LLC v. Robert Clairwood et al. (2012)

MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT (# 111)

FACTS

On July 11, 2011, the plaintiff, Orchard Grove Specialty Care Center, LLC, filed a three-count amended complaint against the defendants, Robert Clairwood and Richard Clairwood.   In the complaint, the plaintiff alleges the following facts.   On November 25, 2008, Marie Clairwood, the defendants' mother, was admitted to the plaintiff's facility to receive healthcare services, which the plaintiff provided.   The defendants undertook the duty and responsibility related to all aspects of Marie Clairwood's finances, including oversight and control of payment to the plaintiff, but the plaintiff has not been compensated fully for the services rendered.   Count one and count three against the defendants, Robert Clairwood and Richard Clairwood, respectively, allege that the defendants were negligent in that they failed to oversee properly the assets and finances of Marie Clairwood in order to ensure that the plaintiff was paid for its services;  and/or they failed to file properly a Title XIX ¹ application on behalf of Marie Clairwood.

The plaintiff further alleges in count two that Richard Clairwood breached a written agreement with the plaintiff.   Pursuant to the agreement, Richard Clairwood agreed to be responsible for all aspects of Marie Clairwood's finances, including oversight and control of payment to the plaintiff for the services rendered by the plaintiff to Marie Clairwood and “being the responsible party for the services.”   Although the plaintiff provided the services to Marie Clairwood in accordance with the agreement, Richard Clairwood breached the agreement by failing to oversee properly Marie Clairwood's finances, and as a result, the plaintiff did not receive payment in full for the services.   In all three counts, the plaintiff alleges that $52,020.28, together with interest, fees and costs, remains outstanding.

On October 28, 2011, the defendants filed a motion for summary judgment as to the entire complaint on the ground that there exists no genuine issue as to any material fact, and therefore, they are entitled to judgment as a matter of law.   The defendants filed a memorandum of law in support, accompanied by various exhibits.   On December 6, 2011, the plaintiff filed a memorandum of law in opposition and various exhibits.   The defendants filed a reply memorandum on February 3, 2012, accompanied by additional exhibits.   The matter was heard at short calendar on February 21, 2012.

DISCUSSION

“Practice Book § 17–49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.   In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.”  (Internal quotation marks omitted.)  Brooks v. Sweeney, 299 Conn. 196, 210, 9 A.3d 347 (2010).

“In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact.   The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law.   The courts hold the movant to a strict standard.   To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact ․ As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent ․ When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue ․ Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue.”  (Internal quotation marks omitted.)  Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 10–11, 938 A.2d 576 (2008).  “In ruling on a motion for summary judgment, the court's function is not to decide issues of material fact, but rather to determine whether any such issues exist.”  (Internal quotation marks omitted.)  Maltas v. Maltas, 298 Conn. 354, 365, 2 A.3d 902 (2010).

In regard to counts one and three, which allege negligence, the defendants appear to argue that they were not negligent because they hired an attorney to help in the preparation of Marie Clairwood's medicaid application and that the application took longer than average, but was within the normal range.   In support, the defendants have submitted an undated affidavit of Deborah Tedford, the attorney they retained to prepare the Title XIX application on behalf of Marie Clairwood.   Tedford attests that her office was retained in May 2009, to prepare a Title XIX application for Marie Clairwood and that the defendants provided her office with all requested documents, but the defendants discovered new assets from time to time, which complicated the processing of the application.   The defendants also assert, in their own affidavits, that Marie Clairwood had an IRA with Dime Bank, which was paid to the plaintiff, a funeral CD, which was used for Marie Clairwood's funeral, and a checking account, which was used for Marie Clairwood's expenses while she was at the plaintiff's facility.

The plaintiff counters that the defendants had a duty to apply timely and properly for medicaid benefits, to use properly the assets of Marie Clairwood and to “spend down” properly the assets of Marie Clairwood.   The plaintiff argues that the evidence submitted demonstrates that there exist genuine issues of material fact regarding whether the defendants exercised reasonable care in fulfilling these obligations.   The plaintiff has submitted the affidavit of Gertrude Klioze, the plaintiff's business office manager, who avers that the defendants represented to her that they had control of and access to Marie Clairwood's income or assets and that they would use Marie Clairwood's income or assets to make prompt payment for services rendered in accordance with the resident admission agreement.   Further, Klioze states that Marie Clairwood was deemed ineligible for medicaid benefits as a result of the withdrawal of the IRA with Dime Bank and the transfer of assets to the defendants from Marie Clairwood's life insurance policy with Jackson National Life Insurance Company;  Marie Clairwood remained ineligible for medicaid benefits from March 2009, to November 2009 as indicated in the notice of denial issued by the department of social services, which is attached to Klioze's affidavit.

In response, the defendants have submitted additional evidence, specifically affidavits of the defendants attesting that they entered into employment and services agreements with Marie Clairwood, accompanied by copies of the April 1, 2008 employment and services agreements.   The defendants argue that the evidence shows that they rendered services in accordance with these agreements to Marie Clairwood prior to the time that she entered the plaintiff's facility.   The defendants aver that they were compensated for the services with a check from Marie Clairwood's life insurance policy with Jackson National Life Insurance Company.

“The essential elements of a cause of action in negligence are well established:  duty;  breach of that duty;  causation;  and actual injury.”   (Internal quotation marks omitted.)  Sturm v. Harb Development, LLC, 298 Conn. 124, 139, 2 A.3d 859 (2010).  “Summary judgment procedure is especially ill-adapted to negligence cases, where ․ the ultimate issue in contention involves a mixed question of fact and law, and requires the trier of fact to determine whether the standard of care was met in a specific situation ․ [T]he conclusion of negligence is necessarily one of fact ․” (Citations omitted;  internal quotation marks omitted.)  Michaud v. Gurney, 168 Conn. 431, 434, 362 A.2d 857 (1975).

In the present case, the plaintiff and the defendants have submitted affidavits and other evidence that establish there was an application for medicaid benefits made on behalf of Marie Clairwood that was denied initially, and the plaintiff remains unpaid for services rendered to Marie Clairwood during the period of ineligibility.   The defendants' evidence, specifically their affidavits, indicates that they used Marie Clairwood's assets to pay the plaintiff, to pay themselves and to pay for Marie Clairwood's expenses while at the plaintiff's facility.   Nevertheless, the plaintiff's evidence indicates that the use and control of these assets by the defendants resulted in the initial denial of medicaid benefits and Marie Clairwood's continuing ineligibility for a period of time.   The Supreme Court has “consistently held that reasonableness is a question of fact for the trier to determine based on all of the circumstances.”  Williams Ford, Inc. v. Hartford Courant Co., 232 Conn. 559, 580, 657 A.2d 212 (1995).   Viewing the evidence in the light most favorable to the nonmoving party, there exists a genuine issue of material fact whether the use and control of Marie Clairwood's assets by the defendants was reasonable, which makes summary judgment inappropriate.   Accordingly, the defendants have not met their burden of establishing the absence of any question of material fact, and they are not entitled to judgment as a matter of law as to counts one and three.

In regard to count two, which alleges breach of contract, the defendants argue that the evidence shows that they did not enter into a contract with the plaintiff assuming personal liability for the services to be rendered to Marie Clairwood.   The plaintiff agrees that the defendants did not assume personal liability;  the plaintiff counters, however, that Richard Clairwood was a party to the resident admission agreement, which is the alleged contract.   The plaintiff argues that the defendant is not entitled to judgment as a matter of law because the plaintiff is pursuing the defendant for the contractual promises he made when he signed the resident admission agreement as the responsible party for Marie Clairwood, including obligations to oversee and control payments to the plaintiff and to make a timely application for medicaid benefits.   Among other evidence, the plaintiff and the defendants have submitted a copy of the resident admission agreement.

“The elements of a breach of contract are the formation of an agreement, performance by one party, breach of the agreement by the other party and damages.”  (Internal quotation marks omitted.)  Hawley Avenue Associates, LLC v. Robert D. Russo, M.D. & Associates Radiology, P.C., 130 Conn.App. 823, 832, 25 A.3d 707 (2011).  “Whether a contract has been breached ordinarily is a question of fact ․” (Internal quotation marks omitted.)  Lydall, Inc. v. Ruschmeyer, 282 Conn. 209, 242, 919 A.2d 421 (2007).

“Under the medicaid act, 42 U.S.C. § 1396r(c),² a nursing facility may require an individual who has legal access to a resident's assets to sign a contract requiring that individual to use those assets to pay for services rendered to the resident.   The act authorizes such contracts as long as the legal representative is not required to guarantee the payments personally.”   Sunrise Healthcare Corp. v. Azarigian, 76 Conn.App. 800, 802, 821 A.2d 835 (2003).   Furthermore, the legal representative “is liable only for her handling of [the resident's] assets and only to the extent that [the resident's] assets would cover outstanding payments owed to the plaintiff.   Because the plaintiff seeks to recover moneys that belonged at all times to [the resident] rather than to the [legal representative], the [legal representative's] liability depends on a showing of her misuse of [the resident's] assets in violation of the contract.”  Id., 808–09.

In the present case, the plaintiff does not allege that Richard Clairwood personally guaranteed payment for the services rendered by the plaintiff.   Further, according to the plain language of the resident admission agreement, “[t]he responsible party does not personally guarantee or serve as surety for payment as described in the agreement, however, if the responsible party has control of or access to the resident's income and/or assets, the responsible party agrees that these funds will be used for the resident's welfare, including but not limited to making prompt payment for care and services rendered to the resident in accordance with the terms of this agreement.”   Additionally, Klioze avers in her affidavit that the durable power of attorney form submitted by Richard Clairwood represented to the plaintiff that Richard Clairwood had control of and access to Marie Clairwood's income and/or assets.   A copy of the durable power of attorney was attached to Klioze's affidavit.

Similar to the defendant in Sunrise Healthcare Corp., Richard Clairwood may be liable to the plaintiff for the handling of Marie Clairwood's assets to the extent that her assets would cover the outstanding amount owed to the plaintiff.   See Sunrise Healthcare Corp. v. Azarigian, supra, 76 Conn.App. 808–09.   Richard Clairwood's liability depends on a showing of his misuse of Marie Clairwood's assets in violation of the agreement.  Id. In Sunrise Healthcare Corp., the defendant used the resident's income and/or assets to pay for additional services provided while the resident was at the plaintiff's facility that went beyond fulfilling her basic needs and were therefore in violation of the contract.   The defendants argue that the present case is factually distinguishable because they used Marie Clairwood's assets to pay themselves for services that were rendered prior to Marie Clairwood entering the plaintiff's facility.   See id., 811–12.   Although this distinction is accurate, the court's holding in Sunrise Healthcare Corp. does not suggest that the outcome would have been different had the payments been made for services rendered prior to the resident entering the plaintiff's facility.   The court held that “the term welfare under the contract refers to those basic necessities, such as nursing care, that would allow [the resident] to live day-to-day.   Any use of [the resident's] assets that goes beyond fulfilling her basic needs is, therefore, in violation of the contract.”  Id., 811.   In the present case, the evidence offered by Richard Clairwood does not demonstrate the absence of a genuine issue of material fact regarding whether the use of Marie Clairwood's assets went beyond fulfilling her basic needs.

Moreover, the plaintiff has submitted evidence, specifically the resident admission agreement and Klioze's affidavit, demonstrating that Richard Clairwood was in control of or had access to Marie Clairwood's assets, and he undertook obligations pursuant to the resident admission agreement, including overseeing the assets to ensure that they were used properly and applying timely for medicaid benefits on Marie Clairwood's behalf to ensure that the plaintiff was paid for its services.   Richard Clairwood offers his own affidavit to show how Marie Clairwood's assets were used.   Nevertheless, whether Richard Clairwood's use and control of the assets of Marie Clairwood was reasonable is a question of fact for the fact finder, not a determination to be made by the court on summary judgment.   See Williams Ford, Inc. v. Hartford Courant Co., supra, 232 Conn. 580.   Accordingly, whether Richard Clairwood breached his agreement as the responsible party with the plaintiff constitutes a genuine issue of material fact, and the court cannot conclude as a matter of law that Richard Clairwood is entitled to judgment in his favor.   The defendants' motion for summary judgment as to count two must be denied.

CONCLUSION

Based on the foregoing reasons, the defendants' motion for summary judgment is denied.

Martin, J.

FOOTNOTES

FN1. In the complaint, the plaintiff alleges that the defendants failed to file properly a Title IX application.   Based on the additional filings by the parties and oral argument at short calendar, it appears that the plaintiffs intended to reference Title XIX and the reference to Title IX is a typographical error.   Accordingly, the court will address the remainder of the memorandum to Title XIX. “Title XIX of the Social Security Act, 42 U.S.C. §§ 11396—1396s, commonly known as the Medicaid Act, is a federal-state cooperative program designed to provide medical assistance to persons whose income and resources are insufficient to meet the costs of medical care ․ General Statutes § 17b–2(8) designates the department [of social services] as the state agency responsible for administering the state's Medicaid program.”  (Citation omitted;  internal quotation marks omitted.)  Marciano v. Kraner, 126 Conn.App. 171, 173 n.2, 10 A.3d 572, cert. denied, 300 Conn. 922, 14 A.3d 1007 (2011)..  FN1. In the complaint, the plaintiff alleges that the defendants failed to file properly a Title IX application.   Based on the additional filings by the parties and oral argument at short calendar, it appears that the plaintiffs intended to reference Title XIX and the reference to Title IX is a typographical error.   Accordingly, the court will address the remainder of the memorandum to Title XIX. “Title XIX of the Social Security Act, 42 U.S.C. §§ 11396—1396s, commonly known as the Medicaid Act, is a federal-state cooperative program designed to provide medical assistance to persons whose income and resources are insufficient to meet the costs of medical care ․ General Statutes § 17b–2(8) designates the department [of social services] as the state agency responsible for administering the state's Medicaid program.”  (Citation omitted;  internal quotation marks omitted.)  Marciano v. Kraner, 126 Conn.App. 171, 173 n.2, 10 A.3d 572, cert. denied, 300 Conn. 922, 14 A.3d 1007 (2011).

FN2. 42 U.S.C. § 1396r(c)(5)(A) provides in relevant part:  “With respect to admissions practices, a nursing facility must ․ (ii) not require a third party guarantee of payment to the facility as a condition of admission (or expedited admission) to, or continued stay in, the facility ․ Moreover, “[s]ubparagraph (A)(ii) shall not be construed as preventing a facility from requiring an individual, who has legal access to a resident's income or resources available to pay for care in the facility, to sign a contract (without incurring personal financial liability) to provide payment from the resident's income or resources for such care.”   42 U.S.C. § 1396r(c)(5)(B)(ii)..  FN2. 42 U.S.C. § 1396r(c)(5)(A) provides in relevant part:  “With respect to admissions practices, a nursing facility must ․ (ii) not require a third party guarantee of payment to the facility as a condition of admission (or expedited admission) to, or continued stay in, the facility ․ Moreover, “[s]ubparagraph (A)(ii) shall not be construed as preventing a facility from requiring an individual, who has legal access to a resident's income or resources available to pay for care in the facility, to sign a contract (without incurring personal financial liability) to provide payment from the resident's income or resources for such care.”   42 U.S.C. § 1396r(c)(5)(B)(ii).

Martin, Robert A., J.