Brandon L. Eady, Appellant,
State of Florida, Agency for Health Care Administration, Appellee.
final until disposition of any timely and authorized motion
under Fla. R. App. P. 9.330 or 9.331.
appeal from a Final Order of the Agency for Health Care
Administration. Lynne A. Quimby-Pennock, Administrative Law
Faglie of Staunton & Faglie, PL, Monticello, for
Alexander R. Boler, Tallahassee, for Appellee.
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), 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.
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.
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.
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). The final hearing occurred in Tallahassee
on January 4, 2018, through a videoconference call from Tampa
where Appellant and one of his witnesses reside.
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.
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.
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.
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.
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.
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.
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
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.
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