New York State Court of Claims

New York State Court of Claims

HOOD v. THE STATE OF NEW YORK, #2000-019-520, Claim No. 99433, Motion No. M-61511


Synopsis


Court approved infant settlement and referred matter to a court of competent jurisdiction for, among other things, the appointment of guardian of the infant's property.

Case Information

UID:
2000-019-520
Claimant(s):
CARA HOOD, an infant by her parents and natural guardians, BEVERLY HOOD and COLLIS HOOD, and BEVERLY HOOD and COLLIS HOOD, individually
Claimant short name:
HOOD
Footnote (claimant name) :

Defendant(s):
THE STATE OF NEW YORK
Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
99433
Motion number(s):
M-61511
Cross-motion number(s):

Judge:
FERRIS D. LEBOUS
Claimant's attorney:
KRESCH & KRESCHBY: Ari Kresch, Esq., of counsel
Defendant's attorney:
HON. ELIOT SPITZER, ATTORNEY GENERAL
BY: Katharine S. Brooks, Assistant Attorney General,
of counsel


For Department of Social Services of the City of New York:
MICHAEL D. HESS, CORPORATION COUNSEL OF THE CITY OF NEW YORKBY: Monica E. Cannon, Esq., of counsel
Third-party defendant's attorney:

Signature date:
July 21, 2000
City:
Binghamton
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

This is a claim against the State of New York (hereinafter "State") alleging medical malpractice in the prenatal care provided to Beverly Hood from September 1989 through July 7, 1990 and the subsequent delivery of the infant Cara Hood at the State University of New York Health Science Center at Brooklyn (hereinafter "Downstate"). Claimants commenced the instant Order to Show Cause seeking this Court's approval of the proposed settlement of $925,000.00 pursuant to CPLR Article 12. The New York City Department of Social Services (hereinafter "Department") appeared in opposition to the proposed settlement seeking the recovery of a Medicaid lien from the settlement proceeds for assistance rendered to the infant in the amount of $90,200.40. The parties appeared before the Court on May 22, 2000 at which time the Court examined the infant, Cara Hood; heard testimony from Beverly Hood, the mother and natural guardian of Cara Hood; and heard oral arguments from counsel relative to the proposed settlement and the issue of the outstanding Medicaid lien.

Proposed Settlement

It is well-settled that "[t]he Court must scrutinize the fairness and reasonableness of a proposed settlement to ensure that it is in the ward's best interest." (Alexander, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR 1207 at 352). The infant, Cara Hood, was born on July 7, 1990 and is presently nine years old. Cara Hood suffers from, among other things, cerebral palsy, spastic quadriplegia, seizure disorder, brain damage, impaired ambulation, impaired speech and developmental delays. Claimants submitted medical reports from Marcia Bergtraum, M.D. from April 6, 1998 and evaluation notes from the infant's neonatologist Nathan Rudolph, M.D. dated November 1999.


The Court found Cara Hood to be an amiable young girl who ambulated unassisted albeit with some difficulty. The Court asked Cara Hood various questions and although she was attentive she was essentially noncommunicative. It was apparent that Cara was both shy and having difficulty understanding the questions posed. The Court heard from Mrs. Hood who appeared as a most credible witness. Mrs. Hood is her daughter's primary care giver. Mrs. Hood explained that Cara often smiles in situations she is unable to understand which may appear to others as shyness when, in fact, there is a lack of understanding. Although Cara can eat and dress herself without assistance, her coordination is at times poor and imprecise. Mrs. Hood testified that her daughter requires constant supervision. Mrs. Hood also testified that Cara Hood attends a special education public school for handicapped children on a full-time basis. Cara receives physical therapy, occupational therapy and speech therapy at school.


In recommending the proposed settlement, Claimants' counsel stated his firm belief that this Claim had a great deal of merit, but also acknowledged that there were complicated medical issues regarding proximate cause of the infant's injuries, as well as whether there was a departure from the applicable standards of care which combined to cast doubt on the ability to obtain a judgment in Claimants' favor. More specifically, counsel referred to the State's medical defense, namely that Cara Hood's cerebral palsy could be attributable to a brain hemorrhage from prematurity at about 33 weeks, and not the State's negligence. Mrs. Hood testified that she understood the risks of a trial ranging from a finding of no liability on the part of the State to a larger amount of recovery if liability were found. Mrs. Hood indicated she accepted the proposed settlement amount as a fair compromise of these risks. The State represented that the proposed settlement was offered after balancing its medical defenses with the genuine issues of care raised by the Claimants. The parties have also entered into a Stipulation wherein it was agreed said settlement amount would include a $125,000.00 payment to Beverly Hood, as mother and natural guardian of Cara Hood, an infant, in full satisfaction of her derivative claim and in which Collis Hood, as father and natural guardian of Cara Hood, waived his derivative claim. In light of these factors, the Court finds the settlement adequately provides for the pain and suffering and future needs of the infant claimant and accepts the settlement figure as reasonable and in the best interest of the infant Cara Hood. Furthermore, the Court accepts as reasonable the Stipulation relative to the derivative actions.


Disbursements

Claimants' counsel submitted a request for the reimbursement of $10,044.41 in disbursements and expenses. CPLR 1206 and the Uniform Rules for Trial Courts (22 NYCRR) 202.67 sets out criteria for allowable expenses. The Court previously reviewed the listed disbursements (Order to Show Cause, Exhibit E) and requested further details from counsel with respect to certain items which were provided by way of a letter dated May 18, 2000. The Court finds that the disbursements contained on Exhibit E are proper, except for the "Research & Investigation" expense in the amount of $793.99 which is inappropriate inasmuch as counsel has not provided authority for its inclusion as a reimbursable disbursement. (Brown v State of New York, 142 Misc 2d 129). During her testimony, Mrs. Hood expressed her consent to the reimbursement of these expenses less the disallowed item. As such, the Court approves counsel's request, as amended, to be reimbursed for disbursements in the amount of Nine Thousand Two Hundred Fifty Dollars and 42 cents ($9,250.42).


Attorney Fees

Claimants' counsel requests the sum of $220,491.00 as payment for legal services rendered. In support of the application, counsel provided a history of the services performed and the handling of this case as between various law firms. (Affirmation of Ari Kresch, Esq. dated May 22, 2000; Affirmation of Judith A. Donnel, Esq. dated February 24, 2000). The amount of attorney's fees requested does not exceed one-third of the amount remaining after deduction of the above disbursements in accordance with the Uniform Rules for Trial Courts (22 NYCRR) § 202.67 (a). Mrs. Hood expressed her satisfaction on the record with the legal services performed and the amount requested. Consequently, the Court finds that the sum of Two Hundred Twenty Thousand Four Hundred Ninety One Dollars and no cents ($220,491.00) to the firm of Kresch and Kresch is a fair and reasonable sum for legal services rendered in this matter.


Proposed Distribution

CPLR 1208 requires that the Court, when approving the settlement, also approve the terms of the proposed distribution. It is at this juncture where this Court is concerned by various factors namely, the nature of the proposed distribution and the additional bits of information that have been revealed upon each subsequent inquiry. Initially, Claimants' proposed distribution involved the payment of $234,152.41 into a joint account between the infant's parents and an unnamed bank "to be deposited and held in an account in said names for the purchase of a home suitable for the infant subject to the further approval of this Court" (Proposed Order), together with the remaining monies being used to fund a structured settlement. There was no indication in these initial papers of any financial trouble by the parents, only the need to find suitable housing to meet the infant's special needs. Thereafter, counsel advised the Court that the Hood home was in foreclosure with a principal balance due of $168,000. Counsel then advised that "Cara's parents ask[ed] that the court approve a purchase [of the Hood house] for the sum of $200,000...[and] they indicated that their financial burdens would be substantially relieved as a result of Cara owning the house without a mortgage." (Ari Kresch Esq., letter dated May 18, 2000; emphasis added). Thereafter, issues arose involving the terms of a possible purchase-lease arrangement between the infant and her parents for the Hood house. The Court notes that throughout these proceedings no background was presented relative to the parents' assets, debts, and/or degree of financial troubles. Assuming, arguendo, that the parents' financial troubles might worsen there would appear to be a legitimate concern regarding the interrelationship between these personal injury settlement funds; the parents' desires; and this infant's possible need for government entitlements in the future. In sum, it now appears to this Court that the infant Cara Hood may need the appointment of a guardian of her property, by a court of competent jurisdiction, who can act in Cara's sole interest separate and apart from the financial interests of her parents. This Court's decision to refer this matter to a court of competent jurisdiction for a determination on the appointment of a guardian should not be viewed as a comment regarding the care provided to Cara by her parents as the Court does not question the efforts or intent of the parents. Rather, it is this Court's obligation to ensure that the settlement proceeds are distributed in a manner that serves Cara's best interest and her interests only, both now and into the future, and protects her assets from any financial problems that the parents currently have or may encounter in the future. For all these reasons, the Court finds that it is in this infant's best interest that the advantages and disadvantages of placing these settlement funds into a supplemental needs trust be explored, together with the appointment of a guardian of Cara Hood's property in a court of competent jurisdiction.


Medicaid Lien

On June 18, 1999, the Department placed a lien of $90,200.40 against any recovery received by or on behalf of Cara Hood from a personal injury lawsuit pursuant to Social Security Law §§ 104 and 104-b for medical expenses paid on behalf of the infant as a result of her injuries. Claimants' position is that the Department has the burden of explaining the charges indicated on the Claim Detail Report (hereinafter "CDR") and establishing that they were, in fact, medical expenses. More specifically, Claimants' assert that the bulk of the charges relate to bus transportation, occupational therapy and physical therapy and were paid to the School Support and Health Services Program which should be viewed as educational, not medical, which cannot be recouped by a Medicaid lien. Both Claimants and the Department spent considerable energy discussing the sufficiency of the CDR, but neither submitted a copy to this Court. In this Court's view, the issue of the ability of the Department to recoup the full amount of its Medicaid Lien is best addressed in the same context as the determination regarding the appropriateness of a supplemental needs trust since the lien may be impacted thereby.


In view of the foregoing, it is

ORDERED, (1) that a proceeding be commenced within the next 90 days, in a court of competent jurisdiction, for a determination relative to the appointment of a guardian of the property of Cara Hood; and (2) the establishment of a supplemental needs trust to address, among other things, the purchase of a suitable home for the infant and the interrelationship between the infant's personal injury settlement funds; the parents' desires; and the infant's future eligibility for government entitlements, if necessary; and (3) a determination of the validity of the Medicaid lien asserted by the Department of Social Services of the City of New York in the amount of $90,200.40; and it is further


ORDERED, that the collection and distribution of any portion of the $925,000 settlement proceeds in accordance with the terms hereof shall be deferred until either the appointment of a guardian for Cara Hood or a judicial determination that a guardianship is not required and a resolution of the issues set forth above.


July 21, 2000
Binghamton, New York

HON. FERRIS D. LEBOUS
Judge of the Court of Claims


The following papers were considered by the Court in connection with this matter:
  1. Order to Show Cause, Motion No. M-61511, dated April 14, 2000.
  2. Amended Petition of Beverly Hood and Collis Hood, dated May 22, 2000, with attached exhibits.
  3. Amended Attorney's Affirmation of Ari Kresch, Esq., dated May 22, 2000, with attached exhibits.
  4. Brief of Ari Kresch, Esq., undated.
  5. Affirmation of Monica E. Cannon, Attorney for the Department of Social Services of the City of New York, in opposition to the Order to Show Cause, dated May 8, 2000 and filed May 15, 2000, with attached exhibits.
  6. Memorandum of Law of the Department of Social Services of the City of New York, dated November 8, 1999.
  7. Letter from Attorney Kresch to Court, dated May 18. 2000.
  8. Stipulation, received by the Court July 20, 2000.