## F I L E D United States Court of Appeals Tenth Circuit 

### FEB 17 1998 

### PATRICK FISHER Clerk PUBLISH UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

JANEY LEE COPELAND, a disabled person, by and through her mother and court-appointed guardian and conservator, Marilyn Copeland,

Plaintiff-Appellant,

v. TOYOTA MOTOR SALES U.S.A., INC., a U.S. corporation; TOYOTA MOTOR CORPORATION, a Japanese corporation; TOYOTA AUTO BODY CO., LTD., a Japanese corporation; TOYOTA CENTRAL RESEARCH & DEVELOPMENT LABORATORIES, INC.; CALTY DESIGN RESEARCH; TOYOTA TECHNICAL CENTER USA, INC., a U.S. corporation; TOYOTA MOTOR CORPORATE SERVICES OF NORTH AMERICA, a U.S. corporation; TOYOTA MOTOR CORPORATION SAN FRANCISCO OFFICE, a U.S. corporation, Defendants, and STATE OF KANSAS, Division of Social and Rehabilitation Services, Defendant-Appellee. No. 96-3181-2- Appeal from the United States District Court

for the District of Kansas (D.C. No. 90-1411-JTM)

Kenneth G. Gale, of Focht, Hughey & Calvert, L.L.C. , Wichita, Kansas (David P. Calvert, of Focht, Hughey & Calvert, L.L.C., Wichit a, Kansas, with him on the brief) for Appellant. Robert R. Hiller, Jr., of Dept. of Social and Rehab ilitation Services, Topeka, Kansas (Reid Stacey of Dept. of Social and Rehabili tation Services, Topeka, Kansas, with him on the brief) for Appellee.

Before LUCERO , McWILLIAMS, and MURPHY , Circuit Judges.

MURPHY, Circuit Judge.

Appellant Janey Copeland was injured in a 1988 auto mobile accident when she was ejected from the Toyota truck she was drivi ng. Invoking the district court’s diversity jurisdiction, Copeland sued and t hen settled with Toyota Motor Sales, U.S.A., Inc. and Toyota Motor Corporation (c ollectively “Toyota”). Thereafter, the United States District Court for th e District of Kansas ordered that essentially all the net settlement proceeds be paid to the Kansas Department of Social and Rehabilitation Services (“SRS”) pursuantto Kan. Stat. Ann. § 39-719a as reimbursement for the funds it dispersed for Cop eland’s medical treatment. Copeland appeals the district court’s apportionmentof the settlement proceeds.-3-

On appeal, Copeland argues the district court erred by (1) failing to reduce SRS’ recovery by the percentage of Copeland’s negli gence; (2) refusing to apply equitable subrogation principles to reduce or elimi nate SRS’ statutory subrogation right to the settlement proceeds; and (3) ordering SRS to pay attorney fees in the amount of 33.33% of SRS’ medical assistance recovery rather than 40%. Upon de

novo review of the district court’s application and int erpretation of state law, we affirm. See Farthing v. City of Shawnee , 39 F.3d 1131, 1135 (10th Cir. 1994).
I. BACKGROUND Under the settlement agreement, Toyota agreed to pay Copeland $250,000 plus court costs of $120. The parties then applied to the district court for approval of the settlement. At a subsequent hearin g, the district court stated that it would approve the settlement. The court also co nsidered at this hearing Copeland’s Motion to Apportion Proceeds, which urge d the court to order that the settlement proceeds be paid to Copeland rather than to SRS. SRS, however, asserted its statutory subrogation rights to the pr oceeds under Kan. Stat. Ann. § 39-719a, which provides in part that when SRS has paid medical assistance and a third party has a legal obligation to pay such expenses, SRS “may recover the same from the [medical assistance] recipient or fro m the third party and shall be in all respects subrogated to the rights of the rec ipient.” Kan. Stat. Ann. § 39- 719a(a).-4-

At the hearing, Copeland and SRS presented argument s concerning SRS’ statutory right to be fully reimbursed from the settlement proceeds for medical assistance payments. Copeland argued that SRS’ sha re of the settlement proceeds should be reduced or eliminated based on the applic ation of equitable principles. Copeland also argued SRS’ share of the proceeds sho uld be reduced pursuant to Kan. Stat. Ann. § 39-719a(c), which provides that “ [i]n the event of a recovery pursuant to K.S.A. 60-258a [Kansas’ comparative neg ligence statute],” SRS’ subrogation right “shall be reduced by the percenta ge of negligence attributable to the injured person.” SRS asserted that its recovery should not be reduced under § 39-719a(c) because Copeland had not presented anyevidence that she was at fault in the accident. The court reserved ruling on both the apportionmentand fault issues during the hearing, allowing the litigants to submit evide nce of Copeland’s fault in the days following the hearing. Accordingly, Copeland submitted evidence that she was under the influence of alcohol and was speeding at the time of the accident. SRS did not submit any evidence that Copeland was n ot at fault, nor did SRS contest the fault evidence submitted by Copeland. On April 12, 1996, the district court filed an orde r approving the settlement but denying the apportionment proposed by Copeland. In the order, the court recited that SRS had paid “at least $244,814.30 in medical benefits to Copeland,”-5-

and stated that “the apportionment sought by SRS . . . would give it virtually the entire settlement.” The court noted that Copeland’ s proposed apportionment, on the other hand, “would provide almost all of the se ttlement to her” and only a small fraction to SRS. The court further stated in the order that “[t]he p arties agree generally that SRS’ recovery may be reduced by the amount of Copel and’s injuries which were the product of comparative fault.” The court expre ssly declined, however, to make a finding as to Copeland’s fault, stating that

a determination of fault on the part of Copeland is inappropriate under the current circumstances. Fir st, the argument is directly inconsistent with Copeland’s previous position throughout this case, in which sh e ascribes 100% of the fault to Toyota. More importa ntly, there is no rational basis for the court, reviewing the depositions submitted by the parties, to ascribe a particular . . . degree of fault to Copeland. In its order, the court also rejected Copeland’s re maining arguments for reducing or eliminating SRS’ subrogation share of t he settlement proceeds, concluding that the subrogation statute provided SR S with a right to full reimbursement for all medical benefits extended. F inally, the court rejected Copeland’s argument that SRS should be assessed a 4 0% rather than a 33.33% attorney fee under Kan. Stat. Ann. § 39-719a(b). Copeland filed a Notice of Appeal on May 9, 1996. On May 10, 1996, the district court filed its “Judgment in a Civil Case. ” This judgment provided: “It is1 After deductions for litigation expenses and attorn ey fees, SRS’ net

recovery from the settlement proceeds was $136,737. 35 and Copeland’s net recovery was $2,665.46. -6- ordered and adjudged, pursuant to the Memorandum an d Order . . . ,filed April 12, 1996, that plaintiff’s motion . . . is hereby g ranted as to approval of the settlement. The motion is denied as to the apporti onment proposed by plaintiff.” In a June 21, 1996 Journal Entry Apportioning Proce eds, the district court specifically apportioned $244,814.30 of the settlem ent proceeds to SRS, deducting from that amount litigation expenses and assessing a 33.33% attorney fee against SRS’ share of the proceeds. 1
II. JURISDICTION Before considering Copeland’s claims, we must firstdetermine the threshold jurisdictional issue of whether her May 9 Notice of Appeal triggers appellate jurisdiction or was fatally premature. Federal Rule of Appellate Procedure 4(a)(2) provide s that “[a] notice of appeal filed after the court announces a decision o r order but before the entry of the judgment or order is treated as filed on the date of and after the entry.” The Supreme Court in FirsTier Mortgage Co. v. Investors Mortgage Insuran ce Co. , 498 U.S. 269 (1991), held that “Rule 4(a)(2) permit s a notice of appeal filed from certain nonfinal decisions to serve as an effective notice from a subsequently-7-

entered final judgment.” Id. at 274. In allowing a premature notice of appeal to mature and thereafter trigger appellate jurisdictio n, the Court explained: Added to the Federal Rules in 1979, Rule 4(a)(2) wa s intended to codify a general practice in the courts of appeals of deeming certain premature notices of appeal effective.

. . . . . . . Under Rule 4(a)(2), a premature notice of app eal does not ripen until judgment is entered. Once judgment is entered, the Rule treats the premature notice of appeal “as filed aft er such entry.” Thus, even if a bench ruling in a given case were n ot “final” within the meaning of § 1291, Rule 4(a)(2) would not rende r that ruling appealable in contravention of § 1291. Rather, it permits a premature notice of appeal from that bench ruling to relate f orward to judgment and serve as an effective notice of appeal from the final judgment

.

. . . . . . . Rule 4(a)(2) was intended to protect the unsk illed litigant who files a notice of appeal from a decision that he re asonably but mistakenly believes to be a final judgment, while failing to f ile a notice of appeal from the actual final judgment. This is not to say that Rule 4(a)(2) permits a noti ce of appeal from a clearly interlocutory decision--such as a di scovery ruling or a sanction order under Rule 11 of the Federal Rules o f Civil Procedure--to serve as a notice of appeal from the final judgment. A belief that such a decision is a final judgment wou ld notbe reasonable. In our view, Rule 4(a)(2) permits a no tice of appeal from a nonfinal decision to operate as a notice of appea l from the final judgment only when a district court announces a dec ision that would be appealable if immediately followed by the entry of judgment. In these instances, a litigant’s confusion is understa ndable, and permitting the notice of appeal to become effective when judgment is entered does not catch the appellee by surprise. L ittle would be accomplished by prohibiting the court of appeals fr om reaching the merits of such an appeal. Id. at 273-76.-8-

The rationale and holding of FirsTierwarrant a similar result in the present case. Copeland could reasonably have mistaken the April 12 Memorandum and Order (“Order”) as a final decision. The Order was not a clearly interlocutory decision. It effectively resolved the case, dispos ing of all the issues which Copeland raised below and now appeals. The Order i dentified the $244,814.30 subject to SRS’ subrogation right and rejected each of Copeland’s arguments for reducing SRS’ subrogation share or assessing SRS a 40% attorney fee.
FirsTierrequires this court to determine whether the Orderwould have been appealable if immediately followed by the entry of judgment. A decision is appealable only if it is final, meaning it “leaves nothing for the court to do but execute the judgment.” Catlin v. United States , 324 U.S. 229, 233 (1945). This court stated in Albright v. UNUM Life Insurance Co. of America , 59 F.3d 1089 (10th Cir. 1995): [T]he touchstone of a final order is “a decision by the court that a party shall recover only a sum certain .”

. . . . . . . [However,] “an order is final even if it does not reduce the damages to a sum certain if the order sufficiently disposes of the factual and legal issues and any unresolved issues are sufficiently ministerial that there would be no likelihood of fu rther appeal.” That is, when the amount of damages awarded pursuant to a judgment on liability “speaks for itself,” we can assume jurisd iction under an exception to the final order doctrine; however, if calculating damages would be complicated and the possible subject of a separate and future appeal, then we cannot assume appellate juri sdiction . . . .-9-

Id. at 1092-93 (quoting Fed. R. Civ. P. 58 (emphasis a dded) and Apex Fountain Sales, Inc. v. Kleinfeld, 27 F.3d 931, 936 (3d Cir. 1994)) (citations and f ootnotes omitted). The Albrightcourt determined it did not have jurisdiction beca use the calculations not completed in the appealed order we re “not likely to be . . . ministerial and uncontroversial.” Id. at 1093. Rather, they were likely to be “complicated and disputed.” Id. The court acknowledged, however, that “there may be cases in which the lack of a sum certain wil l not preclude appellate review.” Id. at 1094. The case at bar is one such case. The April 12 Order “spoke for itself,” disposed of the factual and leg al issues, and left only uncomplicated, undisputed, ministerial tasks to the subsequent Journal Entry. This court thus has jurisdiction.
III. SUBROGATION Copeland received medical assistance from SRS pursu ant to the state’s Medicaid program. Medicaid is a cooperative federa l-state program through which the federal government provides financial ass istance to states so that they may provide medical assistance to needy individuals

. See 42 U.S.C. § 1396; see also Williams v. Kansas Dep’t of Soc. & Rehabilitat ion Servs. , 899 P.2d 452, 455 (Kan. 1995). A state that chooses to participate i n Medicaid must adopt and have approved a medical assistance plan which complies w ith the substantive requirements of 42 U.S.C. §§ 1396 et seq. and accompanying regulations. 42-10-

U.S.C. § 1396a(a)(25) provides that the plan must r equire that the state agency administering the Medicaid program “take all reason able measures to ascertain the legal liability of third parties” to pay for me dical services received by Medicaid recipients, and, when legal liability is f ound, seek reimbursement for the medical assistance provided by the state to the extent of such liability. Consistent with this requirement, Kan. Stat. Ann. § 39-719a provides:

(a) Where medical assistance has been paid by the secretary [of SRS] and a third party has a legal obligation to pay such medical expenses to or on be half of the recipient, the secretary may recover the sam e from the recipient or from the third party and shall be in all respects subrogated to the rights of the recipient in such cases . . . . Payment of medical assistance by the secretary shall be secondary to any other insurance coverage or third party with a legal obligation to pay such medical expenses to or on behalf of the recipi ent. (b) Pursuant to this section unless otherwise agreed, the court shall fix attorney fees, which sh all be paid proportionately by the secretary and the injur ed person, such person's dependents or personal representatives, in the amounts determined by the c ourt. Attorney fees to be paid by the secretary shall be fixed by the court in an amount not to exceed 1/3 of the medical assistance recovered pursuant to subsection (a) for cases settled prior to trial, or in an amount n ot to exceed 2/5 of the medical assistance recovered purs uant to subsection (a) in cases when a trial is convened

. (c) In the event of a recovery pursuant to K.S.A. 60-258a, and amendments thereto, the secretary's ri ght of subrogation shall be reduced by the percentage o f negligence attributable to the injured person.-11-

Section 60-258a, referenced in subsection (c), is K ansas’ comparative negligence statute. Section 60-258a provides, in p art, that

[t]he contributory negligence of any party in a civ il action shall not bar such party . . . from recoveri ng damages . . . if such party’s negligence was less t han the causal negligence of the party or parties against w hom claim for recovery is made, but the award of damage s to any party in such action shall be diminished in proportion to the amount of negligence attributed t o such party. Id. § 60-258a(a). A. Reduction of SRS’ Share According to Injured Party’s Negl igence In the hearing on Copeland’s Motion to Apportion Pr oceeds, the district court, as well as SRS, appeared to agree with Copel and that § 39-719a(c) was applicable to Copeland’s settlement recovery and th at Copeland’s own negligence would proportionately reduce SRS’ recovery. The di strict court thus allowed the parties to submit evidence of fault, and Copeland s ubmitted evidence that she was under the influence of alcohol and was speeding at the time of the accident. SRS did not challenge Copeland’s evidence either by pre senting evidence that Copeland was not at fault or by presenting evidence that another party was responsible for the accident. In its April 12 orde r, however, the district court refused to attribute a percentage of fault to Copel and and necessarily refused to reduce SRS’ recovery under Kan. Stat. Ann. § 39-719 a(c). Because the only evidence before the district court indicated Copela nd’s fault and because that-12-

evidence was not challenged, Copeland contends the district court was required to find that “Copeland’s negligence was 100%” and thus was required to reduce SRS’ subrogation right by 100%. The reduction of SRS’ recovery under § 39-719a(c) e xpressly occurs only “[i]n the event of a recovery pursuant to K.S.A. 60 -258a.” Id. § 39-719a(c). Copeland’s settlement with Toyota, however, did notconstitute a recovery pursuant to § 60-258a, and thus the court was not r equired to reduce SRS’ recovery according to Copeland’s negligence. Section 60-258a does not address settlements, but i nstead contemplates a full trial on the merits in cases “[w]here the comp arative negligence of the parties . . . is an issue.” In such cases, § 60-258a provi des that an injured party’s negligence does not bar the party from bringing an action and recovering damages, so long as the party’s negligence is less than the negligence of the alleged tortfeasor against whom recovery is sought. See Kan. Stat. Ann. § 60- 258a(a). Section 60-258a further provides that

the jury shall return special verdicts, or in the a bsence of a jury, the court shall make special findings, dete rmining the percentage of negligence attributable to each o f the parties, and determining the total amount of damage s sustained by each of the claimants, and the entry o f judgment shall be made by the court. No general ve rdict shall be returned by the jury.-13-

Id. § 60-258a(b). When the fact finder determines a pl aintiff is contributorily negligent, the statute provides that the total awar d of damages to the plaintiff shall be reduced “in proportion to the amount of ne gligence attributed” to the plaintiff. Id. § 60-258a(a); cf. Mick v. Mani , 766 P.2d 147, 150 (Kan. 1988) (discussing purposes of comparative negligence statute). Section 60-258a thus speaks in terms of the jury or , in the event of a bench trial, the trial court making determinations as to the plaintiff’s total damages and comparative negligence following a trial. At the c onclusion of such a fact finding trial, the plaintiff’s damage award is reduced by t he court according to the negligence attributed to the plaintiff by the fact finder. Because the settlement in this case did not involve factual determinations of negligence and total damages following a trial, and because there was accordingl y no reduced damage award, § 60-258a is inapplicable. Like § 60-258a, § 39-719a(c) contains no language e xpressly referring to settlements. Copeland argues, however, that under § 39-719a(c), when there is a settlement, the court apportioning the settlement p roceeds must make findings as to the negligence of the injured party, and then mu st reduce SRS’ subrogation right according to the injured party’s negligence. Section 39-719a(c), however, imposes no such requirement on the court.-14-

The conclusion that § 39-719a(c) does not apply to the settlement in this case is consistent with the apparent purpose of the provision. When an injured party has been found by the fact finder at trial to be negligent and has therefore received a reduced damage award, § 39-719a(c) ensur es that SRS’ reimbursement for medical assistance may only be taken from the i njured party’s reduced damage award and not from the full damage determination. SRS’ reimbursement for medical assistance payments will thus never exceed the actual damage award received by the injured party following a trial. I n contrast to a fact finder’s total damage determination following a trial, no possibil ity exists that the injured party’s recovery in a settlement can be further red uced by a determination of that party’s negligence. Much like the situation of the court reducing the total damage determination by the percentage of the injured party’s own negligence following a trial, the amount of the settlement necessarily inc orporates a reduction attributable to the injured party’s own negligence, if any. Thus, the concerns addressed by § 39-719a(c) are not implicated in cas es when an injured party settles with the alleged tortfeasor. We conclude that because § 39-719a(c) is inapplicab le, the district court did not err in refusing to make a determination of Copeland’s negligence and did not err in refusing to reduce SRS’ reimbursement of medical assistance based on Copeland’s alleged negligence.2 We note that the parties are not in accord as to th e amount of Copeland’s

total damages. At the hearing to approve the settl ement and apportion the proceeds, Copeland’s mother testified that Copeland ’s total damages exceeded $6 million and testified that the total damage figure had been derived in part from a report prepared by an individual “with expertise in rehabilitation.” Toyota’s attorney objected to this testimony except insofar as the evidence of damages was offered solely to assist the district court in dete rmining whether the settlement was just and reasonable. The district court did no t make any findings as to Copeland’s damages. Because our decision in this c ase is not dependent on the amount of Copeland’s total damages, we need not det ermine the accuracy of Copeland’s figure. -15-

B. Equitable Subrogation Principles Copeland also asserts the district court erred in r efusing to apply equitable subrogation principles to reduce or eliminate SRS’ share of the settlement proceeds. Copeland argues that under equitable sub rogation principles, namely the “made whole” rule, SRS is entitled to recover o nly after Copeland is fully compensated for her loss. Copeland asserts that sh e was not fully compensated by the $250,000 settlement because her total alleged d amages exceeded $6.4 million, leaving SRS “entitled to nothing from this settleme nt.” 2 Alternatively, Copeland asserts that SRS’ “recovery must be prorated to all ow subrogation on a proportional basis of damages to recovery.” Copela nd specifically argues that because the settlement represents only 3.886% of he r total alleged damages, SRS should recover at most only 3.886% of the medical e xpenses it paid, less its share of litigation expenses and attorney fees. In rejec ting Copeland’s arguments for application of general equitable subrogation princi ples, the district court-16-

concluded that § 39-719a provides “a statutory righ t on the part of the state to full recovery of medical benefits provided to the plaint iff. . . . There is no provision for application of general common law or equitable principles, which require full recovery as a prerequisite to subrogation.” Kansas courts have not yet interpreted the language of § 39-719a to determine whether SRS’ statutorily created right of subrogation is subject to traditional equitable subrogation principles. Cope land therefore relies on cases from other states in arguing that the statute incorporates unexpressed equitable principles because it creates only a subrogation ri ght and does not provide for a lien. See, e.g., Paulsen v. Department of Soc. & Health Servs. , 898 P.2d 353, 354, 356 (Wash. Ct. App. 1995) (holding state’s statutory right to recover medical payments was not subject to equitable subrogation p rinciples because the statute provided for a lien in addition to a subrogation ri ght and because statute’s language emphasized full reimbursement to state). A review of the cases cited by Copeland and the specific language and structure of § 39-719a indicates that § 39- 719a should not be read to incorporate the equitabl e principles urged by Copeland. In construing medical assistance reimbursement prov isions comparable to § 39-719a, courts have generally concluded that tra ditional equitable principles do apply to a state’s statutory subrogation right abse nt some indication of legislative3 Although many courts have concluded that equitable principles do apply to

the state’s subrogation right under the relevant st ate statute, courts have not uniformly adopted the specific equitable principles suggested by Copeland, namely, the “made whole” rule and proportional reco very. Of those cases in which courts have concluded equitable principles ap ply to the state’s subrogation right, most have involved the question of whether t he trial court had discretion to apportion proceeds between the state agency and the injured party in a manner that awarded the state less than full reimbursementfor medical assistance payments. In those cases, courts have typically he ld that, based on general equitable principles, the trial court does have suc h discretion and that 100% recoupment by the state is not statutorily required , but instead depends on the facts of the case. See, e.g., Smith v. Alabama Medicaid Agency , 461 So.2d 817, 818-20 (Ala. Civ. App. 1984) (stating that the stat e’s statutory subrogation right was subject to equitable principles and that the st atute did not mandate total recoupment by the state in every case, “as such a d etermination depends on the facts of a particular case”).

4 As noted above, in arguing equitable principles app ly to SRS’ subrogation right, Copeland relies on the fact that the Kansas statute does not provide SRS with a lien securing reimbursement, but only create s a subrogation right. Copeland has not adequately explained, however, why the presence or absence of a lien should control this court’s decision whetherequitable principles have been abrogated under Kansas’ statute. Copeland argues g enerally that “principles of equity govern subrogation while they do not general ly govern liens.” Copeland then cites cases in which courts have stated that t he creation of a statutory lien in addition to, or instead of, a subrogation right “ev idences legislative intent to displace equitable principles.” Paulsen v. Department of Soc. & Health Servs. , 898 P.2d 353, 354, 356 (Wash. Ct. App. 1995) (stati ng that “[s]ubrogation and lien are separate equitable remedies designed to se cure repayment of an underlying obligation” and that “[t]he structure an d language of the statutes at -17- intent to displace such principles. 3 See White v. Sutherland, 585 P.2d 331, 334 (N.M. Ct. App. 1978); see also Hedgebeth v. Medford, 378 A.2d 226, 230-31 (N.J. 1977). We therefore look at the specific lan guage of § 39-719a to determine whether the Kansas legislature has expressed or oth erwise indicated an intent to abrogate or incorporate the equitable principles ad vanced by Copeland. 4issue support the presumption that the Legislature was cognizant of the historical

distinction between the two remedies and created a statutory lien as an alternate means to recover”); see also Indiana Dep’t of Pub. Welfare v. Larson , 486 N.E.2d 546, 548 (Ind. Ct. App. 1985) (stating “the equitab le principles and discretion in determining reimbursement pursuant to a subrogationstatute do not apply to reimbursement to the State for the Medicaid benefit s” under statute providing only for a lien). These courts have not held, howe ver, that the existence of a lien is a requirement for finding that equitable princip les do not apply. Rather, a review of the cases interpreting medical assistance reimbursement statutes indicates that resolution of the issue is dependenton the particular language, provisions, and background of each statute. In addition, although some courts have relied on th e existence of a lien to determine that equitable principles have been abrog ated, other courts have not found the creation of a lien to be determinative of legislative intent to retain or abrogate traditional equitable subrogation principl es. See, e.g., Underwood v. Department of Health & Rehabilitative Servs. , 551 So.2d 522, 524-26 (Fla. Dist. Ct. App. 1989) (holding equitable principles apply to state’s subrogation right under former Florida statute, despite existence of lien provision); see also Walker v. District of Columbia , 682 A.2d 639, 643-44 (D.C. 1996) (relying on othe r provisions of statute creating subrogation right an d lien, rather than distinctions between subrogation and lien provisions, in determi ning equitable principles were abrogated). Further, there are no cases holding th at equitable principles necessarily apply in the absence of a lien. We the refore reject Copeland’s assertion that merely because the Kansas statute do es not create a lien in addition to the subrogation right, the equitable principles advocated by Copeland are necessarily contained in the statute. -18- We first note that § 39-719a contains no language e xplicitly providing that SRS’ subrogation right is limited by general equita ble principles, nor is there language explicitly giving the court discretion to apportion proceeds according to such principles. Cf. Davis v. City of Chicago , 322 N.E.2d 29, 31-32 (Ill. 1974) (discussing statute providing that “[t]he court maydetermine what portion of the recovery shall be paid to the injured person and wh at portion shall be paid to the5 Other exceptions to SRS’ subrogation right, not dir ectly relevant in this

case, are contained in subsection (a) of § 39-719a. See Kan. Stat. Ann. § 39- 719a(a). This subsection provides that SRS may rec over for medical expenditures from the medical assistance recipient and that SRS is subrogated to the rights of the recipient “except as provided under K.S.A. 39-7 86 and 39-787, and amendments thereto, or under section 303 and amendm ents thereto of the federal Medicare catastrophic coverage act of 1988, whichev er is applicable.” Id. The referenced provisions in this subsection address th e treatment of the joint income and resources of the medical assistance recipient a nd his or her spouse. The provisions allow the recipient and spouse to divide joint income and resources into separate shares, and place limitations on the state’s rights to the spouse’s share. -19- [state agency providing medical assistance]” and st ating that the clear intent of this language was to permit trial courts to exercis e discretion in apportioning any recovery between the state and injured person). Sp ecifically, there is no indication in § 39-719a that SRS is limited to reco vering a pro rata share of the medical assistance recipient’s settlement proceeds, or that SRS may only recover if the recipient is fully compensated. Although the statute does not indicate that SRS’ re covery is limited by general equitable principles, the statute does expr essly place a number of specific limitations on SRS’ recovery. The primary statutory limitations on SRS’ recovery are found in subsection (b) and subsection (c). 5 Section 39-719a(b) provides for the allocation of attorney fees, stating that “the court shall fix attorney fees, which shall be paid proportionately by [SRS] and th e injured person . . . in the amounts determined by the court.” Kan. Stat. Ann. § 39-719a(b). This subsection6 Many cases raising the issue of whether the state’s subrogation right is

subject to equitable principles involve a request b y an injured party that the state pay a portion of the injured party’s attorney fees and other litigation expenses incurred in obtaining a recovery from a third party . For example, in Hedgebeth v. Medford, 378 A.2d 226 (N.J. 1977), an injured party conten ded that a pro rata share of the injured party’s attorney fees were pro perly deducted by the trial court from the state’s Medicaid reimbursement claim. The state supreme court agreed, holding that the state’s statutory subrogation righ t was governed by equitable principles and that, in accordance with these princ iples, the state must pay a portion of the recipient’s attorney fees. See id. at 374. Because the requirement that the state share attorney fees and other litigation expenses incurred by the injured party in pursuing a recovery is a prominentequitable principle in medical assistance reimbursement cases, the statutory expre ssion of this principle in § 39- 719a(b) is an indication that the Kansas legislatur e was aware of equitable principles and made a choice to include some equita ble principles while excluding all others in its enactment of § 39-719a. -20- thus provides the court with some discretion in all ocating attorney fees. The subsection further provides, however, that the fees paid by SRS may not exceed either two-fifths or one-third of the medical assis tance recovered, depending on whether there was a trial or a settlement prior to trial. **6**See id. ; cf. Walker v. District of Columbia , 682 A.2d 639, 644 (D.C. 1996) (holding equitable principles statutorily abrogated partly because statute explicitly created exception to full reimbursement to government by requiring go vernment to pay portion of medical assistance recipient’s attorney fees). Sec tion 39-719a(c), as discussed previously, also places a limitation on SRS’ recove ry when the injured party’s total damage award has been reduced as a result of negligence attributed to the party pursuant to § 60-258a. See Kan. Stat. Ann. § 39-719a(c).7 Kansas courts have similarly refused to imply addit ional restrictions on an

insurer’s statutory subrogation right under Kansas’ no-fault insurance statute, because the statute creating the subrogation right provides explicit exceptions to that right. See, e.g. , Russell v. Mackey , 592 P.2d 902, 906 (Kan. 1979) (discussing subrogation right, under Kansas’ no-fau lt statute, of personal injury protection (PIP) insurance carrier to reimbursementof PIP benefits paid when the insured recovers by means of a settlement with thir d-party tortfeasor, and stating statute provides for full reimbursement to PIP carr ier for PIP benefits paid, subject only to two statutory exceptions: the PIP c arrier’s recovery may be reduced for attorney fees and may be reduced for th e comparative negligence of the insured when the insured’s own recovery is redu ced by the insured’s negligence in an action brought pursuant to Kan. St at. Ann. § 60-258a); cf. Easom v. Farmers Ins. Co. , 560 P.2d 117, 124-26 (Kan. 1977) (comparing Kansa s nofault statute to Florida no-fault statute which exp licitly permitted equitable apportionment of insured’s recovery between insuredand PIP carrier, and holding that “an apportionment or equitable distribution th eory” should not be injected into the Kansas no-fault law in part because the Ka nsas statute contained no explicit provision for equitable distribution). -21- Because the statute contains these express limitati ons on SRS’ subrogation right, we are reluctant to impose additional, impli ed limitations on SRS’ recovery based on general equitable principles unexpressed i n the statute. 7 Cf. Walker , 682 A.2d at 644 (stating “[t]he Act itself defines the operative pr inciples that govern these exceptions. There is no warrant for the judi cial imposition of another, illdefined exception [based on equitable principles] t o the explicit distributive scheme of the [subrogation] statute”); Norman J. Zi nger, 2A Sutherland’s Statutes and Statutory Construction § 47.11 (5th ed. 1992) ( stating that “exceptions are not to be implied. Where there is an express exception , it comprises the only-22-

limitation on the operation of the statute and no o ther exceptions will be implied”). The general language creating SRS’ subrogation righ t further indicates that, with the exception of the limitations discussed abo ve, SRS is entitled to full reimbursement for all medical assistance payments m ade to the recipient. The statute provides that when SRS has paid for medical care and when a third party has a legal obligation to pay those medical expense s, SRS “may recover the same from the recipient or from the third party and shal l be in all respects subrogated to the rights of the recipient in such cases.” Kan . Stat. Ann. § 39-719a(a) (emphasis added). As the district court indicated, the statute thus “‘emphasize[s] reimbursement, which by definition denotes restorat ion of an amount equivalent to that expended or repayment in full.’” April 12, 1996 Memorandum & Order at 4 (quoting Paulsen , 898 P.2d at 356); cf. Dale v. Gubin , 879 S.W.2d 699, 700-701 (Mo. Ct. App. 1994) (rejecting argument, based on e quitable principles, that state’s reimbursement must be reduced by proportion ate share of attorney fees because statute unambiguously provided that state a gency “shall have a right to recover the full amount of payments made to a provi der”). See generally Unified Sch. Dist. No. 259 v. Sloan , 871 P.2d 861, 865-66 (Kan. Ct. App. 1994) (rejecting, in insurance contract case, application of general equitable principles where insurance contract provisions creating subrog ation right expressly provided for complete reimbursement).8 Cf. Walker , 682 A.2d 643-44 (holding government was entitled to full

reimbursement for Medicaid expenses although lawsui t was settled for less than alleged total damages, and noting court was preclud ed from adopting some equitable principle of proportionate compromise bec ause the statute provided a distribution scheme and contained two express excep tions to full reimbursement: the government was required to contribute to the Me dicaid recipient’s litigation costs, and the government was allowed to waive its reimbursement claim in certain circumstances) ; Coplien v. Department of Health & Soc. Servs. , 349 N.W.2d 92, 93-95 (Wis. Ct. App. 1984) (holding stat ute providing state with subrogation right for medical assistance payments a brogated equitable principles because statute prioritized distribution of proceed s, and rejecting recipient’s argument that because she was not made whole by hersettlement, the state could only recover a pro rata share of the settlement pro ceeds); Waukesha County v. Johnson , 320 N.W.2d 1, 3-4 (Wis. Ct. App. 1982) (holding s tatute providing county with subrogation right rendered traditional equitable principles, including “made whole” rule, inapplicable because statute spe cifically set forth the rights of the county and medical assistance recipient to main tain actions and recover from a third-party tortfeasor). -23- After reviewing the statutory scheme and specific l anguage of § 39-719a, we conclude that SRS’ subrogation right is not subj ect to the equitable principles urged by Copeland. As in other cases in which courts have concluded equitable subrogation principles have been statutorily abrogated, the Kansas statute’s explicit provisions limiting SRS’ recovery in certa in circumstances and the statute’s language emphasizing full reimbursement f or medical assistance payments made by SRS are indications that the legis lature did not intend to reduce or eliminate SRS’ recovery when the injured party h as not been fully compensated by the injured party’s settlement with the tortfeas or. 8 The statute’s provisions and specific language instead indicate that the Kansas legislature has “weighed-24-

medical recipients’ need to be compensated for thei r injuries against the need for conservation of public funds,” and has determined t hat, in general, “the public funds have priority.” Coplien v. Department of Health & Soc. Servs. , 349 N.W.2d 92, 95 (Wis. Ct. App. 1984). We accordingly reject Copeland’s arguments that the district court erred in refusing to eliminate SRS’ recovery based on the “m ade whole” rule or to reduce SRS’ recovery on a proportionate basis. C. Attorney Fees Assessed to SRS’ Share of Settlement Procee ds Copeland finally argues that under § 39-719a(b), SR S should have to pay attorney fees in the amount of 40% rather than 33.3 3% of SRS’ medical assistance recovery because a trial was convened. Kan. Stat. Ann. § 39-719a(b) provides that the court shall apportion attorney fe es between SRS and the medical assistance recipient, but that SRS’ share of attorn ey fees may not exceed one-third of its medical assistance recovery “for cases settl ed prior to trial,” or two-fifths of its medical assistance recovery “when a trial is co nvened.” Under the clear and unambiguous language of this statutory provision, S RS’ share of attorney fees could not exceed one-third of its recovery because Copeland settled with Toyota before trial. Copeland nevertheless contends that the hearing on the motions to approve the settlement and apportion the proceeds constitut ed a “trial” for purposes of-25-

§ 39-719a(b). In so arguing, Copeland relies on pa ssing references by the district court and parties to the hearing as a “trial.” Cop eland also relies on general definitions of the term “trial” to establish that t he hearing constituted a trial. Although the district court may have referred to th e hearing as a “trial,” this reference clearly does not constitute a determ ination, as Copeland suggests, that the hearing was a trial for purposes of § 39-7 19a(b). Further, the statutory language of § 39-719a(b), distinguishing cases sett led before trial from cases settled after a trial is convened, contemplates the convening of a trial on the merits between the injured party and the third-party tortfeasor, and does not refer to proceedings following a settlement which only ad dress the judicial approval of the settlement and the allocation of settlement pro ceeds. In this case, Copeland settled with Toyota before atrial on the merits of the case was convened. The subsequent proceedings to apportion the proceeds were thus irrelevant to the determination, under § 39-71 9a(b), of what percentage of attorney fees applied to SRS’ recovery. This courttherefore rejects Copeland’s argument that SRS should have been required to pay attorney fees in the amount of 40% of its medical assistance recovery.
CONCLUSION The district court properly refused to apply Kan. S tat. Ann. § 39-719a(c) to reduce SRS’ recovery based on Copeland’s alleged ne gligence. The district court-26-

also properly refused to apply general equitable pr inciples to reduce or eliminate SRS’ recovery. Finally, the district court’s orderthat SRS pay attorney fees in the amount of one-third of the medical assistance r ecovered was proper under § 39-719a(b). We therefore AFFIRM the judgment of the district court.