Quaicoe v. The Moses H. Cone Mem'l Hosp. Operating Corp. ( 2020 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA20-233
Filed: 17 November 2020
Guilford County, No. 17 CVS 4557
NYAMEDZE QUAICOE, by and through his Guardian ad Litem, SALLY A.
LAWING, FAFANYO ASISEH and OBED QUAICOE, Plaintiffs
v.
THE MOSES H. CONE MEMORIAL HOSPITAL OPERATING CORPORATION
d/b/a MOSES CONE HEALTH SYSTEM, d/b/a WOMEN’S HOSPITAL; JODY
BOVARD STUCKERT M.D., PIEDMONT HEALTHCARE FOR WOMEN, P.A., d/b/a
GREENSBORO OB/GYN ASSOCIATES, Defendants
Appeal by Plaintiffs from an Order entered 27 September 2019 by Judge David
L. Hall in Guilford County Superior Court. Heard in the Court of Appeals 8
September 2020.
The Law Offices of Wade Byrd, P.A., by Wade E. Byrd, and Nichols Zauzig
Sandler, PC, by Charles J. Zauzig, III, and Melissa G. Ray, pro hac vice,
attorneys for plaintiffs-appellants.
Attorney General Joshua H. Stein, by Special Deputy Attorney General Tamara
Mary Van Pala, for State Health Plan.
HAMPSON, Judge.
Factual and Procedural Background
Nyamedze Quaicoe (Minor Plaintiff), by and through his Guardian ad Litem,
Sally A. Lawing, and his parents, Fafanyo Asiseh and Obed Quaicoe, (collectively,
Plaintiffs) appeal from an Order entered 27 September 2019 denying Plaintiffs’
QUAICOE V. MOSES H. CONE MEM’L HOSP. OPERATING CORP.
Opinion of the Court
Motion1 requesting the trial court reduce a North Carolina State Health Plan (SHP)
lien on monetary proceeds from a minor settlement. The Record before us shows the
following:
In April 2017, Plaintiffs filed a Complaint alleging medical malpractice against
the Moses H. Cone Memorial Hospital Operating Corporation d/b/a Moses Cone
Health System d/b/a Women’s Hospital, Jody Bovard Stuckert M.D., Piedmont
Healthcare for Women, P.A. d/b/a Greensboro OB/GYN Associates (collectively,
Defendants) for serious and permanent injuries Minor Plaintiff sustained during
birth. At the time of the incident giving rise to Plaintiffs’ medical malpractice claim,
Plaintiffs had health insurance coverage through the SHP along with Medicaid. The
medical malpractice action was later settled by consent of both parties, approved by
the trial court, and placed under seal on 20 May 2019. A trust was created for the
disbursement of settlement proceeds for the Minor Plaintiff.
During the course of settlement negotiations, on 25 March 2019, Plaintiffs filed
their Motion seeking to have the trial court reduce the monetary amount of liens
imposed on the settlement by both SHP and Medicaid. Plaintiffs subsequently
secured a voluntary reduction in the Medicaid lien. SHP, however, objected to any
reduction of its lien against the settlement proceeds and moved to dismiss Plaintiffs’
Motion for lack of subject-matter jurisdiction and for failing to state a claim for which
1 Plaintiffs’ Motion is captioned “Motion to Reduce Medicaid Lien”; however, Plaintiffs’ Motion
requested the trial court reduce both the Medicaid lien and the SHP lien.
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Opinion of the Court
relief can be granted under Rules 12(b)(1) and 12(b)(6) of the North Carolina Rules of
Civil Procedure. SHP also filed a Notice of Limited Appearance with the trial court,
explaining its status as a nonparty but asserting it would appear to argue its Motion
to Dismiss.2
On 27 September 2019, the trial court entered a written Order denying
Plaintiffs’ Motion to Reduce State Health Plan Lien (Order). In denying Plaintiffs’
Motion, the trial court emphasized “there is no case law or statutory authority for an
equitable reduction or waiver of the Plan’s lien under N.C. [Gen. Stat. ] §135-48.37.”
Accordingly, the trial court concluded: “This court lacks jurisdiction to reduce or
modify the Plan’s lien and denies Plaintiffs’ Motion. Plaintiffs have failed to state a
claim upon which relief may be granted.” Plaintiffs filed Notice of Appeal on 22
October 2019.
Issue
The sole issue before this Court on appeal is whether the trial court erred in
denying Plaintiffs’ Motion for lack of subject-matter jurisdiction.
Analysis
I. Subject-Matter Jurisdiction
2 The State Health Plan initially moved to intervene in Plaintiffs’ case; however, its Motion to
Intervene was subsequently withdrawn.
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Opinion of the Court
“Subject matter jurisdiction refers to the power of the court to deal with the
kind of action in question[ ]” and “is conferred upon the courts by either the North
Carolina Constitution or by statute.” Harris v. Pembaur, 84 N.C. App. 666, 667, 353
S.E.2d 673, 675 (1987). “A court’s lack of subject matter jurisdiction is not waivable
and can be raised at any time, including on appeal.” Banks v. Hunter, 251 N.C. App.
528, 531, 796 S.E.2d 361, 365 (2017) (citations omitted). “Whether a trial court has
subject-matter jurisdiction is a question of law, reviewed de novo on appeal.” McKoy
v. McKoy, 202 N.C. App. 509, 511, 689 S.E.2d 590, 592 (2010) (citation omitted).
The North Carolina State Health Plan is codified at N.C. Gen. Stat. §§ 135-
48.1 et seq., and was created by the General Assembly “exclusively for the benefit of
eligible employees, eligible retired employees, and certain of their eligible
dependents, which will pay benefits in accordance with the terms of this Article.”
N.C. Gen. Stat. § 135-48.2(a) (2019). The General Assembly delegated administration
and operation of the SHP to the State Treasurer, id. § 135-48.30, and broadly directed
“[t]he Plan shall administer one or more group health plans that are comprehensive
in coverage.” Id. § 135-48.2(a).
Section 135-48.37, titled “Liability of third person; right of subrogation; right
of first recovery,” provides:
The Plan shall have the right of subrogation upon all of the Plan
member’s right to recover from a liable third party for payment
made under the Plan, for all medical expenses, including
provider, hospital, surgical, or prescription drug expenses, to the
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extent those payments are related to an injury caused by a liable
third party. The Plan member shall do nothing to prejudice these
rights. The Plan has the right to first recovery on any amounts
so recovered, whether by the Plan or the Plan member, and
whether recovered by litigation, arbitration, mediation,
settlement, or otherwise. Notwithstanding any other provision of
law to the contrary, the recovery limitation set forth in G.S. 28A-
18-2 shall not apply to the Plan’s right of subrogation of Plan
members.
N.C. Gen. Stat. § 135-48.37(a). Subsection (d) limits, “[i]n no event shall the Plan’s
lien exceed fifty percent (50%) of the total damages recovered by the Plan member,
exclusive of the Plan member’s reasonable costs of collection as determined by the
Plan in the Plan’s sole discretion.” Id. § 135-48.37(d). A separate section—Section
135-48.24—describes the administrative review process for claims brought under the
SHP. Id. § 135-48.24.
In part, Plaintiffs requested the trial court “hold a hearing pursuant to N.C.
[Gen. Stat.] § 108A-57 and determine the appropriate amount of the lien.” In denying
Plaintiffs’ Motion, the trial court correctly noted Section 108A-57 addresses Medicaid
liens and only provides recourse for the trial court to reconsider the amount of a
Medicaid lien, see N.C. Gen. Stat. § 108A-57(a2) (2019), and, instead, Section 135-
48.37 governs liens imposed under the SHP. N.C. Gen. Stat. § 135-48.37. SHP moved
the trial court to dismiss Plaintiffs’ Motion under N.C.R. Civ. Pro. 12(b)(1) for lack of
subject-matter jurisdiction. N.C. Gen. Stat. § 1A-1, Rule 12(b)(1) (2019). On appeal,
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Plaintiffs contend the trial court had jurisdiction over Plaintiffs’ Motion based on the
court’s general role in protecting the rights of minors and its inherent judicial power.
The State Health Plan, however, is a creature of statute, created by the
General Assembly and administered by the State Treasurer pursuant to Sections 135-
48.1 et seq. In enacting Section 135-48.37, the General Assembly expressly provided
“[t]he Plan has the right to first recovery on any amounts so recovered, whether by
the Plan or the Plan member, and whether recovered by . . . settlement[.]” N.C. Gen.
Stat. § 135-48.37(a). The SHP is not always entitled to recover a lien in full; the
General Assembly limited liens imposed by the SHP under Section 135-48.37 so as
not to exceed “fifty percent (50%) of the total damages recovered by the Plan member
. . . .” Id. § 135-48.37(d); see State Health Plan for Teachers & State Emps. v. Barnett,
227 N.C. App. 114, 116, 744 S.E.2d 473, 474 (2013) (“[T]he State Health Plan is
authorized to recover up to one-half of the total damages, less attorney’s fees,
recovered by a Plan member from a third party.”).
“Subject matter jurisdiction is conferred upon the courts by either the North
Carolina Constitution or by statute.” Harris, 84 N.C. App. at 667, 353 S.E.2d at 675.
Here, Plaintiffs have not pointed to any constitutional provision or general statute
conferring jurisdiction on the courts of this State to reduce the monetary amount of
SHP liens imposed upon a settlement pursuant to N.C. Gen. Stat. § 135-48.37.
Instead, Plaintiffs cite a string of cases from our Supreme Court and argue this Court
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has equitable jurisdiction because of North Carolina courts’ strong interest in
protecting the rights of minors. However, this Court has clarified: “the equity powers
of neither the trial court nor this Court extend into areas which are expressly
governed by statute.” Orange County ex rel. Byrd v. Byrd, 129 N.C. App. 818, 822,
501 S.E.2d 109, 112 (1998); c.f. Dare Cnty. v. N.C. Dep’t of Ins., 207 N.C. App. 600,
611, 701 S.E.2d 368, 376 (2010) (“[T]he extent to which the trial court had subject
matter jurisdiction over Petitioners’ request for judicial review of the consent order
depends upon whether the General Assembly has enacted any statutory provisions
authorizing Petitioners to seek and obtain judicial review of the consent order.”).
Here, there is no dispute SHP’s lien is expressly governed by Section 135-48.37.
What Plaintiffs sought from the trial court, and what it now asks of this Court, is to
reduce the amount of the SHP lien based on principles of equity. However, Section
135-48.37 does not confer jurisdiction to review the amount of the SHP lien. Although
we are sensitive to the facts underlying this case, we are constrained by the language
of Section 135-48.37. Orange County ex rel. Byrd¸ 129 N.C. App. at 822, 501 S.E.2d
at 112 (“[W]e are not free to either ignore or amend legislative enactments because
when the language of a statute is clear and unambiguous, the courts must give it its
plain meaning.” (citing State ex rel. Utilities Commission v. Edmisten, 291 N.C. 451,
465, 232 S.E.2d 184, 192 (1977))). Plaintiffs’ proper recourse is with the General
Assembly as “the judiciary should avoid ingrafting upon a law something that has
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been omitted which it believes ought to have been embraced.” Shaw v. U.S. Airways,
Inc., 362 N.C. 457, 463, 665 S.E.2d 449, 453 (2008) (alterations, citations, and
quotation marks omitted). Therefore, we conclude the trial court was correct in
determining it lacked subject-matter jurisdiction over Plaintiffs’ Motion.
Plaintiffs also argue the trial court misapplied North Carolina’s
Administrative Procedure Act and erred in concluding Plaintiffs failed to state a
claim upon which relief may be granted under N.C.R. Civ. P. 12(b)(6), which
determination Plaintiffs contend should be reviewed for abuse of discretion arguing
it was based on a misapprehension of the law. However, because we conclude the
trial court was correct in determining it did not have subject-matter jurisdiction over
Plaintiffs’ Motion, we do not reach Plaintiffs’ subsequent arguments.
Conclusion
Accordingly, for the foregoing reasons, the trial court’s Order is affirmed.
AFFIRMED.
Chief Judge McGEE and Judge DIETZ concur.
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