Present: All the Justices 

COMMONWEALTH OF VIRGINIA, DEPARTMENT 

 OF MEDICAL ASSISTANCE SERVICES 

 OPINION BY 

v. Record No. 001881 JUSTICE LAWRENCE L. KOONTZ, JR. 

 June 8, 2001 

VIRGINIA HUYNH, AN INFANT, BY HER 

MOTHER AND NEXT FRIEND, TIEN HA, ET AL. 

FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH 

A. Bonwill Shockley, Judge 

 The dispositive issue in this appeal is whether the 

authority granted by Code § 8.01-66.9 to a trial court to reduce 

a lien in favor of the Commonwealth for medical services 

rendered to an infant injured by the alleged negligence of her 

physician permits the trial court to exclude the Commonwealth 

from receiving any portion of the infant’s settlement with the 

physician. 

BACKGROUND 

 The material facts are not disputed. Virginia Huynh, an 

infant, suffered permanent, devastating brain damage during her 

birth. In a subsequent medical malpractice suit brought in 

Huynh’s name by her mother as next friend, the physician 

attending Huynh’s birth, without admitting liability, agreed to 

pay $595,000 to settle the suit. 

 The Commonwealth, through the Department of Medical 

Assistance Services, had paid for medical care received by Huynh 

related to her birth injuries because she was a Medicaid 
recipient. The Commonwealth asserted a lien against the 

proceeds of the settlement under Code § 8.01-66.9. The amount 

of the payments secured by the statutory lien was $144,957.22.

 Pursuant to a further provision of Code § 8.01-66.9, Huynh 

filed a motion to reduce the Commonwealth’s lien and to 

apportion the recovery from her physician between herself, her 

attorneys, and the Commonwealth. Huynh asserted that, pursuant 

to Code § 2.1-127, her attorneys had sought “without success” to 

negotiate a compromise of the amount of the lien with the office 

of the Attorney General. According to the motion, Huynh 

expressly sought a “waiver” of the Commonwealth’s lien. 

 The Commonwealth responded to the motion to reduce its lien 

by contending that Huynh’s attorneys had not made a good faith 

effort to negotiate a compromise. The Commonwealth further 

contended that it was willing to consider a compromise of the 

amount of its lien if Huynh’s attorneys would accept a 

proportional decrease in their 40% contingency fee. 

 Following a hearing, the trial court entered an order 

approving the amount and terms of the infant settlement pursuant 

to Code § 8.01-424.1 The order further provided that the trial 

court would reduce the Commonwealth’s lien on the ground that 

“the equities of this tragic case, the limited funds available 

 1

 The trial court’s approval of the amount and terms of the 

settlement is not an issue in this appeal. 

2
to compensate Virginia Huynh, and the permanent injuries of 

Virginia Huynh, require such action.” The order then provided 

for the disbursal of the entire recovery of $595,000 by first 

reducing the amount of the Commonwealth’s lien to “zero,” and 

awarding $238,000 to Huynh’s attorneys (representing their full 

40% contingency fee), $13,779.30 to these attorneys for 

litigation expenses incurred on Huynh’s behalf, and the balance 

of $343,220.70 to Huynh. Huynh’s portion of the recovery was 

divided into two funds; one to purchase an annuity for the sole 

benefit of the child, and the other to fund a “Special Needs” 

trust established under the applicable law for the benefit of 

disabled persons under certain provisions of the Social Security 

Act. Although apportioning no part of the recovery to the 

Commonwealth, the order expressly stated that the Commonwealth’s 

claim for medical care provided to Huynh “shall not be 

extinguished by the elimination of the lien.” We awarded the 

Commonwealth this appeal. 

DISCUSSION 

 When the Commonwealth pays for, or provides, medical 

services to an indigent person necessitated by a tortious 

injury, Code § 8.01-66.9 creates a lien in favor of the 

Commonwealth for the amount of those services on any recovery 

from the tortfeasor by the injured party. Pursuant to Code 

3
§ 2.1-127, the Attorney General may compromise the amount of the 

Commonwealth’s claim. 

 We have previously recognized that, subject to certain 

procedures and limitations, “Code § 2.1-127 has, for many years, 

given authority to the Attorney General . . . to compromise, 

settle, and ‘discharge’ disputes and claims involving the 

interests of the Commonwealth and its institutions.” Rector and 

Visitors of University of Virginia v. Harris, 239 Va. 119, 123, 

387 S.E.2d 772, 775 (1990). Thus, under the authority of Code 

§ 2.1-127, the Attorney General may reduce or eliminate a claim 

of the Commonwealth, and the amount of the Commonwealth’s lien 

created by Code § 8.01-66.9 would be reduced or eliminated 

correspondingly. 

 Code § 8.01-66.9 also provides that “[t]he Commonwealth’s 

. . . lien shall be inferior to any lien for payment of 

reasonable attorney’s fees and costs, but shall be superior to 

all other liens created by the provisions of this chapter and 

otherwise. Expenses for reasonable legal fees and costs shall 

be deducted from the total amount recovered.” Pertinent to this 

appeal, the statute further provides that when the Commonwealth 

asserts a lien against the recovery in a personal injury suit, 

the trial court “may . . . reduce the amount of the lien[] and 

apportion the recovery, whether by verdict or negotiated 

4
settlement, between the plaintiff, the plaintiff’s attorney, and 

the Commonwealth . . . as the equities of the case may appear.” 

 In Commonwealth v. Smith, 239 Va. 108, 387 S.E.2d 767 

(1990), decided the same day as Harris, we held that the effect 

of Code § 8.01-66.9 “was to vest in the trial judge, in the 

circumstances specified by the statute, the authority, otherwise 

vested in the Attorney General . . . by Code § 2.1-127, to 

compromise and reduce the Commonwealth’s lien . . . [in order] 

to reduce expense and delay, to avoid litigation, and to promote 

settlements.” Smith, 239 Va. at 112, 387 S.E.2d at 769. While 

recognizing the similarity between the authority granted to the 

Attorney General and that given to the trial judge, in Harris we 

held that the trial judge’s authority was limited to 

“ ‘reduc[ing] the amount of the lien.’ ” 239 Va. at 125, 387 

S.E.2d at 775. This is so because the General Assembly “did not 

take the further step of authorizing the judge to ‘discharge’ 

the Commonwealth’s claim, although [Code] § 2.1-127 vested that 

authority in the Attorney General, subject to the appropriate 

approvals.” Harris, 239 Va. at 124, 387 S.E.2d at 775. 

 In the present case, the trial court properly recognized 

that it lacked the authority under Code § 8.01-66.9 to reduce or 

eliminate the amount of the Commonwealth’s claim which was 

secured by the lien created by the statute. The issue raised by 

the Commonwealth in this appeal is whether the trial court 

5
nonetheless had the authority to “apportion” to the Commonwealth 

no part of the recovery against which the Commonwealth had 

asserted its lien.2

 “The legislative purpose of Code § 8.01-66.9 [is] to secure 

to the public treasury such recompense as [may] be found, where 

public funds [have] been expended for the treatment of tortious 

injuries.” Commonwealth v. Lee, 239 Va. 114, 118, 387 S.E.2d 

770, 772 (1990). However, no language in this statute suggests 

that the Commonwealth be permitted to enforce its lien in its 

entirety if in a particular case this would result in the 

injured party being denied a just recovery for her injuries or 

her attorneys failing to receive reasonable compensation for the 

services they rendered to obtain that recovery. Rather, the 

statute expressly directs the trial court to “apportion the 

recovery, . . . as the equities of the case may appear.” 

 In this context, Code § 8.01-66.9 necessarily involves a 

case-by-case analysis to ensure that the Commonwealth is 

 2

 During oral argument of this appeal, the Commonwealth 

asserted, as it had in the trial court, that Huynh had not “made 

a good faith effort to negotiate a compromise pursuant to [Code] 

§ 2.1-127” as required by Code § 8.01-66.9 and, thus, was not 

entitled to petition the trial court for a reduction of the 

Commonwealth’s lien. However, the Commonwealth did not assign 

error to the trial court’s failure to deny Huynh’s motion to 

reduce the lien on this ground. Accordingly, we will not 

consider this issue. Rule 5:17(c); City of Winchester v. 

American Woodmark Corp., 250 Va. 451, 460, 464 S.E.2d 148, 153-

54 (1995) (this Court does not consider arguments that are not 

the subjects of assignments of error). 

6
permitted to assert its lien subject to a just recovery for the 

injured party and reasonable compensation for her counsel. The 

statute, however, provides little guidance for determining 

whether, or by how much, to reduce the Commonwealth’s lien if 

the recovery is inadequate to meet the just claims of all three 

parties. The only guidance which has been given to assist the 

trial court, and this Court on appeal, in determining what 

factors should be considered in deciding how, or even whether, 

such relief is warranted, is the general doctrine of “the 

equities of the case.” Accordingly, the ultimate decision is a 

matter of sound judicial discretion. 

 In the absence of express direction from the legislature, 

it becomes the province and duty of this Court to provide 

guidelines which will assist the trial court in exercising its 

discretion to apportion a recovery between the injured party, 

the injured party’s attorneys, and the Commonwealth. In doing 

so, we look to the plain meaning of the language used by the 

legislature. See Abbott v. Willey, 253 Va. 88, 91, 479 S.E.2d 

528, 530 (1997).

 As we stated in Harris, “ ‘Apportion’ is defined: ‘To 

divide and assign in just proportion . . . to allot.’ ” 239 Va. 

at 125, 387 S.E.2d at 776 (quoting Webster’s New International 

Dictionary 132 (2nd ed. 1934)). Thus, we held that, by this 

choice of a precise word, it was apparent “[t]he General 

7
Assembly, . . . intended that the court would have the power to 

determine what portion of the recovery each of the contending 

parties would ultimately receive, and to divide and distribute 

the recovery accordingly.” Harris, 239 Va. at 125, 387 S.E.2d 

at 776. 

 Although we did not address the issue in Harris, or in 

Smith or Lee, it is equally apparent that in order to divide and 

assign a just portion of the recovery between three parties with 

claims to shares of the recovery, the General Assembly could not 

have intended for the trial court to wholly disregard the claim 

of the Commonwealth in order to benefit the injured party or her 

attorneys. Accordingly, we hold that a trial court must assign 

or allot some portion of the recovery to the Commonwealth. 

We recognize, as was asserted by Huynh’s counsel during 

oral argument of this appeal, that part of the philosophy 

underpinning the policy of making legal services accessible by 

permitting attorneys to take cases on contingency is that a fee 

collected in an individual case, while appearing excessive in 

the abstract, actually represents, in part, compensation for the 

risk taken by counsel in undertaking contingent representation 

where no recovery may be ultimately obtained. Certainly, in 

weighing “the equities of the case,” this is one factor the 

trial court may consider in determining what compensation is 

reasonable for the services rendered to the plaintiff by her 

8
attorneys. Nonetheless, in undertaking a representation of a 

tort plaintiff whose recovery would be subject to a statutory 

lien under Code § 8.01-66.9, an attorney is presumed to be aware 

that her fee may be subject to apportionment under the terms of 

that statute. 

 Although the Commonwealth’s lien is statutorily “inferior” 

to any lien for the payment of “reasonable” attorney’s fees, we 

further hold that such fees are not immune from apportionment 

under Code § 8.01-66.9. Rather, in apportioning the recovery, 

the trial court is required to determine the reasonable 

attorney’s fees after considering the circumstances of the 

particular case, including, but not limited to, the efforts 

expended in obtaining the recovery for the injured party, the 

amount of the recovery, and the amount of the Commonwealth’s 

lien against that recovery. In making this determination, the 

trial court may reduce, but not eliminate, the fee provided for 

in the contract for legal services between the injured party and 

the attorneys in order to provide equitable portions of the 

recovery to the injured party, the injured party’s attorneys, 

and the Commonwealth. 

 Applying these principles to the facts of this case, we 

hold that the trial court erred in failing to award some portion 

of the recovery to the Commonwealth while providing Huynh’s 

attorneys the full amount of their contractual fee. This is 

9
particularly true in light of the fact that both the 

Commonwealth and Huynh’s attorneys concede that the portion of 

the recovery afforded to Huynh under the trial court’s 

apportionment provided her with less than complete relief, and 

was inadequate to meet her expected future needs. Indeed, the 

trial court’s use of a “Special Needs” trust to preserve Huynh’s 

share of the recovery was predicated on the inescapable 

conclusion that her future medical expenses would rapidly 

exhaust the money awarded to her if it were not sheltered in a 

manner that would allow her to continue receiving assistance 

from the Commonwealth. Accordingly, we will reverse the 

judgment of the trial court on this issue and remand this case 

to the trial court to make an appropriate apportionment.3

 In addition to challenging the trial court’s application of 

its authority to reduce the Commonwealth’s lien pursuant to Code 

§ 8.01-66.9, the Commonwealth also assigned error to the trial 

judge’s failure to recuse herself from consideration of this 

case. Nothing in the record discloses an actual conflict of 

 3

 In light of our holding, we need not address in detail 

Huynh’s assertions that the trial court did not reduce the 

amount of the Commonwealth’s claim and, thus, that the 

Commonwealth may ultimately recover on its claim at her death 

under the provisions of the Special Needs trust. We simply note 

that Code § 8.01-66.9 concerns the Commonwealth’s lien on the 

injured party’s present recovery from the tortfeasor and not the 

Commonwealth’s ability to ultimately recover on its claim in the 

future. 

10
interest, as defined by Canon 3(E) of the Code of Judicial 

Conduct, that would have required the trial judge to recuse 

herself. Accordingly, we find no merit in this assignment of 

error. 

CONCLUSION 

 For these reasons, we will reverse the judgment of the 

trial court and remand the case for further proceedings 

consistent with the views expressed in this opinion.4

Reversed and remanded. 

 4

 In light of our resolution of the main issue, we need not 

address the Commonwealth’s remaining assignment of error. 

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