KLINE, P. J.
Appellant Smitty's Bar, Inc. (Smitty's), appeals after the trial court granted the motion of respondent Keith Karpinski to enforce a settlement between the parties, pursuant to Code of Civil Procedure section 664.6.
On December 11, 2012, Karpinski filed a complaint for damages against Smitty's, Kyle Phillip Algeo, and Scott Newcomb, with a cause of action against Smitty's for negligence and a cause of action against the two other defendants for assault and battery. The complaint alleged that, on July 2, 2012, Smitty's, a bar in Sausalito, negligently allowed two intoxicated individuals, Algeo and Newcomb, to enter and remain in the bar, and that the two men threatened and punched Karpinski in the face and head, causing serious injuries.
On March 20, 2014, following court-ordered mediation, Smitty's and Karpinski signed an initial settlement agreement in which Karpinski agreed to dismiss the complaint as to Smitty's with prejudice in exchange for $40,000. On May 5, 2014, Karpinski and his attorney signed a formal "Settlement Agreement and Release of All Claims" (settlement agreement), in which, in exchange for the $40,000 payment, Karpinski provided a general release of all claims against Smitty's.
On July 22, 2014, Karpinski filed a motion for entry of judgment pursuant to the settlement agreement, under section 664.6. Smitty's opposed the motion on the ground that liens had been imposed against the settlement amount by the federal government, based on Medicare payments to Karpinski,
On September 2, 2014, the trial court granted the motion to enforce the settlement, reasoning as follows: "While the terms of the settlement agreement state that [Karpinski] and his counsel will `negotiate, satisfy, and dispose of all liens,' it does not state that they must do so before receiving payment. Further, the settlement agreement requires [Karpinski] and his counsel to hold [Smitty's], its attorneys, and [Crusader] Insurance Company harmless with respect to any lien claims. Although Crusader ... expresses concern over whether [Karpinski] and his counsel will honor that obligation if a claim arises, Crusader ... has a remedy if they do not." On September 11, 2014, the court ordered entry of judgment for Karpinski and against Smitty's in the amount of $40,000. The court also awarded Karpinski $2,200 in attorney fees. On September 17, 2014, Karpinski served notice of entry of judgment.
On October 15, 2014, Smitty's filed a notice of appeal.
Smitty's contends the trial court erred when it granted Karpinski's motion to enforce the settlement because satisfaction of the outstanding medical liens is a condition precedent to payment of the settlement and Karpinski has failed to resolve the liens.
Section 664.6 provides: "If parties to pending litigation stipulate, in a writing signed by the parties outside the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement. If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement."
In addition to providing for payment of $40,000 to Karpinski in exchange for a release of all claims, the settlement agreement contained the following relevant provisions. In paragraph No. 5, Karpinski and his attorney "agree[d] to negotiate, satisfy, and dispose of all liens, including but not limited to all client claims which are now known, including but not limited to the lien asserted by State of California, as well as any other lien claims which may hereafter be asserted. [Karpinski] further agrees, as consideration for the above payment, to indemnify and hold harmless [Smitty's], its attorneys and its insurance carrier, Crusader ..., with respect to all past, present, and future lien claims." In paragraph No. 6, Karpinski and his attorney also agreed to indemnify Smitty's, its attorneys, and Crusader from any loss, liability, or claim of any kind "arising from or occasioned by any lien, rights or obligations [of] any character whatsoever, including but not limited to,
According to Smitty's, the question in this case is "whether a court can enter judgment on a settlement agreement, thus making it immediately enforceable, if there are outstanding liens (or their functional equivalent) that have attached to the proceeds of the settlement which the plaintiff has not yet resolved." Smitty's acknowledges that a defendant has no obligation to protect a plaintiff's contractual liens, but argues that "it is equally clear that it must protect statutory liens, especially where a statute expressly makes it liable." (Boldface, underscoring & fns. omitted.)
The first statute at issue, Government Code section 13963, is part of the statutory scheme of the California Victims of Crime Program, which is intended to "operate[] as a kind of safety net for victims of crime who suffer losses for which there is no other public or private source of compensation." (County of Alameda v. State Bd. of Control (1993) 14 Cal.App.4th 1096, 1107 [18 Cal.Rptr.2d 487].) Government Code section 13963 provides in relevant part: "(a) The [California Victims of Crime Board] shall be subrogated to the rights of the recipient to the extent of any compensation granted by the board. The subrogation rights shall be against ... any person liable for the losses suffered.... [¶] (b) The board shall also be entitled to a lien on any judgment, award, or settlement in favor of or on behalf of the recipient for losses suffered as a direct result of the crime that was the basis for [the] receipt of compensation in the amount of the compensation granted by the board. The board may recover this amount in a separate action, or may intervene in an action brought by or on behalf of the recipient.... [¶] ... [¶] (d) No judgment, award, or settlement in any action or claim by a recipient, where the board has an interest, shall be satisfied without first giving the board notice and a reasonable opportunity to perfect and satisfy the lien...." Subdivision (g) of Government Code section 13963 requires the trial court,
Medicare also has a right of action to recover its payments from, inter alia, a beneficiary or attorney "that has received a primary payment." (42 C.F.R. § 411.24(g).) (2015).)
The parties agree that Medicare is entitled to reimbursement of its conditional payments and that the lien of the board must be paid. Smitty's asserts, however, that Karpinski's motion to enforce the settlement was an improper attempt to use section 664.6 to evade his obligation to resolve the liens before payment of the settlement amount. In particular, Smitty's asserts that reimbursement to Medicare and the board are conditions precedent to payment of the settlement proceeds to Karpinski.
First, we observe that Smitty's did not raise the legal theory of conditions precedent in the trial court. (See Sea & Sage Audubon Society, Inc. v. Planning
Here, the settlement agreement provides that Karpinski will satisfy all liens and indemnify Smitty's, its attorneys, and Crusader with respect to any claim arising under a lien or other obligation. There is no provision that either expressly states or implies that Karpinski must satisfy the liens before it receives the settlement proceeds. Smitty's points to paragraph No. 7, which states that Karpinski "covenants and declares that there are no liens, claims or demands of any kind either by any person providing services to [Karpinski] or by any attorney either past or present who may have represented [Karpinski] in the above-entitled action." That provision does not demonstrate that resolution of all liens is either an express or implied condition precedent to Smitty's settlement payment to Karpinski. Notably, paragraph No. 7 appears to be a general boilerplate provision regarding liens, whereas paragraphs Nos. 5, 6, and 17 all relate to the particular facts and reimbursement obligations of the present case. (See § 1859 [in a contract, "when a general and particular provision are inconsistent, the latter is paramount to the former. So a particular intent will control a general one that is inconsistent with it"]; accord, Prouty v. Gores Technology Group (2004) 121 Cal.App.4th 1225, 1235 [18 Cal.Rptr.3d 178].) Hence, Smitty's has not shown that Karpinski's satisfaction of the liens is an express or implied condition precedent to payment of the settlement proceeds. (See Pfeifer v. Countrywide Home Loans, Inc., supra, 211 Cal.App.4th at p. 1267.)
In addition, neither the lien imposed under Government Code section 13963 nor the reimbursement obligation under title 42 of the United States Code
The Hearn court agreed with the reasoning of a Connecticut court, which had observed that "`there is no authority for an insurer's insistence that it protect a governmental agency's lien by making that agency a co-payee on a check tendered in payment of a judgment or settlement. To the contrary, the recent case of Zaleppa v. Seiwell [(2010) 2010 PA Super 208 [9 A.3d 632]], stands for the proposition that, absent express authorization, private parties may not assert the interests of the government (in that case, Medicare) in a post-trial motion or any phase of litigation. Generally, putting an agency's name on a check as a co-payee is neither authorized or required under federal or state law, and quite obviously, is not an efficient way to resolve personal injury lawsuits.... [¶] While an insurer has a responsibility to assure that governmental agency liens are taken into account, such responsibility is generally discharged by obtaining a written commitment by the plaintiff, either in a release document or in an independent document, to be responsible
In this case, as with the agreement in Hearn, the parties referred to Medicare's right of reimbursement in the settlement agreement, and Karpinski signed a release acknowledging, in paragraph No. 5, his responsibility to honor all lien obligations. (See Hearn, supra, 726 S.E.2d at p. 668.) Moreover, if Karpinski fails to honor his obligation to repay Medicare, paragraph No. 5 of the agreement requires him to indemnify Smitty's, its attorneys, and Crusader "with respect to all past, present, and future lien claims" and paragraph No. 17 specifically requires him to indemnify Crusader in any claim related to Medicare reimbursement. (See ibid.) Had Smitty's and Crusader wanted to ensure that Medicare was reimbursed for its conditional payment to Karpinski before payment of the settlement proceeds, they could have negotiated for inclusion of such a provision in the settlement agreement.
The judgment is affirmed. Costs on appeal are awarded to respondent Keith Karpinski.
Richman, J., and Stewart, J., concurred.
The Hearn court also distinguished cases such as Wilson v. State Farm Mutual Automobile Ins. Co. (W.D.Ky. 2011) 795 F.Supp.2d 604 — also relied on by Smitty's — in which, "[i]n the limited context of bad faith failure-to-pay claims against insurance companies, some courts have determined that, in the absence of an explicit agreement, it is reasonable for an insurer to list Medicare as a payee on a settlement check." (Hearn, supra, 726 S.E.2d at p. 668 [citing cases].)