Idaho Dep't of Health & Welfare v. McCormick (In re Estate)
| Decision Date | 09 August 2012 |
| Docket Number | No. 38694.,38694. |
| Citation | 153 Idaho 468,283 P.3d 785 |
| Parties | In the Matter of the Estate of George D. Perry. IDAHO DEPARTMENT OF HEALTH & WELFARE, Petitioner–Appellant, v. Barbara K. McCORMICK, Personal Representative of the Estate of George D. PERRY, Respondent. |
| Court | Idaho Supreme Court |
Honorable Lawrence G. Wasden, Attorney General, Boise, for appellant. Corey Cartwright argued.
Sisson & Sisson, Boise, for respondent. Peter Sisson argued.
This appeal arises from a claim filed by the Idaho Department of Health and Welfare (the Department) in the probate proceeding of George D. Perry, the deceased spouse of a Medicaid recipient, Martha J. Perry. The Department sought to recover funds under I.C. § 56–218 from the sale of the couple's home—their only significant asset—to recoup Medicaid benefits paid to Martha during her lifetime. The magistrate court disallowed the Department's claim for recovery, finding that Martha had no interest in the real property because George, acting for Martha under a power of attorney, conveyed the property to himself before his death. That decision was upheld on appeal to the district court. The Department now appeals to this Court, and we reverse.
This case stems from the probate of the estate of George D. Perry, who was born April 7, 1929, and died February 25, 2009. At the time of his death, George was married to Martha J. Perry, who was born November 13, 1930, and died May 3, 2010. Before George and Martha were married, Martha—then known as Martha Jean Boyle—owned a home in Ada County as her sole and separate property. On November 18, 2002, well into the couple's marriage, Martha executed a Quitclaim Deed conveying the home to "Martha Jean Perry and George Donald Perry" as grantees. The deed was recorded that same day in Ada County.
On March 3, 2005, Martha executed a general durable power of attorney, naming George as her attorney-in-fact. On July 31, 2006, George conveyed Martha's remaining interest in the couple's real property to himself, signing a Quitclaim Deed on behalf of Martha using the power of attorney. The deed was recorded the same day. Around September 15, 2006, George and Martha applied to the Idaho Department of Health and Welfare for medical assistance to assist in Martha's medical care. From October 1, 2006, until Martha's death, the Department provided medical benefits of more than $100,000 to Martha through the Medicaid program.
On February 25, 2009, George predeceased Martha, and in March 2009, Barbara K. McCormick was appointed personal representative of his estate. The primary and only significant asset of the estate was the home, which was sold by the personal representative for a net of $81,688.95. In April 2009, the Department filed a contingent claim1 with the probate court, seeking to establish a claim in the probate for funds in the amount of $106,251.08 for the Medicaid benefits provided to Martha. Specifically, the Department claimed entitlement under I.C. § 56–2182 to "any property or estate which, at any time, had been the community property of the decedent and decedent's spouse, or which had been the property of decedent's spouse."3
The magistrate court denied the claim, finding that although I.C. § 56–218 allows the Department to recover against the estate of a Medicaid recipient's spouse, such recovery is limited to "property in which the recipient spouse had an interest at the time of her death," and that Martha validly conveyed her interest in the home to George via the power of attorney before that time. On appeal to the district court, the district court affirmed the magistrate court's decision and declined to award attorney fees. The Department timely appealed to this Court.
A. Standard of Review
"On appeal of a decision rendered by a district court while acting in its intermediate appellate capacity, this Court directly reviews the district court's decision." In re Doe, 147 Idaho 243, 248, 207 P.3d 974, 979 (2009). However, to determine whether the district court erred in affirming the magistrate court, independent review of the record before the magistrate court is necessary. Id. This Court reviews questions of law de novo. Martin v. Camas Cnty. ex rel. Bd. of Comm'rs, 150 Idaho 508, 511, 248 P.3d 1243, 1246 (2011). The interpretation of a statute is a question of law. State, Dep't of Health and Welfare v. Housel, 140 Idaho 96, 100, 102, 90 P.3d 321, 325 (2004). Further, whether Idaho law is preempted by federal law is also a question of law. Christian v. Mason, 148 Idaho 149, 151, 219 P.3d 473, 475 (2009).
B. The district court erred in determining that, under I.C. § 56–218 and 42 U.S.C. § 1396p, the Department may only recover assets in which a Medicaid recipient has an interest at the time of her death.
Although the Department claimed entitlement under I.C. § 56–218 to recover "any property or estate which, at any time, had been the community property of [George and Martha], or which had been the property of [Martha]," the magistrate court found that its recovery was limited to property in which Martha had an interest at the time of her death. The magistrate court relied on a Minnesota Supreme Court interpretation of definitions in the federal Medicaid recovery statute as limiting the extent to which states may recover property transferred by the recipient before death. See In re Estate of Barg, 752 N.W.2d 52 (Minn.2008). on appeal, the district court agreed with that interpretation, finding that although Idaho law alone would allow recovery of the former community property here, such recovery would conflict with federal law and, thus, was preempted by federal law. On appeal to this Court, the Department argues that: no conflict exists between the plain language of Idaho and federal law, Barg does not apply, and this Court already disposed of this issue in Idaho Department of Health and Welfare v. Jackman, 132 Idaho 213, 970 P.2d 6 (1998). The Estate responds that: the magistrate and district courts were correct under the plain statutory language and the reasoning in Barg, Jackman does not resolve the question, and the Department's argument relies on a general definition of "assets" in the federal statutory scheme that does not displace the more specific provision at issue.
The Medicaid program is a "cooperative endeavor [with the states] in which the Federal Government provides financial assistance to participating States to aid them in furnishing health care to needy persons." Harris v. McRae, 448 U.S. 297, 308, 100 S.Ct. 2671, 2683, 65 L.Ed.2d 784, 799 (1980). Participating states enact legislation and rules, incorporate them into state medical assistance plans, and submit those plans to the U.S. Secretary of Health and Human Services (HHS) for approval. 42 U.S.C. § 1396a(a) - (b). Upon approval, the states receive federal payments for the program. 42 U.S.C. § 1396. As one of the many conditions for receipt of federal Medicaid funds, federal law specifically regulates when and to what extent states may recover for payments made to individuals. 42 U.S.C. § 1396p.
The Supremacy Clause mandates that federal law "shall be the supreme Law of the Land," and the U.S. Supreme Court has held that a state law which conflicts with federal law is "without effect." U.S. Const. art IV, cl. 2; Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516, 112 S.Ct. 2608, 2617, 120 L.Ed.2d 407, 422 (1992). In determining whether state law is preempted, we begin with a presumption of no preemption. Walker v. Am. Cyanamid Co., 130 Idaho 824, 828, 948 P.2d 1123, 1127 (1997). We have stated:
"The preemption of state law is not to be readily inferred." Federal law may preempt state law in one of two ways. First, if Congress has shown the intent to occupy a given field, any state incursion into that field is preempted by federal law. Second, even if the field is not preempted, if state law conflicts with federal law, it is preempted to the extent of the conflict. In order to find that a state law has been preempted, this Court must determine that the law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Essentially, this Court must find that a state law is directly contrary to the congressional intent behind a federal statute before state law will be preempted.
Christian, 148 Idaho at 152, 219 P.3d at 476 (quoting In re Estate of Mundell, 124 Idaho 152, 153, 857 P.2d 631, 632 (1993) ) (citations omitted).
The cooperative nature of the Medicaid program shows that Congress did not intend to occupy the entire Medicaid field, as the federal Medicaid statute calls for participating states to adopt their own legislation and regulations. E.g. 42 U.S.C. § 1396a(a) - (b). However, it is clear that Congress made compliance with federal law a prerequisite to states participating in the program. E.g. 42 U.S.C. § 1396p ; 42 U.S.C. § 1396a(a)(18). In the Medicaid recovery context, Congress has stated the general rule that "[n]o adjustment or recovery of any medical assistance correctly paid on behalf of an individual under the State plan may be made," and then specifies certain exceptions to that rule. 42 U.S.C. § 1396p(b)(1). However, more broadly, Medicaid has always been intended to be "the payer of last resort." Arkansas Dep't of Health and Human Servs. v. Ahlborn, 547 U.S. 268, 291, 126 S.Ct. 1752, 1767, 164 L.Ed.2d...
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