The 17th Annual Elder and Disability Law Symposium was held on September 17, 2014 at the New Jersey Law Center in New Brunswick, NJ. Thank you to the 144 who attended the 17th Annual Symposium this year. As in past years, I gave the case law update at the opening plenary session by summarizing the top “ten (10)” elder and disability law cases decided in 2013-2014. This year I presented not ten (10), but nineteen (19) top cases. I’ve reproduced the presentation below for readers of this blog. Each hyper-linked case name takes the reader to an article on my blog about the case, where the reader may obtain a copy of each opinion.
Case Law Update
September 17, 2014
17th Annual Elder and Disability Law Symposium
The following is a summary of noteworthy New Jersey state and federal elder law cases of the past year, broken down into topical categories:
SPECIAL NEEDS TRUSTS
NEW JERSEY SUPREME COURT PERMITS DISABLED CHILD OF RETIRED FIREMAN TO DESIGNATE SPECIAL NEEDS TRUST AS BENEFICIARY OF STATE PENSION PLAN.
The Supreme Court made three important rulings in the case: (1) The Court characterized the State Pension Board’s decision denying Saccone’s request to designate a special needs trust as the beneficiary of his pension benefits as “arbitrary, capricious and unreasonable;” (2) The Court faulted the Pension Board for taking a “one size fits all” approach when applying the pension statutes, rather than properly examining the equities of each public employee’s situation when applying the pension regulations; and (3) The Court recognized special needs trusts as “legitimate planning tools” which would allow the retiree’s disabled child to meet his care needs in the future.
NOTWITHSTANDING MEDICAID’S INITIAL ERRONEOUS FINDING THAT GLOBAL OPTIONS APPLICANT WAS ELIGIBLE, MEDICAID’S FORMAL DENIAL THREE MONTHS LATER IS AFFIRMED.
In September 2012, Medicaid mistakenly found that the applicant was eligible for Global Options. Three and a half months later, Medicaid realized its mistake and formally denied the application. No one informed the applicant’s son that the application might be denied, or that his mother might be eligible for another Medicaid program.
The Administrative Law Judge (ALJ) noted that Medicaid regulations require that applications be determined within 45 days, unless there are “exceptional” circumstances. It noted that “there must be some consequence to non-compliance,” and yet declined to grant relief because retroactivity is prohibited under Medicaid’s Global Options program and because the applicant was never eligible for Global Options.
MEDICAID APPLICANT’S CLAIM AGAINST THE STATE FOR UNREASONABLE DELAY SURVIVES STATE’S MOTION TO DISMISS.
In federal court, plaintiff sought to enjoin the State from treating an annuity purchase as an impermissible transfer and from its “policy of delaying determinations involving annuities.” Two weeks later, Medicaid reversed its position on the annuity, changed the status of the application to “pending,” and moved to dismiss.
The court denied the motion, noting that “voluntary cessation of alleged illegal conduct does not generally moot a case.”
FEDERAL DISTRICT COURT AWARDS MEDICAID, EXCLUDING ENTIRE VA PENSION BENEFIT FROM COUNTABLE INCOME.
The District of New Jersey ruled that a pension from the Department of Veterans Affairs (VA) “resulting from unusual medical expenses” may not be counted as income for the purposes of any Medicaid program. It determined that plaintiff was eligible for VA pension benefits only because of unusual medical expenses, and held the entire VA benefit was not countable income in determining Medicaid eligibility.
GIFT PENALTY AFFIRMED: NO EVIDENCE THAT TRANSFER WAS A LOAN REPAYMENT, AND NO DEFERENCE ACCORDED ALJ’S CONTRARY DECISION.
The Director of the Division of Medical Assistance and Health Services (DMAHS) had reversed an ALJ and found that transfers were gifts, not reimbursements of nursing services and repayment of loans.
The ALJ affirmed, commending the Director for “carefully considering” the evidence. It downplayed the deference owed to an ALJ, and emphasized the deference owed to the Medicaid Director: “We owe substantial deference to the decisions of the administrative agency, not the findings of an ALJ,” and an ALJ is given special deference “only regarding credibility determinations made based on live testimony.”
MEDICAID PERMITTED TO REDUCE HOURS OF PRIVATE DUTY NURSING CARE ALLOCATED, BASED ON CARE PROVIDED BY SCHOOL AND FAMILY.
M.F.’s received 16 hours per day of private duty nursing services through a Medicaid waiver program. Those services were cut in half because MF was receiving services from his school. M.F. challenged the cut, claiming that the regulations only allowed the State to reduce his benefits to accommodate services provided by insurance, not by his school; and that the State’s requirement that his mother provide 8 hours of care did not comply with federal law. The Appellate Division upheld the ALJ’s decision.
MEDICAID APPLICANT FOUND ELIGIBLE FOLLOWING “GIFT-ANNUITY” PLAN.
As part of a “gift-annuity” plan, MW made a gift of $43,190.53 to her son and purchased an annuity valued at $80,010.58, which was irrevocable, non-assignable and actuarially sound. The State was the first remainder beneficiary. DMAHS had found that MW made $80,010.58 inaccessible by purchasing an annuity when the funds could have been used to pay for nursing home costs, so the annuity was a countable resource.
The ALJ reversed: the annuity could not be considered a countable resource because it was exempt under federal law. The Director found “[I] am constrained to adopt the Initial Decision finding that petitioner’s annuity cannot be considered a countable resource at this time.”
DISTRICT COURT DENIES PRELIMINARY INJUNCTION SEEKING TO PREVENT MEDICAID FROM COUNTING ANNUITY AS AVAILABLE RESOURCE.
The District Court ruled that a Medicaid applicant was not entitled to a preliminary injunction to prevent the State from counting her annuity as an available resource before Medicaid had ruled on the application, because plaintiff’s claims were speculative, based on the assumption that defendants would treat her annuity as a resource.
PAYMENTS TO FAMILY MEMBER UNDER CARE AGREEMENT WERE UNCOMPENSATED TRANSFERS SUBJECT TO A PENALTY PERIOD.
Monthly transfers to family members were found to be gifts, not care services, despite a care agreement with the applicant’s daughter. Medicaid determined the $1,200 monthly payments to Paula for services were transfers for less than market value and imposed a penalty period. The Director found that the care agreement was a “mechanism for transferring resources” and that the applicant had not received fair market value for the $1,200 per month as set forth in the agreement. The Appellate Division affirmed. It found that “all of the transfers to family members made during the look-back period must be scrutinized.”
MEDICAID AGENCY NOT BOUND BY COURT ORDER OF SUPPORT FOR COMMUNITY SPOUSE ENTERED WITHOUT NOTICE TO MEDICAID.
The Appellate Division held that Medicaid was not bound by an order for separate support and maintenance entered by a Family Part judge when the Family Part action was uncontested and proceeded without notice to the Medicaid agency.
SUMMARY JUDGMENT INAPPROPRIATE WHERE RIGHT OF SURVIVOR OF MULTIPLE-PARTY ACCOUNTS TURNS ON INTENT OF THE DECEDENT AND RELATIONSHIP OF THE PARTIES.
On appeal of summary judgment involving bank accounts under the Multiple Party Deposit Account Act, the Appellate Division reversed and remanded, concluding that there were disputed facts concerning the decedent’s state of mind and her relationship with the parties, which generally should not be decided on summary judgment. It ruled that “a rational fact finder could find a confidential relationship existed between defendant and her mother, or that the accounts were created for decedent’s convenience only, or both.”
SUBSTANTIAL ATTORNEY FEE AWARD UPHELD IN WILL CONTEST ALLEGING UNDUE INFLUENCE.
The Appellate Division upheld an attorney fee award that exceeded the amount in controversy in an undue influence case. The court found that the wrongdoer’s actions contributed to, and greatly increased, the time and effort required to litigate the matter.
DOCTRINE OF LACHES JUSTIFIES DISMISSAL OF PROBATE ACTION AGAINST EXECUTOR, FILED FIVE YEARS AFTER EXECUTION OF RELEASE AND REFUNDING BOND.
After being confronted by his brother with evidence of wrongdoing regarding their uncle’s estate, a nephew executed a release and refunding bond in 2005 for his full share of the estate. Almost five years later, he filed a verified complaint for an accounting and his allegedly unpaid $75,000 share of the estate. The Appellate Division affirmed the probate court dismissal, agreeing that the statute of limitations, which applies to a contract claim, was inapplicable, and that the doctrine of laches justified dismissal.
ATTORNEY REPRESENTING FATHER AND SONS IN ESTATE-PLANNING REAL ESTATE TRANSACTION DID NOT CONSTITUTE CONFLICT OF INTEREST OR BREACH OF FIDUCIARY DUTY.
When a widower contemplated remarriage, he and his sons went to attorneys, who recommended an estate plan involving transferring ownership of real properties to Limited Liability Companies (LLCs). After the widower remarried and conflicts developed, his sons and the LLCs filed suit against the law firm, claiming that its representation of the father and sons was a nonwaivable conflict of interest. The Appellate Division found in favor of the law firm, concluding that the transfers of real property were not traditional commercial transactions, but were part of the father’s estate plan, and did not constitute a concurrent conflict of interest. The Supreme Court denied certification.
DECEDENT’S ESTRANGED WIFE’S COMPLAINT FOR WILL CONSTRUCTION BASED ON PROBABLE INTENT IS PROPERLY DISMISSED; BUT COURT LACKED AUTHORITY TO ORDER NON-PROBATE ASSETS TO BE PLACED IN TRUST.
An estranged wife filed a caveat, claiming that the decedent had not intended to disinherit her. That caveat was rejected and the will admitted to probate. The estranged wife then filed a complaint seeking to construe the will to provide for an inheritance to her. That complaint was dismissed. The probate court also directed that certain non-probate assets (which designated the decedent’s son as beneficiary) were to be placed in the testamentary trust that was created for the son.
The Appellate Division agreed that the estranged wife’s complaint was properly dismissed based on res judicata, collateral estoppel and the entire controversy doctrine, and because the will was clear on its face, the doctrine of probable intent was not applicable.
However, it found that the probate court lacked power to direct that the non-probate assets be held in the testamentary trust, even though it made good sense.
NURSING HOME RESIDENT’S CHILD WHO SIGNS ADMISSION AGREEMENT AS “RESPONSIBLE PARTY” CAN BE SUED INDIVIDUALLY FOR SERVICES RENDERED TO THE RESIDENT.
A nursing home resident’s adult child who signs an admission agreement as the “Responsible Party” can be sued in his/her individual capacity for services rendered to the resident, if the adult child fails to use the resident’s financial resources to pay for care provided by the facility.
A COMPETENT LITIGANT CANNOT APPEAR IN A DIVORCE TRIAL THROUGH AN AGENT UNDER A POWER OF ATTORNEY.
A wife filed for divorce. Although the husband had not been declared incapacitated, the agent under his Power of Attorney (POA) (his daughter) signed the Verified Answer as POA. The wife objected. The court held that “a competent party cannot designate a surrogate… to testify in his place without consent of the other party or court order” because it would “sidestep [the divorcing party’s] testimonial obligations by simply deputizing another person as POA….”
COURT DISMISSES LAWSUIT BY ALLEGED ABUSER AGAINST THOSE WHO REPORTED AND INVESTIGATED CLAIMS OF ELDER ABUSE AND NEGLECT.
After the Bergen County Board of Social Services (BCBSS) filed a complaint to remove a son as his father’s agent following allegations of abuse, the son sued relatives, BCBSS investigators and a BCBSS examining doctor, claiming violation of his civil rights based upon civil trespass. The court granted summary judgment for the defendants, holding that the Adult Protective Services Act provides immunity for good faith reports of abuse.
DISTRICT COURT GRANTS REQUEST FOR WAIVER OF SOCIAL SECURITY DISABILITY OVERPAYMENT.
After receiving Social Security Disability (SSD) benefits for 5 years, the beneficiary began working again until he was laid off 3 years later. During this time period, he wrote letters and called the Social Security Administration (SSA) to inform them that he had begun working; he even sent his paychecks to the SSA. SSA representatives told him to keep his SSD checks unless otherwise notified, and that he would not be billed later for those payments. SSA later sought to recover the $11,902.80 overpayment.
After the ALJ denied his waiver request, the District Court reversed, finding that the beneficiary made substantial efforts to keep SSA informed of his employment, and requiring overpayment “would defeat the purpose of the [Social Security] Act or be against equity and good conscience.”
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