Neil D. Reid, Inc. v. Department of Health Care Services

[420]

Opinion

DRAPER, P. J.

When 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. (Welf. & Inst. Code, § 14117.)

Plaintiff, an attorney, filed in Lake County an action in behalf of Edward O’Bar, Jr., a minor, for damages for injuries to O’Bar caused by the negligence of operators of a fishing pier. In that action, the state filed its lien for $38,715.29, the amount of the Medi-Cal advances. Plaintiff attorney negotiated a settlement for $100,000, the full insurance coverage of the alleged tortfeasors. At his request, the state agreed to reduce its lien claim to $30,000. No fee agreement was made. The settlement was completed. Plaintiff did not apply to the Lake County court for fees. Plaintiff delivered to the state a check for $20,000, explaining that it was in payment of the $30,000 lien, $ 10,000 having been deducted by plaintiff as “the customary one-third attorney’s fee.” The state rejected the check. Plaintiff paid the $30,000 into court, and brought this action in San Francisco to compel the state to contribute $10,000 to his fee. Judgment below was for defendants.

The statute (Welf. & Inst. Code, § 14117) provides that the lien may be enforced “in the same manner, with the same rights and authority . . . and to the same extent provided in Chapter 5 (commencing with Section 3850), Part I, Division 4 of the Labor Code”

(id.).

That chapter of the Labor Code provides for a lien against a third party tortfeasor in favor of an employer who has paid compensation under the workers’ compensation statutes. Thus the state, as a Medi-Cal lienor, has the same benefits and obligations as are afforded to an employer by the Workers’ Compensation Act. The established rule, until September 10, 1975, was that an employer, as lienor, was not required to contribute to the fee of the attorney who had effected a settlement for the injured worker against a third party tortfeasor.

(Fuchs