SEPTEMBER 15, 2003 VOLUME 11, NUMBER 11
Betty Budd spent the last years of her life at Presbyterian Medical Center, a nursing home in Oakmont, Pennsylvania. When she died she owed $96,000 to the facility, and only had $28,000 left in her estate. After collecting that amount, the nursing home filed suit against Ms. Budd’s daughter Elizabeth.
Using a power of attorney, Elizabeth Budd had handled her mother’s finances for the entire time she resided in the nursing home. At one point, with the unpaid bill mounting rapidly, the facility contacted Elizabeth Budd about the delinquency. She insisted that the money was almost gone, and promised that she would spend down the remaining money and make an application with the state Medicaid agency.
Elizabeth Budd never did apply for Medicaid for her mother. If she had her mother would not have qualified. She still had too much money available, even at the time of her death—generally speaking, single Medicaid applicants may not have more than $2,000 in available resources. Even if Elizabeth Budd had simply paid a portion of the nursing home bill her mother would not have qualified if, as the nursing home suspected, Elizabeth Budd had taken $100,000 of her mother’s money and put it into an account in her own name.
The nursing home sued Elizabeth Budd after her mother’s death. Their lawsuit made four different allegations against her. First, it charged that she had agreed to spend down the money and make a Medicaid application, and that she had breached her contract. Second, it alleged that she had defrauded the nursing home by misrepresenting her intentions. Third, the nursing home argued that Elizabeth Budd had fraudulently conveyed her mother’s property to avoid her creditors. Finally, the facility claimed that Elizabeth Budd had a duty to use her own funds to support her ailing and indigent mother.
The Pennsylvania Superior Court dismissed the nursing home’s claims for breach of contract, fraud and fraudulent conveyance. It found that any agreement Elizabeth Budd entered into with the nursing home was really between the home and her mother, and that Elizabeth Budd could not defraud the nursing home because she did not personally owe it any money.
The court did decide, however, that Elizabeth Budd might be liable. Pennsylvania law requires adult children to support their indigent parents, and the court ruled that the nursing home might be able to prove that Elizabeth Budd owed money on her mother’s bill—especially if it appears that the very reason her mother was indigent was that Elizabeth Budd took her money. The case was sent back to the trial court for further proceedings to determine her liability. Presbyterian Medical Center v. Budd, August 29, 2003.
Betty and Elizabeth Budd’s case is in some ways similar to an earlier case reported on in Elder Law Issues. Almost exactly two years ago we described a Connecticut case involving J. Michael Cantore, Jr., who was sued for failing to get Medicaid eligibility for his ward, Diana Kosminer. Because he had been appointed as conservator for Ms. Kosminer, the nursing home brought suit against Mr. Cantore’s bonding company for an unpaid $63,000 nursing home bill. While two cases probably do not amount to a national trend, nursing facilities regularly report problems with getting family members, agents and conservators to properly pay care bills, and at least occasionally must resort to litigation to secure payment.
