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OSTMAN v. ST. JOHN'S EPISCOPAL HOSP.

March 11, 1996

JAMES OSTMAN, Plaintiff, against ST. JOHN'S EPISCOPAL HOSPITAL, PENINSULA HOSPITAL CENTER and THE JOSEPH P. ADDABBO FAMILY HEALTH CENTER, INC., Defendants. THE JOSEPH P. ADDABBO FAMILY HEALTH CENTER, INC., Third-Party Plaintiff, - against - UNITED STATES OF AMERICA, Third-Party Defendant. ST. JOHN'S EPISCOPAL HOSPITAL, Third-Party Plaintiff, - against - M. CHRIS OVERBY, PETER HOLLIS and ALLAN HAUSKNECHT, Third-Party Defendants. JAMES OSTMAN, Plaintiff, - against - UNITED STATES OF AMERICA, Defendant.


The opinion of the court was delivered by: SEYBERT

 SEYBERT, District Judge:

 In the instant related actions that have been consolidated for purposes of settlement, plaintiff James Ostman asserts personal-injury claims against several defendants, including the United States government. The plaintiff alleges that the defendants, through their agents, negligently failed to diagnose an epidural abscess in his cervical spine, complications of which eventually led to his paralysis.

 Pending before the Court are motions filed by defendants St. John's Episcopal Hospital, Peninsula Hospital Center and The Joseph P. Addabbo Family Health Center, Inc. to confirm a settlement that was stipulated on the record before the Honorable John L. Caden, United States Magistrate Judge for the Eastern District of New York, on January 11, 1995, and to impose sanctions against those parties who have delayed or hindered the enforcement of the settlement. The plaintiff, in turn, has cross-moved to vacate the settlement. Alternatively, the plaintiff cross-moves to vacate the United States' putative claims for reimbursement of conditional payments made by Medicare on plaintiff's behalf, and to vacate putative liens asserted by the State of New York with respect to conditional Medicaid payments made on plaintiff's behalf subsequent to January 11, 1995.

 For the reasons that follow, the Court confirms the settlement on the terms stipulated on the record before Magistrate Judge Caden, and construes the parties' settlement agreement as not having contemplated whether the United States, as an alleged tortfeasor, could assert any right of reimbursement with respect to Medicare payments made on the plaintiff's behalf. In addition, plaintiff's applications to vacate the claims asserted subsequent to January 11, 1995 by the State of New York for reimbursement of Medicaid payments, and by the United States government for reimbursement of Medicare payments, are denied. Finally, the parties' cross-motions for sanctions are denied.

 FACTUAL BACKGROUND

 The cases at bar involve plaintiff James Ostman, who is a quadriplegic as a result of an untreated epidural abscess in the cervical spine that he incurred at age thirty-nine. The plaintiff alleges that, on May 25, 1988, upon complaining of pain in his chest, back, both arms and neck, he was taken by ambulance from The Joseph P. Addabbo Family Health Center, Inc. [the "Addabbo Health Center"] to Peninsula Hospital Center ["Peninsula"]. At the Addabbo Health Center, plaintiff was treated by a physician who was employed by the United States of America. Without the proper tests being performed upon him, plaintiff was sent home with a diagnosis of chronic back pain. On May 26, 1988, plaintiff returned to the Addabbo Health Center again complaining of neck pain. He was given Valium and released without a diagnosis being offered. On May 30, 1988, plaintiff reported to St. John's Episcopal Hospital Emergency Room complaining of difficulty in swallowing and pain in the throat. Again, the necessary and proper neurological tests were not performed. Plaintiff's medical condition subsequently deteriorated, and ultimately he became paralyzed from the neck down as a result of an undiagnosed epidural abscess in the cervical spine.

 Following several months of negotiations, a formal Stipulation of Settlement was entered into by the parties, on record and in open Court, at a settlement conference held on January 11, 1995 before Magistrate Judge Caden [the "Settlement Conference"]. The transcript of this proceeding reflects the following:

 
The action is settled for the total sum of two million dollars; sum of nine hundred and fifty thousand dollars is to be paid on behalf of St. John's Episcopal Hospital; the sum of seven hundred fifty thousand dollars is to be paid on behalf of the U.S.A.; the sum of three hundred thousand dollars is to be paid . . . on behalf of Episcopal Hospital Center.
 
Plaintiff will furnish . . . general releases and stipulations of discontinuance with prejudice in the usual form to the St. John's Episcopal Hospital, United States of America, Peninsula Hospital Center and Joseph P. Addabbo Family Health Center, Inc.
 
The plaintiff reserves his right to continue an action presently pending against the . . . third party defendants Hausknecht, Overby and Hollis.
 
MR. McDONOUGH (counsel for defendant St. John's Episcopal Hospital): Off the record, I think we should clarify that is in a state court action. Oh, forgive me, I didn't mean to be presumptuous.
 
MR. STEVENS (counsel for defendant Peninsula Hospital Center): In Queens which is currently pending, the Supreme Court of the State of New York County of Queens. Settlement is subject to final approval from Roger Marks, Executive Director St. John's Episcopal Hospital, who is presently out of the country.
 
Within 48 hours counsel for St. John's Episcopal Hospital will be in touch with Mr. Marks and convey his anticipated consent to all parties.
 
All cross claims and third-party complaints pending before this Court are hereby discontinued with prejudice and without costs.
 
Said settlement is subject to any outstanding liens. Should Mr. Marks not consent, this case is to be restored to this Court on the unopposed application of the plaintiff.
 
MR. McDONOUGH: But we have -- it has been conveyed to us that, at least, as of today the plaintiff has indicated his willingness to accept that figure.
 
MR. SHANDELL: Yes. I speak on behalf of my client [the plaintiff] who has conveyed his acceptance of this settlement offer to me, myself.
 
. . . .
 
THE COURT: I will ask each counsel to identify himself. Did you want to say anything further?
 
MR. SHANDELL: No, Your Honor . . . .
 
THE COURT: Anything more by the ...

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