Aristocrat Lakewood Nursing Home v. Mayne

• Decision Date: 17 May 1999
• Docket Number: No. 73328.,73328.
• Citation: 133 Ohio App.3d 651,729 NE 2d 768
• Parties: ARISTOCRAT LAKEWOOD NURSING HOME, Appellant, v. MAYNE, Appellee.
• Court: Ohio Court of Appeals

133 Ohio App.3d 651

729 NE 2d 768

ARISTOCRAT LAKEWOOD NURSING HOME, Appellant, v. MAYNE, Appellee.

No. 73328.

Court of Appeals of Ohio, Eighth District, Cuyahoga County.

Decided May 17, 1999.

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Timothy N. Toma Co., L.P.A., and Timothy N. Toma, for appellant.

McCarthy, Lebit, Crystal & Haiman Co., L.P.A., and Joshua B. Nathanson, for appellee.

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KARPINSKI, Judge.

Plaintiff-appellant, Aristocrat Lakewood Nursing Home ("nursing home"), appeals from a judgment against it on claims to recover payment from defendant-appellee Joan Mayne for long-term nursing care bills.

In its suit against Mayne, the nursing home alleges that when she sold her parents' house she improperly took all her stepfather's assets, before deserting him, penniless and ineligible for Medicaid, and burdening the nursing home with substantial unpaid nursing home bills. Mayne argued to the contrary that she was well-intentioned, took care of her mother, and was entitled to the couple's assets under an agreement with them even though her stepfather was never able to live with her.

Mayne's elderly mother, Emily Wolf, and elderly step-father, Nelson Wolf, who were married for approximately 45 years, lived in a jointly owned residence in Cleveland. According to Mayne, her mother, Emily, who was 93 years of age, became concerned about Nelson, who was approximately 81 years of age, because he was "not competent" and both needed help. They had discussions about moving to Tulsa, Oklahoma, where Mayne and her husband lived in a residence at 59th Place. Nelson was reluctant to move there.

In November 1993, Nelson suffered "a series of strokes" and was hospitalized at the Veterans Administration ("VA") hospital. In late December 1993, when Emily was living alone, Mayne and her husband, a paralegal, drove to Cleveland.

On December 20, 1993, Mayne, her husband, and mother went to the VA hospital, where the Wolfs executed a "General Power of Attorney" appointing Mayne to act on their behalf. Mayne sold the Wolfs' house for $15,000 in cash the following day. After they packed her mother's possessions, including the funds from the mother's joint checking account with Nelson, they left for Tulsa on December 23, 1993. Nelson remained hospitalized in Cleveland at the VA hospital.

On December 24, 1995, Emily moved into the Maynes' existing 59th Place residence in Tulsa while Mayne was refurbishing a second house she purchased four months earlier on South Florence. Two days later, on December 27, 1993, Mayne deposited the $15,000 proceeds from the sale of the Wolfs' house in a bank certificate of deposit in her own name. Mayne rerouted Nelson's social security check, which Emily and Nelson had previously shared, to Emily in Tulsa and established for Emily and Mayne a joint checking account in which Mayne claimed a fifty percent ownership interest. Emily also continued to receive her own social security check.

The South Florence house which Mayne had allegedly purchased for the Wolfs to live in, was "a super deal" and cost only $2,500 down. She paid approximately $7,500 over several months to paint and refurbish it. The remaining debt for the purchase price was $35,000.¹ On May 27, 1994, Emily paid the monthly payment of $405 due on the note for the South Florence property. The following month, the Maynes sold their original residence on 59th Place and moved into the South Florence residence. Emily continued sharing living expenses with the Maynes throughout this period.

Even before his strokes, the loss of his house, and the transfer of all his assets and income, Nelson had modest means. The VA program for veterans, like the Medicaid program for the general public, requires demonstrated economic need, but has less stringent financial criteria for eligibility. The fact that the VA paid for any of Nelson's medical expenses, arising from a stroke at age 81 for a nonservice connected disability, demonstrated that he had few disposable assets even for his nonmedical, personal needs.²

The VA made a social work service report on January 27, 1994, near the end of his stay at the VA hospital.³ It summarized the VA's efforts to obtain a guardian for Nelson to look after his interests because he had been left alone in Cleveland by his family. Apart from Nelson's medical needs, the report recognized the VA's dilemma concerning his placement because "he is here alone without funds, clothes, or a home." Mayne assured the VA that she would move Nelson to Tulsa to join them within weeks in the Spring.

On February 4, 1994, near the date when Mayne indicated that Nelson was originally expected to go to Tulsa, he was transferred from the VA hospital directly to the nursing home. Payment was guaranteed to the nursing home on a VA contract for a period of up to 180 days. Nelson never went to Tulsa and stayed intermittently in the nursing home until his death sixteen months later. See fn. 22, infra.

During his stay at medical facilities in Cleveland, Nelson had no funds for personal expenses. There is no evidence that he had any funds while at the VA hospital, and the VA documented efforts to obtain funds for him prior to his discharge. On January 27, 1994, Mayne informed the VA that Emily was entitled to keep Nelson's social security checks—in addition to her own—"while he is on a VA Contract," but that Mayne would send Nelson $50. Although there is no indication that Nelson ever received these funds, Mayne ultimately sent two checks, each for $7, directly to the nursing home to pay for two haircuts.⁴

Mayne testified that by Spring 1994 she knew that Nelson would never move to Tulsa because of his condition. The VA paid for the entire 180-day period of long-term care charges incurred by Nelson at the nursing home through August 8, 1994, pursuant to the VA contract. Even after the expiration of the VA contract, and despite her knowledge that Nelson would not move to Tulsa, however, Mayne never offered to return the money she had taken from him for housing in Tulsa so that he could pay his own bills for housing, medical, or personal expenses in Cleveland.

Mayne testified that she knew, before Nelson's VA contract lapsed, that he had to qualify for Medicaid to obtain assistance in paying his nursing home bills. On July 8, 1994, before the VA contract elapsed, Mayne completed an application for Medicaid on Nelson's behalf under the "General Power of Attorney." Following treatment at another medical facility, Nelson was later readmitted to the nursing home, on a "Medicaid pending" status.

Approximately one year after Mayne originally stated that Nelson would join her in Tulsa, after the Department of Human Services made several requests for further information from Mayne, and after several months of bills had been incurred, the Medicaid application was denied. Nelson was found to be ineligible for Medicaid because his residence had been sold and none of the proceeds had been used to pay his medical expenses. After the Department of Human Services reportedly referred the matter to the prosecutor's office, Mayne continued to retain the proceeds and accumulated interest from the sale of the Wolfs' house and renewed the certificate of deposit until she cashed it "a couple years" later to buy herself a recreational vehicle.

The nursing home's complaint indicated that a second application for Medicaid benefits, filed March 1, 1995, was denied, effective ten days after Nelson's death, for failure to cooperate in verifying the value of resources. No appeal was taken. Fortunately, Medicare, which deducted the premium from his social security check before it was rerouted to Emily in Tulsa, covered some of his nursing home expenses. Some of his expenses were also satisfied by his own social security checks, which were restored to him in September 1994, one month after the termination of the VA contract. Nelson died on June 18, 1995, leaving an unpaid itemized balance owed to the nursing home of $16,311.32, for long-term nursing care services, underwear, and haircuts.

In a four-count complaint filed against Mayne, the nursing home alleged tort claims of conversion, fraudulent conveyance, breach of fiduciary duty, and negligence. It sought to recover the debt owed to it, along with punitive damages, attorney fees, and other relief. The trial court granted summary judgment for Mayne on all the nursing home's claims except the claims for fraudulent conveyance, punitive damages, and attorney fees, which proceeded to a bench trial.

The nursing home presented testimony from (1) Mayne as if on cross-examination, (2) its bookkeeper, Michelle Mroczka, (3) its social worker, Nancy Yantok Quigley, and (4) attorney John Manley concerning the reasonableness of attorney fees incurred in pursuing its claims.

During the case in chief, Mayne testified that her mother Emily lived with her in Tulsa for approximately two years before she—like Nelson—suffered a stroke, was hospitalized for two months, and was then discharged into a nursing home for long-term care. At the time of trial, Mayne and her husband continued to live in the South Florence residence with all improvements and additions.⁵ Emily had lived in the house, which they bought when she was 93 years of age, only "for over a year, maybe close to two"; Nelson never lived there.

Mayne denied any knowledge that the Department of Human Services had referred the matter concerning Nelson's Medicaid application to the County Prosecutor because of the sale of his residence and her retention of the proceeds. In the Medicaid application Mayne completed for Emily at the end of 1995, Mayne stated under penalty of perjury that Emily never sold any house, that Emily paid rent to Mayne while staying at her residence, and that Emily never owned or transferred property. Mayne subsequently recanted all these statements and, under oath, testified to...