Idaho Dep't of Health & Welfare v. Peterson (In re Estate)

• Citation: 340 P.3d 1143,157 Idaho 827
• Decision Date: 12 December 2014
• Docket Number: No. 40615.,40615.
• Parties: In the Matter of the ESTATE OF Melvin PETERSON, Deceased. Idaho Department of Health & Welfare, Petitioner–Respondent, v. Cathie Peterson, Respondent–Appellant.
• Court: Idaho Supreme Court

157 Idaho 827

340 P.3d 1143

In the Matter of the ESTATE OF Melvin PETERSON, Deceased.

Idaho Department of Health & Welfare, Petitioner–Respondent,

v.Cathie Peterson, Respondent–Appellant.

No. 40615.

Supreme Court of Idaho.

Dec. 12, 2014.

Featherston Law Firm, Chtd. Sandpoint, for appellants. Brent C. Featherston argued.

Hon. Lawrence G. Wasden, Idaho Attorney General, Boise, for respondents. William C. Cartwright, Deputy Attorney General argued.

SUBSTITUTE OPINION, THE COURT'S PRIOR OPINION DATED AUGUST 13, 2014 IS HEREBY WITHDRAWN.

BURDICK, Chief Justice.

This case arose out of the Department of Health and Welfare's (IDHW) attempt to recover Medicaid benefits from Melvin Peterson's estate that were paid during his lifetime. At issue is whether any part of a real estate transfer from Melvin Peterson to his daughter Cathie Peterson is subject to Medicaid recovery.

I. FACTUAL AND PROCEDURAL BACKGROUND

The relevant facts of this case are not in dispute. Melvin Peterson died on March 3, 2007, at the age of 83. Prior to his death, he was the owner of residential real property located in Boundary County. On December 6, 2001, Melvin Peterson executed a Gift Deed of his real property to his daughter, Cathie Peterson, retaining for himself a life estate in the property. Shortly thereafter, he applied for Medicaid and began receiving Medicaid benefits in March 2003. At the time of his death, Melvin Peterson had received a total of $171,386.94 in Medicaid benefits.

Cathie Peterson was appointed personal representative of her father's estate on July 26, 2007. IDHW filed a timely Claim Against Estate and later an Amended Claim Against Estate in the amount of $171,386.94. Cathie Peterson, in her capacity as personal representative, disallowed the claims without stating a reason. In response, IDHW filed a Petition for Allowance of Amended Claim. After a hearing on March 25, 2008, the court granted IDHW's petition.

After receiving no response to its claim against the estate, IDHW filed a Petition to Require Payment of Claim on May 5, 2008, setting forth its demand for payment of the value of Melvin Peterson's life estate. Using the Life Estate Remainder Table contained in IDAPA 16.03.05.837 and Melvin Peterson's age at the time of his death, IDHW valued the life estate at $41,444. After a hearing, the magistrate court entered an order requiring payment of IDHW's claim on June 12, 2008. This June 12, 2008 Order held that the life estate was an asset of the estate for purposes of Medicaid recovery and ordered the personal representative to add the life estate interest to the estate's inventory and assign it an appropriate value. However, the personal representative instead filed and was granted a motion to hire an appraiser to determine the fee simple value of the residential real property. After the personal representative failed to file an appraisal, IDHW filed various motions relative to the appraisal, sale of the property, and payment of its claim. On August 11, 2009, the magistrate court granted IDHW's motions to compel appraisal, sale of the property, and payment of the Medicaid claim, which the personal representative subsequently appealed.

On appeal, the district court vacated the magistrate's August 11, 2009 Order and remanded the matter for additional findings of fact and conclusions of law. Shortly after the ruling on appeal was entered, Cathie Peterson, in her capacity as personal representative, sought permission from the magistrate court to sell the property, liquidate an escrow account, and pay counsel for the personal representative of the estate. On the same day, she also filed an Amended Personal Representative's Inventory assigning the life estate zero value.

On September 17, 2010, Attorney Brent Featherston filed a Demand for Notice and Special Appearance on behalf of "Cathie Peterson, individually," stating that he was seeking to vacate and dismiss all orders entered by the magistrate court regarding her real property. IDHW responded by filing a petition to remove Cathie Peterson as personal representative of the estate, which the magistrate court granted.

Following a court trial, the magistrate court held that the life estate remainder interest was an estate asset of value for purposes of Medicaid reimbursement and that its value was to be determined in accordance with IDAPA 16.03.05.837.01. On appeal, the district court affirmed the magistrate court in its November 16, 2012 Opinion. Cathie Peterson then timely appealed to this Court on December 27, 2012.

II. ISSUES ON APPEAL

1. Whether Cathie Peterson waived her appeal of the decision that Melvin Peterson's life estate was an asset subject to Medicaid recovery.

2. Whether the court had subject matter jurisdiction to determine the issues before it.

3. Whether the court had personal jurisdiction over Cathie Peterson individually.

4. Whether any part of the gift transaction Melvin Peterson made to his daughter before applying for Medicaid benefits is subject to Medicaid recovery.

5. Whether Cathie Peterson was entitled to offsets to the value of the real property based on improvements she made.

6. Whether either party is entitled to attorney fees on appeal.

III. ANALYSIS

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." Idaho Dep't Of Health & Welfare v. McCormick, 153 Idaho 468, 470, 283 P.3d 785, 787 (2012) (quoting 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, we review the record before the magistrate court to determine whether substantial and competent evidence supports the magistrate's findings of fact. Pelayo v. Pelayo, 154 Idaho 855, 858, 303 P.3d 214, 217 (2013). We review questions of law such as statutory interpretation de novo. McCormick, 153 Idaho at 470, 283 P.3d at 787.

Interpretation of a statute begins with an examination of the statute's literal words. Where the language of a statute is plain and unambiguous, courts give effect to the statute as written, without engaging in statutory construction. Only where the language is ambiguous will this Court look to rules of construction for guidance and consider the reasonableness of proposed interpretations. Moreover, unless a contrary purpose is clearly indicated, ordinary words will be given their ordinary meaning when construing a statute. In construing a statute, this Court will not deal in any subtle refinements of the legislation, but will ascertain and give effect to the purpose and intent of the legislature, based on the whole act and every word therein, lending substance and meaning to the provisions.

In re Estate of Wiggins, 155 Idaho 116, 119, 306 P.3d 201, 204 (2013) (internal citations and quotation marks omitted).

B. Whether Cathie Peterson waived her appeal of the decision that Melvin Peterson's life estate was an asset subject to Medicaid recovery.

IDHW argues that because the June 12, 2008 Order was an appealable order that was not appealed within 42 days, it is no longer subject to challenge on appeal. The June 12, 2008 Order granted IDHW's Petition to Require Payment of Claim to the extent of available assets and ordered that Melvin Peterson's retained life estate be deemed an asset of his estate for Medicaid recovery purposes and that the personal representative assign an appropriate value to it in the estate's inventory. About a year later, IDHW filed a Petition to Compel Sale of Home, which the magistrate court granted on August 11, 2009. In her capacity as personal representative, Cathie Peterson timely appealed the August 11, 2009 Order. In this first appeal, IDHW argued that the June 12, 2008 Order was final and not timely appealed. The district court issued its Decision on Appeal on May 26, 2010, holding that the June 12, 2008 Order was interlocutory and not appealable, and further vacated the judgment and remanded the case for the trial court to set forth adequate findings of fact. IDHW now argues that the district court erred in holding that the June 12, 2008 Order was interlocutory and asks this Court to reverse that decision.

Idaho Code section 17–201 allows appeals from a judgment or order of the magistrate division to the district court in eight different probate matters, three of which IDHW argues apply to the June 12, 2008 Order:

4. Against or in favor of setting apart property, or making an allowance for a widow or child.

5. Against or in favor of directing the partition, lease, mortgage, sale or conveyance of real property.

7. Refusing, allowing or directing the distribution or partition of an estate, or any part thereof, or the payment of a debt, claim, legacy or distributive share.

I.C. § 17–201.

In its May 26, 2010 Decision on Appeal, the district court concluded that the June 12, 2008 Order was interlocutory because the trial court did not determine any value, nor distribute, nor set aside, nor partition the life estate in the order itself. The district court is correct that the June 12, 2008 Order was interlocutory. Thus, Cathie Peterson did not waive her challenges to the June 12, 2008 Order by failing to appeal it and this Court may review any challenges to that order on appeal under Idaho Appellate Rule 17(e). Matter of Estate of Keeven, 110 Idaho 452, 456–57, 716 P.2d 1224, 1228–29 (1986) ("If there is a final appealable order in a case and an appeal is properly taken from that order, then all other orders which would otherwise not be appealable may be considered by this Court.").

C. Jurisdiction

Cathie Peterson contends that the court did not have subject matter jurisdiction to determine the title to her real property in a probate proceeding. She argues that she cannot be held personally liable except through a separate proceeding requiring process and acquisition of the court's jurisdiction, which did not occur in this case. She also...