I.P. v. Henneberry

• Decision Date: 26 April 2011
• Docket Number: Civil Action No. 09–cv–01681–WJM–MEH.
• Citation: I.P. v. Henneberry, 795 F.Supp.2d 1189 (D. Colo. 2011)
• Parties: I.P., a minor, by and through her mother and conservator, Cynthia CARDENAS, Plaintiff,v.Joan HENNEBERRY, in her individual capacity and official capacity as the Executive Director of the Colorado Department of Health Care Policy and Financing, and Gary H. Ashby, in his individual capacity and official capacity as Manager of the Benefits Coordination Section in the Colorado Department of Health Care Policy and Financing, Defendants.
• Court: U.S. District Court — District of Colorado

795 F.Supp.2d 1189

I.P., a minor, by and through her mother and conservator, Cynthia CARDENAS, Plaintiff,

v.Joan HENNEBERRY, in her individual capacity and official capacity as the Executive Director of the Colorado Department of Health Care Policy and Financing, and Gary H. Ashby, in his individual capacity and official capacity as Manager of the Benefits Coordination Section in the Colorado Department of Health Care Policy and Financing, Defendants.

Civil Action No. 09–cv–01681–WJM–MEH.

United States District Court, D. Colorado.

April 26, 2011.

R. Eric Solem, Lance Eric McKinley, Solem, Mack & Steinhoff, P.C., Englewood, CO, for Plaintiff.Jennifer L. Weaver, Colorado Attorney General's Office, Denver, CO, for Defendants.

ORDER

WILLIAM J. MARTÍNEZ, District Judge.

This is a declaratory action in which Plaintiff seeks, among other things, a declaration of her rights under certain provisions in the federal Medicaid statutes. The matter is before the Court on Defendants' Motion for Summary Judgment and Plaintiff's First Amended Motion for Partial Summary Judgment.¹ The Court has jurisdiction under 28 U.S.C. § 1331.

I. BACKGROUND

Plaintiff is I.P., a minor, through her authorized legal representative, Cynthia Cardenas. Defendants are officials with the Colorado Department of Health Care Policy and Financing (Department), the agency that administers the Medicaid program in Colorado.²

Plaintiff was born on May 27, 2004.³ She suffered a brain injury at birth and as result is permanently disabled.⁴ Plaintiff has been receiving Medicaid benefits in Colorado since her birth.⁵ As of April 24, 2009, Colorado Medicaid paid a total of $836,673.71 in medical assistance on Plaintiff's behalf.⁶ Plaintiff has indicated she intends on remaining enrolled in the Medicaid program.⁷

Plaintiff, through her mother, Cynthia Cardenas, filed a medical malpractice suit against Dr. Vadna Jerath and St. Anthony North Hospital for the injuries she suffered at birth.⁸ In December 2008, Plaintiff settled her case against Dr. Jerath in an amount that is under seal with the Jefferson County, Colorado District Court.⁹ Pursuant to an agreement between the Department and Plaintiff, the Department was paid $100,000 from that settlement for medical care provided to Plaintiff before the final settlement.¹⁰

In April 2009, Plaintiff reached a confidential settlement with St. Anthony North Hospital.¹¹ Pursuant to Colorado's recovery statute, the Department has a lien on these proceeds in the amount of $736,673.71. ¹² On July 21, 2009, the Jefferson County District Court approved this settlement.¹³ The court established the I.P. Qualified Settlement Fund (QSF) and funded it with $785,000.00 of the settlement.¹⁴ This amount represents the Department's largest possible claim pursuant to its asserted lien ($736,673.71) plus additional funds to cover legal and administrative fees.¹⁵

On July 15, 2009, filed the instant action. She brought three claims; two are still pending.¹⁶ In her first claim, Plaintiff seeks a declaration that Colorado's Medical Assistance Act Lien Provisions are inconsistent with the anti-lien provisions of the Medicaid Act, and preempted by federal statute to the extent they are inconsistent. In her other claim, Plaintiff seeks a declaration that the assignment provisions of the Medicaid Act, to the extent they provide a limited exception to the Act's anti-lien provisions, prevent the State from recovering more than amounts from the settlement for past medical damages, apportioned in accordance with Arkansas Dep't of Health & Human Servs. v. Ahlborn, 547 U.S. 268, 126 S.Ct. 1752, 164 L.Ed.2d 459 (2006).

On March 12, 2010, Defendants moved for summary judgment.¹⁷ On April 16, 2010, Plaintiff moved for partial summary judgment.¹⁸

II. STANDARD OF REVIEW

Under Federal Rule of Civil Procedure 56, summary judgment is warranted when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248–50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A movant who bears the burden at trial must submit evidence to establish every essential element of its claim. In re Ribozyme Pharms., Inc. Sec. Litig., 209 F.Supp.2d 1106, 1111 (D.Colo.2002). The nonmoving party may not rest solely on the allegations in the pleadings, but instead must designate “specific facts showing that there is a genuine issue for trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); see Fed.R.Civ.P. 56(c).

Only disputes over material facts can create a genuine issue for trial and preclude summary judgment. Faustin v. City & County of Denver, 423 F.3d 1192, 1198 (10th Cir.2005). A disputed fact is “material” if under the relevant substantive law it is essential to proper disposition of the claim. Wright v. Abbott Labs., Inc., 259 F.3d 1226, 1231–32 (10th Cir.2001). An issue is “genuine” if the evidence is such that it might lead a reasonable jury to return a verdict for the nonmoving party. Allen v. Muskogee, 119 F.3d 837, 839 (10th Cir.1997). When reviewing a motion for summary judgment, a court must view the evidence in the light most favorable to the non-moving party. See McBeth v. Himes, 598 F.3d 708, 715 (10th Cir.2010).

When the parties file cross motions for summary judgment, the court is entitled to assume that no evidence needs to be considered other than that filed by the parties, but summary judgment is nevertheless inappropriate if disputes remain as to material facts. Atlantic Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1148 (10th Cir.2000) (quotation omitted). Cross motions for summary judgment must be treated separately—the denial of one does not require the grant of another. Buell Cabinet v. Sudduth, 608 F.2d 431, 433 (10th Cir.1979).

III. DISCUSSION

The Court first considers Defendants' motion for summary judgment.

A. Defendants' Motion for Summary Judgment

Defendants advance four arguments in support of their motion. The Court addresses each in turn.

1. Whether Plaintiff Waived Her Right to Dispute the Department's Lien Against the Settlement Proceeds

First, Defendants argue Plaintiff waived her right to dispute the payment of the Department's lien by agreeing to partially reimburse the Department for medical assistance paid out of the first settlement and by entering into an agreement with the Department to take every reasonable effort in settlement negotiation to ensure that the lien is paid in full out of the second settlement.¹⁹ This purported agreement is allegedly reflected, among other things, in a letter dated November 24, 2008, from Anne Holton, Defendants' counsel, to Eric Solem, Plaintiff's counsel.²⁰

Plaintiff denies the existence of any such agreement. The question whether the parties entered into a contract is a question of fact. I.M.A., Inc. v. Rocky Mountain Airways, Inc., 713 P.2d 882, 887 (Colo.1986) (“it is for the jury to determine whether the parties have entered into a contract.”). In this case, the Court concludes that whether such an agreement exists is a material fact over which the parties have genuine disputes. Accordingly, the Court rejects Defendants' argument that Plaintiff waived her right to dispute the Department's lien based on a prior agreement between the parties.

2. Whether the Court Should Enter Judgment in Favor of Defendants and Against Plaintiff on Plaintiff's First Claim

Next, Defendants argue the Court should enter judgment in their favor on Plaintiff's first claim. Plaintiff's first claim is for a declaration that the lien provisions of Colorado's Medical Assistance Act are inconsistent with the anti-lien provisions of the Medicaid Act, and preempted by federal statute to the extent they are inconsistent. Colorado's Medical Assistance Act provides in relevant part:

(a) When the state department has furnished medical assistance to or on behalf of a recipient pursuant to the provisions of this article, and articles 5 and 6 of this title, for which a third party is liable, the state department shall have an automatic statutory lien for all such medical assistance. The state department's lien shall be against any judgment, award, or settlement in a suit or claim against such third party and shall be in an amount that shall be the fullest extent allowed by federal law as applicable in this state, but not to exceed the amount of the medical assistance provided.

(b) No judgment, award, or settlement in any action or claim by a recipient to recover damages for injuries, where the state department has a lien, shall be satisfied without first satisfying the state department's lien. Failure by any party to the judgment, award, or settlement to comply with this section shall make each such party liable for the full amount of medical assistance furnished to or on behalf of the recipient for the injuries that are the subject of the judgment, award, or settlement.

(c) Except as otherwise provided in this article, the entire amount of any judgment, award, or settlement of the recipient's action or claim, with or without suit, regardless of how characterized by the parties, shall be subject to the state department's lien.

Colo.Rev.Stat. § 25.5–4–301(5).

Plaintiff attempts to invalidate these provisions by comparing the facts of her case to those in Arkansas Dep't of Health & Human Servs. v. Ahlborn, 547 U.S. 268, 126 S.Ct. 1752, 164 L.Ed.2d 459 (2006). The plaintiff in that case, Ahlborn, suffered severe and permanent injuries in a car accident. Id. at 272–73, 126 S.Ct. 1752. She became a Medicaid recipient under Arkansas's Medicaid plan. Id. at 273, 126 S.Ct. 1752. The state agency in charge of administering that plan, the Arkansas Department of Human Services (ADHS), paid medical providers $215,645.30 on Ahlborn's behalf. Id. at 273, 275, 126 S.Ct. 1752. Ahlborn sued two alleged tortfeasors from the accident. Id. The...