Naccache v. Taylor
Naccache v. Taylor
Opinion of the Court
A Superior Court jury awarded appellee Angela Taylor $6.5 million in damages following a trial at which she alleged that appellant Maurice Naccache, an obstetrician employed by the District of Columbia, had provided negligent prenatal care that led to her son's premature birth and his severe and permanent developmental injuries. The District of Columbia, which participated in the trial on Dr. Naccache's behalf and continues to participate here, challenges two of the trial court's orders pertaining to the jury award. At issue in this appeal is the meaning of the statute providing for interest on judgments against the District of Columbia "at the rate of not exceeding 4% per annum,"
The jury's award included damages "with interest, thereon at the statutory rate and their costs of action." Of the $6.5 million awarded, the jury allocated $3.3 million to future care costs, but did not allocate any portion of the judgment for past Medicaid expenses.
In March 2015, more than four years after the verdict and almost two years after this court affirmed the judgment on appeal,
In the months following the issuance of the consent order, the trial court issued two additional orders granting motions filed by Ms. Taylor: the first, in July 2015, approved costs and interest on the judgment at 4% per year pursuant to
I. The Post-Judgment Interest Order
We review questions of statutory interpretation de novo. E.g. , District of Columbia v. Place ,
In common usage, the word "exceed" means "to extend outside of" or "to go beyond a limit set by." Webster's Third New International Dictionary 791 (2002). To "not exceed," then, means that the rate of interest shall not "extend outside of" or "go beyond the limit set by." The statute is not ambiguous. The text of the statute reflects that the D.C. Council's intent was to set a cap on the rate of interest on judgments against the District and its officers at 4%, and neither party offers a competing interpretation of the plain language. The two other subsections in § 28-3302 reinforce this understanding. Had the D.C. Council intended to set an interest rate on judgments against government officials at 4%-no more no less-the Council could have stated, as it did in subsection (a), that the rate "is" 4%, or stated, as it did in subsection (c), that the rate "shall be" 4%.
The legislative history does not provide such a reason. Section 28-3302 (b) originated from a subsection of an 1890 appropriations Act of Congress addressing payments of judgments against the District of Columbia, which provided "[t]hat hereafter interest, when authorized by law, on judgments against the District, in suits begun after the passage of this act, shall be at the rate of not exceeding four per centum per annum." Act of Sept. 30, 1890, ch. 1126,
In Ms. Taylor's view, this characterization of the 1890 act as having "fixed" the interest rate at 4% demonstrates that Congress agreed the interest rate on judgments against the District was required to be 4%. Based on the plainness of the "not exceeding" language and the lack of any indication that Congress perceived itself as clarifying an ambiguity in the 1890 act, however, we agree with the government that the language from the 1902 act did not intend to dramatically alter its meaning but simply described the prior law imprecisely. The subsequent history of the law supports this. In 1964, Congress enacted
Ms. Taylor highlights our case law in contending that the statute should be interpreted as a fixed rate and not a cap. But our case law does not necessitate this conclusion. In Burke v. Groover, Christie & Merritt, P.C. ,
Focusing on the words "fixed rate," Ms. Taylor argues that in Burke , we specifically held that the interest rate on judgments against the District must be set at 4%. As the District notes, however, this line in Burke may be read to say either that the rate on judgments is "fixed" at 4% or that it is "fixed" at the time of judgment. Given the court's focus upon the fluctuation in interest rates on judgments against private parties under § 28-3302 (c) between the time such judgments are entered *186and the time they are satisfied, the better reading of the line Ms. Taylor emphasizes is that the rate of interest against the District under § 28-3302 (b) -in contrast to § 28-3302 (c) -is "fixed" at the time of entry and therefore does not fluctuate before satisfaction of judgment. See also District of Columbia Office of Human Rights v. District of Columbia Dep't of Corr. ,
The trial court in this case granted Ms. Taylor's request for interest at 4% per year, but it was not clear whether, in doing so, the court interpreted § 28-3302 (b) as a cap or as a fixed rate.
II. The Medicaid Lien Order
The District also challenges the trial court's order striking its lien encumbering the judgment, which was imposed to reimburse the District for all future post-judgment Medicaid expenses. The District argues that it is entitled, under federal and local law, to collect from the judgment the costs it will incur for continued health-care assistance to Ms. Taylor's son for the duration of his life-notwithstanding that the award has been placed in a supplemental needs trust-and contends that the trial court will be able to determine how such an open-ended and forward-looking lien should operate. In the alternative, the District argues that it is at the very least entitled to recover for the amount of Medicaid assistance provided to Ms. Taylor's son in the period between the entry of judgment in 2010 and Ms. Taylor's actual receipt of the judgment award in 2015, before the award was deposited in the supplemental needs trust.
A. The Governing Framework
The Medicaid program
In compliance with these federal provisions, the District of Columbia enacted its own third-party liability statutes to effectuate reimbursement. "As soon as the District begins providing health-care assistance to a beneficiary, it shall become subrogated to any right or claim that the beneficiary has against a third party for the care and treatment it has undertaken to provide or pay for as health-care assistance."
The District's right to reimbursement for Medicaid expenses is to some degree limited, however, by the federal anti-lien provision contained in 42 U.S.C. § 1396p,
The Court took this holding one step further in Wos v. E.M.A. ex rel. Johnson ,
The parties dispute how this governing framework applies to the present case, which in our view presents two questions: whether the District is entitled to an open-ended lien for all medical costs that it will cover since Ms. Taylor placed the award in a supplemental needs trust in 2015, and whether the District is entitled to reimbursement for the medical care it covered from the time judgment was entered in 2010 following the jury verdict until the time the trust was established in 2015.
B. The Validity of a Lien on Post-2015 Trust Payments
The jury rendered its verdict in 2010, but Ms. Taylor represented at oral argument, and the District has not disputed, that she did not actually take possession of the award until satisfaction of the judgment in 2015-at which time she deposited the sum into a Medicaid supplemental needs trust.
We begin with Ms. Taylor's contention that Ahlborn clarified that federal law limits a state's recovery to proceeds shown to be properly allocable to past medical expenses, and because the jury's verdict did not include such an award, Ahlborn precludes the District from asserting its lien. As some courts have noted and as the split among various courts reveals, the decision in Ahlborn did not make clear whether a state may assert a lien against settlement proceeds or a portion of a judgment allocable to future medical expenses to reimburse medical expenses already paid on behalf of a Medicaid recipient.
We need not address whether a claim for a lien to cover future payments may be permissible in circumstances other than those presented here. Fundamentally, and ultimately dispositive on the issue in this case as to future payments, Congress added a provision-in the same section as the anti-lien provision of the U.S. Code-that allows parties who obtain a judgment to continue to qualify for public benefits such as Medicaid while supplementing their future care needs through the use of a Medicaid supplemental needs trust. See 42 U.S.C. § 1396p (d)(4)(A). Not just anyone may establish such a trust. Congress limits eligibility to those who are under age 65 and disabled
Ms. Taylor argues that the District's proposed forward-looking lien in the amount of all medical care the District will provide from creation of the trust until Mr. Taylor's death would undermine the whole point of supplemental needs trusts and the "statutory scheme established by Congress." We agree. A jury determined that Ms. Taylor's son was disabled as a result of Dr. Naccache's negligence and awarded a judgment to compensate him for the resulting costs he will incur. No one disputes that Mr. Taylor qualified for a supplemental needs trust, and with the judgment assets now protected in such a trust, Mr. Taylor will continue to be able to receive public benefits while supplementing those payments with the trust's funds, as intended by Congress.
The District contends that if it is not able to obtain reimbursement now and moving forward for all future medical care it will cover, it is possible that the trust will have no assets remaining to reimburse the District for any Medicaid expenditures upon Ms. Taylor's son's death. This is precisely correct, but essentially amounts to a recitation of the decision Congress made when enacting § 1396p (d)(4)(A). Congress specifically provided that the state (or District) is entitled to all amounts remaining in a supplemental needs trust upon the death of the beneficiary, "up to an amount equal to the total medical assistance paid on behalf of the individual." 42 U.S.C. § 1396p (d)(4)(A). Although it may be that the trust could be depleted before the beneficiary's time of death, leaving nothing for the government to collect in reimbursement, that is the balance Congress chose to strike. See In re E.B. ,
The cases the District cites in arguing that a party may not "shelter" judgments from parties imposing Medicaid liens do not support the District's contention that it should be entitled to place a lien on funds already in a supplemental needs trust for an amount not yet even established. In Sullivan v. Cty. of Suffolk ,
The District further contends that absent a lien, it will have to pay the same expenses twice, through the judgment and through Medicaid. This is again correct-at least to the extent that any funds remaining upon the death of the beneficiary are insufficient to cover such payments-and again in line with the express purpose of a supplemental needs trust: that a beneficiary may retain an award while still qualifying for public benefits, so that the award may cover all expenses not covered by other payers. See In re Matey ,
In sum, because we conclude that the District's proposed open-ended lien on funds now in the supplemental needs trust is contrary to Congress's purpose for establishing such trusts under § 1396p (d)(4)(A), we affirm the trial court's order striking the lien as to any amount that the District may cover in Medicaid payments after the date of deposit in the trust.
C. Reimbursement for the 2010-2015 Medicaid Payments
Even if it is not entitled to recover for payments for medical care costs made after the trust was established, the District contends that it at least is entitled to recovery from the judgment for medical care payments made during the five-year period prior to the establishment of the trust. We agree with the District on this point.
As already indicated in the discussion above, while it may be disputed as to the degree that a lien can reach future payments, it is another matter where, as here, recovery is sought for payments actually made. By its wording, the District lien clearly covers payments actually made. Nor do we find anything in the federal or local Medicaid laws that would prohibit the District from seeking reimbursement for post-judgment medical costs already paid. We note that Federal law requires Medicaid recipients "to assign to the State any rights ... to payment for medical care from any third party," 42 U.S.C. § 1396k (a)(1)(A) (emphasis added), instructs them to assist the state in identifying and pursuing "any third party who may be liable to pay for care and services available under the plan ," 42 U.S.C. § 1396k (a)(1)(B) (emphases added), and entitles states to retain such part of the amount collected "as is necessary to reimburse it for medical assistance payments made on behalf of an individual," 42 U.S.C. § 1396k (b). The District's health-care assistance reimbursement statute, enacted in accordance with these provisions, similarly provides that the District "shall have a lien ... upon any judgment or settlement awarded or executed in favor of a beneficiary *192against a third party for that amount of the judgment or settlement that represents the care and treatment it has undertaken to provide or pay for as health-care assistance ."
Alternatively, Ms. Taylor argues that the District is estopped from asserting any lien because it imposed the lien only after failing to obtain its requested $1.8 million remittitur, neglected to present any expert testimony related to its claim for future expenses or apprise Ms. Taylor of its envisioned lien, and failed to request an itemized verdict form to reflect future health care costs that would be covered by Medicaid. We see no merit in this argument. It is undisputed that the judgment was stayed until the final action of our court upholding the judgment. The right to reimbursement was not contingent on the lien itself,
In sum, we conclude that the District was entitled to reimbursement for medical payments made after judgment was entered awarding Ms. Taylor $3.3 million for future care costs and before the supplemental needs trust was established. Consequently, we hold that the Superior Court erred in striking that portion of the District's lien.
III.
For the foregoing reasons, we reverse the order granting interest on the judgment at 4% per year and remand for further proceedings consistent with this opinion. We affirm the order striking the District's lien on the judgment for all future care costs after the creation of the supplemental needs trust in 2015, but reverse the order striking the District's lien for the period between the entry of judgment in 2010 and establishment of the supplemental needs trust in 2015.
So ordered.
The jury also awarded $1.2 million for lost earnings and earning capacity; $1 million for past physical pain, emotional distress, disfigurement and deformity; and $1 million for future physical pain, emotional distress, disfigurement and deformity.
This latter figure thus included both the $764,277.46 in prejudgment Medicaid expenses-for which the District no longer seeks reimbursement on appeal-and $86,955.61 in post-judgment payments up to that point in time. In its reply brief the District represented that as of the time of filing, the post-judgment medical expenditures covered by Medicaid payments had increased further to $115,881.89.
In their appeal from the jury's verdict awarding Ms. Taylor $6.5 million, Dr. Naccache and the District challenged the validity of the judgment on various grounds. In Naccache v. Taylor ,
A Special Needs Trust is sometimes also called a "supplemental needs trust."
After Ms. Taylor filed this motion, the parties stipulated to, and the trial court approved in a consent order, costs of $13,178.91 in the trial court and $1,278.91 in this court, rendering the motion moot as to costs.
For the same reason, we are unpersuaded by the District's argument that the trial court was required to apply the interest rate applicable to private parties, subject to a 4% cap. Section 28-3302 (c) governing interest on judgments against private parties expressly excludes interest on judgments against "the District of Columbia, or its officers, or its employees acting within the scope of their employment." Moreover, as Ms. Taylor notes in her brief, the D.C. Council considered and then chose not to enact a proposal to add to § 28-3302 (b) qualifying language that the rate "shall be at the rate described in subsection (c) ... provided that the rate shall not exceed 4%." 2015 Washington D.C. Legislative Bill No. 669, Section 1033, Fiscal Year 2017 Budget Support Act of 2016.
D.C. Law 4-70, § 2,
In District of Columbia v. Mitchell ,
Our uncertainty stems from multiple potentially conflicting statements. The trial court first stated "that the plain language of the statute provides a ceiling of 4% per year for interest rates applying to judgments against the District .... The language simply mandates that the interest rate applied is not to exceed 4%." The court then added, however-in expressing disagreement with the District's argument that the proper interest rate should be that applicable to private litigants-that this court "has interpreted [the statute] as establishing a fixed rate of interest," citing Burke ,
Section 1396a (a)(18) requires that a state Medicaid plan comply with § 1396p.
In October 2017, Congress passed the Bipartisanship Budget Act of 2013, Pub. L. No. 113-67, § 202 (b), which effectively overturned the decisions in Ahlborn and Wos by permitting states to attach a lien equal to the amount of Medicaid costs regardless of whether a portion of an award was designated for medical costs. On February 9, 2018, however, Congress confirmed in the Bipartisanship Budget Act of 2018 that Ahlborn and Wos remained good law. Pub. L. No. 115-123, § 53102 (b)(1).
Whether the District is entitled to the lien it seeks to impose is a matter of statutory construction, which we review de novo. Tippett ,
As noted above, the court ordered that $850,000 of the jury award would be placed into the court registry pending a decision on the amount of the District's asserted Medicaid lien.
Some courts have interpreted Ahlborn to limit the state's recovery to proceeds specifically allocated to past medical expenses. See, e.g. , In re E.B. ,
A person qualifies as "disabled" for purposes of this statute "if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months." 42 U.S.C. § 1382c (a)(3)(A).
42 U.S.C. § 1396p (d)(4)(B) defines under what circumstances a trust is established "for the benefit of an individual." The District does not dispute that the trust in this case satisfies these or any other requirements.
See also Brief of Lienor-Appellee at 5, Sullivan v. Cty. of Suffolk ,
Ms. Taylor argues that, even if the District could assert a lien on a judgment for future medical expenses , it is not entitled to assert a lien on a judgment for future care costs , which includes both medical and non-medical costs. Here, it appears likely that the award for future care costs includes an award for future medical expenses far in excess of the District's lien. But to the extent that this remains an issue on remand, the trial court may conduct further proceedings to determine the proper allocation of the award for "future care costs" to ensure that the District's lien is limited to that portion of the judgment that is "designated as payments for medical care," Wos ,
Reference
- Full Case Name
- Maurice F. NACCACHE v. Angela M. TAYLOR
- Cited By
- 3 cases
- Status
- Published