COURT ALLOWS MEDI-CAL LIEN SUIT AGAINST MEDICAL MALPRACTICE PLAINTIFF ATTORNEY IN WRONGFUL LIFE CASE
In Bonta v. Friedman (2001) 01 CDOS 7182, plaintiffs in a medical malpractice case sued a physician and a hospital for failing to inform a pregnant mother with rubella that her child would be born with birth defects. After learning that the case had been settled, the state Department of Health Services demanded reimbursement of amounts paid by Medi-Cal for the newborn's care under Welfare and Institutions Code section 14124.71(a) which allows the state to recover when Medi-Cal benefits are provided "because of an injury or which another person is liable." Plaintiffs argued that they did not have to honor a Medi-Cal lien because the newborn suffered from a birth defect rather than an "injury". The state then sued the plaintiffs' attorney, but not the plaintiffs themselves, to recover its lien under causes of action for violation of statute, unjust enrichment, fraud, and breach of fiduciary duty.
The court of appeal held that a birth defect was an injury for the purposes of allowing the state a lien on any recovery under sections 14124.70 et seq. The court also held that the state should have been allowed to amend the causes of action for fraud and breach of fiduciary duty against the attorney for plaintiffs to recover its lien.
Bonta v. Friedman is of interest to physicians and their insurers not only because it clearly allows Medi-Cal liens in wrongful life/birth defect cases, but also because it appears to allow the state to sue the attorney for the medical malpractice plaintiffs to recover its lien on the plaintiffs' settlement. Given the aggressive nature of the state's prosecution of this lien case against the plaintiffs' attorney, physicians and their insurers should consider including the state Department of Health Services as an additional payee on any payment for any settlement or judgment if Medi-Cal provided any benefits for the plaintiff to avoid any possible liability as a fiduciary to the state for the lien.
