Lake v. Levy

390 S.W.3d 885, 2013 WL 150910, 2013 Mo. App. LEXIS 63
CourtMissouri Court of Appeals
DecidedJanuary 15, 2013
DocketNo. WD 74306
StatusPublished
Cited by6 cases

This text of 390 S.W.3d 885 (Lake v. Levy) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lake v. Levy, 390 S.W.3d 885, 2013 WL 150910, 2013 Mo. App. LEXIS 63 (Mo. Ct. App. 2013).

Opinion

GARY D. WITT, Judge.

This appeal involves the question of how to prioritize two competing liens on workers’ compensation proceeds. John Lake appeals the judgment of the Circuit Court of Cole County, which granted judgment on the pleadings in favor of Department of Social Services. Because Lake’s attorney fee lien had statutory priority over the Department’s lien for Medicaid reimbursement and because paying the portion of the attorney fee lien attributable to the award of medical expenses out of the medical expenses portion of the award does not result in the State paying the fees or in a reduction of the debt owed the Department, we reverse and remand for further proceedings.

Factual Background

John Lake (“Lake”) is a licensed attorney who represented Kenneth Stephenson (“Claimant”) in a workers’ compensation claim. The claim was tried before an administrative law judge (“ALJ”) on a Joint Submission of Stipulated Facts between Claimant and his employer.1

The parties to the workers’ compensation proceeding stipulated that Claimant suffered a thirty-eight percent (38%) permanent partial disability to the body as a whole as a result of his work-related injury and that he was entitled to $34,694 in disability compensation for that injury. Further, the stipulated facts provided that Claimant had incurred medical expenses in the amount of $45,001.73 and that the Missouri Department of Social Services (“De[888]*888partment”) had filed a lien in the amount of $45,001.73 to recover funds that Medicaid had paid out on Claimant’s medical treatment costs for the work-related injury. The stipulated facts then provided that the employer/insurer “will issue payment in the amount of $45,001.73 directly to the Missouri HealthNet Division, Third Party Liability Unit, to resolve the Missouri Department of Social Service’s lien.”

On March 29, 2010, and April 13, 2010, the Labor and Industrial Relations Commission (“Commission”) entered an award and an amended award in Claimant’s favor, which included a twenty-five percent (25%) attorney fee award to Lake specifically on the medical expenses of $45,001 awarded to Claimant. Both awards stated that “It is my understanding that Claimant’s attorney, Mr. Lake, is to pursue his attorney lien on the medical expenses with Missouri HealthNet Division, Third Party Liability Unit, Department of Social Services, and Claimant’s attorney has stipulated not to pursue his attorney fee on the medical expenses against the Employer/Insurer.” 2

On May 3, 2010, Lake demanded payment of his attorney fee lien from the Department, which rejected his claim.3 Lake then filed a two-count petition against Ronald Levy, Director of the Department, asking for judgment against the Department in the sum of $10,001.43.4 The Department filed a motion for judgment on the pleadings, arguing that (1) the Department was not a party to Claimant’s workers’ compensation claim; (2) the amended award did not require the Department to do anything; (3) the ALJ lacked the authority to impose any costs of the workers’ compensation proceeding on the Department and had not assessed the attorney fees to the Department; (4) section 287.2665 prohibits the Department from paying the legal fees to Lake in these circumstances; and (5) no unjust enrichment occurred as the Department had paid the reasonable value of the benefit it received.

Lake responded and filed a counter-motion for judgment on the pleadings in which he argued that section 287.266 gives his attorney fee lien priority over the Department’s lien. Further, he argued that his lien was proper pursuant to section 287.266.10, which grants the ALJ the authority to apportion debt due the State between the injured worker and the employer.

The trial court entered judgment in the Department’s favor, concluding that Lake “may not enforce his lien against [the Department] as it would preclude [the Department] from recovering the full amount of its payments, thus having the effect of making the State pay a portion of the attorney fees of the employee (Claimant).”

[889]*889In his sole point on appeal, Lake argues the trial court erred in granting judgment on the pleadings in favor of the Department as a matter of law because the debt due the Department for medical payments is lower in priority and overridden by Lake’s attorney fee rights, in that section 287.266.7 states with respect to Lake’s lien rights: “[t]his debt due the state shall be subordinate only to the fee rights of the injured employee’s attorney pursuant to this chapter....”

Standard of Review

“The question presented by a motion for judgment on the pleadings is whether the moving party is entitled to judgment as a matter of law on the face of the pleadings.” Eaton v. Mallinckrodt, Inc., 224 S.W.3d 596, 599 (Mo. banc 2007) (quoting RGB2, Inc. v. Chestnut Plaza, Inc., 103 S.W.3d 420, 424 (Mo.App. S.D. 2003)). “The well-pleaded facts of the non-moving party’s pleading are treated as admitted for purposes of the motion.” Eaton, 224 S.W.3d at 599 (citing State ex rel. Nixon v. Am. Tobacco Co., 34 S.W.3d 122, 134 (Mo. banc 2000)). “Judgment on the pleadings is appropriate where the question before the court is strictly one of law.” Id. (citing RGBS, 103 S.W.3d at 424).

When the motion for judgment on the pleadings is based on a failure to state a claim under Rule 55.27(a)(6) and (b), we review de novo. Hansen v. Ritter, 375 S.W.3d 201, 205 (Mo.App. W.D.2012) (citations omitted). “In reviewing the dismissal of a petition, the sole issue to be decided is whether, after allowing the pleading its broadest intendment, treating all facts alleged as true and construing all allegations favorably to the plaintiff, the plaintiff is entitled to relief.” Id. “ ‘If the petition sets forth any set of facts that, if proven, would entitle the plaintiff to relief, then the petition states a claim.’ ” Id. We review the law only to ascertain whether Lake’s interpretation is viable, thereby stating a claim for relief in his petition. If Lake’s petition states a claim upon which relief can be granted, then judgment on the pleadings was not appropriate.

Analysis

In analyzing whether Lake has failed to state a claim, we begin by accepting as true all facts alleged in Lake’s petition. Eaton, 224 S.W.3d at 599. The facts as alleged by Lake are, inter alia, that (1) he was awarded a 25% attorney fee lien on medical expenses by the ALJ for his work in obtaining a workers’ compensation recovery for Claimant; and (2) section 287.266.7 forms the basis of his claim for an attorney fee lien. In support of his petition, Lake attached copies of the March 29, 2010 workers’ compensation award he obtained.

As a threshold issue, we address the concern of whether Lake failed to state a claim upon which relief could be granted on the ground that the Department was not a party to the underlying workers’ compensation dispute where Claimant was awarded disability compensation and medical treatment costs.

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390 S.W.3d 885, 2013 WL 150910, 2013 Mo. App. LEXIS 63, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lake-v-levy-moctapp-2013.