The Elder Law Forum

The Elder Law Forum by Professor Michael Myers Editor's Note: The Elder Law Forum is a public service of the University of South Dakota School of Law, an extension of the SENIOR LEGAL HOTLINE available at no cost to persons 60 and older at 605-677-6343 and mmyers@usd.edu during regular business hours. The Elder Law Forum delivers information and educational material by radio, a weekly newspaper column, and Law School research papers placed on the USD School of Law Web site. Professor Myers teaches Elder Law at the School of Law.

"Defensive Lawyering" Breach of Fiduciary Duty

Lawyers and physicians are, in the legal sense, "fiduciaries." As such, they have a relationship of trust and confidence with the persons to whom they sell services. Theoretically, this distinguishes them from commercial vendors.

Governed by a code of ethics, they have a duty to act in the best interest of their patient or client, even though such action is contrary to their own interest. Physicians breach that duty whenever they perform a test or procedure for their own legal protection, rather than for the well-being of a patient.

"Defensive medicine," by definition, is a breach of fiduciary duty. So is the type of "defensive lawyering" described by a caller to the USD Senior Legal Helpline (1-800-747-1895;mmyers@usd.edu).

She is 72 and suffers from severe arthritis and Parkinson's disease. Last fall she fell at a hotel, injured her shoulder and incurred medical expenses of $7,150, of which Medicare paid $5,553.

When the hotel refused to accept responsibility for the condition of its premises, she engaged a lawyer and filed a lawsuit. After several months, the case was settled with the hotel's insurance carrier for $15,000.

Attorney fees were $8,086, leaving the caller with $6,914; a division she considered fair. However, prior to disbursing the settlement monies, Medicare informed her lawyer of its lien for $3,608. He challenged the lien and obtained a court order stating that the "Medicare lien asserted in this matter be and is hereby discharged."

He advised the caller not to pay the lien, then stepped over the ethical line by insisting that as a condition of giving her the check for $6,914 that she agree to hold him harmless in the event Medicare made a claim against him.

He and the judge failed to acknowledge that federal law, in this instance the Medicare Secondary Payer statute, trumps state law. He thereby exposed his client to a 12 percent interest penalty, withholding of her Social Security payments, and receiving only $3,306 of the $15,000 settlement.

I advised her to demand that the lawyer personally satisfy the lien; and that if he refused, she should file a grievance with his (east coast) bar association and initiate a malpractice claim.

"He placed his own interest ahead of yours," I said. "He should not have done that."

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