Melmark, Inc. v. Schutt (majority)Annotate this Case
This case arose due to the failure of a New Jersey couple to pay for their adult son’s stay at a Pennsylvania nonprofit residential facility. It primarily raised a choice-of-law issue in relation to the two states’ filial-support statutes. Alexander Schutt (“Alex”), born in 1986, had severe mental and physical disabilities, including autism and obsessive-compulsive disorder. Alex's parents lived in New Jersey. In 2001, Alex was placed at Melmark, a non-profit residential care facility for intellectually and physically disabled persons, in Delaware County, Pennsylvania. Once Alex turned 21, the Princeton Regional School District stopped paying for his care at Melmark; at that point, payment for his care shifted to the New Jersey Department of Human Services, Division of Developmental Disabilities (NJ-DDD). In July 2011, NJ-DDD informed the Parents Alex would have to be relocated because the agency disapproved Melmark’s rates. NJ-DDD stated that the Parents, as guardians, should pick Alex up at Melmark and NJ-DDD would provide him with an emergency placement pursuant to New Jersey law. Parents did not retrieve Alex from Melmark. In December 2011, NJ-DDD wrote to Parents, stating it would fund Alex’s residence on a permanent basis at an identified facility in New Jersey beginning in January 2012. Unsatisfied, the Parents asked NJ-DDD instead to continue paying for Alex’s care at Melmark. NJ-DDD denied the request and advised the Parents it would stop paying Melmark as of December 31, 2011. Parents filed an administrative appeal in New Jersey in an effort to keep Alex at Melmark. NJ-DDD granted extensions of time to allow for Alex’s transfer to a New Jersey facility, but the agency ultimately informed Parents it would make no further payments to Melmark after March 31, 2012. When that date arrived, neither Parents nor NJ-DDD accepted custody of Alex, leaving Melmark to care for him uncompensated. Nevertheless, Parents continued to pay for off-campus speech classes, art classes, and equestrian therapy for Alex, all of which took place in Pennsylvania. In addition, Parents continued to visit Alex at Melmark almost every weekend even after NJ-DDD’s payments ceased. The Pennsylvania Supreme Court's resolution of the choice-of-law issue vitiated the trial court's basis for concluding the parents did not, in the individual capacity, appreciate Melmark's services. "[I]n weighing the equities, we conclude that it would be inequitable for Parents to retain the benefits they received from Melmark without paying for them. Thus, Melmark has established all three prerequisites for its equitable claims." As such, the Court held the Superior Court erred in finding the trial court properly denied relief on Melmark's equitable claims.