Nursing Home Sues Resident's Daughter with Impunity Since Admissions Agreement Did Not Give Nursing Home The Right to Sue the Daughter

New Jersey's highest court has ruled that an admissions agreement signed by a nursing home resident's daughter did not violate federal law because it did not require the daughter to use personal funds to pay for her mother's care, notwithstanding that the nursing home actually sued the daughter personally for her mother's nursing home debt.  Manahawkin v. O'Neill (N.J., No. A-17 SEPT.TERM 2012, 071033, March 11, 2014).

Frances O'Neill admitted her mother, Elise Hopkins, to a nursing home. As her mother's agent under a power of attorney, Ms. O'Neill signed the admissions agreement, which named her as the responsible party for the purposes of paying her mother's bills. Ms. O'Neill did not sign the portion of the agreement that required the responsible party to guarantee the resident's costs. She also received a copy of the resident's bill of rights, which stated that she was not required to guarantee payment as a condition of admission.

When Ms. Hopkins died, she left an unpaid balance of $878.20. The nursing home sent Ms. O'Neill a collection action, stating that she, as the responsible party, had the obligation to pay any debts. When Ms. O'Neill didn't pay, the nursing home sued her in her personal capacity. Ms. O'Neill counterclaimed, arguing the nursing home was violating New Jersey’s Nursing Home Act, which incorporates relevant portions of the federal Nursing Home Reform Act, by asking for payment from her directly. The nursing home dropped its claim, but Ms. O'Neill asked for summary judgment on her counterclaim. The trial court denied summary judgment, and the appeals court affirmed. Ms. O'Neill appealed.

The New Jersey Supreme Court affirmed the lower courts rulings, holding that the admissions agreement did not violate the Nursing Home Act.  The Court reasoned that the admissions agreement specifically limited Ms. O'Neill's obligation to that of paying her mother's bills with her mother's assets. The court noted that while the nursing home's collection letter was "inartfully drafted" it "did not attempt to impose on [Ms.] O'Neill an obligation to use her personal assets on her mother's behalf." Similarly, the court ruled that the nursing home's lawsuit was "lacking in detail" and "improperly pled," but it did not violate federal law because it did not allege that Ms. O'Neill was required to use her personal assets.   

So, a nursing home sues a daughter, personally, for less than a thousand dollars, and when the daughter actually counterclaims, the nursing home dismisses its action, but the daughter does not prevail on her claim since the nursing home technically did not have the right to make the claim that, if the claim actually existed, would have violated federal and state law.  Clearly. 

For the full text of the decision, go here.