Michigan Court of Appeals; Docket No. 66383; Published
Judges Cynar, Hood, and Jason; Unanimous; Per Curiam
Official Michigan Reporter Citation: 131 Mich App 26; Link to Opinion 
STATUTORY INDEXING:
General / Miscellaneous [§3148]
TOPICAL INDEXING:
Medicaid Benefits
CASE SUMMARY:
In this unanimous per curiam Opinion, the Court of Appeals held that an attorney representing an injured claimant who files a lawsuit against a no-fault insurer to recover unpaid medical expenses is not entitled to claim an attorney fee out of the portion of the recovery which reimburses Medicaid. The injured plaintiff in this case was not covered by any no-fault insurance policy at the time of her accident Accordingly, all of her medical bills were paid by Medicaid. Plaintiff then submitted an application for no-fault benefits to the assigned claims facility which assigned the claim to Aetna. Approximately a month after assignment, plaintiff’s lawyer filed a complaint against Aetna for payment of the unpaid medical expenses. Approximately one month after the filing of the lawsuit, the Department of Social Services (Medicaid) learned of the lawsuit when its medical records were subpoenaed by plaintiff’s counsel. DSS immediately sent a letter to plaintiff’s attorney advising, among other things, that DSS was statutorily subrogated to any right of recovery plaintiff had against Aetna and that plaintiff’s counsel had no authority to seek attorney fees out of the recovery of such expenses, proximately four months after the initiation of suit, plaintiff filed a motion for partial summary judgment seeking payment of medical expenses previously paid by DSS. DSS intervened. The trial court ruled that DSS was entitled to recovery from Aetna under the subrogation provisions of MCLA 400.106. The trial court further found that this recovery should be reduced to the extent of services rendered by plaintiff’s counsel since the State had benefited from the "diligence and efforts of plaintiff." Accordingly, plaintiff’s attorney was awarded one-third of the amount recovered.
In reversing the trial court and denying any attorney fees to plaintiff’s counsel, the Court of Appeals noted that MCLA 400.106 clearly provides that any Medicaid claimant who initiates an action against the third party "shall notify the state department of the action or proceeding entered into upon commencement of the action or proceeding." No such notice was ever given in this case. DSS did not learn of plaintiff’s suit against Aetna until served with a subpoena for medical records. Upon obtaining knowledge of the lawsuit, DSS immediately assented its lien and notified plaintiff' s attorney that his assistance was not required.
The Court further noted that the result may have been different if this were a case where "despite a clear right to proceed in its own right against the tort feasor the [state] refrains from acting" a situation where the equities favor the subrogor's attorney. In this case, "The state acted as soon as it received the notice it was statutorily entitled to. Informed in no uncertain terms that his assistance was not required, plaintiff’s attorney assumed the status of a volunteer. As such, any 'enrichment' enjoyed by the state as a product of his services was not unjust."
