Opinion ID: 1059478
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: 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 tiled 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 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.