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09/14/87 DEPARTMENT PUBLIC WELFARE v. LULA J. TYREE

Filed: September 14, 1987.

DEPARTMENT OF PUBLIC WELFARE, STATE OF INDIANA, DEFENDANT-APPELLANT
v.
LULA J. TYREE AND TRANSAMERICA INSURANCE COMPANY, PLAINTIFF-APPELLEES, JESSICA LYNN FITHIAN; MAXINE BROWN ALDRIDGE, GUARDIAN OF THE PERSON AND ESTATE OF JESSICA LYNN FITHIAN; MAXINE BROWN ALDRIDGE, ADMINISTRATRIX OF THE ESTATE OF LINDA K. FITHIAN, DECEASED; THEODORE C. FITHIAN; DEACONESS HOSPITAL; ST. JOSEPH HOSPITAL; HUNTINGBURG CONVALESCENT CENTER AND GIBSON GENERAL HOSPITAL, DEFENDANT-APPELLEES



APPEAL FROM THE PIKE CIRCUIT COURT, The Honorable Marvin D. Stratton, Judge, Cause No. 85-C-168.

Neal, J., Robertson, J. and Hoffman, J. Concur.

Author: Neal

NEAL, J.

STATEMENT OF THE CASE

Defendant-appellant, Indiana Department of public Welfare (DPW), appeals the Pike Circuit Court's grant of a summary judgment denying a Medicaid lien on settlement proceeds obtained by cross-claimant-appellee, Maxine Brown Aldridge, Administratrix of the Estate of Linda K. Fithian, deceased (the Estate).

We reverse.

STATEMENT OF THE FACTS

On February 9, 1984, Linda K. Fithian and her daughter, Jessica Lynn Fithian, were injured in an automobile accident caused by Lula J. Tyree. Linda K. Fithian ultimately died as a result of her injuries. On September 16, 1985, Tyree and her insurer, Transamerica Insurance Company (Transamerica), filed a complaint seeking declaratory relief. The complaint averred that Tyree's automobile liability policy had limits for bodily injury or death of $25,000.00 per person and $50,000.00 per accident. The complaint also related that a settlement had been reached whereby Transamerica would pay Aldridge, who had been named guardian of Jessica and administratrix of the Estate, $50,000.00, to be divided evenly between Jessica and the Estate. In return Tyree and Transamerica would be released from all further claims. The prayer for relief asked the trial court to discharge Tyree and Transamerica from all liability upon making payment, require Aldridge to execute releases, and require the defendants to interplead and determine their respective rights to the settlement proceeds. Named as defendants were: Jessica Lynn Fithian; Aldridge, as both guardian of Jessica and administratrix of the Estate; Theodore C. Fithian, Linda's husband; DPW, which had paid for Linda's medical treatment; and several health-care providers. DPW was named as a defendant because it had filed a lien for $59,984.90, representing the amount DPW had paid for medical assistance on Linda Fithian's behalf. The Estate then filed a cross-claim against DPW and the health-care providers, alleging that none of the settlement proceeds were being recovered for medical, hospital funeral, or burial expenses, but were for the support of Linda Fithian's two dependent children. The trial court ordered the settlement proceeds deposited in an interest-bearing account, and one-half of the funds were later paid to Jessica Fithian in settlement of her personal injury claim against Tyree and Transamerica. DPW did not object to this disbursement because it had not made any expenditures on Jessica Fithian's behalf.

Both DPW and the Estate moved for summary judgment. DPW claimed that its lien entitled it to all the funds in the account, and, because none of the proceeds could pass into the Estate until DPW's lien was satisfied, the statutes concerning claims against an estate were inapplicable. The Estate maintained that DPW's lien was unenforceable because Linda Fithian was survived by two dependent children and also because DPW had failed to deny the Estate's allegation in its cross-claim that none of the settlement proceeds were being sought for medical, hospital, funeral, or burial expenses. Following a hearing on the motions, the trial court granted summary judgment in favor of the Estate, prompting DPW to institute this appeal.

ISSUE

DPW presents the following issue, as restated by us, for our review:

Whether DPW is entitled to recover its lien, minus attorney fees and a pro rata share of the costs, from the settlement proceeds because the statutes pertaining to claims against an estate are inapplicable.

STANDARD OF REVIEW

Our standard of review in an appeal from a summary judgment is well established. We ascertain whether the pleadings, affidavits, answers to interrogatories, responses to requests for admission, and depositions, when read in the light most favorable to the non-moving party, reveal any genuine issues of material fact, and if not, whether the trial court correctly applied the law. Shallenberger v. Scoggins-Tomlinson, Inc. (1982), Ind.App., 439 N.E.2d 699. In performing our function of review we stand in the position of the trial court and consider the same matters as it does. Moll v. South Central Solar Systems, Inc. (1981), Ind. App., 419 N.E.2d 154.

Discussion AND DECISION

DPW argues that it has a valid, enforceable lien against the settlement proceeds because the statutes concerning recovery against an estate are inapplicable to the circumstances of the case.

Pursuant to 42 USAC § 1396a(a) 25(A) and (B), the State or local agency administering the medical assistance plan has an affirmative duty to:

take all reasonable measures to ascertain the legal liability of third parties (including health insurers) to pay for care and services available under the plan . . . [and] . . . in any case where such legal liability is found to exist after medical assistance has been made available on behalf of the individual and where the amount of reimbursement the State can reasonably expect to recover exceeds the costs of such recovery, the State or local agency will seek reimbursement of such assistance to the extent of such legal liability.

The vehicle by which DPW is to obtain reimbursement from liable third parties is IND. CODE 12-1-7-24.6, which provides in pertinent part:

(a) Whenever:

(1) the department pays medical expenses for or on behalf of a person who has been injured or has suffered an illness or disease as a result of the ...


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