Failure to Access Nursing Home Resident’s Assets as Contracted Made Daughter Personally Liable For Unpaid Balance

In Uncategorized by Jason Sutton

This is an interesting case out of New York…

The case was an action to collect fees due to plaintiff for nursing home care rendered to defendant Ernest Naylor, deceased. The court awarded summary judgment to plaintiff holding the defendant, decedent’s daughter, personally liable to plaintiff for failing to use her access to decedent’s property to pay his nursing home bills. On two occasions when decedent was readmitted to the nursing home after spending time in the hospital, defendant executed agreements with plaintiff in which she promised to utilize her access to decedent’s assets —by virtue of her power of attorney (POA)— to pay for his care. She also agreed to pay damages to plaintiff for any breach of that obligation. Decedent’s assets included properties, undeveloped lots, savings accounts, a checking account, various stocks, and motor vehicles. During his lifetime, he also received monthly Social Security and pension benefits. Prior to his permanent admission at the nursing home, decedent created an irrevocable trust, by which he transferred his residence by deed to defendant as trustee of a newly created family trust.

On appeal, the court affirmed the trial court’s decision. The court also rejected defendant’s argument that the agreements that she executed to secure decedent’s residency at plaintiff’s facility violated the Federal Nursing Home Reform Act. The Act expressly permits a nursing facility to require an individual, who has legal access to a resident’s income or resources available to pay for care in the facility, to sign a contract to provide payment from the resident’s income or resources for such care. The court also rejected defendant’s contention that she signed one agreement with POA after her name so it could not be enforced against her in her personal capacity. The court stated that agreement’s clear terms defined defendant’s obligations as the responsible party by means of her control over decedent’s assets, leaving no room to suggest that the document was signed on decedent’s behalf.

Troy Nursing & Rehabilitation Center, LLC v. Naylor, 2012 WL 1431653 (April 26, 2012)