Jones by Williams v. Missouri Dept. of Social Services

• Decision Date: 17 March 1998
• Docket Number: No. 72304,72304
• Citation: 966 S.W.2d 324
• Parties: Deshauna JONES, A Minor by her Next Friend, Sonia WILLIAMS, Respondents, v. MISSOURI DEPARTMENT OF SOCIAL SERVICES, Appellant.
• Court: Missouri Court of Appeals

Page 324

966 S.W.2d 324

Deshauna JONES, A Minor by her Next Friend, Sonia WILLIAMS Respondents, v. MISSOURI DEPARTMENT OF SOCIAL SERVICES, Appellant.

No. 72304.

Missouri Court of Appeals,

Eastern District,

Division Three.

March 17, 1998.

Motion for Rehearing and/or Transfer to

Supreme Court Denied May 7, 1998.

Gerald L. Meyr, Jefferson City, for appellant.

Stuart Cofman, Cofman & Townsley, St. Louis, for respondents.

AHRENS, Presiding Judge.

The Missouri Department of Social Services, Division of Medical Services ("DMS") appeals from a judgment reducing its lien pursuant to Section 208.215 RSMo Cum.Supp.1996. ¹ DMS first contends the application of Section 208.215 was an unconstitutional and unlawful retrospective application of a statute in that the events creating respondents' liability to pay the lien occurred before the effective date of Section 208.215. DMS also contends the respondents presented insufficient evidence to support a reduction in the lien, the trial court did not consider all of the factors set out in Section 208.215.9, and the trial court did not make specific findings of fact. We affirm.

Deshauna Jones, a four year old child, was struck by a motorist while crossing a street in the City of St. Louis on July 27, 1995. As a direct result of the accident, Deshauna suffered permanent injuries. She underwent extensive medical treatment and incurred substantial medical expenses. Deshauna by her next friend and natural mother, Sonia Williams, settled her claim against the motorist for the policy limits of $25,000.

Deshauna was a Medicaid recipient. DMS provides Medicaid to Missouri citizens in conjunction with the United States government. DMS paid at least $91,841 in Medicaid benefits to compensate medical providers for their treatment of Deshauna's injuries, resulting from the July 27, 1995 accident. DMS perfected a lien in the amount of $91,841 and sought to enforce the lien against the $25,000 proceeds from the settlement of the claim.

On October 2, 1996, Deshauna by her next friend, Sonia Williams, filed a petition with the St. Louis City Circuit Court requesting that the lien held by DMS be reduced under the authority of Section 208.215 RSMo Cum.Supp.1996. At the hearing on December 4, 1996, the parties stipulated that DMS held a properly perfected lien in the amount of $91,841.

Counsel for DMS objected to further proceedings upon the ground that respondents were proceeding under the incorrect version of the statute. Counsel for DMS argued that because Section 208.215 did not take effect until August 28, 1996, its application would be an improper retrospective application of the statute under the Missouri Constitution. The court overruled the objection of DMS.

Sonia Williams testified she is Deshauna's natural mother. She further testified that as a result of the accident, Deshauna suffered a stroke, sustained brain damage affecting her learning ability, lost the use of one of her arms, and suffers from impaired speech. Deshauna cannot perform daily functions, such as dressing herself or going to the bathroom without assistance.

Doctors do not know Deshauna's prognosis with any certainty. Sonia Williams testified the doctors explained that Deshauna suffered brain damage from the stroke. Doctors hope that Deshauna can train herself, through therapy, to compensate for her losses. The doctors are uncertain whether Deshauna will ever fully recover. The doctors believe that in time Deshauna may be able to walk again.

Sonia Williams testified she received a bill from the Children's Hospital in the amount of $161,000 and a second bill in the amount of $25,000. She stated that Deshauna continues to receive therapy at Children's Hospital. She thought these bills were being paid by Medicaid.

Sonia Williams does not have the ability to pay for any of the medical bills incurred. She did not have any private insurance available to cover Deshauna. Deshauna's father had private medical insurance that paid approximately $20,000 of the bills, exhausting the insurance limits.

On January 13, 1997, the trial court found that Section 208.215.9 was a procedural statute and did not create or impair the substantive rights of DMS. The trial court considered the factors set forth in Section 208.215.9(1-6). Sonia Williams had entered a contingency fee agreement on behalf of her daughter, entitling an attorney to one-third of any amount recovered. The trial court reduced the lien of DMS to $8,333.34, which is the equivalent of fifty percent of the remaining recovery amount from the settlement of the claim against the motorist, after payment of attorney fees and costs. DMS appealed.

It is the position of DMS that the crucial events occurred before the effective date of Section 208.215 and the trial court's application of the amended statute was therefore unconstitutionally retrospective. Mo. Const. Art. 1, Section 13.

Section 208.215.9 provides that a party may file a petition requesting an evidentiary hearing for the purpose of determining whether a lien asserted by DMS should be reduced or apportioned. There is no right to a reduction hearing under the previous version, Section 208.215 RSMo 1994. Additionally, Section 208.215.7 RSMo 1994 provided "[t]he director shall have the right to recover the full amount of payments made to a provider under this chapter...." Our legislature removed the word "full" in the 1996 amendment. DMS contends these changes attach new disabilities to past transactions and impair its vested rights in violation of Missouri's Constitution. State v. Thomaston, 726 S.W.2d 448, 459 (Mo.App.1987). We disagree.

Article 1, Section 13 of the Missouri Constitution provides "no ex post facto law, nor law ... retrospective in its operation can be enacted." We, therefore, presume statutes operate prospectively. Callahan v. Cardinal Glennon Hosp., 863 S.W.2d 852, 872 (Mo. banc 1993). There are, however, two exceptions: (1) where the legislature manifests a clear intent that the statute act retroactively, and, (2) where the statute is solely procedural or remedial and does not affect the substantive rights of the parties. Schweigert v. Braxton, 902 S.W.2d 370 (Mo.App.1995).

Clearly, the legislature has not indicated by express language that Section 208.215 is to operate retroactively. Similarly, a thorough reading of the statute does not reveal an unavoidable implication that Section 208.215 should apply retroactively. Dept. of Co. Serv. v. Villa Capri Homes, 684 S.W.2d 327, 332 (Mo. banc 1985). The first exception does not apply.

DMS goes beyond this analysis, contending the decision to draft the statute in the future tense is indicative of the legislature's intent that the statute is to be applied only prospectively. See Gershman Inv. Corp. v. Duckett Creek Sewer District, 851 S.W.2d 765, 768 (Mo.App.1993). We are not persuaded that the tense of the language is controlling on this issue. See Schweigert v. Braxton, 902 S.W.2d 370 (Mo.App.1995) (finding retroactive application appropriate even though the statute at issue did not use language in the past tense).

Respondents contend the second exception is applicable in that Section 208.215 is procedural or remedial rather than substantive in nature. A law that makes only a procedural or remedial change and does not affect the substantive rights of a party is not "retrospective" and may be applied "retroactively". State ex rel. Webster v. Myers, 779 S.W.2d 286, 289 (Mo.App.1989) (citing State v. Thomaston, 726 S.W.2d 448, 459 (Mo.App.1987)). There is no constitutional prohibition against the enactment of laws that may be applied "retroactively", but not "retrospectively". Id.

Substantive law creates, defines, and regulates rights and duties giving rise to a cause of action. Stewart v. Sturms, 784 S.W.2d 257, 261 (Mo.App.1989). Moreover, substantive law takes away or impairs a vested right acquired under existing law, creates a new obligation, imposes a new duty, or attaches a new disability to a past transaction. Schweigert, 902 S.W.2d at 372 (citing Gershman Inv. Corp., 851 S.W.2d at 767). Procedural law, on the other hand, prescribes a method of enforcing rights or obtaining redress for their invasion. Wilkes v. Mo. Highway and Trasp. Com'n, 762 S.W.2d 27, 28 (Mo. banc 1988). Remedial laws include laws that "merely substitute a new or more appropriate remedy for the enforcement of an existing right." Faulkner v. St. Luke's Hosp., 903 S.W.2d 588, 592 (Mo.App.1995). No person may claim a vested right in any particular mode of procedure for the enforcement or defense of his rights. Vaughan v. Taft Broadcasting Co., 708 S.W.2d 656, 660 (Mo. banc 1986).

Respondents assert in their brief that a lien is a remedial creature, citing S & R Builders & Suppliers, Inc. v. Marler, 610 S.W.2d 690 (Mo.App.1980). Respondents reason that Section 208.215 relates to a type of lien and is therefore remedial in nature. See also, Maran-Cooke, Inc. v. Purler Excavating, Inc., 585 S.W.2d 38, 40 (Mo. banc 1979). This argument fails. Both the mechanics lien and the statutory lien set out in Section 429.015.1 RSMo 1994 are remedial in nature, securing the contractual rights of a service provider. Both the prior and amended versions of Section 208.215 do more than create a statutory lien. Section 208.215 RSMo 1994 created a right for DMS to bring an action to recover benefits paid when a Medicaid recipient receives compensation from a third party for health services incurred due to personal injury, disability or disease. Therefore, unlike some statutory lien statutes, Section 208.215 is more than merely remedial in nature.

The respondents are, however, correct in arguing the rights afforded DMS do not differ between the prior and amended versions of Section 208.215. Under the amended version, DMS still has the same vested right. DMS may still recover benefits paid when a Medicaid recipient receives compensation from a third party for health services...