State Ex Rel. Office of Recovery Services v. Streight Ex Rel. Jensen

2004 UT 88, 108 P.3d 690, 511 Utah Adv. Rep. 38, 2004 Utah LEXIS 196, 2004 WL 2416054
CourtUtah Supreme Court
DecidedOctober 29, 2004
Docket20020572
StatusPublished
Cited by8 cases

This text of 2004 UT 88 (State Ex Rel. Office of Recovery Services v. Streight Ex Rel. Jensen) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Ex Rel. Office of Recovery Services v. Streight Ex Rel. Jensen, 2004 UT 88, 108 P.3d 690, 511 Utah Adv. Rep. 38, 2004 Utah LEXIS 196, 2004 WL 2416054 (Utah 2004).

Opinions

[691]*691PARRISH, Justice:

¶ 1 On appeal is the district court’s conclusion that the attorney fee provision of the Medical Benefits Recovery Act, Utah Code Ann. § 26-19-7 (1998), did not require the State to pay attorney fees in the action below. Counsel for Peggy Sue Streight obtained a recovery on her behalf for injuries she suffered when struck by an automobile. The State asserted a right to be reimbursed from that recovery for Medicaid payments it had made on Streight’s behalf. We are asked to consider whether the State’s right to reimbursement is subject to deduction for attorney fees Streight incurred even though Streight and her attorneys neither requested nor obtained the State’s consent before entering into the settlement that yielded the recovery. We conclude that the State need not pay Streight’s attorney fees, and we therefore affirm the district court’s holding.

BACKGROUND

¶2 While crossing the street, Streight, a single mother of three children, was struck by an automobile and severely injured. She had no health insurance. The accident left Streight unable to care for herself. Her parents, who had been appointed as her conservators, applied for assistance from the state Medicaid program to pay for her extensive medical bills. The State paid approximately $107,000 in medical expenses for Streight’s care.

¶ 3 Streight’s parents retained the law firm of Robert B. Sykes & Associates (“Sykes”) to pursue any recovery available from the driver of the car and any insurers. Sykes obtained a collective settlement of $110,000 from the driver’s insurer and Streight’s un-derinsured motorist insurance provider, but did so without requesting or obtaining the State’s consent for the settlement. Approximately $38,000 of the settlement was paid to Sykes pursuant to a contingent fee agreement. Out of the settlement proceeds, the State claimed a right to reimbursement of the approximately $107,000 it had paid in Medicaid payments, without a reduction for attorney fees. The State filed suit, seeking disgorgement of the fees paid to Sykes pursuant to Utah Code section 26-19-7, which specifies the terms under which the State is given control over actions to recover medical costs that have been paid by the state Medicaid program. Utah Code Ann. § 26-19-7 (1998).

¶4 The district court granted the State’s motion for summary judgment, ruling that the State is entitled to reimbursement of the full $107,000 recovered on behalf of Streight, without reduction for the fees paid to Sykes. It therefore ordered that Sykes disgorge the fees in satisfaction of the State’s Medicaid reimbursement claim. Sykes appeals, maintaining that our holding in State ex rel. Office of Recovery Services v. McCoy, 2000 UT 39, ¶¶ 13-20, 999 P.2d 572, requires the State to pay the attorneys who obtained the settlement from which the State has, in turn, recovered.

ANALYSIS

¶ 5 We review a grant of summary judgment by viewing all the facts and inferences to be drawn therefrom in the light most favorable to the nonmoving party, in this case Streight and her attorneys. State Farm Mut. Auto. Ins. Co. v. Green, 2003 UT 48, ¶ 3, 89 P.3d 97. We will affirm summary judgment only “if there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law.” Utah R. Civ. P. 56(c).

¶ 6 Streight’s appeal of the district court’s grant of summary judgment requires us to interpret both a statute and our case law. These are questions of law that we review for correctness, giving no deference to the district court’s interpretations. Johnson v. Redevelopment Agency, 913 P.2d 723, 727 (Utah 1995) (noting that statutory interpretations are reviewed for correctness); Stevensen v. Goodson, 924 P.2d 339, 346 (Utah 1996) (“ We consider the trial court’s interpretation of binding case law as presenting a question of law and review the trial court’s interpretation of that law for correctness.’ ” (quoting State v. Richardson, 843 P.2d 517, 518 (Utah Ct.App.1992))).

¶ 7 Sykes argues that it is entitled to attorney fees from the State under Utah Code section 26-19-7 and our decision in State ex [692]*692rel. Office of Recovery Services v. McCoy, 2000 UT 39, 999 P.2d 572, in which we interpreted that statute. The district court held that Utah Code section 26-19-7 does not provide a basis for requiring the State to pay-attorney fees in this case because the facts of McCoy are distinguishable from those presented here. Alternatively, the district court held that McCoy was wrongly decided. Although we decline the district court’s suggestion that we revisit McCoy, we nevertheless affirm the district court because we agree with its conclusion that the statute, as we interpreted it in McCoy, does not require the State to pay Sykes’ attorney fees in this case.

¶ 8 Utah Code section 26-19-7 provides, in pertinent part:

(l)(a) A recipient may not file a claim, commence an action, or settle, compromise, release, or waive a claim against a third party for recovery of medical costs for an injury, disease, or disability for which the [State] has provided or has become obligated to provide medical assistance, without the [State’s] written consent.
(4) The [State] may not pay more than 33% of its total recovery for attorney’s fees, but shall pay a proportionate share of the costs in an action that is commenced with the [State’s] written consent.

Utah Code Ann. § 26-19-7(l)(a), (4) (1998). On its face, the statute requires the State to share proportionally in the costs of an action to which it consents, and provides an upper limit on the amount of fees the State may pay. The statute does not, however, explicitly address the State’s obligation to pay attorney fees for an action to which it did not consent.

¶ 9 In McCoy, we considered the case of a Medicaid recipient whose attorney asked for the State’s consent to bring an action to pursue insurance recovery on behalf of the recipient and the State. 2000 UT 39 at ¶ 3, 999 P.2d 572. The State refused. Id. The attorney, John McCoy, then proceeded against the relevant insurers, but did so in such a way as to expressly exclude the State’s claim against the insurers, thereby preserving the State’s right to seek recovery separately. Id. at ¶ 15. We reasoned that the State could not enforce its Medicaid lien against McCoy’s attorney fees because McCoy had requested consent and had done nothing.to prejudice the State’s right to recover its Medicaid payments. Id. at ¶ 18 & n. 4. We therefore held that “under subsection (4), when the State elects to recover directly from a recipient who has expressly excluded the State’s claim from any attempt to recover from a third party, the State must pay the attorney fees incurred in procuring the State’s share of the settlement proceeds.” Id. at ¶ 18.

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2004 UT 88, 108 P.3d 690, 511 Utah Adv. Rep. 38, 2004 Utah LEXIS 196, 2004 WL 2416054, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-office-of-recovery-services-v-streight-ex-rel-jensen-utah-2004.