RECENT COURT DECISIONS
Snook v. Oakland County Deputy Sheriffs
This case stands for the proposition that a settlement agreement will be enforced irrespective of whether the final Medicare Reimbursement Amount is determined unless the parties clearly state otherwise. In Snook v. Oakland County Deputy Sheriffs, et al., 2009 US Dist. LEXIS 75435 (U.S.D.MI, Southern Div., August 25, 2009), the plaintiff agreed to settle his assault and battery case for $75,000 but only if the Medicare Reimbursement Amount did not exceed $10,000. The settlement was not placed on the record per the request of the Plaintiff and the Medicare Reimbursement Amount was unknown. Subsequent to the settlement date, plaintiff received the payment summary form from the Medicare Secondary Payer Contractor. The amount claimed was $3,254.14 but it was not a final pay off figure. Plaintiff immediately advised the defendant of their agreement to settle via e-mail stating: "This will confirm our phone conversation this morning wherein I advised you that because the Medicare claim is less than $10,000 the settlement will go forward as previously agreed between the parties and the court." Subsequent to that e-mail, defendants' forwarded closing documents to plaintiff's counsel that contained a provision to add the U.S. Treasury as a payee on the check, but made no mention that the settlement was conditioned on the amount of the Medicare lien. Plaintiff's counsel objected, but only to the defendants' attempt to include the US Treasury as a payee on the check. The defendant submitted a revised release deleting the requirement of including the US Treasury on the check and added a provision that required plaintiff's counsel to withhold $10,000 from the settlement proceeds to resolve the Medicare lien. The balance if any from the amount withheld was to be disbursed to plaintiff after satisfaction of the Medicare lien. Plaintiff's attorney took the documents to his client for signature, but his client refused to sign because he believed the settlement was conditioned on the final Medicare amount being less than $10,000 and that had not occurred. Defendant's counsel then moved to confirm settlement and won.
The court in reaching its decision found that there was no condition precedent to the settlement. The original discussion that occurred at the court was not placed on the record and therefore not enforceable. The enforceable settlement occurred when plaintiff's counsel transmitted his agreement via e-mail confirming the terms of the settlement. At that time there was no condition precedent, simply that the settlement had been accepted. Consequently, the settlement was confirmed and plaintiff was required to accept the terms. Plaintiff's belief that he had preserved settlement for the amount only if the Medicare lien was less than $10,000 was appropriately ignored.
This case is important to demonstrate the importance the settlement agreement will play in the Medicare case. The terms need to be addressed carefully; otherwise the intent of the parties may not be carried out. The parties to a case need to lay out carefully responsibility for the Medicare lien. If not properly done so, a party, like the plaintiff in this case may not achieve the intended benefit of his bargain.