Changes in the Recovery to Survivorship Damagers: A Lien Perspective

Changes in the Recovery to Survivorship Damagers: A Lien Perspective

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Back in February 2020, we wrote about resolving Medicare liens in cases where the CMS beneficiary has passed away and both survivorship claims by the estate and wrongful death claims by the heirs are in play.

We revisit the issue in light of recent amendments to California Code of Civil Procedure Section 377.34, which now allows for the recovery of general damages by the estate in a survivorship action. This marks a significant change in California law. Previously, a decedent’s general damages died with them, leaving the estate limited to recovery of special damages—typically limited to Howell-adjusted medical specials.

When lienholders like CMS or well-drafted self-funded ERISA plans asserted reimbursement rights against the estate’s limited recovery, the financial viability of those claims was often questionable. After accounting for liens and attorney’s fees, there was often little to no net recovery for the estate.

These situations are further complicated when wrongful death (WD) claims are asserted against the same policy limits, especially when the estate’s representative is also one of several WD heirs. Conflicts of interest abound. Any payment to the estate to resolve the survivorship claim reduces the amount available to the wrongful death heirs. Our original article aimed to guide trial counsel through this balancing act—navigating settlement allocation while managing complex lien exposures.

The revision to C.C.P. § 377.34 both heightens the conflict between the estate and the wrongful death heirs and simultaneously strengthens the case for resolving lien issues with finality.

The greater the estate’s entitlement, the more significant the potential for conflict. Each case tells its own story, but it’s not difficult to imagine that a plaintiff who survives for even a few days—aware they are dying as a result of the tort—now leaves behind a meaningfully more valuable survivorship claim. With general damages now recoverable, estates have much more at stake.

Importantly, while the scope of recoverable damages has expanded, the policy limits themselves remain unchanged. Survivorship and wrongful death claims continue to compete for the same coverage. But now, the estate’s claim is not just viable—it may be substantial.

In cases where policy limits are tight and the lien against the estate could exceed the available coverage, an informed decision may be made for the estate not to pursue a claim at all. This approach enables the wrongful death heirs to seek the full policy limits for themselves. Unlike in the past, this decision is not merely about avoiding a lien—it also involves walking away from newly authorized general damages. This fact substantially weakens any argument by lien recovery agents that the estate’s decision constitutes "collusion."

Previously, such arguments were already tenuous. But now, with the estate also forfeiting broader damages it could legally recover, the claim of collusion essentially evaporates.

The bottom line? The amendments to C.C.P. § 377.34 are a gamechanger.

Explore More Resources with Lien Project Network

For a deeper dive into lien resolution strategies, settlement planning, and reimbursement challenges, explore our educational modules. Lien Project Network serves as a trusted resource for plaintiff attorneys, providing insights on financial planning, public benefits, and structured settlements in the context of lien management.

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If you need expert legal assistance in navigating lien resolution, reimbursement claims, or settlement planning, our team at The Lien Project, PC is ready to help. As an LPN member, you earn credits that can be applied toward lien reduction and resolution services provided by The Lien Project, PC, allowing you to offset up to $900 per year. Your investment in continuing education through Lien Project Network not only enhances your lien resolution skills but also reduces the cost of engaging legal experts when needed.

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