Matter of Felipe Francisco Contreras, Jr.

Case Number

25PR00258

Case Type

Hearing Date / Time

Tue, 07/01/2025 - 09:00

Nature of Proceedings

Minor's Compromise

Tentative Ruling

Probate Notes:

The following must be submitted before the matter can be recommended for approval:

Evidence of Recovery. Adequate documentation that the minor has fully recovered, or is expected to fully recover from the injuries.  The attachments supporting the allegation at paragraph 9 of the petition do not support a finding that the minor will fully recover.  The medical records attached to the petition are only the initial records, not any records of follow up visits or recent records showing a recovery.  Please note: It is insufficient to attach the initial medical records. The Court needs confirmation of a full recovery, thus current, recent records showing minor suffers no symptoms from the original injury are required.

Evidence of Insolvency. Adequate evidence of sufficient investigation into the solvency of the settling defendant above the policy limits of the settling insurance company must be submitted.  Minor had extensive broken bones and other injuries, which alone would warrant a high damages award far above what appears to be the policy limits of the Defendant’s insurer.  There are no facts alleged that defendant cannot meet a judgment past the policy limits, and the evidence on file shows the injury is far more severe than the amount of the settlement will compensate for.  At minimum, petitioner must submit report showing defendant is insolvent.

Ahlborn calculations or motion. Ahlborn calculations must be submitted, and an Ahlborn motion is likely necessary.  The proposed settlement includes payouts to Medi-Cal that are almost 1/3 of the settlement amount. This violates the principles outlined in Arkansas Dept. of Health and Human Services v. Ahlborn (2006) 547 U.S. 268.  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.)