Wilhoite v. Mo. Dep't of Soc. Serv.
| Decision Date | 15 July 2011 |
| Docket Number | Case No. 2:10-CV-03026-NKL |
| Parties | RAMONA DENISE WILHOITE, individually and on behalf of other similarly situated, Plaintiff, v. MISSOURI DEPARTMENT OF SOCIAL SERVICES, by and through its director, Robert J. Levy, et al., Defendants. |
| Court | U.S. District Court — Western District of Missouri |
Before the Court are the Motion for Summary Judgment [Doc. # 78] filed by Defendants Missouri Department of Social Services ("DSS"), Ronald J. Levy, Ian McCaslin, Julie Creach, and Markus Cicka, the Motion Objecting to Defendants' Fee Statement [Doc. # 86] filed by Plaintiff Ramona Wilhoite ("Wilhoite"), and the Motion to Intervene [Doc. # 80] filed by Wilhoite's counsel on behalf of Rene Dampier, Justin Epperson, Kelly Forest, Kensey Esry, K.E. by and through her next friend Kensey Esry, Shadow Dickerson, Kathleen Mitchell, Donna Collinge, Sandy Stidham, and Kathryne Harris. For the following reasons, the Court grants in part and denies in part Defendants' Motion for Summary Judgment, grants Plaintiff's Motion Objecting to Defendants' Fee Statement, and grants the Motion to Intervene.
On May 14, 2009, Wilhoite submitted an application for MO HealthNet ("Medicaid") benefits to the Dallas County office of DSS. DSS approved Wilhoite's application for benefits and paid medical expenses on her behalf.
On August 27, 2009, Wilhoite filed a civil suit in Dallas County, Missouri, against the Sheriff and other Sheriff's Department employees. That underlying suit alleged violations of her civil rights during her incarceration at the Dallas County Jail. On September 11, 2009, the Dallas County civil suit was removed to the U.S. District Court for the Western District of Missouri. On December 22, 2009, Wilhoite filed a motion to amend her complaint, which was granted by U.S. District Judge Richard E. Dorr. In that amended complaint, Wilhoite alleged that during her 51-day incarceration she was served a diet devoid of vitamins and minerals which "cause[d] her to suffer internal bleeding and/or ulcers" and that she "started passing black stool and bloody stool" while confined in the Dallas County Jail. [Case No. 6:09-cv-03339-RED, Doc. # 17, Ex. 1, || 8-10, 29-31.] Among other counts, Wilhoite's second amended complaint asserted a claim under 42 U.S.C. § 1983 for failure to treat her serious medical condition: "As a direct and proximate result of [those defendants'] . . .failure to provide Plaintiff Wilhoite the necessary medical treatment, Plaintiff Wilhoite suffered damages." Id. at ¶ 35.
On January 7, 2010, Wilhoite's attorney, Craig Heidemann, or someone from the firm of Douglas Haun & Heidemann, telephoned DSS requesting a "lien letter." A "lien letter" is a letter sent by DSS to MO HealthNet participants and to liable third parties, alerting them to the debt owed to the Department and to the Department's right to a lien under Missouri's Medicaid lien statute, Section 208.215.
The same day, January 7, DSS sent a lien letter to Wilhoite's attorneys. The letter's subject line identified May 13, 2009, as the date of Wilhoite's injury and gave notice that DSS was "asserting a lien against any settlement or judgement involving" Wilhoite, in the "Total Lien Amount" of $4,411.29. [Doc. # 79, Ex. C at 6.] The letter explained:
Id. DSS attached a detailed billing statement to the letter.
On January 14, 2010, Wilhoite's attorneys telephoned DSS asking for the removal from the billing statement of all payments for mental health services. DSS technician RachelSchmitz noted at that time: Id. at 12. Schmitz's affidavit explains: "Based upon my research in response to that call, I was able to confirm that the payments in question were to treat a psychological condition of Ms. Wilhoite's that pre-existed her May 13, 2009, injury." Id. at 2. The next day, January 15, DSS sent a revised letter to Wilhoite's attorneys, which included an updated billing statement and a request to be notified prior to the satisfaction of any judgment, award, or settlement of Wilhoite's claim against the third party liable to her for the injury that occurred on May 13, 2009.
On January 21, 2010, the Department sent a letter to Wilhoite's attorneys seeking an update on the status of Wilhoite's pending claim against the third party liable to her for the May 13, 2009 injury. The "LIEN AMOUNT" was stated as $4,021.44. Id. at 20.
Also on January 21, 2010, Wilhoite filed this action against Missouri DSS. On February 2, 2010, Wilhoite's attorneys received a check for $20,000, payable to Denise Wilhoite and Douglas Haun & Heidemann, issued by the insurer of the Dallas County Sheriff's Department. During discovery, Wilhoite stated that she settled her claims against the Dallas County Sheriff's Department "for violation of my civil rights," but the settlement "did not include reimbursement for medical expenses." [Doc. # 50, Ex. G at 1-2.] Nonetheless, in response to the DSS letters asserting a lien against any settlement of her case, Wilhoite deposited an amount equal to the Medicaid expenditures in her attorney's trust account, where it remains today.
Wilhoite's original Complaint alleged: "Despite Plaintiff's and class members' receiving recovery for damages in addition to reimbursement for medical expenses, Defendant has attached liens and received recovery payments out of Plaintiff's and class members' gross settlements/judgments." [Doc. # 1, ¶ 27.] Wilhoite alleged that such a practice violated federal law because Defendant "asserted liens and received recovery where medical costs were only a portion of Plaintiffs and class members' recovery." Id. at ¶ 31.
Thus, Wilhoite alleged violations of Section 1396p(a)(1) of the Social Security subchapter on "Grants to States for Medical Assistance Programs," which provides: "No lien may be imposed against the property of any individual prior to his death on account of medical assistance paid or to be paid on his behalf under the State plan . . . ." 42 U.S.C. § 1396p(a)(1) ("Federal Anti-Lien Statute"). In Arkansas Department of Health and Human Services v. Ahlborn, 547 U.S. 268, 292 (2006), the U.S. Supreme Court held that this Federal Anti-Lien Statute precluded a state from asserting a lien on settlement or judgment proceeds for damages other than medical costs.
Wilhoite's original Complaint asserted three counts against DSS. Count I was brought under 42 U.S.C. § 1983, alleging a violation of the Federal Anti-Lien Statute as well as the Fifth and Fourteenth Amendments. Count I prayed for injunctive relief, damages, and fees. Count II asserted an unjust enrichment claim, alleging that a benefit was conferred on Defendant, retention of which would be inequitable. Count II prayed for disgorgement ofall amounts collected in violation of the Federal Anti-Lien Statute, as well as injunctive relief. Count III asserted a breach of contract claim and prayed for damages.
On February 4, 2011, DSS filed its first motion for summary judgment [Doc. # 49]. On February 7, 2011, the Court granted Wilhoite's motion to certify the following class:
Missouri citizens who have received Medicaid and who had liens asserted and/or monies taken by Defendant out of their third party civil settlements or judgments from January 21, 2000 to present, where said settlements or judgments were unrelated to medical care and services, or where the liens asserted and or monies taken by the Defendants were in excess of the amount of said settlement or judgment related to medical care and services, in violation of 42 U.S.C. § 1396p(a)(1).
[Doc. # 51.]
At a March 3, 2011 teleconference, the Court extended discovery and granted Wilhoite leave to file her first motion to amend her Complaint. Wilhoite's First Amended Complaint sought to join the following Defendants, in their individual capacities: Ronald J. Levy, Julie Creach, Ian McCaslin, Deborah E. Scott, Chris Reeter, Steven Renne, K. Gary Sherman, Christine Rackers, Q. Michael Ditmore, Michael Rehagen, Judy Muck, David Hart, Markus Cicka, and John and Jane Does 1-10. Between 2000 and the present, these individuals were directors of DSS, the Third Party Liability Unit, the MO HealthNet Division, or Missouri Medicaid. Wilhoite's Motion to Join Additional Parties (Doc. # 58) was granted by the Court on April 26, 2011.
Wilhoite stated that her First Amended Complaint also sought to clarify her claims and Wilhoite made the following factual allegations. First, because of the liens Defendantsasserted pursuant to Mo. Rev. Stat. § 208.215.8, Defendants received payments out of class members' settlement proceeds and judgments in excess of the amounts authorized by federal law. Wilhoite acknowledges that she has maintained the amount of Defendants' lien in her attorney's trust account to satisfy Defendants' lien. Second, Defendants wrongfully asserted liens and received recovery where medical costs were only a portion of class members' recovery. With respect to Wilhoite, Defendants wrongfully asserted a lien on her settlement, which did not include any compensation for medical costs.
The First Amended...
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