Riddell

Welfare and Institutions Code section 14124.70 et seq., allows the Department of Health Services of the State of California to recover Medi-Cal benefits paid to a beneficiary who is injured by a third party. 1 But what if the tortfeasor is another department of the State of California? May the Department of Health Services obtain a lien against the proceeds of a pretrial settlement between the Medi-Cal beneficiary and the state? We hold that it can. We also hold that the provisions of Government Code section 985, subdivision (f), allowing the trial court to reduce the amount of the Medi-Cal lien, do not apply to a pretrial settlement. We reverse.

*1610 Facts

Brett Kevin Riddell was injured in an automobile accident. He received Medi-Cal benefits for the treatment of his injuries.

He brought an action against the Department of Transportation of the State of California (hereinafter Transportation) alleging that an unsafe bridge on Highway 101 was the cause of his injuries. The trial court ordered a representative of the Department of Health Services (hereinafter Health Services) to appear as the Medi-Cal lienholder at the settlement conference.

Attorneys for both…

I respectfully dissent.

Respondent was seriously injured when his car went over the side of a bridge owned and maintained by the State of California. The injuries left him totally disabled. Respondent incurred $200,000 medical expenses, some of which were paid by Medi-Cal.

*1614 Respondent filed suit. At a court supervised settlement conference, the State of California, through its Department of Transportation, settled for $290,000 and stipulated that respondent’s comparative fault was 80 percent. The State Department of Health Services appeared at the settlement conference but refused to participate. A week later, it filed a Medi-Cal lien for $45,599.34. (Welf. & Inst. Code, § 14124.71.) On June 2, 1995, more than three months after the settlement conference, it moved to enforce the lien.

The trial court reduced the lien to zero on the ground that Welfare and Institutions Code section 14124.71 did not authorize a lien recovery where the settling tortfeasor is the state. It found that the State of California may not “reduce its own liability for damages by dividing itself into two separate entities, and taking back through one entity the damages agreed to be paid by the…

Daniel E. Lungren, Attorney General, John H. Sanders and James F. Ahern, Deputy Attorneys General, for Claimant and Appellant.

James R. Nichols, Jr., for Plaintiff and Respondent.

OPINION

GILBERT, J.

Welfare and Institutions Code section 14124.70 et seq., allows the Department of Health Services of the State of California to recover Medi-Cal benefits paid to a beneficiary who is injured by a third party. [1] But what if the tortfeasor is another department of the State of California? May the Department of Health Services obtain a lien against the proceeds of a pretrial settlement between the Medi-Cal beneficiary and the state? We hold that it can. We also hold that the provisions of Government Code section 985, subdivision (f), allowing the trial court to reduce the amount of the Medi-Cal lien, do not apply to a pretrial settlement. We reverse.

Brett Kevin Riddell was injured in an automobile accident. He received Medi-Cal benefits for the treatment of his injuries.

He brought an action against the Department of Transportation of the State of California (hereinafter Transportation) alleging that an unsafe bridge on Highway 101 was the cause of his injuries. The trial court…