Date: 01-16-2018

Case Style: Salomon G. martinez v. Department of Health Care Services

Case Number: B278117

Judge: Gilbert, P.J.

Court: California Court of Appeals Fourth Appellate District on appeal from the Superior Court, Riverside County

Plaintiff's Attorney: Kevin H. Park

Defendant's Attorney: Malinda Lee, Malinda Lee

Description: The California Department of Health Care Services
(Department) moved to determine the amount of a Medi-Cal lien
on the settlement of plaintiff’s medical malpractice action. (Welf.
& Inst. Code, § 14124.76, subd. (a)1.) The trial court determined
the amount of the lien to be $39,004.41. Plaintiff appeals. We
reduce the amount of the lien by 25 percent for statutory attorney
fees. (§ 14124.72, subd. (d).) In all other respects, we affirm.

FACTS

1 All statutory references are to the Welfare and
Institutions Code unless otherwise stated.
2
Salomon G. Martinez was a victim of medical malpractice.
A doctor failed to properly treat an infection. As a result,
Martinez was required to undergo surgery and suffered
permanent injury. He applied for and received $86,676.46 in
Medi-Cal payments to repair the damage caused by the negligent
doctor.
Martinez sued the doctor and settled for $150,000. The
settlement did not apportion the amount between medical
expenses and other damages. The Department sent Martinez’s
counsel notice of a Medi-Cal lien in the amount of $86,676.46.
Martinez and the Department attempted to negotiate the
amount of the lien without success. The Department brought a
motion requesting that the trial court determine the amount of
the lien.
The trial court determined the value of Martinez’s case by
adding $250,000, the maximum amount of noneconomic damages
allowed under the Medical Injury Compensation Reform Act
(MICRA) (Civ. Code, § 3333.2), to the $86,676.46 in medical costs,
for a total of $336,676.46.
The trial court then calculated that the $150,000
settlement represented 45 percent of the $366,676.46 value of the
case. The court awarded the Department 45 percent of its
$86,676.46 claim; that is, $39,004.41.
DISCUSSION
I
Martinez contends the trial court erred in determining the
value of his case.
Martinez argues the actual value of his case was $3 million,
including $171,000, representing the original hospital billing for
medical treatment; $300,000 for lost future wages, calculated at
3
minimum wage for the 16 years remaining in his work life; and
$2.5 million in general damages for loss of use of his left leg,
scarring and disability.
Section 14124.76, subdivision (a) provides in part,
“Recovery of the director’s lien from an injured beneficiary’s
action or claim is limited to that portion of a settlement . . . that
represents payment for medical expenses, or medical care,
provided on behalf of the beneficiary.” The section also provides
that absent an advance agreement with the director as to what
portion of a settlement represents payment for medical expenses,
the parties may seek resolution of the matter by motion in the
trial court. Section 14124.76, subdivision (a) continues: “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 [(Ahlborn)] and other relevant
statutory and case law.”
In Ahlborn, the United States Supreme Court held that the
entire settlement is not subject to Medicaid reimbursement, but
only to that portion of the settlement attributable to medical
benefits. (Ahlborn, supra, 547 U.S. at p. 282.) Ahlborn, however,
does not mandate a particular formula for allocating medical
benefits where the settlement makes no such allocation. Instead,
the allocation must be made on the basis of a “rational approach.”
(Bolanos v. Superior Court (2008) 169 Cal.App.4th 744, 754.)
Here, in evaluating Martinez’s case, the trial court limited
Martinez’s noneconomic damages to $250,000. That is the
4
maximum allowed under MICRA. (Civ. Code, § 3333.2, subd. (b).)
Martinez’s claim that the court erred in not valuing his
noneconomic damages at $2.5 million is unsupportable.
Crediting Martinez with more in noneconomic damages than he
could possibly have recovered is not a rational approach required
by Ahlborn.
Nor would it be reasonable to credit Martinez with the
$171,000 amount of the hospital bill instead of the $86,676.46
actually paid. The Department’s lien is based on the amount
actually paid, not the hospital bill.
Martinez argues that the trial court erred in not crediting
him with $300,000 in lost wages. The amount is based on the
minimum wage during the remaining 16 years of Martinez’s work
life. The court found there is no evidence of lost earnings.
Loss of earning capacity may be an element of plaintiff’s
damages. (Licudine v. Cedars-Sinai Medical Center (2016) 3
Cal.App.5th 881, 892.) But the plaintiff is entitled to recover
such damages only if he proves he is reasonably certain to suffer
a loss of future earnings. (Ibid.) A trier of fact may draw the
inference that plaintiff has suffered a loss of earning capacity
from the nature of the injury, but it is not required to draw that
inference. (Id. at pp. 892-893.) Proof of plaintiff’s prior earnings,
while relevant to demonstrate earning capacity, is not a
prerequisite for an award of such damages. (Id. at p. 893.)
Martinez relies on the rule that he need not show a work
history to prove loss of earning capacity. That is true enough.
But he is required to show some proof of a loss of earning
capacity. (Licudine v. Cedars-Sinai Medical Center, supra, 3
Cal.App.5th at p. 892.) Some people lack the capacity to earn
even minimum wage. In fact, there is evidence in the record that
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Martinez suffered from a number of preexisting medical
conditions that raises doubt about his earning capacity. Here,
Martinez points to no credible evidence that he lost any earning
capacity.
Martinez argues the trial court erred in failing to reduce
the amount of the lien by 25 percent for attorney fees as required
by section 14124.72, subdivision (d). The Department concedes
the point. The lien is reduced by 25 percent to $29,253.31.
Martinez raises a number of points for the first time in his
reply brief. We do not consider points raised by appellant for the
first time in his reply brief. (9 Witkin, Cal. Procedure (5th ed.
2008) Appeal, § 723, p. 790.)

Outcome: The amount of the Department’s lien is reduced to
$29,253.31. In all other respects, the judgment (order) is
affirmed. The parties are to bear their own costs.

Plaintiff's Experts:

Defendant's Experts:

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