North Carolina Department of Human Resources v. Weaver

466 S.E.2d 717 (1996)

The NORTH CAROLINA DEPARTMENT OF HUMAN RESOURCES, DIVISION OF MEDICAL ASSISTANCE, Plaintiff,
v.
Areanda WEAVER, Thad A. Throneburg, and Caudle & Spears, P.A., a North Carolina Corporation, Defendants.

No. COA94-1426.

Court of Appeals of North Carolina.

February 6, 1996.

Attorney General Michael F. Easley by Associate Attorney General Elizabeth L. Oxley, for plaintiff-appellant.

Wyrick, Robbins, Yates & Ponton by Lee M. Whitman, Raleigh, for defendant-appellees.

EAGLES, Judge.

Plaintiff argues that the trial court erred by denying plaintiff's motions regarding the interpretation of G.S. 108A-57 because plaintiff contends that G.S. 108A-57 limits attorney's fees for private attorneys recovering from a third party on behalf of a medicaid beneficiary to one-third of the gross recovery. We disagree with plaintiff's construction of the statute and affirm.

When a person accepts medical assistance through the Department of Human Resources, Division of Medical Assistance, the person assigns to the State the right to any third party benefits the person may subsequently recover. G.S. 108A-59(a). However, G.S. 108A-57 provides in part:

(a) Notwithstanding any other provisions of the law, to the extent of payments under this Part, the State, or the county providing medical assistance benefits, shall be subrogated to all rights of recovery, contractual or otherwise, of the beneficiary of such assistance, or of his personal representative, his heirs, or the administrator or executor of his estate, against any person. It shall be the responsibility of the county attorney or an attorney retained by the county and/or the State or an attorney retained by the beneficiary of the assistance if such attorney has actual notice of payments made under this Part to enforce this section, and said attorney shall be compensated for his services in accordance with the attorneys' fee arrangements approved by the Department; provided, however, that any attorney retained by the beneficiary of the assistance shall be compensated for his services in accordance with the following schedule and in the following order of priority from any amount obtained on behalf of the beneficiary by settlement with, judgment against, or otherwise from a third party by reason of such injury or death:

(1) First to the payment of any court costs taxed by the judgment;

(2) Second to the payment of the fee of the attorney representing the beneficiary making the settlement or obtaining the judgment, but this fee shall not exceed one-third of the amount obtained or recovered to which the right of subrogation applies;

(3) Third to the payment of the amount of assistance received by the beneficiary as prorated with other claims against the amount obtained or received from the third party to which the right of subrogation applies, but the amount shall not exceed one third of the amount obtained or recovered to which the right of subrogation applies; and

(4) Fourth to the payment of any amount remaining to the beneficiary or his personal representative.

Contrary to plaintiff's interpretation of G.S. 108A-57, the plain language of the statute does not provide that the State is subrogated to all rights of recovery to the extent of all money a medical assistance beneficiary receives. The first sentence of G.S. 108A-57(a) only provides that the State is subrogated to all rights of recovery of the beneficiary of medical assistance "to the extent of payments under this Part [i.e. Part 6, entitled Medical Assistance Program]." (Emphasis added.) It follows that defendant Caudle & Spears lawfully took one-third of the "medicaid lien" as part of its attorney's fee because G.S. 108A-57(a)(2) provides that the attorney's fee shall not exceed one-third of the amount recovered "to which the right of subrogation applies." Here, defendant Caudle & Spears received as its fee representing defendant Weaver in her medical malpractice claim one-third of the gross recovery and received in addition one-third of the "medicaid lien" amount payable to plaintiff pursuant to G.S. 108A-57. The statute does not govern a private attorney's fee arrangement with its client. The statute regulates the amount of the attorney's fee only as it relates to the amount of the "medicaid lien" payable to plaintiff. Accordingly, the trial court properly denied plaintiff's motions regarding the interpretation of G.S. 108A-57.

Because we conclude the trial court did not err in granting summary judgment for defendants, we need not address defendants' cross-assignment of error.

Affirmed.

JOHNSON and WALKER, JJ., concur.