MSA as Protection from Sheister Lawyer?

Medicare Set-Aside Blog on July 23, 2012 | Posted by


In a recently published disciplinary opinion, I was very interested to read that, despite all the other misdeeds of the claimant’s attorney, prior to settlement he met with his clients and very clearly discussed the settlement offer and explained how the Medicare set-aside was only accessible for payment of future medical expenses, including an explanation of how the MSA would be funded. Unfortunately the claimant and his wife had other concerns that the attorney attempted to resolve for them as well. Claimant was first concerned with outstanding medical bills that the attorney assured them he would handle. After failing to resolve the issue with the Division of Workers’ Compensation and heated phone calls from the claimant’s daughter, the attorney accepted that he had represented that he would take care of the bills and stated that he would personally make payment. He did have checks cut and provided copies to claimant; however, at some point he realized that he had no obligation to make those payments, stopped payment on the checks and never reissued them, so the collection efforts against the claimant resumed. The court found the promise to take care of the bills was a significant inducement to claimant accepting the settlement and, without touching the obligation to make personal payment or not, he at least had a duty to notify claimant of the stop payment order.

The second issue was that claimant had voiced concern following the worker’s compensation settlement he would no longer receive weekly permanent disability payments. Fortunately, his attorney had another client in need of a loan and helped pair the two up. His other client had lost her husband a few years prior and used her insurance proceeds to pay off her house and was now looking for money to remodel it so she could rent it out when she relocated to Atlanta with her new boyfriend. The attorney had already loaned her $30,000 but she wanted another $80,000 and was willing to pay 8% because her bad credit prevented her from getting a traditional loan. Did I forget to mention that she struggles with methamphetamine addiction, a bipolar disorder, and suicidal ideation? Anyway, the attorney advised the claimant to loan her this money, suggesting this investment could provide a reliable monthly income stream for his family. Needless to say, things did not work out. Due to recording some questionable deeds of trust, permitting his paralegal to practice law using his federal bar number, and some other indiscretions, this attorney is no longer practicing law in the State of Colorado.

But it sounds like claimant’s MSA is safe, unless of course that is where the $80,000 came from…

THE PEOPLE OF THE STATE OF COLORADO, Respondent: DAVID ROSS CALVERT
SUPREME COURT OF COLORADO, PRESIDING DISCIPLINARY JUDGE
2011 Colo. Discipl. LEXIS 102
November 15, 2011, Decided