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Gonzalez v. United States

United States District Court, S.D. California

March 22, 2017

FRANCISCO GONZALEZ, Petitioner,
v.
UNITED STATES OF AMERICA, Respondent.

          ORDER GRANTING RESPONDENT'S MOTION TO DISMISS [DOC. NO. 8]

          Hon. Michael M. Anello United States District Judge

         Petitioner Francisco Gonzalez filed a “Petition for Order that Conservatee's Outstanding Medical Expenses be Paid From Medical Care Trust Established for the Care of Conservatee” in the Superior Court of California, County of San Diego. See Doc. No. 1. Subsequently, Respondent United States of America removed the action to this Court pursuant to 28 U.S.C. § 1442, and moved to dismiss the petition for lack of subject matter jurisdiction and failure to state a claim upon which relief may be granted. See Doc. Nos. 1, 8; Fed.R.Civ.P. 12(b)(1), (6). For the following reasons, the Court GRANTS Respondent's motion to dismiss this action, and DISMISSES the action without prejudice.

         Background [1]

         A. Petitioner's Allegations

         According to the Petition, Luz Maria Gonzalez (hereinafter, “Mrs. Gonzalez”) “suffered a permanent neurologic brain injury on February 4, 20100 [sic] at Balboa Naval Hospital” during childbirth, leaving her in a “comatose and vegetative” state. See Doc. No. 1-2. Petitioner is her husband.[2] Thereafter, Petitioner filed a Federal Tort Claims Act (FTCA) action in this district-Luz Gonzalez v. United States of America, 13CV0861-LAB (WVG). Eventually, the parties agreed to settle the FTCA action during mediation on July 30, 2014. According to Petitioner, “[a] key component of this settlement was to allow [Mrs. Gonzalez] to be transferred to a better facility for continuing care.” See Doc. No. 1-2. On August 8, 2014, Mrs. Gonzalez was transferred to this new facility, Care Meridian, purportedly in part based on the government's agreement to settle the action and pay for her continuing care in some capacity. The Petition states that on September 2, 2014, Petitioner's attorney filed a motion requesting the Court approve the settlement agreement. In support of the motion, Petitioner's counsel submitted a declaration in which he stated that he “was able to negotiate an agreement with the U.S. Attorney that the government would pay for [Mrs. Gonzalez's] care at Care Meridian . . . from August 11, 2014 forward, with such sums to be paid after the government funded the settlement.” See Doc. No. 1-2. Petitioner states that the government did not object to that statement.

         The United States Attorney's office had reduced the settlement terms into writing in a “Stipulation for Compromise and Release Federal Tort Claims Act Claims Pursuant to 28 U.S.C. § 2677” (hereinafter, “Stipulation”).[3] See Doc. No. 1-2. In the Stipulation, the parties agreed to the creation of an “Irrevocable Reversionary Inter Vivos Grantor Medical Care Trust for the Benefit of Luz Maria Gonzalez.” See Doc. No. 1-2. The Trust names Medivest Benefit Advisors, Inc. as Administrator, and Wells Fargo Bank, N.A. as Trustee. However, according to the Petition, the Court declined to approve the settlement because a portion of the settlement payments would be paid to minors, and the minors were required to first obtain minors' compromises in Superior Court. After the minors' compromises were approved, Petitioner filed another petition for approval of the settlement agreement on September 24, 2014, which included the above mentioned Declaration, Stipulation, and Trust as exhibits. Subsequently, the magistrate judge assigned to the FTCA action submitted a report and recommendation to the assigned district judge recommending the Court approve the settlement. On October 3, 2014, the Court approved the settlement agreement.

         According to the Petition, “the United States did not sign the Trust until December 28, 2014” and “did not actually fund the Trust until February 25, 2015.” See Doc. No. 1-2. Petitioner states that “[t]he reasons for the delay can only be attributed to the fact that the Federal Government itself was involved and unfortunately, nothing moves quickly within the Federal Government.” See Doc. No. 1-2. Petitioner asserts that “[h]ere, the outstanding issue is the payment of the ongoing routine medical services provided to [Mrs. Gonzalez] by Care Meridian for the time period from August 8, 2014 until February 15, 2015, which represents the day [Mrs. Gonzalez] was transferred to Care Meridian's care, through the last date Medivest Benefit Advisors has not made payment.” See Doc. No. 1-2. The Trust Administrator, Medivest Benefit Advisors, denied Petitioner's request that those bills-totaling over $200, 000-be paid from the Trust funds on the grounds “that the Trust language provides that dates of service prior to the establishment of the trust are not payable from trust funds.” See Doc. No. 1-2. Petitioner contends that “this is a completely unreasonable position to take.” See Doc. No. 1-2. Petitioner argues that the federal government should not be allowed to “take advantage of a delay that they alone caused in the first place and more importantly cannot claim they were unaware of the Care Meridian lien.” See Doc. No. 1-2. In support, Petitioner points to an exhibit “where counsel for Petitioner in the underlying action explained the government's agreement to the Conservatee's transfer to Care Meridian where after [sic] the cost of her care would be paid out of the Trust once funded.” See Doc. No. 1-2. The Petition also states that the Stipulation “provides that Plaintiff is to provide evidence that all liens have been paid off yet the U.S. Attorney did not require evidence of the Care Meridian lien being paid off because the U.S. Attorney was well aware of the agreement that this lien was to be paid from the Trust funds, once funded.” See Doc. No. 1-2.

         Under the heading “Authority for Petition, ” Petitioner lists three Probate Code sections. The Petition states, “Probate Code 2430 provides that a Conservator may petition the court . . . for instructions when there is doubt whether a debt should be paid.” See Doc. No. 1-2. Also, it states, “Probate Code section 2403 . . . provides broad authority to the court to issue orders concerning the administration of a Conservatorship.” See Doc. No. 1-2. Lastly, according to the Petition, “Probate Code section 850 et seq. provides that a Conservator may file a Petition where the Conservatee has a claim to personal property in possession of another and request that this personal property be transferred to the person entitled thereto.” See Doc. No. 1-2.

         B. The Stipulation and Trust Terms[4]

         Pursuant to the Stipulation, the United States agreed to pay $1, 994, 567.00 in cash (deemed “Upfront Cash”), $900, 000.00 to purchase annuity contracts, and $2, 855, 433.00 to the Trust. See Luz Gonzalez v. United States of America, 13CV0861-LAB (WVG), Doc. No. 36, Exhibit A, Stipulation. Under the agreement, the United States was required to send a formal request to the United States Department of Treasury requesting that $5, 750, 000.00 “be expeditiously sent by electronic funds transfer” to the client trust account. Id. The United States was required to do so within three days after it obtained copies of the Stipulation and Trust signed by all parties, relevant Social Security and tax identification numbers, court orders approving the settlement, and authorization by the Attorney General or his designee. The settlement was expressly conditioned on the Attorney General's or the Attorney General's designee's approval of the settlement terms, the full agreement by the parties to all terms, and on court approval of the settlement. It was also conditioned on the parties' written agreement to all terms, conditions, and requirements.

         The Stipulation states that the plaintiffs “stipulate and agree that they are legally responsible for any and all past, present, and future liens and past, present, and future claims for payment or reimbursement, including any past, present, and future liens or claims for payment or reimbursement by any individual or entity, including an insurance company, Medicaid, and Medicare, but excluding Tricare, arising from the injuries that are the subject matter of this action.” Id. It further states that the plaintiffs agree to satisfy or resolve any such liens, and that, as of the date of signing the Stipulation, they certify that they have diligently searched for outstanding liens or claims for reimbursement arising out of the action. Id. Under the agreement, the plaintiffs agreed to provide the United States with evidence that they have satisfied or resolved liens or claims within 30 days of the date of any “past, present, or future lien[s] or claim[s] for payment or reimbursement” and within 90 days “from the date the United States has paid the Settlement Amount.” Id. The Stipulation states that the plaintiffs and their counsel agree to, through their counsel, “satisfy or resolve any and all known claims . . . before distributing to the [plaintiffs] any portion of the Upfront Cash.” Id.

         Finally, the Stipulation states that plaintiffs “represent that they have read, reviewed and understand this Stipulation and the Reversionary Trust.” Id.

         According to the Trust, its purpose is to “pay allowable benefits, as defined in . . . the Trust, to or on behalf of the Beneficiary according to the terms and conditions of the Trust.” See Luz Gonzalez v. United States of America, 13CV0861-LAB (WVG), Doc. No. 36, Exhibit B, Trust. The Trust states that “[n]o rights, obligations, duties, or allowable benefits are created or payable pursuant to the Trust unless and until . . . the Grantor has deposited with the Trustee the initial sum stated or determined by the terms of the Stipulation . . . and the Trustee has deposited said sum into a separate account opened by the Trustee in the name of the Trust.” Id. Only once those and other conditions were satisfied, the Trust was to “be deemed established.” Id.

         In deciding whether to authorize payment of allowable benefits, the Trust requires that the Administrator rely “exclusively on the terms of the Trust.” Id. The Trust states that “[u]nless otherwise specifically authorized . . . the Administrator shall not authorize (and the Trustee shall not pay) [for] . . . goods and services that were provided prior to the date the Trust is deemed established [or] goods and services for which an obligation to provide such goods and services was incurred prior to the date the Trust is deemed established.” Id. The Trust also defines allowable benefits in part as those that are “incurred after the date the Trust is deemed established.” Id.

         Regarding dispute resolution, the Trust states that the parties should resolve disputes informally where possible, but “[i]f the dispute cannot be resolved informally, the Grantor, Trustee, Administrator, or Beneficiary may have the dispute resolved by a court of competent jurisdiction.” Id. The Trust states that “any such court of competent jurisdiction shall not have the right to alter, amend, or change the terms or conditions of the Trust . . . notwithstanding any state or federal law to the contrary.” Id. The parties agreed that “[t]he Trust is irrevocable and the terms shall not be amended, ...


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