Lawsuit for Unpaid Bills by Nursing Home Against Resident’s Power of Attorney Dismissed, and Attorneys Fees Awarded

A Superior Court judge in Ocean County dismissed a lawsuit filed by a nursing home for unpaid bills against a power of attorney appointed by a former resident, and ordered the nursing home to pay legal fees incurred by the power of attorney, ruling that the law prohibited the nursing home from requiring the power of attorney to provide a guarantee of payment as a condition of the resident’s admission to the facility. Hamilton Ridge Healthcare & Rehabilitation Center v. Estate of Idella Wright and Charles Douglas, Docket No. L – 2335 – 16 (Law Division, 2017)

Idella Wright, an aged New Jersey resident, signed a power of attorney appointing her nephew, Charles Douglas, as her agent to handle her financial affairs. Thereafter, Charles Douglas signed an admissions agreement with Hamilton Ridge Healthcare & Rehabilitation Center, a nursing home, on behalf of Idella Wright.

Idella Wright received care in the nursing home for two months before she passed away. Since her only asset was her monthly Social Security benefits, the power of attorney turned over the benefits to the nursing home each month to compensate the facility for care provided to Ms. Wright. However, the unpaid nursing home bill was $18,322.

Almost two years later, Hamilton Ridge filed a complaint to recover unpaid nursing home bills, including accrued interest on the unpaid balance and counsel fees, against Idella Wright and Charles Douglas. An Amended Complaint was also filed by Hamilton Ridge. The nursing home claimed that the defendants breached the nursing home admissions agreement by failing to pay the nursing home bills and/or apply for Medicaid benefits.

After filing an Answer and Counterclaim, Charles Douglas filed a motion for summary judgment, asking the Court to dismiss the Complaint. Charles based his motion on New Jersey law permitting a nursing home to require a resident’s power of attorney sign a contract to pay the facility from the resident’s income and assets, but barring a facility from requiring a power of attorney guarantee payment of a resident’s nursing home bills from income or assets belonging to the power of attorney.

The Court granted the motion for summary judgment, dismissing the nursing home’s Complaint with prejudice. Thereafter, Charles Douglas filed another motion, asking the Court to award all attorneys fees and costs he incurred in defending against the nursing home’s lawsuit. After oral argument on the motion, the Court held that the law clearly insulated a power of attorney appointed by a resident from personal financial liability for a resident’s unpaid nursing home bills. Since defendant was forced to defend against a lawsuit filed by the nursing home which was clearly without merit and should never have been filed, an award of attorneys fees and costs in favor of Charles Douglas was justified.

The case is attached here – Hampton Ridge Healthcare & Rehabilitation Center v.Estate of Idella Wright and Charles Douglas

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