Matter of Heard

[*1] Matter of Heard 2009 NY Slip Op 52401(U) [25 Misc 3d 1233(A)] Decided on November 30, 2009 Sur Ct, Monroe County Calvaruso, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected in part through December 7, 2009; it will not be published in the printed Official Reports.

Decided on November 30, 2009
Sur Ct, Monroe County

In the Matter of the Estate of Oscar L. Heard, Deceased.



2004-2039/A



Sean J. Doolan Esq., Law Offices of Sean J. Doolan, 5428 Main Street, PO Box 298, Windham, New York, 12496, for the Estate.

Sanford R. Shapiro, Esq., Boylan Brown, Code, Vigdor & Wilson, LLP, 2400 Chase Square, Rochester, New York 14604, for Mary Brown as an individually.

Jeffrey H. Marks, Esq., Traynor, Skehan and Marks, 45 Exchange Boulevard, Suite 701, Rochester, New York 14614, Guardian ad Litem, for Doyle Heard.

Daniel M. Delaus, Jr., Esq., Monroe County Attorney by Richard R. Marchese, Jr., Esq., Senior Deputy County Attorney, 307 County Office Building, 39 West Main Street, Rochester, New York 14614, for Monroe County, Department of Social Services.

Edmund A. Calvaruso, J.

Decedent died on April 9th, 2003, a resident of Jennifer Matthews Nursing and Rehabilitation center. He was eighty five years of age and a permanent resident of the nursing home. Decedent sustained injuries while living at the nursing home beginning on July 18th, 1996 and continuing to his date of death. The injuries included a B-12 deficiency, hip fracture, contusions and lacerations. The Estate alleges that these injuries, as well as the decedent's death from hip fracture complications , were due to the negligence of the nursing home.

On March 18th, 2008, the estate filed a petition seeking Surrogate approval of a [*2]compromise of the cause of action against the nursing home. The proposed settlement amount was Two hundred thousand dollars ($200,000.00). The Petition requested , after subtraction of costs and disbursements, that the distribution be divided as follows: 1/3 of the settlement for attorney fees, 1/3/ of the settlement to the Monroe County Department of Social Services ("DSS") in compromise of its claim against the estate, and 1/3 of the settlement to be divided equally amongst the Decedent's three distributees. The Petition also requested that the Surrogate allocate the proceeds 50% to wrongful death and 50% to conscious pain and suffering.

The Guardian ad Litem appeared on behalf of his ward and objected to the amount which DSS would receive under the proposed distribution. He argued that DSS is entitled to reach only the proceeds of the conscious pain and suffering cause of action and that the allocation of the proceeds should be done prior to the compromise of the DSS claim. He argued that based upon the proposed allocation of to 50% wrongful death and 50%to the conscious pain and suffering cause of actions, DSS was only entitled to receive 1/3 of $100,000.00( less disbursements and fees), essentially reducing by half the amount that DSS would receive under the Estate's proposal.

This Court issued an Decision and Order on May 28th, 2009 that approved the compromise against the defendant nursing home in the amount of $200,000.00 and decreed that the allocation of the compromise proceeds was 100% to conscious pain and suffering and 0% to wrongful death. The Court further decreed that the Estate's costs and disbursements and settlement of the claim of DSS for a on-third percentage of the recovery were approved. Almost immediately after the Court issued its decision, counsel for the estate contacted the Court by letter and asked the Court to address the issue of a Medicare lien , the amount of which was unknown at the time of the filing of the petition seeking approval of the compromise. Also, the Administrator contacted the Court by letter seeking to join in the position of the Guardian ad Litem to reduce the portion of the compromise and challenge "Monroe County's claim against our father's estate." Consequently, the Court directed the Estate to submit and serve a Supplemental Citation to all interested parties to address these issues. The parties have submitted their respective positions.

Opinion

The Guardian ad Litem and the Administrator assert that the damages sustained by the Decedent, a public assistance recipient, are susceptible to a medicaid lien that does not exceed the cost of the medical care provided to decedent on and after the date of injury. They rely upon the Supreme Court's holding in Arkansas Department of Human Services v Ahlborn, 547 U.S. 268 , (2006). In Ahlborn, supra, the plaintiff was a 19 year old student, aspiring to become a teacher, when she was struck by a car and sustained a traumatic brain injury leaving her unable to complete her education and with permanent injuries. In order to become Medicaid eligible, plaintiff executed an assignment of any payment from any third party for medical care.

42 U.S.C. section 1396k(a)(1) provides in pertinent part that, "as a condition of [Medicaid] eligibility...,the individual is required...(A) to assign the State any rights... to payment for medical care (emphasis added) from any third party;...(B) to cooperate with the State...in [*3]obtaining [such] payments...and...( C ) ...in identifying and providing information to assist the State in pursuing, any third party who may be liable. The Court in Ahlborn, supra, concluded that the State's right to recover its lien, was predicated upon the assignment to the State agency of "any rights to payment for medical care from any third party" and that the assignment itself circumvented the antilien provisions of the Medicaid statutes and created the vehicle upon which lawful recovery of the states expenditure could be recouped. However, as the express provisions of the assignment itself were limited to "payment for medical care", so too went the Supreme Court's interpretation of a limitation of the State's right to recoup to the cost of medical care provided. Here, in the case at hand, the Guardian ad Litem and the Administrator urge this Court to so hold.

In the instant matter, it is uncontroverted that the Monroe County Department of Health and Human Services, Division of Social Services (Department) filed a Notice of Claim with the Estate on or about July 8th, 2005, in the amount of $421,231.45. The Department's claim is for Medicaid services paid on behalf of the decedent from 1995 through and until the time of his demise in 2003.

Pursuant to both Federal and New York law, the Department is required to seek recovery from the estate of the decedent of all Medicaid assistance provided to the decedent after his 55th birthday. New York State's codification of 42 U.S.C. Section 1396p [b] [1] [B], is found in Section 369 [2] (b)(I) (B) of the Social Services Law, which provides:

Notwithstanding any inconsistent provision of this chapter or other law, no adjustment or recovery may be made against the property of any individual on account of any medical assistance correctly paid to or on behalf of an individual under this title, except that recoveries must be pursued: (B) from the estate of an individual who was fifty-five years of age or older when he or she received such assistance.

Section 104 (1) of the Social Services Law, in pertinent part provides:

A public welfare official may bring action or proceeding against a person discovered to have real or personal property, or against the estate or the executors, administrators and successors in interest of a person who dies leaving real or personal property, if such person, or any one for whose support he is or was liable, received assistance and care during the preceding ten years, and shall be entitled to recover up to the value of such property the cost of such assistance or care.

Here, the Department argues that it is not asserting a medicaid lien akin to the lien asserted in Ahlborn, supra. Rather, it asserts a preferred lien against the estate of the decedent predicated upon sections 104(1) and 369 [2] (b) (I) (B) respectively. The Department further relies upon

the Matter of Ramirez, 14 Misc 3d 480 in which the claim of Department was also predicated upon Social Services Law section 369 [2] [b] [I] [B]. In Ramirez, supra, the Decedent was injured as a passenger of a motor vehicle accident on June 30th, 2005 and subsequently died on July 4th, 2005, at 87 years of age. There, the no-fault insurance carrier covered the costs of the [*4]decedent's care resulting from the accident, but Medicaid provided assistance to the decedent totaling $109,269.69 for the period between July 5th, 1995 through the date of his death. The Court ruled that had DSS based its claim on an assignment to it of the decedents' right to recover medical costs, then Ahlborn, supra, would control. However, because the claim was based upon Social Services Law section 369 [2] [b] [I] [B], the court correctly concluded that said statute complied with the mandate in section 1396p (b) (1) (B) that provides, "the State shall seek...recovery" of medical assistance correctly pain from the estate " of an individual who was 55 years of age or older when the individual received such medical assistance, and did not limit recovery to the cost of medical care provided as a result of the motor vehicle accident. Ramirez, supra at 483.

As stated above, the decedent, Oscar Heard, was 85 years of age at his demise. He had received $421,231.95 in Medicaid benefits that were expended on his behalf from 1995 through 2003. Clearly, the situation at hand is identical to the facts presented the Court in Ramirz, supra, which clearly is and should be distinguished form the facts and the holding of the Supreme Court in Ahlborn, supra.

At the time of the filing of the Petition for the Court's approval of the compromise, Petitioner plead the existence of a "conditional" Medicare lien. The Medicare lien is now known in the sum of $7,204.34.

Conclusion

Due to the foregoing, the amount of the Department's lien shall not be limited to the cost of medical care. Sections 369 [2] [b] [I] [B] and 104 [1] of the Social Services Law mandate that the Department assert a lien and seek recovery of the benefit conferred upon the Decedent from his estate. Notwithstanding the fact that the Department is entitled to seek full recovery, they have indicated their willingness to compromise the lien as plead in the petition for approval and allocation of the wrongful death action pending before this Court. Petitioner is directed to pay $14,654.35 to Petitioner's attorney (Doolan) for disbursements, $612.00 to petitioner for disbursements, an allowance of $8,000.00 to the Guardian ad Litem, all as set forth in this Court's previous Decision and Order dated May 28th, 2009, together with the Medicare lien in the amount of $7204.34. The balance of $169,531.31 shall be paid out in three equal amounts to the Monroe County Department of Social Services, the Law Offices of Sean Doolan and to Mary E. Brown as Administrator of the Estate of Oscar Heard for final distribution pursuant to EPTL Section 4-1.1. All other terms and conditions of the court's prior order of May 28th, 2009 shall remain in force and effect.

Dated: November30th, 2009

Hon. Edmund A. Calvaruso