NM Court of Appeals rejects AG King’s overbroad interpretation of Medicaid Fraud Act

by Emil J. Kiehne Posted on June 16, 2014

The New Mexico Medicaid Fraud Act does not impose liability whenever a medical provider violates any federal, state, or local law that applies to it, but only when the provider violates a law that is an actual precondition for payment. So held the New Mexico Court of Appeals last week in State ex rel. King v. Behavioral Home Care, Inc. (June 9, 2014).

Attorney General Gary King alleged that Behavioral Home Care failed to comply with the Caregivers Criminal History Screening Act, because it employed caregivers without first submitting a request for a criminal history screen for each employee. Behavioral Home Care then submitted 1,800 invoices to the Medicaid program asking to be paid for services provided by those caregivers.

Nothing in the invoices stated that Behavioral Health Care was certifying compliance with the Caregivers Criminal History Screening Act. No one disputed that the caregivers had provided the services that were billed. And one alleged that any patients were harmed.

Nevertheless, Attorney General King argued that Behavioral Home Care violated the Medicaid Fraud Act by submitting the invoices because in its contract with the State, Behavioral Health Care had promised to comply with all applicable federal, state, and local laws, including the Caregivers Criminal History Screening Act, but it failed to do so. Continue reading →

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Temporary total disability benefits available “for life,” says NM Supreme Court

by Emil J. Kiehne Posted on June 13, 2014

The New Mexico Supreme Court, in Fowler v. Vista Care (June 5, 2014, by Justice Daniels) has held that temporary total disability (TTD) benefits are not subject to any time limits, but are available during a worker’s entire life, as long as he or she has not reached maximum medical improvement.

Administrative agencies, like the Workers’ Compensation Administration, sometimes argue that an agency’s long-term, consistent interpretation and implementation of a statute is entitled to deference, but this decision is a reminder that this principle cannot overcome a statute’s commands. Justice Daniels’ opinion acknowledges the WCA’s long-standing practice was to treat TTD benefits as being subject to time limits, but still held that “whatever WCA practice may exist,” the Workers’ Compensation Act does not impose time limits on those benefits. See Paragraphs 14, 22-23.

In sum, an agency’s long-standing practice and belief that a statute does not allow certain conduct will not prevail if the statute actually does permit that conduct.

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New Mexico Supreme Court overturns Governor’s veto of judicial pay raises

by Emil J. Kiehne Posted on June 12, 2014

Yesterday, the New Mexico Supreme Court heard oral argument, and issued an oral decision, striking down Governor Susana Martinez’s line-item veto of judicial pay raises. You can read about the arguments and decision in this article by Milan Simonich in the Santa Fe New Mexican.

Four of the five justices recused themselves from hearing this case, and thus former Justice Patricio Serna, former Court of Appeals Judges Celia Foy Castillo and A. Joseph Alarid, and former district court Judge Jim Hall were appointed to the panel. Justice Bosson was the only sitting justice not to recuse himself.

(UPDATE, June 13, 2014): You should also check out this post by Rob Nikolewski at Capitol Report New Mexico, which has a video with comments by the two attorneys who argued the case, Ray Vargas for the judges, and Jessica Hernandez for the Governor. Both of them are very good lawyers, so I wish I could’ve been there for the argument!

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NM Court of Appeals rejects church autonomy defense to claims arising from alleged harassment

by Emil J. Kiehne Posted on June 12, 2014

I’ve been on vacation the past couple of weeks or so, but in my absence the New Mexico Court of Appeals issued a decision in Galetti v. Reeve that explains the limits of the church autonomy doctrine.

The plaintiff, Melissa Galletti, was a teacher at an elementary school run by the Seventh-Day Adventist church, who alleged that she was fired after complaining that her supervisor, Derral Reeve, had harassed her. Ms. Galetti alleged that her employment contract required the school to inform her of any non-renewal of her contract by May 1, but that the decision to fire her was made after that date, in breach of the contract. She also alleged tort claims against the church, Mr. Reeve, and other individuals who allegedly retaliated against her.

The district court granted the defendants’ Rule 1-012(B)(6) motion to dismiss the complaint, finding that the church autonomy doctrine barred Ms. Galetti’s claims.

In a decision by Judge Garcia, the Court reversed. The Court explained that the church autonomy doctrine, which arises from the First Amendment, prohibits civil courts from reviewing “internal church disputes involving matters of faith, doctrine, church governance, and polity.”

The Court explained that this doctrine did not bar Ms. Galetti’s breach of contract claim, which (as pled) involved only whether the church complied with its obligation to timely inform her of non-renewal, because it could be decided without any “religious intrusion,” and “does not appear to be religious in nature.” The tort claims against the individual defendants were also not barred because “these claims do not concern religious matters.”

The Court was, however, careful to explain that its decision was based on the fact that it was reviewing a motion to dismiss, and that if evidence arose on remand that Ms. Galetti’s claims “cannot be resolved without religious entanglement,” then her claims could still be dismissed at that time.

(UPDATE, June 13, 2014): Professor Leslie C. Griffin of UNLV Law School has written this post about Galetti at a blog called Hamilton and Griffin on Rights. Prof. Griffin agrees with the Court’s opinion, but criticizes it for having “mistakenly accepted the idea that the ‘church autonomy doctrine’ is based on the First Amendment.”

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NM Court of Appeals holds that workers’ compensation covers medical marijuana

by Emil J. Kiehne Posted on May 20, 2014

MarijuanaIn an interesting decision, Vialpando v. Ben’s Automotive Services, the Court of Appeals has affirmed an order by a Workers’ Compensation Judge directing an employer and insurer to reimburse an injured worker for medical marijuana prescribed to relieve pain resulting from a lower back injury.

The opinion, by Judge James Wechsler, rejected the employer’s argument that the use of medical marijuana was contrary to public policy and federal law.

This decision represents one more chapter in the growing acceptance of marijuana in our society. In my opinion, this is a step in the right direction, away from the failed War on Drugs. But if you disagree, please leave a comment and let us know why.

 

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Is “independent intervening cause” alive in New Mexico?

by Emil J. Kiehne Posted on May 12, 2014

In Silva v. Lovelace Health System, Inc. (May 6, 2014), the New Mexico Court of Appeals (in a 2-1 decision) reversed a jury verdict in a wrongful death case for failure to instruct the jury on the doctrine of independent intervening cause. The question is whether this decision will survive review by the New Mexico Supreme Court. I think it will not.

To combat Susan Silva’s depression, a physician prescribed antidepressants, including Paxil, in 2004. Sadly, Ms. Silva committed suicide in 2006 (and was found with 22 times the therapeutic dose of Paxil in her system). Ms. Silva’s family sued the physician and her employer, Lovelace, for negligence in treating her depression.

At trial, the defendants asked the trial judge to instruct the jury on their theory that Ms. Silva’s suicide was an independent intervening cause. That instruction would have told the jury that an “independent intervening cause interrupts and turns aside a course of events and produces that which was not foreseeable as a result of an earlier act or omission.” This request was denied, and the jury returned a plaintiffs’ verdict.

Surprisingly, the Court of Appeals (in an opinion by Judge Fry) reversed the verdict, holding that the defendants were entitled to have the jury instructed on the doctrine of independent intervening cause. Continue reading →

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No, police experts can’t testify that a defendant isn’t credible, 10th Circuit says

by Emil J. Kiehne Posted on May 2, 2014

For your weekend pleasure reading, I recommend the Tenth Circuit’s decision this week in United States v. Hill, a case that raises the question “What were they all thinking?”

At Stanley Hill’s trial on criminal charges arising from his alleged involvement in an Oklahoma bank robbery, the prosecutor presented expert testimony from an FBI agent who was trained in “special tactics and ways to identify [] deception in statements and truths in statements.”

The agent testified about Hill’s post-arrest interview with police, and said that Hill’s answers demonstrated that he was not worthy of belief. For example, the agent said that Hill’s behavior and answers were “common among the criminal element to keep law enforcement at bay” during an interrogation.

This sort of “expert” testimony, which essentially told the jury to disbelieve Hill, is so obviously improper, said Judge Carlos Lucero, that it warranted reversal under the plain error rule even though defense counsel did not object.

In sum, a prosecutor presents clearly improper testimony, defense counsel doesn’t object, and the trial judge lets it happen. Again, what were they all thinking?

 

 

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NM Court of Appeals affirms dismissal due to government’s use of false document

by Emil J. Kiehne Posted on April 29, 2014

When you’re litigating a case, it sometimes happens that your client will lose, or will not have kept, copies of relevant documents. When that situation arises, what do you do? I guess it would depend on the circumstances, but here’s a protip from the New Mexico Court of Appeals — it’s not okay to fabricate false documents to take their place.

In State ex rel. King v. Advantageous Community Services, LLC, the New Mexico Attorney General’s office sued a home healthcare provider under the Medicaid Fraud Act. The provider allegedly allowed six caregivers to work without first obtaining a “clearance letter” from the Department of Health (DOH) stating that the caregivers had passed a criminal background check.

The clearance letters for each provider were therefore of central importance to the case. The AG’s investigator asked DOH for copies of the letters, but DOH responded that it would not be possible to reprint them, because DOH’s computer system had updated several fields on the template used to create the letters.

The investigator asked DOH to print the letters using the updated data, and turned them over to the Assistant AG prosecuting the case, without telling her that they weren’t copies of the actual clearance letters. The Assistant AG then used the false letters to impeach the provider’s owner at a deposition. When the deceit was brought to the trial judge’s attention, she sanctioned the AG’s office by dismissing the entire case.

The Court of Appeals, in an opinion by Judge Michael Vigil, affirmed the sanction. The Court stressed that where false evidence is offered, trial courts may impose severe sanctions, including dismissal, even where no prejudice to the opposing party is shown, because such conduct undermines the integrity of the judicial process and the due process rights of other litigants. “Such misconduct is so egregious that even a single instance warrants dismissal.”

This result makes sense to me, because in many instances the offering of false testimony or documents probably goes undetected. Parties who contemplate engaging in such conduct may be deterred by the knowledge that if they are caught, severe sanctions will be imposed. In addition, if the State is going to pursue medical providers for Medicaid fraud, it should not engage in fraudulent conduct itself.

Do you agree with this result? Or do you think the sanction in this case was too harsh? Please leave a comment and let us know what you think.

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Tenth Circuit: plaintiff cannot manufacture diversity jurisdiction by assigning claims to corporation

by Emil J. Kiehne Posted on April 25, 2014

The federal district court in Utah found that J. Hoyt Stephenson was a resident of Utah, and therefore dismissed his counterclaims and third-party claims against a number of other Utah residents.

Mr. Stephenson then incorporated National Fitness Holdings, Inc. in Wyoming, and assigned his claims to the corporation. Four days after the assignment, National Fitness Holdings filed suit against the same Utah residents in the Utah federal district court. The trial court dismissed the new lawsuit, holding that assignments had been made to manufacture diversity jurisdiction in violation of 28 U.S.C. § 1359.

Yesterday, in National Fitness Holdings, Inc. v. Grand View Corporate Centre, LLC, the Tenth Circuit affirmed. Judge Gregory Phillips explained that to determine whether an assignment of claims has been made to manufacture diversity jurisdiction, a district court should consider the totality of the circumstances, including the following factors:

  • Did the assignee lack a proper connection with the matter?
  • Did the assignor select the assignee’s attorney and pay the assignee’s litigation expenses?
  • Did the assignor retain control of the litigation?
  • Did the assignee agree to pay the assignor a portion of any recovery?
  • Did the assignee provide meaningful consideration for the assignment?
  • Is the assignment’s timing suspicious?
  • Was the assignment motivated by a desire to create diversity jurisdiction?

Affirmative answers to these questions weigh in favor of dismissal, and in Mr. Stephenson’s case, most of the answers were affirmative.

Even if you are not a federal jurisdiction nerd, I recommend reading this opinion for Judge Phillips’ crystal clear writing, which is a pleasure to read. In the competition for best writer on the Tenth Circuit, it looks like Judge Phillips is going to give Judge Gorsuch a run for his money.

 

 

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Borrower who failed to make payments can’t be criminally charged for damaging property

by Emil J. Kiehne Posted on April 4, 2014
Wyatt Earp, the Sheriff, not the borrower.
Wyatt Earp, the deputy town marshal of Tombstone, not the borrower.

In 2006 Wyatt Earp (no, not that Wyatt Earp) bought a home on a real estate contract.

(In New Mexico, “real estate contract” is a term of art, which refers to an arrangement in which the buyer agrees to pay the seller in installments. If the buyer fails to make a payment, the seller can terminate the contract and repossess the property.)

In any event, Mr. Earp apparently did not make a required payment in 2009, and the seller terminated the contract.

But before vacating the property, Mr. Earp allegedly removed appliances and fixtures from the home, and left it in a state of disrepair. The State, who made these accusations, charged him with criminal damage to property and embezzlement, and obtained a conviction on both counts.

The problem for the State was that New Mexico law has long recognized that a buyer under a real estate contract has an equitable ownership interest in the property. To be convicted of criminal damage to property, however, one must damage the “property of another” without the owner’s consent, and the embezzlement statute also requires the conversion of another’s property.

Thus, the Court of Appeals, in an opinion (State v. Wyatt Earp) written by Judge Monica Zamora, held (without, of course, approving of the alleged conduct) that Mr. Earp could not have violated these statutes, because he was an owner of the property.

While this decision may have the unfortunate effect of sparing frustrated defaulters who damage property from criminal sanction, that is a consequence of the language in the statutes. The Legislature may want to consider amending the criminal statutes to make it unlawful for purchasers of real estate contracts to damage the property if they default on their obligations. Also, the fact that a buyer is not subject to criminal punishment does not mean that he or she will get off scot free. The seller may have claims in contract or tort.

Do you agree or disagree with this decision? Leave a comment and let us know!

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