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Eady v. State, Agency for Health Care Administration

Florida Court of Appeals, First District

September 12, 2019

Brandon L. Eady, Appellant,
v.
State of Florida, Agency for Health Care Administration, Appellee.

         Not final until disposition of any timely and authorized motion under Fla. R. App. P. 9.330 or 9.331.

          On appeal from a Final Order of the Agency for Health Care Administration. Lynne A. Quimby-Pennock, Administrative Law Judge.

          Floyd Faglie of Staunton & Faglie, PL, Monticello, for Appellant.

          Alexander R. Boler, Tallahassee, for Appellee.

          JAY, J.

         In Arkansas Department of Health & Human Services v. Ahlborn, 547 U.S. 268 (2006), the United States Supreme Court ruled that the federal Medicaid Act's anti-lien provision preempts a State's effort to take any portion of a Medicaid recipient's tort judgment or settlement not "designated as payments for medical care." Id. at 284. What the Supreme Court in Ahlborn did not have occasion to answer, however, was "how to determine what portion of a settlement represents payment for medical care." Wos v. E.M.A., 568 U.S. 627, 634 (2013). Instead, the Court "anticipated that a judicial or administrative proceeding" would resolve the dispute. Id. at 638-39. In Florida, section 409.910(17)(b), Florida Statutes (2016)[1], permits a Medicaid recipient to file a petition under chapter 120, Florida Statutes, with the Division of Administrative Hearings ("DOAH") to prove "that Medicaid provided a lesser amount of medical assistance than that asserted by" the Agency for Health Care Administration. § 409.910(17)(b), Fla. Stat. The question expressly presented by this appeal is whether the evidence adduced by the Medicaid recipient constituted competent, substantial evidence sufficient to carry his burden of proof.

         BACKGROUND

         On July 6, 2011, Appellant, Brandon Eady, suffered a catastrophic injury to his spinal cord when the car in which he was a passenger swerved to avoid hitting an animal, rolled, and ended upside down in a ditch less than forty yards from his home. The accident rendered him an incomplete quadriplegic-meaning, he is profoundly impaired with very limited use of his arms and hands. Florida's Medicaid program paid $177, 747.91 for Appellant's medical care.

         Appellant brought a personal injury action against the driver of the car, the owner of the car, and the insurance carrier that provided uninsured/underinsured motorist insurance coverage. The Agency for Health Care Administration ("AHCA") was notified of the action and, in turn, notified Appellant's attorney that it had filed a preliminary lien of $177, 747.91 against any damages Appellant might recover from the third-party tortfeasors. Appellant later entered into a series of confidential settlement agreements with the defendants totaling $1, 000, 000. AHCA did not participate in the settlement negotiations. Appellant's grave condition and his need for a life-care plan was not in dispute.

         Appellant filed with DOAH a "Petition to Determine Amount Payable to Agency for Health Care Administration in Satisfaction of Medicaid Lien." He and AHCA filed a Joint Pre-hearing Stipulation with the administrative law judge ("ALJ") in which they agreed that Appellant's burden of proof would not be the "clear and convincing evidence" standard in section 409.910(17)(b), but the default, lesser standard of proof of a "preponderance of the evidence" found in section 120.57(1)(j), Florida Statutes-an unmistakable nod to the decision in Gallardo v. Dudek, 263 F.Supp.3d 1247 (N.D. Fla. 2017).[2] The final hearing occurred in Tallahassee on January 4, 2018, through a videoconference call from Tampa where Appellant and one of his witnesses reside.

         At the hearing, Appellant's counsel called two attorneys as witnesses, each of whom was accepted as an expert in the valuation of damages. The first witness to testify was Ralph M. Guito, III. Mr. Guito is Appellant's stepfather. He also assisted in representing Appellant in each of the settlement negotiations. Mr. Guito came to the hearing with twenty-nine years of experience as a member of the Florida Bar, and testified to having practiced primarily in the areas of medical malpractice, personal injury, and catastrophic injury cases. He had experience representing individuals who suffered spinal cord injuries "on numerous occasions." In addition to representing his own clients, Mr. Guito felt it was important to stay abreast of the types of damages other juries were awarding, particularly in catastrophic injury cases. As a routine part of his practice, Mr. Guito would make assessments of the overall damages suffered by his clients, oftentimes hiring experts to make those evaluations, followed by round-table discussions of damages with the other attorneys in his firm.

         In the course of his assisting in the representation of Appellant, Mr. Guito reviewed Appellant's extensive medical records and considered how Appellant's treatment would project into the future as part of a life care plan. He explained that, as a result of the accident, Appellant suffers from "quadriparesis," which means he is not a complete quadriplegic, but has very limited movement in his arms and limited use of his hands. His prognosis is poor and as he ages, he will become completely dependent on a caregiver.

         Mr. Guito acknowledged that Appellant's past medical expenses approximated $177, 000, but he emphasized that Appellant also would have been entitled to recover damages for future medical expenses, future pain and suffering, future loss of enjoyment of life, future lost wages, and mental anguish-all reasonable elements of a potential jury verdict. Based on his training and experience, as well as his knowledge of Appellant's medical condition and the life care plan prepared for him, Mr. Guito "conservatively" projected the value of Appellant's damages to be in excess of $15, 000, 000, "just looking at the future medical expenses and the economic damages associated with his life care plan." The life care plan itself, however, did not include dollar figures or a final dollar amount.

         As for non-economic damages, Mr. Guito explained: "[T]hose are harder to quantify, obviously, because we don't have a calculator to determine how this has effected [sic] somebody's life, and how you can compensate them for all of the losses of being able to walk down a beach or walk up a flight of stairs, or play with your child." (Appellant has a daughter who was then six years old.) He referred to the non-economic damages as "subjective," but appointed them an estimated value of $25 to $40 million.

         Based on his conservative valuation of Appellant's damages at $15, 000, 000-and over AHCA's objection that he had not been accepted as an expert on allocation of damages-Mr. Guito was permitted to testify as to his calculation that the $1, 000, 000 settlement represented approximately 6.66% of the value of Appellant's total estimated damages. Applying that same percentage difference to the $177, 747.91 in past medical expenses claimed by AHCA, Mr. Guito testified that $11, 838 would be a reasonable allocation of the confidential settlement agreement for past medical expenses. In other words, the $11, 838 represented a pro rata share of the million dollar settlement.

         AHCA's attorney conducted what can only be described as a tepid cross-examination of Mr. Guito that lasted only a matter of moments. It did nothing to impeach Mr. Guito's testimony on valuation or allocation; neither did it impugn Mr. Guito's credentials and experience.

         Appellant's next witness was attorney R. Vinson Barrett, a forty-two-year member of the Florida Bar whose practice had dealt almost exclusively with personal injury litigation representing plaintiffs who had suffered catastrophic and spinal cord injuries. Mr. Barrett had reviewed Appellant's files for purposes of testifying at the hearing. He concluded that Appellant's "pure damages" were conservatively placed at $15, 000, 000, but he would have "place[d] the case at a minimum . . . of 25 or 35 million dollars." Mr. Barrett "paid most attention" to the life care plan, opining that in his experience, life care plans for quadriplegics are "above 10 million dollars," while noting that Appellant was "not the worst quadriplegic" he had seen. It was a routine part of his practice to assess the value of damages suffered by a client, and he was familiar with both jury verdicts and settling cases, although he testified that the great majority of his cases settled at some point in the process. Based on his knowledge of Appellant's medical records and the extent of his injuries, Mr. Barrett was of the opinion that an estimated $15, 000, 000 in damages was "extremely conservative." He would have placed the case "at a minimum . . . of $25 or $30 million dollars," but was willing to accept the more conservative amount for purposes of valuation.

         Again, over AHCA's objection, the ALJ allowed Mr. Barrett to testify that the $1, 000, 000 settlement fairly represented 6.66% of the estimated $15, 000, 000 recovery. Mr. Barrett also agreed that if Appellant recovered only 6.66% of the full value of his case, that same percentage should be allocated to past medical expenses recoverable by AHCA. Furthermore, he added that applying that ratio was not only reasonable, but was common practice in the legal proceedings with which he historically had been associated. Again, Mr. Barrett approved of the notion that applying a pro rata formula to the settlement amount would result in $11, 838 allocated to past medical expenses.

         As before with Mr. Guito, AHCA's half-hearted cross-examination of Mr. Barrett did nothing to impeach his opinions. For its part, AHCA did not put on any evidence at the hearing regarding the fairness or reasonableness of the 6.66% ...


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