Carmen Paz Mendoza v Anthony Raymond Araujo

Case Number

23CV04658

Case Type

Hearing Date / Time

Mon, 04/07/2025 - 08:30

Nature of Proceedings

Compromise of Disabled Person

Tentative Ruling

Probate Notes:

Appearances required.

The following is noted for the Court at the hearing:

Medical Expenses.  Medical expenses in this case are alleged to be $2,194,394.60, of which $451,314.77 were paid by Medi-Cal.  A reduction was negotiated in the amount of $32,841.28.

Medical Liens must be apportioned to a percentage consistent with the percentage of recovery.

According to SCOTUS, DHCS violates federal law when it places a statutory lien on any amount of a settlement or judgment above an amount specifically designated as reimbursement for medical costs.  (Arkansas Dept. of Health and Human Services v. Ahlborn (2006) 547 U.S. 268, 272.)  Thus, according to California cases decided after Ahlborn, DHCS cannot seek full reimbursement for Medi-Cal payments made for medical care required to treat injuries caused by a third-party tortfeasor, unless the recipient of the medical care recovers the full value of their tort claim. (See e.g. Lopez v. Daimler Chrysler Corp. (2009) 179 Cal.App.4th 1373, 1378; Lima v. Vouis (2009) 174 Cal.App.4th 242, 260; Bolanos v. Superior Court (2008) 169 Cal.App.4th 744, 748.) Thus in a settlement, DHCS’s recovery is limited to a percentage of the portion of the settlement apportioned for reimbursement of payments made for medical care, equivalent to the percent the settlement is to the value of the full claim amount:

 

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] × Value of Benefits Provided.)

(Aguilera v. Loma Linda University Medical Center (2015) 235 Cal.App.4th 821, 828.)

IN THIS CASE, Petitioner does not state the full value of the claim, but the medical fees of $2,194,394.60 are alone enough to determine that Medi-Cal’s reimbursement is too high, because the settlement amount ($100,000) divided by the known damages ($2,194,394.60) equals just 4.5%.  That figure does not even include general damages.

Thus, at minimum, Medi-Cal’s reimbursement should only be $20,309.16, based on the medical bills alone. Petitioner should provide a damages/recovery value estimate and make a motion under Ahlborn for reduction of Medi-Cal’s reimbursement.

Attorney’s Fees too high.  California Rules of Court, rule 7.955 does not dictate a presumptively reasonable percentage or mathematical method of determining the appropriate attorney fees under a contingency agreement. Indeed, in adopting the rule, the Judicial Council explicitly preempted local rules regarding attorney fees for minors, many of which had established a baseline recovery of 25 percent.  (Schulz v. Jeppesen Sanderson, Inc. (2018) 27 Cal.App.5th 1167, 1175.)

IN THIS CASE, the attorney’s fees are too high. Petitioner requests that 30% of the recovery be paid to the attorney, when there is no evidence that the claim was specifically problematic, or that settlement was difficult to obtain.

In contrast, the Conservatee will need the funds to provide for her care, and will receive relatively little from the settlement if the Court does not reduce both the attorney’s fees and the amount Medi-Cal will be reimbursed.

Thus, the Court should reduce attorney’s fees to 25%.

Appearances:

The court is open to the public for court business. The court is also conducting hearings via Zoom videoconference.

Meeting ID: 161 797 5412

Passcode: 8749009