Brian

BROWN (Gerald), P.J.

Plaintiff, Earl W. Brian, Director of the Department of Health Care Services of the State of California, appeals the dismissal of his second amended complaint after defendant Walter P. Christensen's general demurrer was sustained without leave to amend.

The facts are taken from the second amended complaint. Charlene La Rosse, a passenger in a car negligently driven by James Armshaw, was injured in an accident November 18, 1968.

In July 1969 La Rosse applied for Medi-Cal benefits, agreeing to reimburse the Department of Health Care Services should she collect damages from a third party, and to direct any attorney she might have to reimburse the agency should there be any recovery. She received Medi-Cal benefits of $10,451.10.

In September 1969 La Rosse sued Armshaw. In January 1970 Blue Shield, which administered the Medi-Cal program, asked La Rosse to advise it of any civil action for damages. She did not. Attorney Christensen was substituted as her counsel of record in February 1970. The case was settled for $120,000 in July 1971, and was dismissed with prejudice by La Rosse August 3, 1971.

On October 14, 1971, Attorney Christensen wrote the…

Plaintiff, Earl W. Brian, Director of the Department of Health Care Services of the State of California, appeals the dismissal of his second amended complaint after defendant Walter P. Christensen's general demurrer was sustained without leave to amend.

The facts are taken from the second amended complaint. Charlene La Rosse, a passenger in a car negligently driven by James Armshaw, was injured in an accident November 18, 1968.

In July 1969 La Rosse applied for Medi-Cal benefits, agreeing to reimburse the Department of Health Care Services should she collect damages from a third party, and to direct any attorney she might have to reimburse the agency should there be any recovery. She received Medi-Cal benefits of $10,451.10.

*379 In September 1969 La Rosse sued Armshaw. In January 1970 Blue Shield, which administered the Medi-Cal program, asked La Rosse to advise it of any civil action for damages. She did not. Attorney Christensen was substituted as her counsel of record in February 1970. The case was settled for $120,000 in July 1971, and was dismissed with prejudice by La Rosse August 3, 1971.

On October 14, 1971, Attorney Christensen wrote the Orange County Social…

I respectfully dissent.

In the action brought by La Rosse against a third party, neither La Rosse nor her attorney gave to the Department of Health Care Services the notice of the pendency of the action called for by Labor Code section 3853, whose provisions are made available to the department by virtue of Welfare and Institutions Code section 14117 (California State Auto. Assn. Inter-Ins. Bureau v. Jackson, 9 Cal.3d 859, 867 [ 109 Cal.Rptr. 297 , 512 P.2d 1201 ]). In consequence of that failure, the department was denied the opportunity to claim its statutory lien in that action.

Because of that failure and because La Rosse had in writing agreed to reimburse the department and to direct her attorney to do so from any recovery, and upon the other facts alleged, the state should have been entitled to an equitable lien upon any of the settlement proceeds of $120,000 which came into possession of La Rosse or her attorney.

The attorney knew there had been Medi-Cal payments made and knew of the department’s right to a lien in such a case.

*383 The attorney had available to apply in satisfaction of the lien at least the 75 percent he sought to have the department accept in full;…