Business Law
Soto v. Superior Court (State Teachers’ Retirement System) (May 29, 2024, E081902) _ Cal.App.5th _, 2024 WL 2745836
Soto v. Superior Court (State Teachers’ Retirement System) (May 29, 2024, E081902) ___ Cal.App.5th ___, 2024 WL 2745836
The MICRA collateral source statute does not bar CalSTRS from recovering disability payments from its member who settled her medical malpractice lawsuit without notice to CalSTRS.
Arasely Soto, a former public school teacher, sued her medical providers for medical malpractice after she suffered a stroke during a medical procedure. Soto then attended a disability benefits planning session where California State Teachers’ Retirement System (CalSTRS) informed her that she must notify it of any claim against a third party for the same impairment that entitled her to benefits and that failing to do so could require her to reimburse CalSTRS for some of her disability benefits. The next day Soto recovered a six-figure settlement from her doctor without notifying CalSTRS of the malpractice suit. Ten days later she filed an application for disability benefits, and four months after that Soto recovered a seven-figure settlement from the hospital and dismissed her medical malpractice action with prejudice. CalSTRS approved Soto’s claim for disability benefits, but when it learned of her medical malpractice settlements, it sued Soto for depriving it of its subrogation rights. CalSTRS moved for summary adjudication on the ground that Education Code section 24500 allowed it to seek reimbursement directly from Soto, while Soto moved for summary judgment on the ground CalSTRS’s claim was barred by MICRA (Civil Code, § 3333.1). The trial court granted CalSTRS’s motion and denied Soto’s motion. Soto petitioned for writ relief.
The Court of Appeal denied Soto’s writ petition. The court rejected Soto’s argument that the Education Code authorized CalSTRS to seek reimbursement only from the third parties who injured Soto, not from Soto herself. The court found controlling the Supreme Court’s decision in Board of Administration v. Glover (1983) 34 Cal.3d 906, which construed analogous CalPERS statutes in the workers’ compensation context. The court also rejected Soto’s claim that MICRA barred CalSTRS’s claim, holding section 3333.1 does not apply where, as here, evidence of collateral source benefits was never introduced into evidence at trial and there was no evidence that the pretrial settlements Soto recovered were reduced to reflect her prospective disability benefits. Accordingly, Soto failed to satisfy the conditions necessary for invoking section 3333.1.