Wimberly v. Katruska

25 Pa. D. & C.5th 532
CourtPennsylvania Court of Common Pleas, Alleghany County
DecidedMay 23, 2012
DocketNo. AR-11-004777
StatusPublished

This text of 25 Pa. D. & C.5th 532 (Wimberly v. Katruska) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Alleghany County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wimberly v. Katruska, 25 Pa. D. & C.5th 532 (Pa. Super. Ct. 2012).

Opinion

WETTICK, J,

Plaintiffs’ petition to enforce settlement is the subject of this opinion and order of court.

Through a telephone conversation between counsel, the claims of Anna B. Wimberly (“plaintiff’) were settled for $9,000. The issue that is the subject of this opinion and order of court is whether defendant may condition payment upon plaintiff providing a no-lien letter from Medicare.

Pursuant to the Medicare secondary payer act (“MSPA”), Medicare is a secondary payer meaning that Medicare can only pay bills not paid by a “primary payer.” If Medicare makes a payment and a primary payer is identified, the primary payer must reimburse the United States. 42 U.S.C. §1395y(b)(2). The MSPA identifies an automobile or liability insurance policy as a primary payer. 42 U.S.C. [534]*534§1395y(b)(2)(A)(ii). This means that if the insurance company has made a settlement payment and it is later discovered that Medicare had already made a payment for the same services or items, the insurance company which paid the settlement amount can be required to reimburse Medicare, pursuant to regulations promulgated by the U.S. Department of Health and Human Services to implement the MSPA. These regulations give Medicare and centers for Medicare services (“CMS”) a direct right of action to recover from any primary payer. 42 C.F.R. §411.24(e).

1.

Defendant’s first argument is that, as a matter of law, the insurance company is entitled to withhold payment until Medicare has issued a no-lien letter. This is the only manner by which an insurance company and its insured may avoid double payments. However, this argument is without merit as a result of the opinion of the Pennsylvania Superior Court in Zaleppa v. Seiwell, 9 A.3d 632 (Pa. Super. 2010).

Zaleppa was a personal injury action in which the jury returned a verdict in the amount of $15,000. The defendant alleged that the trial court erred in denying her post-trial motion which requested that the court enter an order directing her to pay the verdict either (1) by naming Medicare, along with Zaleppa and her attorneys, as payees on the draft satisfying the verdict or (2) paying the verdict into court pending notification from Medicare that all outstanding Medicare liens have been satisfied. The trial court denied the defendant’s motion. The Superior Court [535]*535affirmed.

The Superior Court recognized that the MSPA assigns primary responsibility for medical bills of Medicare recipients to private health plans when a Medicare recipient is also covered by private insurance. This means that the private insurer may be required to pay for any treatment for which Medicare has already paid by reimbursing Medicare for the expense. Thus, if an outstanding Medicare lien existed, the MSPA gave CMS a direct action against the defendant’s insurer to reimburse Medicare.1

In other words, the court recognized that if it denied the defendant’s request for post-trial relief, it would be subjecting the insurance company to the possibility of a double payment. Nevertheless, the court ruled that the defendant failed to offer any legal basis for the post-trial relief that would prevent a double recovery.

The court based its decision on settled Pennsylvania case law which obligates a party to satisfy a judgment once it has been entered. In order to satisfy a judgment for monetary damages, payment of the underlying debt must be tendered in full and must be payable to the parties specified in the judgment. This case law controls this litigation unless there are provisions within the MSPA or other federal legislation that alter Pennsylvania case law.

Through her motion for post-trial relief, the defendant argued that state law does not apply because the defendant [536]*536was properly protecting the interests of the United States government. The court rejected this argument stating that the statutory scheme established by the MSPA was not designed to enable private parties to act on behalf of the United States government as a “private attorneys general.” Id. at 639 (citation omitted). Under the MSPA, only the United States government is authorized to pursue its own right to reimbursement.

2.

In his answer in opposition to the petition to enforce settlement (¶¶ 1 and 6 and exhibits A-E), defendant raises a second ground: Defendant’s counsel avers that prior to the parties reaching an agreement as to the settlement amount, plaintiff’s counsel, through letters and email, agreed that payment would be conditioned on plaintiff’s counsel obtaining documentation from Medicare, stating whether plaintiff is currently receiving Medicare benefits and what, if any, benefits were paid that were related to the accident. Counsel for plaintiff, on the other hand, avers that he never agreed to allow defendant to withhold the settlement funds because of a possible Medicare lien.

A settlement is a contract. The parties may agree that the settlement amount will not be paid until information regarding Medicare is provided to the defendant. However, unless there is a specific agreement conditioning payment on a no-lien letter, it is a matter of contract law that a defendant cannot subsequently raise new conditions regarding the payment that the defendant agreed to make.

I considered a similar matter in Export Boxing & [537]*537Crating, Inc. v. TechMet, 150 P.L.J. 35 (2001). In that case, on the eve of trial, the plaintiffs agreed to the settlement offer by one of two joint tort-feasors. Subsequently, the plaintiffs filed a motion to enforce the settlement.

Through their motion, the plaintiffs sought a court order compelling the release of the settlement funds because the plaintiffs had furnished executed pro tanto releases. The settling joint tort-feasor, on the other hand, sought a ruling that the plaintiffs were not entitled to the settlement funds until the plaintiffs executed pro rata releases.

At oral argument on the motion, counsel for the parties stipulated that there was a binding settlement. In other words, no attorney was taking the position that I should set aside the agreement based on a failure to agree upon a material term. Each of the witnesses who participated in the settlement discussions testified that no one used the term “pro rata release” or “pro tanto release” in any of the discussions. In other words, the type of release was not discussed.

I stated:

A settlement agreement is a contract governed by the general rules of contract interpretation. See Friia v. Friia, 780 A.2d 664, 668 (Pa. Super. 2001). Where the intentions of the parties cannot be gleaned from the language of the agreement, under general rules of contract interpretation a court should determine whether there are common expectations that would reveal the intentions of the parties.
[538]*538In this case, this is a relatively easy task.

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Related

Friia v. Friia
780 A.2d 664 (Superior Court of Pennsylvania, 2001)
Zaleppa v. Seiwell
9 A.3d 632 (Superior Court of Pennsylvania, 2010)

Cite This Page — Counsel Stack

Bluebook (online)
25 Pa. D. & C.5th 532, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wimberly-v-katruska-pactcomplallegh-2012.