Posted 2/3/2014 12:00 am
Updated 9 months ago
Arkansas parents who were awarded $12 million after a doctor operated on the wrong side of their son’s brain haven’t paid for five years of care that a Virginia rehabilitation center provided the young man, the center claims in a federal lawsuit.
The Neurological Rehabilitation Living Center of Virginia Beach says its staff cared for Cody Metheny of Mabelvale from 2008 to 2013 but didn’t get paid the $950 a day it was owed. Nor was the center reimbursed for sending staff members to Arkansas to testify in the trial that resulted in the bulk of the money awarded, according to the complaint.
Instead, the center alleges, Kenny and Pamela Metheny of Mabelvale quietly routed the millions they received in damages into a special needs trust to keep it out of the reach of the center, which has submitted a bill of $1.7 million.
“The Methenys’ transfers of all or substantially all of Cody’s assets to [Cody’s] Trust were done with the actual intent to hinder, delay, or defraud the Center by ostensibly placing the assets out of the Center’s reach,” according to the complaint filed June 11 in U.S. District Court in Little Rock.
On July 18, the same day Kenny and Pamela Metheny’s answer was due in federal court, the couple filed for Chapter 7 bankruptcy, listing $16,320 in debts and $67,755 in assets. The bankruptcy filing put the center’s lawsuit on hold.
However, on Nov. 6 U.S. Bankruptcy Court Judge James Mixon ruled that the litigation could move forward in federal court because the Methenys were only named in the lawsuit as guardians of the estate of their son.
Neither Pamela nor Kenny Metheny has filed a response to the center’s lawsuit as of Wednesday. Cody Metheny, who has also been named as a defendant, hasn’t filed a response either.
Pamela Metheny didn’t return a message left at her workplace last week. But Kenny Metheny told Arkansas Business, “Sir, at this time I have nothing to say.”
The Methenys’ bankruptcy case is winding down. On Jan. 24, Trustee M. Randy Rice of Little Rock reported to Judge Mixon that “I have neither received any property nor paid any money on account of this estate.” He asked to be discharged from any further duties as trustee. The request is pending.
Adrienne Baker, a Little Rock attorney who is representing the center, which has a legal name of Voogt Rehabilitation Center LLC, declined to comment.
Cody Metheny, who is now 24 or 25, was 7 years old when doctors diagnosed him with a seizure disorder, according to a lawsuit his parents filed in 2009 against Medical Assurance Co. of Birmingham, Ala., the insurance carrier for Arkansas Children’s Hospital of Little Rock.
Cody’s seizures were “well-managed under seizure-control medication until such medication was discontinued, reduced or changed,” according to the lawsuit, filed in Pulaski County Circuit Court.
On Aug. 2, 2004, in an attempt to eliminate the seizures, 15-year-old Cody was scheduled for brain surgery at Arkansas Children’s Hospital.
The surgery was supposed to last about four hours, but something went wrong.
“ACH’s surgical team draped and shaved Cody’s head on the left side instead of the right side of his head,” the Methenys said in their lawsuit. “ACH’s surgical team then proceeded together as a team to perform a surgery on the left side, which was the wrong side of Cody’s brain,” the lawsuit said, underlining the word “wrong.”
When they discovered what had happened, the surgical team then operated on the right side of Cody’s brain, the lawsuit said.
Cody’s parents said during the trial that the surgery “turned a vibrant teenager into an emotionless husk of a man subjected to psychotic delusions, continuing seizures and deteriorating intelligence,” according to a Sept. 25, 2010, article in the Arkansas Democrat-Gazette.
In 2005, Cody’s parents sued the neurosurgeon who did the operation, Dr. Badih Adada.
In early 2008, while the Methenys’ lawsuit was pending, Cody was moved from Arkansas to the 12-room Neurological Rehabilitation Living Center in Virginia Beach. The center provides rehabilitation to individuals with brain injuries and other neurological impairments, according to its website.
“Rehabilitation at NRLC starts where traditional medicine ends, using community-based environments to build individual dignity, respect and esteem,” the website said.
The center is in a quiet neighborhood yet is within walking distance to an extensive medical complex and hospital; it’s just three miles from the ocean.
Pamela Metheny enrolled Cody in the center on Feb. 1, 2008, according to the contract that was included as an exhibit in the center’s lawsuit.
“Your obligation to pay our bills is not dependent on the outcome of the court case,” the contract said, with the word “not” underlined. “Whether you win or lose in court, the bill will be paid in full.”
In May 2008, just months after the contract was signed, the Methenys’ lawsuit against the surgeon settled for $1 million. That money was deposited into the Cody R. Metheny Special Needs Trust.
The center said the Methenys didn’t tell the center’s officials that the case had settled, which allegedly constituted a breach of the contract, the lawsuit said.
The benefit of putting the money in the trust is that the trust should be immune from lawsuits, said Jeffrey Minde, an attorney and president of the National Special Needs Network Inc. of Coral Springs, Fla., which is a nationwide affiliation of independent special needs professionals who provide support services.
Minde, who wasn’t familiar with Cody Metheny’s case, said that by using a trust, the disabled person maintains eligibility for government benefits, such as the Supplemental Security Income program. “You can have an unlimited amount of money in the trust and not put yourself over the benefit limits,” Minde said.
The trustee, not the parents, is the one who decides who gets paid with the funds from the trust, he said. “Paying for things like going to a center would be a perfectly acceptable payment for a trust to make,” Minde said.
The Argent Trust Co. of Memphis is the trustee of the Cody R. Metheny Special Needs Trust. It also has been named as a defendant.
Argent Trust, in its court filings, asked U.S. District Court Judge D. Price Marshall Jr. to be dismissed from the case. Argent said in its filing that the lawsuit should be between the Methenys and the center.
“The only contract in this case is between [the center] and the Methenys,” said Argent’s attorney, Kevin Keech of North Little Rock, in his court filing. “Argent is neither a party to, nor guarantor of, that contract.”
Keech declined to comment to Arkansas Business last week.
But Marshall ruled in September that Argent was to stay in the case because it holds the disputed money. “Argent need not do anything other than answer, respond to basic discovery, and wait,” Marshall wrote on Sept. 10.
After the Methenys settled their case with the surgeon, they filed another medical malpractice case in 2009 against Arkansas Children’s Hospital’s insurance carrier, Medical Assurance Co.
The Methenys’ attorneys, Phillip Duncan of Little Rock and Tom Jones of Kansas City, Mo., requested that several employees from the center travel to Arkansas to testify on Cody’s behalf.
The staff members made two trips to Arkansas and billed the attorneys for their travel, the center’s lawsuit said. “But nothing was paid by Duncan, Jones or the Methenys, who continued to promise to pay the Center from the proceeds of the medical malpractice actions,” the lawsuit said.
Neither Duncan nor Jones returned calls for comment.
The Methneys won a $20 million judgment against the insurance carrier in 2010. But the insurance company asked Pulaski County Circuit Judge Ellen Brantley to reduce the amount to $11 million, which was the amount of its liability coverage for the hospital. Brantley agreed and lowered the judgment to $11 million.
After the case made it through the appeals process, the Methenys in January 2013 asked a probate court to put the proceeds from the judgment into Cody’s trust, bypassing paying the rehabilitation center.
The center alleges that the transfer of the money “was designed and intended” to lower the amount in Cody’s estate so it would be left “without sufficient funds to pay what was owed to the center.”
As of Feb. 13, 2013, the center said it was owed $1.157 million for neurological rehabilitation services and room and board and $590,100 for financial charges. In addition, the center said it has a bill for $17,500 connected with the testimony it provided during the lawsuit against the insurance company.
Cody left the center in the spring of 2013.
“After providing neurological rehabilitation services to Cody for approximately five years, the Center has received no payments whatsoever for its services,” the center’s lawsuit said.
The center also has requested payment from Cody’s trustee, but the “trustee has refused to pay anything to the Center.”
The center is suing the Methenys on several counts, including breach of contract and fraudulent conveyance in connection with allegedly not keeping the center’s officials informed of the status of the lawsuits and not paying the bill.
The case is set for a bench trial on Jan. 12, 2015.