Courts continue to protect family members of nursing home residents from efforts by institutions to hold family members personally responsible for residents' expense. These actions are becoming more prevalent as States tighten Medicaid restrictions, leaving more residents with outstanding obligations to the nursing home.
An Ohio appellate court recently reversed the decision of a trial holding that a son is not personally liable for breach of contract after his father was discharged from a nursing home for non-payment even though the son breached his duty to his father as agent under a power of attorney. Extendicare Health Services v. Dunkerton (Ohio Ct. App., 11th Dist., No. 2015-P-0004, Feb. 6, 2017).
Herbert Dunkerton entered a nursing home after he broke his leg. His son, Michael, signed the admission agreement as his agent under a power of attorney. After Herbert's Medicare coverage was terminated, the nursing home asked that Michael apply for Medicaid on his father's behalf. Michael never applied for Medicaid, and the nursing home eventually discharged Herbert for nonpayment.
The nursing home sued Michael for breach of contract and fraudulent conveyance of Herbert's funds. The trial court ruled that Michael breached his duty as his father’s attorney-in-fact when he refused to apply for Medicaid for his father and entered judgment in the amount of $25,228.43. Michael appealed, arguing that he was not a guarantor of his father's debt.
The Ohio Court of Appeals, Eleventh District, reversed, holding that even though Michael breached his duty as attorney-in-fact, Michael did not breach the admissions agreements with the nursing home. According to the court, Michael "signed the admission agreement and the payor confirmation as his father’s attorney-in-fact, and neither document provides that appellant was Herbert’s voluntary guarantor," so Michael was not responsible for his father's debt pursuant to these agreements. The court notes that under state law an attorney-in-fact can be personally liable under certain circumstances, but the nursing home did not raise the state law in its complaint.
For the full text of this decision, go here.
A North Carolina appellate court recently dismissed a breach of contract lawsuit against a nursing home resident's daughter even though the daughter signed the admission agreement on the grounds that the resident was named as representative in the agreement. Wrightsville Health Holdings, LLC v. Buckner (N.C. Ct. App., No. COA16-726, Feb. 21, 2017).
An Ohio appellate court recently reversed the decision of a trial holding that a son is not personally liable for breach of contract after his father was discharged from a nursing home for non-payment even though the son breached his duty to his father as agent under a power of attorney. Extendicare Health Services v. Dunkerton (Ohio Ct. App., 11th Dist., No. 2015-P-0004, Feb. 6, 2017).
Herbert Dunkerton entered a nursing home after he broke his leg. His son, Michael, signed the admission agreement as his agent under a power of attorney. After Herbert's Medicare coverage was terminated, the nursing home asked that Michael apply for Medicaid on his father's behalf. Michael never applied for Medicaid, and the nursing home eventually discharged Herbert for nonpayment.
The nursing home sued Michael for breach of contract and fraudulent conveyance of Herbert's funds. The trial court ruled that Michael breached his duty as his father’s attorney-in-fact when he refused to apply for Medicaid for his father and entered judgment in the amount of $25,228.43. Michael appealed, arguing that he was not a guarantor of his father's debt.
The Ohio Court of Appeals, Eleventh District, reversed, holding that even though Michael breached his duty as attorney-in-fact, Michael did not breach the admissions agreements with the nursing home. According to the court, Michael "signed the admission agreement and the payor confirmation as his father’s attorney-in-fact, and neither document provides that appellant was Herbert’s voluntary guarantor," so Michael was not responsible for his father's debt pursuant to these agreements. The court notes that under state law an attorney-in-fact can be personally liable under certain circumstances, but the nursing home did not raise the state law in its complaint.
For the full text of this decision, go here.
A North Carolina appellate court recently dismissed a breach of contract lawsuit against a nursing home resident's daughter even though the daughter signed the admission agreement on the grounds that the resident was named as representative in the agreement. Wrightsville Health Holdings, LLC v. Buckner (N.C. Ct. App., No. COA16-726, Feb. 21, 2017).
When Sharon Buckner entered a nursing home, her daughter, Melissa, signed the admission agreement on her behalf. The agreement stated that Sharon was the "resident" and the "representative," but Melissa signed the agreement and initialed the portion stating that the representative agreed to personally guarantee payment in the event the resident's Medicaid application was denied. The nursing home demanded that Melissa pay Sharon's unpaid bill.
After Melissa refused to pay, the nursing home sued her for breach of contract. Melissa filed a motion to dismiss, and the trial court granted the motion. The nursing home appealed.
The North Carolina Court of Appeals affirmed, holding that Melissa was not liable for breach of contract. The court ruled that because Sharon is named as resident and representative under the admission agreement, Melissa's signature at the bottom of the document "must be read as" Melissa signing on behalf of Sharon and "her signature and initials on the document merely obligated her mother to comply with the terms of the Admission Agreement."
For the full text of this decision, go here.
Both cases underscore the importance of family members distinguishing their role as "agent" or "attorney-in-fact" when signing nursing home admissions agreements.
Both cases underscore the importance of family members distinguishing their role as "agent" or "attorney-in-fact" when signing nursing home admissions agreements.
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