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Nacino v. Chandler

9/11/2002

The sole issue presented by this appeal is whether the Circuit Court of the First Circuit (the circuit court) properly reduced from $141,422.19 to $21,213.33 the medical assistance lien which the State of Hawaii, Department of Human Services (DHS) held pursuant to Hawaii Revised Statutes (HRS) § 346-37 (1993 & Supp. 1997) against the $600,000.00 in settlement proceeds that Appellant-Appellee Gerry Nacino (Nacino), a Medicaid benefits recipient, recovered from a third-party tortfeasor.


We conclude that the circuit court incorrectly reduced DHS's medical assistance lien amount. Accordingly, we reverse that portion of the Final Judgment. The Final Judgment is affirmed in all other respects.


BACKGROUND


The relevant facts in this case are not in dispute. On March 15, 1996, Nacino, who was twenty-two years old, suffered severe and permanent brain and orthopedic injuries when a moped on which he was a passenger and which was being driven by a seventeen-year-old acquaintance, Troy Sunio (Sunio), collided with a pick-up truck owned by the City and County of Honolulu (the City). Nacino's damages as a result of his injuries included: severe pain and suffering; emotional distress; loss of enjoyment of life; loss of wages and/or lifetime earning capacity; and medical, hospital, rehabilitative, attendant, institutional, nursing, and life care costs.


Pursuant to applications submitted by Nacino or on his behalf, DHS paid for all of Nacino's medical care and treatment expenses arising out of the moped incident. Each of these applications included one of the following assignment of rights provisions, as required by HRS § 346-29(c) (Supp. 2001):


(6) ASSIGNMENT AND AGREEMENT:


Assignment of rights: I understand that by applying for medical assistance, I am assigning to the State of Hawaii [(the State)], my rights to medical support or any other third party payments for medical care the entire time I am receiving assistance.


(7) ASSIGNMENTS AND AGREEMENT:


ASSIGNMENT OF RIGHTS: . . . I am assigning to the [State] my rights to any third party payments for medical care. I will cooperate in obtaining third party payments. I must use my household's private medical coverage before Medicaid will help with eligible costs.


Nacino also executed a separate DHS Assignment of Payment form, which provided, in pertinent part:


FOR VALUE RECEIVED, [Nacino] hereby hereby assigns to . . . and authorizes any of my representatives, agents, attorneys or insurers to pay to DHS, from any money due me as compensation for injuries received in, and medical costs incurred as a result of, an accident or incident on or about March 15, 1996 a sum of money equal to that paid by DHS for my hospital, medical and other similar expenses necessitated by said accident or incident.


Should compensation for my injuries received in the above referenced accident be paid to me directly, I agree to reimburse the medical costs paid on my behalf as a result of said accident from any judgment, settlement or insurance proceeds received.


On June 28, 1996, Nacino, by his guardian ad litem, filed a lawsuit in the circuit court against Sunio and the City, seeking to recover damages from Sunio and the City as a result of the March 15, 1996 accident. Although authorized by HRS § 346-37(c) (Supp. 1997) to intervene in the lawsuit, DHS did not do so. However, DHS did provide numerous notices to the attorneys representing the parties to the lawsuit, as well as interested insurers and other interested parties, that it held an assignment of Nacino's rights in any recovery and would pursue reimbursement due to it at the

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