Filed 8/21/26 J.M. v. Garfield Medical Center CA2/1 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
J.M., a Minor, etc., B342088
Plaintiff and Respondent, (Los Angeles County Super. Ct. No. 19STCV15763)
v.
GARFIELD MEDICAL CENTER et al.,
Defendants;
CALIFORNIA DEPARTMENT OF HEALTH CARE SERVICES,
Claimant and Appellant.
APPEAL from an order of the Superior Court of Los Angeles County, Lisa R. Jaskol, Judge. Reversed and remanded with directions.
Rob Bonta, Attorney General, Cheryl L. Feiner, Assistant Attorney General, Maureen C. Onyeagbako and Michael E. Byerts, Deputy Attorneys General, for Claimant and Appellant.
Lew-Stevens and Steven B. Stevens for Plaintiff and Respondent.
____________________________
Plaintiff Jennifer M., individually and as guardian ad litem for her minor daughter, plaintiff and respondent J.M., sued a hospital and two doctors for medical negligence.1 The trial court later granted J.M.’s petition for an order approving the settlement of her claims for $7,480,000. In that approval order, the court determined the value of J.M.’s overall damages, including the present value of the costs of her future care, and reserved jurisdiction to decide a claim for the reduction of a $410,466.68 Medi-Cal lien for past medical costs.
Several years later, J.M. moved for a determination of the value of the Medi-Cal lien. J.M. asked the trial court to reduce the lien using the following formula: Reimbursement Due = [Total Settlement ÷ Full Value of Claim] x Value of the Medi-Cal Benefits Provided.2 In response, claimant and appellant
1 To protect the minor’s privacy, we identify her by initials and her mother by first name and last initial. (See Cal. Rules of Court, rule 8.90(b)(9) & (b)(11).) For the sake of clarity and consistency, we refer only to J.M. when discussing actions undertaken by Jennifer M. in her capacity as J.M.’s guardian ad litem.
2 As we explain in our Applicable Law Regarding Medi-Cal Liens, post, this equation is designated the Ahlborn formula, in
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California Department of Health Care Services (the Department) asked the trial court to exclude a substantial portion of J.M.’s future medical expenses from the denominator of the ratio used in the Ahlborn formula, namely, the full value of the claim. The Department argued this exclusion was proper because Medi-Cal will cover much of J.M.’s future care. Granting the Department’s request would have increased the ratio employed in the formula, thereby allowing the Department a greater recovery on the Medi- Cal lien.
The trial court employed the Ahlborn formula, declined to exclude any future medical expenses from the denominator, further reduced the Medi-Cal lien to account for the Department’s share of J.M.’s attorney fees and costs, and awarded the Department $71,974.26 from the settlement. The court reasoned that in seeking exclusion of certain future expenses from the formula, the Department was attempting improperly to relitigate the court’s prior determination of the present value of the costs of J.M.’s future care.
We reverse the order determining the Medi-Cal lien. The Department’s request for exclusion of certain future expenses from the denominator of the Ahlborn computation is not a challenge to the trial court’s prior finding as to the present value of future medical care. Rather, the Department merely seeks an adjustment to the formula based on the Department’s claim that a subset of J.M.’s future expenses will be covered by Medi-Cal. Furthermore, J.M. fails to demonstrate that claim or issue preclusion bars the Department from making this request. On
reference to Arkansas Department of Health and Human Services v. Ahlborn (2006) 547 U.S. 268 (Ahlborn).
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remand, the trial court shall consider in the first instance whether the Department met its burden of demonstrating it is reasonably probable that Medi-Cal will pay for J.M.’s future health care expenses and, if so, the court shall recalculate the Department’s recovery accordingly.
PROCEDURAL BACKGROUND3
We summarize only those facts pertinent to our disposition of this appeal.
In May 2019, plaintiffs filed this action for medical negligence against defendants Garfield Medical Center; Jamie C. Lin, M.D.; and Ben Ha, M.D.4 J.M. claims she sustained serious injuries at birth, “[s]he is severely handicapped due to global developmental delay,” and she will require around the clock “care by a licensed vocational nurse . . . at school and at home[ ] for the rest of her life.” J.M. acknowledges in her appellate brief that “[s]ome of [J.M.’s] health care costs were paid by Medi-Cal.”
The parties ultimately agreed to settle the action for $7,480,000. In October 2020, J.M. filed a petition to approve this compromise of her pending action. The petition included a life care plan for J.M. and a report calculating the present value of her future medical care to be $28,185,265. An attachment to the petition stated: “Medi-Cal claims that it paid $410,466.68, but
3 We derive our Procedural Background in part from undisputed aspects of the trial court’s orders and admissions made by the parties in their appellate briefing. (Association for Los Angeles Deputy Sheriffs v. County of Los Angeles (2023) 94 Cal.App.5th 764, 772, fn. 2 (Association for Los Angeles Deputy Sheriffs) [employing this approach].)
4 The three defendants are not parties to this appeal.
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[J.M.] disputes that amount . . . . [J.M.] proposes to hold that sum in [a] client trust account pending later determination of the Medi-Cal lien, under Welfare & Institutions Code section 14124.76 (separate motion to determine lien claim).”5 J.M. asked the trial court to retain jurisdiction of the case pending resolution of the lien claim.
The Department was served with a copy of the petition for approval of the compromise of J.M.’s action. The Department did not object to the petition.
On February 18, 2021, the trial court signed and filed an order approving the compromise of J.M.’s pending action. In the order, the court stated: “The Court finds that the overall value of the minor’s damages are: (1) present value of future care, in the amount of $28,185,265; (2) present value of loss of earning capacity in the amount of $3,994,721; [and] (3) Non-economic damages in an amount greater than $250,000.00 but for purposes of approval of the settlement, the Court assigns a value of $250,000.” The court also found, “[T]he settlement is fair and reasonable and in the best interests of the minor, in light of the overall value of damages, the cost of further litigation, including trial, the delay if the parties proceeded to trial, the risks of prevailing or losing at trial, and the delay and risks of appeal.” The court reserved jurisdiction to determine a claim for reduction of the Medi-Cal lien and ordered that $410,466.68 be held in a client trust account pending resolution of the lien claim.
On April 27, 2021, the trial court dismissed the entire action with prejudice at plaintiffs’ request.
5 Undesignated statutory citations are to the Welfare and Institutions Code.
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On March 21, 2024, J.M. filed a motion under section 14124.76 to determine the amount of the Department’s lien. J.M. argued, inter alia, the trial court should employ the Ahlborn formula to calculate the Medi-Cal lien as follows: (1) the full case value for the denominator should be $32,840,653; (2) the settlement amount of $7,480,000 is 22.777 percent of the full case value; and (3) 22.777 percent of $410,667 is $93,538.6 J.M. contended the court should further reduce that figure to account for the Department’s share of attorney fees and costs such that the final recoverable amount is $66,645.
The Department opposed the motion, contending it provided Medi-Cal services valued at $501,219.02, and not merely $410,466.68. Additionally, citing Aguilera v. Loma Linda University Medical Center (2015) 235 Cal.App.4th 821 (Aguilera), the Department contended that J.M.’s Ahlborn calculation was flawed because she did not reduce the full case value used in the denominator by the amount of future medical expenses that Medi-Cal is reasonably likely to pay. The Department submitted declarations to support its position that Medi-Cal will cover most of the expenses included in J.M.’s life care plan.
In her reply, J.M. argued the Department had not demonstrated that it will pay for J.M.’s future health care expenses.
On August 27, 2024, the trial court awarded the Department $71,974.26 on its lien.7 The court agreed with the
6 In her calculation, J.M. appears to have rounded the $410,466.68 Medi-Cal lien identified in the approval order up to the nearest dollar.
7The judicial officer who made this award is not the trial judge who had approved the settlement.
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Department that the reasonable value of past medical costs paid by Medi-Cal was $501,219.02. On the other hand, the court ruled that its prior determination of the present value of J.M.’s future medical care barred the Department from seeking exclusion of certain future expenses from the denominator used in the Ahlborn formula.8 Using that equation, the court calculated the amount recoverable by the Department as follows: “(1) [T]he settlement amount of $7,480,000.00 is 23.06% of the total case value [of $32,429,986], and (2) 23.06% of $501,219.02 is $115,606.53.” To arrive at the $71,974.26 award to the Department, the court reduced the $115,606.33 figure by 25 percent to account for the Department’s share of attorney fees ($28,901.58), and further reduced the Department’s recovery by its proportionate share of costs ($14,730.49).
The Department timely appealed from the trial court’s order determining the Department’s recovery on the Medi-Cal lien.
APPLICABLE LAW REGARDING MEDI-CAL LIENS “Medicaid is a medical assistance program for low-income individuals that is jointly funded by the federal and state governments. . . . . [¶] California has elected to participate in Medicaid by establishing the Medi-Cal program. California’s implementing legislation, known as the Medi-Cal Act, is codified at section 14000 et seq. [Citation.] [The Department] is the state agency charged with administering the Medi-Cal program.” (Daniel C. v. White Memorial Medical Center (2022) 83 Cal.App.5th 789, 795, 800 (Daniel C.).)
8 We describe this aspect of the trial court’s order in greater detail in Discussion, part A, post.
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“[W]hen benefits are provided to a Medi-Cal beneficiary because of an injury for which a third party . . . is liable, [the Department] has the right to recover from such party . . . the reasonable value of the Medi-Cal benefits.” (Daniel C., supra, 83 Cal.App.5th at p. 800.) The Department may “fil[e] an action directly against [the] third party tortfeasor, . . . interven[e] in [the] Medi-Cal beneficiary’s action against [the] third party, or . . . fil[e] a lien against [the] beneficiary’s settlement, judgment, or award.” (Ibid.)
“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. . . . 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 [Ahlborn, supra,] 547 U.S. 268 and other relevant statutory and case law.” (§ 14124.76, subd. (a), italics added.)
Ahlborn announced a formula that a trial court may, but is not obligated to, employ to “determine which portion of the settlement is attributable to past medical expenses, against which [the Department] is entitled to collect its lien . . . .” (See Daniel C., supra, 83 Cal.App.5th at p. 811.) “The Ahlborn formula is the ratio of the settlement to the total claim, when applied to the benefits provided by the Department. [Citation.] 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
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benefits provided. (Reimbursement Due = [Total Settlement ÷ Full Value of Claim] x Value of Benefits Provided.)” (Aguilera, supra, 235 Cal.App.4th at p. 828.)
If a trial court elects to “apply[ ] the Ahlborn formula to reduce the Department’s lien” and “future benefits . . . will be paid by Med-Cal” in connection with the injury to the beneficiary, then the court must, “as a matter of law,” “exclude” those future costs “from its Ahlborn calculation.” (See Aguilera, supra, 235 Cal.App.4th at pp. 831–833.) Specifically, these future expenses must be subtracted from the full value of the beneficiary’s claim (i.e., the denominator in the Ahlborn formula), thereby “result[ing] in a . . . higher ratio, and thus, a . . . higher recovery by the Department.” (See id. at pp. 829–830, 833.) “[E]xcluding such expenses is contingent on the Department presenting sufficient evidence” that “it is reasonably probable Medi-Cal will pay . . . th[ose] expenses in the future.” (See id. at pp. 831–832.)
After the trial court determines which portion of the settlement is attributable to past medical expenses (e.g., by resort to the Ahlborn formula), the Department’s “claim for reimbursement [on its lien] is [further] reduced by 25 percent, representing its share of attorney fees, as well as by its statutory share of litigation costs. [Citation.] A final determination of rights and obligations with respect to a Medi-Cal lien is appealable . . . .” (See Daniel C., supra, 83 Cal.App.5th at pp. 800–801, 814.)
DISCUSSION
On appeal, neither side contests the trial court’s selection of the Ahlborn formula to determine the Department’s recovery. Rather, the Department challenges the court’s ruling that in
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requesting exclusion of certain future health care costs from the Ahlborn calculation pursuant to Aguilera, the Department was, in essence, attempting to relitigate a prior finding in the court’s order approving the settlement, namely that $28,185,265 is the present value of J.M.’s future medical care. J.M. likewise characterizes the Department’s request for exclusion of future expenses from the Ahlborn formula as an effort to “relitigate the amount of [J.M.]’s overall damages.” J.M. further argues res judicata precludes the Department from seeking a reduction of “the overall value of damages . . . to account for its promise to pay for medical care in the future.”9 Because our resolution of these issues does not turn on disputed facts, our review is de novo. (Shewry v. Begil (2005) 128 Cal.App.4th 639, 642.) We reverse the order determining the value of the Medi-Cal lien because the trial court erred in failing to determine whether, and if so to what extent, J.M.’s future medical expenses should be excluded from the Ahlborn computation. (Discussion, parts A–B, post.) On remand, the court must determine in the first instance whether the
9 J.M. also argues, in passing, that the trial court erred by failing to add the Department’s gross lien of $501,219.02 to the denominator of the Ahlborn equation, which adjustment J.M. claims would have reduced the Department’s net recovery from $71,974.26 to $70,640. In asserting the Department’s gross lien is not already accounted for in the denominator, J.M. apparently takes issue with the trial court’s rejection of her contention that she “could not pursue damages based on [past medical] expenses in [the] lawsuit” “because she was required to assign her claim for [those] expenses to the Department . . . .” Because J.M. states she is “not pursuing [this alleged] error,” we do not address it further.
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Department satisfied its burden of showing “it is reasonably probable the Department will pay [J.M.’s] future health care expenses,” and, if so, recalculate the Medi-Cal lien accordingly. (See Aguilera, supra, 235 Cal.App.4th at pp. 831–833 [indicating that a trial court is charged with making this factual determination based on the evidence presented].) Our disposition moots the Department’s arguments that (1) the order determining the Medi-Cal lien violated the Department’s right to due process, and (2) requiring the Department to raise the Aguilera issue in response to a petition to approve a minor’s compromise would “impose additional costs and delays on the parties and the trial courts.” (Boldface & some capitalization omitted.)
A. The Trial Court Erred In Concluding the Department’s Invocation of Aguilera Was an Attempt To Relitigate the Present Value of J.M.’s Future Care Although the Department offered evidence in support of its position that it will pay most of J.M.’s future health care expenses (see Procedural Background, ante), the trial court did not decide whether the Department satisfied its evidentiary burden under Aguilera. The court instead concluded that a previous finding in the order approving the settlement barred the Department from seeking exclusion of future health care expenses from the full value of the claim used in the Ahlborn equation. Specifically, the court observed that in approving the settlement, the court (1) found, without objection from the Department, that the present value of future care was $28,185,265; and (2) “did not reserve jurisdiction to determine the present value of [J.M.’s] future medical care.” In concluding the Department was seeking to relitigate the present value of future
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care, the court rejected the Department’s contention that, “under Aguilera, supra, 235 Cal.App.4th 821, determining case value for purposes of a petition to approve a minor’s compromise is different from determining case value for purposes of determining the Department’s lien.” (Italics added.)
In its order approving the settlement, the trial court had determined the overall value of J.M.’s damages, including the present value of future medical care, compared that overall value to the $7,480,000 settlement amount, and found that “the settlement [was] fair and reasonable and in the best interests of the minor . . . .” By invoking Aguilera, the Department was not disputing the factual finding that the present value of J.M.’s future care is $28,185,265. Although we acknowledge that Aguilera requires a court to subtract certain costs of future care from the full value of the claim (the denominator in the Ahlborn formula) (see Aguilera, supra, 235 Cal.App.4th at pp. 829–833), that is merely a mathematical adjustment to the lien calculation to account for the future health care costs “it is reasonably probable the Department will pay” (see id. at p. 833). The purpose of this adjustment is to ensure “the Department [is not] forced to accept a[n otherwise] lower percentage of its total lien” that does not take into consideration the future expenses “it will in fact pay . . . .” (See id. at pp. 831–832.) Thus, allowing the Department to make its case under Aguilera would not disturb the court’s prior valuation of future care costs. The court would simply be permitting the Department to show that it will pay a
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subset of those future costs, thereby potentially attaining a higher recovery on the lien.10 Further, although we agree with the trial court that it did not retain jurisdiction to redetermine the present value of J.M.’s future medical care, the order approving the settlement did reserve jurisdiction to “determine a claim for a reduction of a Medi-Cal lien under . . . section 14124.76.” Because the Aguilera adjustment is made in the course of reducing the Department’s Medi-Cal lien under the Ahlborn formula (see Applicable Law Regarding Medi-Cal Liens, ante), the court had jurisdiction to address the Department’s request to exclude certain future health care costs from the calculation.
In sum, the trial court erred in barring the Department from invoking Aguilera to increase potentially the Department’s recovery on its lien.
B. We Reject J.M.’s Contention Res Judicata Barred the Department From Seeking Exclusion of Certain Future Medical Expenses from the Ahlborn Calculation “ ‘Claim preclusion arises if a second suit involves (1) the same cause of action (2) between the same parties [or parties in privity with them] (3) after a final judgment on the merits in the first suit.’ . . . [Citation.]” (See Parkford Owners for a Better
10 Although J.M. insists one of the Department’s declarants had opined that J.M. does not need care from a licensed vocational nurse, the Department represents in its appellate briefing that it does not challenge the trial court’s finding that “the present value of future medical care is $28,185,265.00.”
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Community v. Windeshausen (2022) 81 Cal.App.5th 216, 225 (Parkford Owners for a Better Community).) Conversely, “[i]ssue preclusion applies . . . : ‘ “(1) after final adjudication (2) of an identical issue (3) actually litigated and necessarily decided in the first suit and (4) asserted against one who was a party in the first suit or one in privity with that party.” ’ [Citations.]” (Ibid.) Although claim preclusion has “historically [been] referred to as res judicata” and issue preclusion has “historically [been] referred to as collateral estoppel” (see 7 Witkin, Cal. Procedure (6th ed. 2026) Judgments, § 361), “[c]ourts have at times used ‘res judicata’ . . . as an umbrella term, encompassing both” doctrines (see Parkford Owners for a Better Community, at p. 225).
J.M. attempts to salvage the trial court’s determination of the Medi-Cal lien by resorting to a legal theory not discussed in the court’s order. Specifically, J.M. argues the prior order approving the settlement has “res judicata implications,” that is, the approval order barred the Department from requesting exclusion of certain future medical costs from the Ahlborn formula.
As for issue preclusion, J.M. seems to argue the trial court had “necessarily decided” not to reduce the full case value used for the Ahlborn calculation when the court determined the present value of J.M.’s future medical care in the order approving the settlement. (See Parkford Owners for a Better Community, supra, 81 Cal.App.5th at p. 225; see also ibid. [noting that an essential element of issue preclusion is that the issue sought to be precluded necessarily was decided in the first suit].) The court’s determination of the present value of J.M.’s future medical expenses, however, is an issue distinct from whether the court should exclude certain of those future medical expenses
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from the Ahlborn formula. (See Discussion, part A, ante [explaining the latter question turns on whether the Department shows it is reasonably probable Medi-Cal will pay those future expenses].) Accordingly, issue preclusion has no application here.
Turning to claim preclusion, “Two proceedings are on the same cause of action if they are based on the same ‘primary right.’ [Citations.] Under this theory, a cause of action is ‘ “comprised of a ‘primary right’ of the plaintiff, a corresponding ‘primary duty’ of the defendant, and a wrongful act by the defendant constituting a breach of that duty. [Citation.] . . . [Citation.] . . . ” ’ [Citation.]” (Association of Irritated Residents v. Department of Conservation (2017) 11 Cal.App.5th 1202, 1228, fn. 24.) J.M. does not argue — let alone demonstrate — that under the primary rights theory, the Department sought to relitigate a cause of action that the trial court adjudicated when it approved the settlement of J.M.’s medical negligence action. Thus, insofar as J.M. contends claim preclusion bars the Department from seeking an adjustment to the lien calculation under Aguilera, J.M. fails to provide any analysis to support that contention. (See Association for Los Angeles Deputy Sheriffs, supra, 94 Cal.App.5th at pp. 787, fn. 19, 792 [noting that the respondent has a duty to aid the appellate court in sustaining the judgment, and that “ ‘[w]e do not serve as “backup appellate counsel,” or make the parties’ arguments for them’ ”].)
We thus reject J.M.’s invocation of “res judicata.” In light of our analysis above, we do not address the Department’s arguments that (1) claim and issue preclusion are inapplicable because the Department was not a party to the petition to approve the settlement, (2) issue preclusion is inapposite because the petition for approval and the motion to determine the
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Department’s lien did not address identical factual allegations, and (3) claim preclusion does not apply because “[t]he petition [for approval] could not have litigated the Aguilera issue . . . .” (Boldface omitted.)
DISPOSITION
We reverse the trial court’s order determining that claimant and appellant California Department of Health Care Services shall recover only $71,974.26 on its Medi-Cal lien, and remand this matter for further proceedings consistent with this opinion. In the interests of justice, we order each party to bear its own costs on appeal. (Cal. Rules of Court, rule 8.278(a)(5).)
NOT TO BE PUBLISHED.
BENDIX, Acting P. J.
We concur:
WEINGART, J.
M. KIM, J.