Court Slams Petitioner for Poor Draft of Release
Roy Franco
April 3, 2014

At the conclusion of a claim involving a Medicare beneficiary, it is important that the Release terms be clear on its face.  The Medicare Secondary Payer Act requires Parties to work collaboratively to secure finality with regard to its compliance.  When that collaboration breaks down, the terms of the Release will more than likely control the outcome.  If clear on its face, the Release is enforced, if not, the Court typically sets it aside as the Parties have not agreed on an essential term.  All in all it could be a trying time for both sides.  To avoid it, draft clear and unambiguous terms.

In this particular case (Paluch v. UPS, 2014 IL App (1st) 130621; 2014 Ill. App. LEXIS 194), Petitioner requested additional monies to fund the Workers’ Compensation Medicare Set-Aside that was approved by CMS.  UPS argued that the $400,000 settlement it had negotiated was inclusive of any such WCMSA allocation.  Petitioner disagreed and the Court sided with him.  The language of the Release was unambiguous and read like an open checkbook.  The release was sufficient for the Court to make its finding and enforce its terms.

This case demonstrates the need for Parties to be careful in their drafting.  We consult with Parties about terms to make certain they do not run into unnecessary exposures such as presented in this case.  Please contact us to discuss how we can assist you on these type of issues.