Opinion
Review Granted July 14, 1988.
Previously published at 200 Cal.App.3d 882
Rehwald, Rameson & Lewis, Thomas Trent Lewis, Woodland Hills, for defendant and appellant.
John K. Van de Kamp, Atty. Gen., Charlton G. Holland, Asst. Atty. Gen., Anne S. Pressman, Supervising Deputy Atty. Gen., for plaintiff and respondent.
FUKUTO, Associate Justice.
Jack E. Hanna, as executor of the estate of Zyoud Jacob, appeals from the grant of summary judgment in favor of Kenneth W. Kizer, M.D., Director of the Department of Health Services, State of California (Department).
The facts are not in dispute. During the period November 1, 1974 through June 28, 1981, Jacob received $44,713.97 in Medi-Cal benefits and $15,658.93 in Medi-Cal benefits from June 28, 1981, until her death on June 26, 1983. Thereafter, the Department filed a preferred creditor's claim against the Jacob estate for $60,372.90, the total amount of Medi-Cal benefits received by decedent. Hanna partially accepted the claim, tendering $15,658.93 for services rendered to Jacobs for the period June 28, 1981 through June 26, 1983. The Department filed the present action seeking to collect the remaining $44,713.97 for services rendered from November 1, 1974 through June 28, 1981, alleging reimbursement is authorized by section 14009.5, which was enacted effective June 28, 1981. The trial court granted the Department's motion for summary judgment for the full amount of its creditor's claim of $60,372.90.
Medi-Cal, California's Medicaid program, is a cooperative federal-state venture in which the state is partially reimbursed for specified costs of medical treatment for needy individuals. (42 U.S.C. § 1396 et seq; Welf. & Inst.Code, § 14000 et seq.) An applicant is eligible for benefits if his or her assets do not exceed $1,500 in value. (Cal.Admin.Code, tit. 22, § 50420; Welf & Inst.Code, §§ 14005.4, 14005.7, 14005.12, 14006, 14015.) An applicant's residence and certain other items are not included in determining the amount of assets held. (Welf. & Inst.Code, § 14006; Cal.Admin.Code, tit. 22, §§ 50416, 50418, 50425, 50427.) Prior to the passage of section 14009.5, a recipient's estate, upon the death of the recipient, was not liable for reimbursement of the state for benefits properly paid. (Oliva v. Swoap (1976) 59 Cal.App.3d 130, 136, 130 Cal.Rptr. 411.) Accordingly, any assets which remained following the recipient's death passed either by will or by operation of law. In 1981, section 14009.5 became effective, allowing the state to claim against the estates of Medi-Cal recipients an amount equal to payments for health care services received, except where the recipient was under age 65 when services were received or where there is a surviving spouse or a blind, disabled, or minor surviving child. Hanna concedes the validity of the Department's claim to reimbursement of benefits paid on Jacob's behalf following the effective date of section 14009.5, but contends that the Department is not entitled to recover from Jacob's estate those Medi-Cal benefits paid on Jacob's behalf before the effective date of the statute, June 28, 1981.
Welfare and Institutions Code section 14009.5 reads, as follows: "Notwithstanding any other provision of this chapter, when a decedent has received health care services under this chapter or Chapter 8 (commencing with Section 14200) the department may claim against the estate of the decedent, or against any recipient of the property of that decedent by distribution or survival an amount equal to the payments for the health care services received. The department may not claim where the eligible person was under 65 when services were received, or where there is a surviving spouse, or where there is a surviving child who is under age 21 or who is blind or permanently and totally disabled, within the meaning of the Social Security Act. [p] The department may waive its claim, in whole or in part, if it determines that enforcement of the claim would result in substantial hardship to other dependents of the individual against whose estate the claim exists."
The identical issue was decided in Department of Health Services v. Fontes (1985) 169 Cal.App.3d 301, 215 Cal.Rptr. 14 and Estate of Messner (1987) 190 Cal.App.3d 818, 235 Cal.Rptr. 495.) Both cases hold that the statute is to be given prospective application only. ( Department of Health Services v. Fontes, supra, 169 Cal.App.3d at p. 304, 215 Cal.Rptr. 14; Estate of Messner, supra, 190 Cal.App.3d at pg. 821, 235 Cal.Rptr. 495.) However, Fontes held that section 14009.5 authorizes the Department to claim reimbursement for Medi-Cal benefits from the estate of a Medi-Cal recipient, when the recipient died after the effective date of the statute, but the benefits were received before the effective date of the statute. ( Fontes, supra, 169 Cal.App.3d at p. 303, 215 Cal.Rptr. 14.) Messner, on the other hand, held that the Department may be reimbursed for only those Medi-Cal benefits paid after the effective date of the statute. ( Messner, supra, 190 Cal.App.3d at p. 820, 235 Cal.Rptr. 495.) Not surprisingly, the Department urges this court to follow Fontes while Hanna urges that Messner be followed.
The Fontes court concluded that the application of section 14009.5 to estates which arose after its effective date did not affect any existing rights and, accordingly, had no impermissible retroactive effect, even where the benefits had been received prior to its effective date. In reaching this conclusion, the court reasoned that "[t]his statute merely affected the distribution of a Medi-Cal recipient's estate. Testamentary disposition, as well as intestate succession, is a creature of statute and is controlled by the law in effect as of the date of the death. [Citations.] Therefore, any right which the Medi-Cal recipient had in the disposition of her estate was defined, in part, by section 14009.5, in effect at the time of her death. Moreover, this statute did not affect any existing rights held by the Medi-Cal recipient's estate because such an entity did not even come into existence until the time of her death." ( Fontes, supra, 169 Cal.App.3d at p. 305, 215 Cal.Rptr. 14.)
The Messner court distinguished those cases relied on by Fontes, finding that something more was involved. "The statute effectively prevents a person from controlling the testamentary disposition of some or all of his or her property. The notion of taking property without notice is contrary to our fundamental commitment to due process." ( Estate of Messner, supra, 190 Cal.App.3d at p. 823, 235 Cal.Rptr. 495.) The Messner court also held that the application of the statute was impermissibly retroactive because it operated to change the legal effect of past transactions. (Cole v. Fair Oaks Fire Protection Dist. (1987) 43 Cal.3d 148, 153, 233 Cal.Rptr. 308, 729 P.2d 743.) "To permit the statute to operate in a fashion which authorizes the creation of an after-the-fact debt resulting in the partial or total elimination of a person's life savings is a classic illustration of a statute's retroactive application materially changing the legal effect of past transactions." ( Messner, supra, 190 Cal.App.3d at p. 823, 235 Cal.Rptr. 495.)
We conclude that application of section 14009.5 to Medi-Cal benefits received before its effective date, does not amount to a retroactive application of the statute.
Neither the federal nor California Constitution prohibits the enactment of legislation "Our courts have viewed the obligation of a governmental entity to pay welfare benefits pursuant to law as a debt due to the recipient as of the date he first became entitled to them. [Citations.] Such a debt is analogous to the obligation of a governmental entity to make payments of back wages unlawfully withheld from its workers or of pension benefits unlawfully withheld from its retiree: each such payment becomes a debt due to the employee as of the date he was entitled to receive it." (Green v. Obledo (1981) 29 Cal.3d 126, 141, 172 Cal.Rptr. 206, 624 P.2d 256.) Absent a statute, a welfare recipient was absolutely immune from repayment of benefits lawfully received. ( Oliva v. Swoap, supra, 59 Cal.App.3d at p. 136, 130 Cal.Rptr. 411.) The Legislature, in enacting section 14009.5, did not change existing law in this respect. While the Medi-Cal recipient remains alive, no claim for Medi-Cal benefits received by the recipient may be made against the recipient or the recipient's assets. The Medi-Cal recipient is free to do with his or her property as he or she wishes. Section 14009.5 allows the Department (under certain conditions) to seek reimbursement for repayment of Medi-Cal benefits paid only from the estate of a Medi-Cal recipient who has died. Thus, section 14009.5 does not impair a Medi-Cal recipient's vested right not to repay Medi-Cal benefits lawfully received.
Does a Medi-Cal recipient then have a vested right, as the Messner court concludes, to control the testamentary disposition of his or her property? We believe, under established California law, the answer is no.
The authorities, without exception, hold that " 'the right to make testamentary disposition of property is not an inherent right or a right of citizenship, nor is it even a right granted by the constitution. It rests wholly upon the legislative will, and is derived entirely from statutes.' " (Estate of Burnison (1949) 33 Cal.2d 638, 639-640, 204 P.2d 330.) " 'The so-called right of inheritance and also the right of testamentary disposition are not inherent rights of the individual, nor are they safeguarded or secured in futuro by any provision of our constitution. They are both subject to legislative control and are creatures of legislative will. Consequently the legislature has the power to take away both rights and to make the state the successor to all property upon the death of the owner. The right and power to impose a succession tax rests on this principle.' " (Estate of Watkinson (1923) 191 Cal. 591, 595, 217 P.2d 1073.)
Finally, does section 14009.5, as applied to benefits paid before the date of its enactment, impair any vested rights of the deceased Medi-Cal recipient's estate or those who take from the estate? Here, again, we say no. As succinctly expressed by the Fontes court, since the estate "did not even come into existence until" the death of the Medi-Cal recipient (Prob.Code, § 300), no vested rights of the estate, or of those who take from the estate, are impaired. ( Department of Health Services v. Fontes, supra, 169 Cal.App.3d at p. 305, 215 Cal.Rptr. 14.)
Whatever vested rights the Medi-Cal recipient may have had in Medi-Cal benefits died with the death of the recipient. When The judgment is affirmed.
ROTH, P.J., and COMPTON, J., concur.
Jacob was over age 65 when services were received and no spouse or a blind, disabled, or minor child survived her.