Lake v. Levy
2013 Mo. App. LEXIS 63
| Mo. Ct. App. | 2013Background
- Lake, an attorney, represented Claimant in a workers’ compensation claim.
- Claimant had a 38% permanent partial disability and a $34,694 disability award.
- Claimant incurred $45,001.73 in medical expenses, with Medicaid/Department of Social Services (DSS) lien filed for reimbursement.
- ALJ/Commission awarded 25% attorney fee to Lake on medical expenses; instruction not to pursue fee against employer/insurer.
- DSS lien is limited to medical expense portion per Medicare/Medicaid rules; Lake seeks payment of his attorney lien from proceeds.
- The Department was not a party to the underlying proceeding; the dispute concerns priority of liens on workers’ compensation proceeds under Missouri law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Priority of liens on proceeds | Lake: attorney lien priority over DSS lien under 287.266.7 | DSS: lien should not be subordinated or paid from fee funds | Lake’s lien has priority over DSS lien on medical-expense proceeds |
| Proper interpretation of 287.266.7 and related subsections | Subsections harmonize; attorney fees outrank state debt on medical portion | Subordination would require State to pay part of fees; statute conflict | Subsections harmonized; attorney lien priority over DSS lien on medical proceeds |
| Effect of limited funds on lien payment | If funds are insufficient, Lake’s lien pays first, DSS lien paid from remainder | State must be made whole; funds may be insufficient to satisfy both liens | With insufficient funds, Lake’s lien pays first; remaining funds go to DSS. |
Key Cases Cited
- Ark. Dept. of Health and Human Services v. Ahlborn, 547 U.S. 268 (U.S. 2006) (Medicaid lien applies only to medical expenses portion of recovery)
- Dale By and Through Dale v. Gubin, 879 S.W.2d 699 (Mo.App. S.D. 1994) (Medicaid lien not reduced by proportionate attorney fee in lump-sum settlement)
- Brinker Mo., Inc. v. Dir. of Revenue, 319 S.W.3d 433 (Mo. banc 2010) (statutory interpretation harmonization; avoid reading provisions in conflict)
- Turner v. Sch. Dist. of Clayton, 318 S.W.3d 660 (Mo. banc 2010) (statutory construction guidance; plain meaning governs)