APPEAL
FROM THE PULASKI COUNTY CIRCUIT COURT, SEVENTEENTH DIVISION
[NO. 60PR-17-903] HONORABLE MACKIE M. PIERCE, JUDGE
The
Brad Hendricks Law Firm, P.A., by: George R. Wise; and Brian
G. Brooks, Attorney at Law, PLLC, by: Brian G. Brooks, for
appellants.
Shanice Johnson, Office of Chief Counsel, for appellee.
ROBERT
J. GLADWIN, JUDGE
Appellants,
George Prange, as vice president and trust officer of Bank of
the Ozarks and guardian of the estate of Khyree Martin, a
minor, and the estate of Khyree Martin (collectively, the
Estate) appeal the March 28, 2018 order of the Pulaski County
Circuit Court awarding full reimbursement of the Medicaid
lien in the sum of $260, 209.99 in favor of appellee Arkansas
Department of Human Services (DHS). The Estate argues that
the circuit court erred in its determination of what portion
of a tort settlement for the injured minor should be
available to satisfy DHS's lien for past medical expenses
consistent with the holdings in Arkansas Department of
Health & Human Services v. Ahlborn, 547 U.S. 268
(2006), and Wos v. E.M.A. ex rel. Johnson, 568 U.S.
627 (2013), and pursuant to Arkansas Code Annotated section
20-77-315(a) and (b) (Repl. 2014). We affirm.
I.
Facts and Procedural History
It is
undisputed that Khyree was profoundly brain injured at birth.
Through his mother, he sued the doctor and the hospital for
negligently causing his injuries and reached separate
compromised settlements with both the doctor and the hospital
totaling $4, 450, 000.[1]
DHS
sought to enforce the full amount of an undisputed $260,
209.99 lien[2] for past medical expenses that it had paid
on Khyree's behalf against the proceeds of the
settlement, but the Estate sought to have the lien reduced
proportionally to be consistent with the percentage the
settlement represented Khyree's alleged total damages.
The Estate requested that the circuit court allocate or
apportion the settlement funds and hear evidence and argument
regarding both parties' positions, which DHS opposed.
A
hearing was held by the circuit court during which testimony
was taken and documents were introduced setting forth what
the Estate considered to be Khyree's full damages. The
evidence indicated that Khyree is profoundly brain damaged
and suffers from a form of cerebral palsy. He is unable to
walk, talk, or see, and he is fed through a feeding tube.
Khyree is unable to tend to any of his own needs and likely
will require twenty-four-hour-a-day care for the rest of his
life. The Estate introduced what it claims is the minimum
cost to provide future care for Khyree, reduced to present
value, of $25, 382, 130.72.[3] Evidence was also introduced as
to the Estate's estimate for the minimum loss of capacity
to work and of fringe benefits to Khyree, reduced to a
present value, of $795, 753.52. The Estate submitted that a
reasonable jury verdict in favor of Khyree for other damages
including pain and suffering and mental anguish is $6, 000,
000. Evidence was also submitted that Medicaid, through DHS,
paid $260, 209.99 for past medical expenses for Khyree and
that the amount of that undisputed lien would have been
presented as evidence of past medical expenses if the case
had proceeded to trial. Accordingly, the Estate submitted
that the total damages suffered by Khyree are, at minimum and
reduced to present value where appropriate, $32, 438, 094.23;
but there was no stipulation by the parties with respect to
that amount or evidence as to an allocation of the $4, 450,
000 settlement.
The
Estate noted that it settled the case for roughly 13 percent
of its estimated value of the total damages in order to avoid
the risk of (1) a defense verdict or a verdict lower than the
estimated damages and (2) the larger portion of fault
potentially being allocated to the physician who was
sued[4]
rather than the hospital. The Estate asked DHS to compromise
by reducing its lien to the same percentage, and when it
would not, the Estate asked the circuit court to direct DHS
to do so.
The
circuit court denied the Estate's request and enforced
DHS's lien in full in its order filed on March 28, 2018.
According to the circuit court, the value of the Estate's
cause of action is $4, 450, 000, the amount the Estate chose
to settle the case for, rather than the $32, 428, 094.23 that
the Estate speculated are the actual damages suffered by
Khyree and the likely jury verdict had Khyree prevailed at
trial. The potential value of the case as explained by the
Estate was deemed "not reliable" by the circuit
court and was not accepted. The circuit court found that the
Estate had failed to meet its "burden of showing the
amounts recovered by way of settlement were for damages other
than the medical care already received by Khyree." The
Estate filed a timely notice of appeal on April 4, 2018.
II.
Standard of Review
The
parties have acknowledged that the Ahlborn and
Wos cases allow, but do not require, a ratio-based
determination of the lien amount to be paid as reimbursement
to Medicaid. Accordingly, we hold that the issue before
us-whether the circuit court's factual findings of the
ultimate value of the case and how much to reimburse Medicaid
for past medical expenses-is a question of fact subject to
clear-error review. See Hartness v. Nuckles, 2015
Ark. 444, at 4, 475 S.W.3d 558, 562 (citing Ark. R. Civ. P.
(52)(a)). A finding is clearly erroneous when, "although
there is evidence to support it, the reviewing court on the
entire evidence is left with a definite and firm conviction
that a mistake has been committed." Middleton v.
Ark. Dep't of Human Servs., 2019 Ark.App. ...