Mirabal v. C.R. Bard, Inc. et al. – Demonstration of MSP Induced Waste of Time and Judicial Resources

Medicare Set-Aside Blog on June 27, 2011
Posted by

Background:  Ms. Mirabal sued her doctor for professional malpractice in 2003. After several venue transfers, the last of which required approval by the PA Superior Court, the case was returned to the Court of Common Pleas of Philadelphia County on June 19, 2009. On April 23, 2010, mid-trial, Plaintiff settled her claim against the remaining Defendant, however Defendant refused to release settlement proceeds until the Medicare lien was determined. On July 19, 2010, Plaintiff filed an Affidavit of Non-Payment of Settlement Funds pursuant to PA RCP 229.1 and requested sanctions, which were ultimately denied on August 26, 2010. Motion for Reconsideration was filed on September, 24, 2010 and on October 22, 2010 the trial judge ordered that half the settlement proceeds be released from escrow with interest and upon proof that the Medicare demand of September 2, 2010 was satisfied, the remaining funds would then be released. The Order also again denied sanctions. On November 13, 2010, Plaintiff filed her first appeal challenging the denial of sanctions and on November 24, 2010, filed a Petition for Contempt/Sanctions. Meanwhile the PA Superior Court issued its Zaleppa decision on November 17, 2010, supporting the notion that the Defendant had no right to assert the rights of the federal government with respect to repayment of Medicare liens, so the Plaintiff discontinued her appeal and filed a second Motion for Reconsideration, again requesting sanctions. On December 20, 2010, the trial judge order the release of all settlement funds with interest, vacated the two prior orders, and denied interest, attorney’s fees and expenses. On December 29, 2010, the trial judge denied the Petition of Contempt/Sanctions. On January 19, 2011, Plaintiff appealed the two December orders. After several motions filed in March with regard to the appeal, the court ultimately dismissed all claims. This trial judge opined that “the imposition of an order for sanctions or contempt on Defendants was not required due to the Defendants’ good faith beliefs and justified concerns related to the delivery of the settlement proceeds without assurances.”

After nearly a decade in court and the voluminous filings that ultimately showed no mistake of facts, errors of law, or any abuse of discretion in denying Plaintiff’s numerous requests for sanctions, wouldn’t it just be easier to accept the MSP for what it is and deal with it. The defendants have a very real exposure of paying twice and no amount of indemnification by any plaintiff or attorney is going to make amends for the time and expense of dealing with the MSP issue again, long after the settlement has concluded. We need to stop blaming parties to the settlement for acts of the federal government and work together to resolve the issue because the fact remains that the federal government does possess a very real right to priority recovery. Leave the state courts out of it.