict indicates that Plaintiff was awarded $0 in past economic loss, 14 million in future economic loss, $0 in past noneconomic loss, and 10 million in future noneconomic loss. (See January 16, 2023 Judgment on Special Verdict After Trial by Jury, Question No. 9.)

In his declaration in opposition to the motion, Mr. Casillas states that “I subpoenaed a representative from the Department of Health Care Services to testify as to the amounts paid by the State for the treatment received by Plaintiff…I scheduled the individual for testimony and the individual appeared as subpoenaed but refused to testify as to the amount paid by the State…Because the State’s representative refused to testify as to the amounts paid by the State for the medical services received, I did not ask the jury to include an amount for past medical costs because I did not have the medical services costs in evidence. As reflected in the special verdict, no amount was awarded for past medical services.” (Casillas Decl., ¶ 3.)

Mr. Casillas asserts that “[c]ontrary to the State’s arguments in the present petition, Plaintiff has not received any money as reimbursement for medical care that was paid for by the Medi-Cal program. To the contrary, Plaintiff attempted to secure compensation for such costs but was prevented from doing so due to the unwillingness of the representative of the Department of Health Care Services to testify as to the amount that was paid.” (Casillas Decl., ¶ 4.) Mr. Casillas further asserts that “Plaintiff has not kept the Department’s share of the settlement money…Again, the settlement of the matter was based on the amount secured by the verdict. The verdict amount did not include any amount for past medical expenses. (Casillas Decl., ¶ 5.)

However, as noted by the Department, Mr. Casillas’s declaration “is silent with regard to the terms of settlement agreement and any provision for the Department’s lien. A copy has not been provided to the court.” (Reply at p. 3:8-10.) In addition, the Department asserts that “[t]he witness’s testimony notwithstanding, there is no dispute that the Department’s lien is statutory, and the duty to satisfy that lien is statutory.” (Reply at p. 5:3-4.) As set forth above, Welfare and Institutions Code section 14124.71, subdivision (a) provides, inter alia, that “[w]hen benefits are provided or will be provided to a beneficiary under this chapter because of an injury for which another party is liable, or for which a carrier is liable in accordance with the provisions of any policy of insurance issued pursuant to Section 11580.2 of the Insurance Code, the director shall have a right to recover from such a party or carrier the reasonable value of benefits so provided.” (Emphasis added.) The Department also cites to Neil D. Reid, Inc. v. Department of Health Care Services (1976) 55 Cal.App.3d 418, 420, where the Court of Appeal noted that “[w]hen the state Medi-Cal program pays for medical services rendered to an injured person who has a claim for damages for the injury for which he is treated, the state is granted a lien upon the injured person's recovery, whether by judgment or settlement, to the extent of the Medi-Cal benefits it has provided.”

The Department also asserts that “[e]ven if the settlement agreement made no allocation of the settlement proceeds to past medical expenses, section 14124.76, subdivision (a) provides that the court shall made [sic] that determination.” (Reply at p. 3:10-12.) Indeed, as set forth above, “[a]bsent the director’s advance agreement as to what portion of a settlement, judgment, or award represents payment for medical expenses, or medical care, provided on behalf of the beneficiary, the matter shall be submitted to a court for decision.” (Welf. & Inst. Code, § 14124.76, subd. (a).) The Department also cites to Aguilera v. Loma Linda University Medical Center (2015) 235 Cal.App.4th 821, 827-828, where the Court of Appeal noted that “[s]ettlements, however, are often not allocated between past medical expenses and other damages. This was the situation in Ahlborn. Thus, the parties in Ahlborn stipulated to the use of a formula (the Ahlborn formula) as an allocation method. Numerous courts have since accepted the Ahlborn formula as an acceptable method of approximating the amount of medical expenses. The Ahlborn formula is the ratio of the settlement to the total claim, when applied to the benefits provided by the Department. Expressed mathematically, the Ahlborn formula calculates the reimbursement due as the total settlement divided by the full value of the claim, which is then multiplied by the value of benefits provided. (Reimbursement Due = [Total Settlement ÷ Full Value of Claim] x Value of Benefits Provided.) The parties’ dispute focuses on the variable addressing the full value of Ashlynn’s claim; specifically, whether future attendant care and medical care should be included in this variable.” (Internal citations omitted.) As noted by the Department, Mr. Casillas does not appear to dispute the amount of the Department’s lien here ($206,503.71).

In addition, as noted by the Department, no opposition to the motion appears to have been filed by the City of Los Angeles, Rohayent Gomez Eriza, or Maria De Jesus Eriza Duque.

Based on the foregoing, the Court finds that the Department has demonstrated that it provided benefits “to a beneficiary under this chapter because of an injury for which another party is liable,” such that “the director shall have a right to recover from such a party…the reasonable value of benefits so provided.” (Welf. & Inst. Code, § 14124.71, subd. (a).)

The Court notes that Mr. Casillas asserts that the motion should be denied, but that “[a]lternatively, should the court find merit to the State’s arguments, the matter should be referred to arbitration or mediation to resolve the matter fairly and justly such that the underlying circumstances can be taken into account to arrive at a lien amount that takes into account the equities of the present circumstances.” (Casillas Decl., ¶ 7.) The Court notes that Mr. Casillas does not provide any legal authority or evidence to support his assertion that the matter should be referred to arbitration or mediation. Thus, the Court denies such request.

The Department also asserts that “the Court should award the Department its attorney fees and costs incurred in the collection of its statutory lien.” (Mot. at p. 16:5-6.) In support of this assertion, the Department cites to Government Code section 12513.1, which provides that “[a]ny person who fails to pay on a timely basis any liability or penalty imposed by or on behalf of any state agency or official, the People of the State of California, the State of California, or any liability or penalty otherwise imposed in any matter prosecuted by the Attorney General, shall be required to pay, in addition to that liability or penalty, interest, reasonable attorneys’ fees, and costs for any collection proceedings to enforce payment.”

However, the Court notes that the Department does not appear to provide any evidence of its attorney’s fees or costs purportedly incurred in the collection of its statutory lien. Rather, the Department states that it seeks “attorney’s fees after motion brought pursuant to California Rules of Court, rule 3.1702.” (Mot. at p. 16:17-18.) Thus, the Court denies any request by the Department in the instant motion for attorney’s fees. The Court notes that the Department may file a regularly noticed motion concerning its request for attorney’s fees.

Lastly, the Department also requests that the Court award “interest at the lawful rate from the date of approval of payment by City of Los Angeles of the $15 million settlement on August 12, 2015, through the date the lien is ultimately paid…” (Mot. at p. 16:15-17.) The Court notes that the Department does not appear to provide any evidence that the City of Los Angeles paid the $15 million settlement on August 12, 2015. This date does not appear to be otherwise mentioned in the Department’s motion or supporting declarations. Thus, the Court denies the Department’s request that the Court award interest from the date of August 12, 2015.

Conclusion

Based on the foregoing, the Court grants the Department’s motion in part. The Court grants the Department’s motion to re-open this matter and hereby issues this order “compelling plaintiff Rohayent Gomez Eriza, Maria de Jesus Eriza Duque, counsel Arnoldo Casillas, Esq., and the City of Los Angeles to pay the Department’s $206,503.71 lien with interest thereron…” The motion is otherwise denied.

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The Department is ordered to give notice of this order.

DATED:  May 20, 2024                                 ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court