Bethany Lutheran Health Servs. v. Cumpston, 20-1700

CourtCourt of Appeals of Iowa
Writing for the CourtAHLERS, JUDGE
PartiesBETHANY LUTHERAN HEALTH SERVICES, Plaintiff-Appellee, v. PATRICIA CUMPSTON, Defendant-Appellant.
Docket Number20-1700
Decision Date15 December 2021

BETHANY LUTHERAN HEALTH SERVICES, Plaintiff-Appellee,
v.

PATRICIA CUMPSTON, Defendant-Appellant.

No. 20-1700

Court of Appeals of Iowa

December 15, 2021


Appeal from the Iowa District Court for Pottawattamie County, Jeffrey L. Larson, Judge.

Patricia Cumpston appeals from the order finding her responsible for the outstanding balance owed to Bethany Lutheran Health Services. AFFIRMED.

Amanda Heims, Council Bluffs, for appellant.

Jennifer E. Lindberg and Jordan D. Nickerson of Brown, Winick, Graves, Gross and Baskerville, P.L.C. and Emily S. Hildebrand Pontius and Brandon R. Underwood of Fredrikson & Byron, P.A., Des Moines, for appellee.

Heard by Mullins, P.J., and Schumacher and Ahlers, JJ.

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AHLERS, JUDGE

Bethany Lutheran Health Services (Bethany Lutheran) filed suit against Patricia Cumpston seeking to recover amounts owed by her late husband. The district court found the amounts owed were reasonable and necessary family expenses under Iowa Code section 597.14 (2018) and entered judgment against Cumpston for the amounts owed. Cumpston appeals. She argues section 597.14 was not properly before the court, the amounts Bethany Lutheran charged were not family expenses, and Bethany Lutheran breached a fiduciary duty it owed to her. We reject Cumpston's arguments and affirm.

I. Background Facts and Proceedings.

Bethany Lutheran is a residential facility located in Council Bluffs that specializes in providing assisted living and skilled therapy and nursing services. In March 2017, Cumpston, acting as an authorized representative for her husband, Dean, executed a residency agreement for her husband to reside at and receive care from Bethany Lutheran. At the time, Cumpston and Dean had been married for more than fifty years.

In August 2017, Cumpston, assisted by her daughter, completed and submitted her first application for Medicaid assistance to pay for Dean's charges incurred at Bethany Lutheran. The Iowa Department of Human Services (DHS) responded with a request for additional information. The DHS later denied the first application for failure to provide the requested information.

Cumpston approached Lisa Hough, an accounting associate for Bethany Lutheran, for help with a new Medicaid application. In November 2017, Hough and Cumpston completed and submitted a second Medicaid application. The DHS

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again requested additional information, which Cumpston and Hough provided. The DHS later denied the second application because the Cumpstons' income was above the Medicaid income limit. Hough directed Cumpston to an attorney to establish a Miller Trust[1] in order to keep their income within the Medicaid limit.

In January 2018, after establishing a Miller Trust, Hough and Cumpston completed and submitted a third Medicaid application. The DHS again requested additional information and later denied the application because the Cumpstons' total resources were above the Medicaid resource limit.

In late February or early March 2018, Cumpston met with an attorney to seek assistance qualifying for Medicaid. The attorney testified Cumpston was concerned Bethany Lutheran "wanted her to use all of her money." Cumpston's resources at the time included a recent insurance settlement check for $19, 017.37 to pay for repairs from storm damage to her home. The attorney testified this check should have been excluded from Cumpston's resources when applying for Medicaid.[2] The attorney further testified, "I told [Cumpston] not to pay [Bethany Lutheran] until we got information on the Medicaid application."

Nevertheless, Cumpston continued working with Hough to qualify for Medicaid. For the next application, Hough testified:

[Cumpston] needed to [spend] down about $19, 000 in order to get to the threshold. I think it was nineteen seven something, and one of the options I gave her was to write a check to [Bethany Lutheran]
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because it would cash right away and it would be applied to Dean's old balance with us. That would immediately put her down at the threshold limit-at the resource limit

On March 5, Cumpston wrote a check to Bethany Lutheran for $19, 700.00, which reduced her resources at the time to below the Medicaid resource limit. That same day, Hough and Cumpston submitted a fourth Medicaid application, which the DHS denied because resources for Medicaid eligibility are measured as of “the first moment of the first day of the month.”

On March 21, the attorney and Cumpston submitted Cumpston's fifth Medicaid application. After requesting and receiving additional information, the DHS approved the Medicaid application on April 19.

Following Dean's death in July 2018, Bethany Lutheran filed a petition against Cumpston seeking to recover Dean's unpaid balance owed to Bethany Lutheran under theories of breach of contract and unjust enrichment. Cumpston filed a separate petition against Bethany Lutheran claiming breach of fiduciary duty, negligence, and unjust enrichment related to Bethany Lutheran's actions while Cumpston attempted to qualify for Medicaid. The district court consolidated the two petitions into the current action. Both parties moved for summary judgment, which the court denied.

The case went to trial. About one week after the trial finished, Bethany Lutheran moved for leave to amend its petition to add a claim for recovery under Iowa Code section 597.14 (2018). Two months after that, the district court issued its order finding Cumpston liable for Dean's expenses owed to Bethany Lutheran under section 597.14 and rejecting all other claims from both parties. The court

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ordered Cumpston to pay damages of $16, 933.48. Cumpston appeals the finding of liability under section 597.14 and the denial of her fiduciary-duty claim.

II. Standard of Review.

The parties disagree on the standard of review. "Generally, we will hear a case on appeal in the same manner in which it was tried in the district court." Johnson v. Kaster, 637 N.W.2d 174, 177 (Iowa 2001). To determine whether a proceeding was at law or equity, we consider "[t]he pleadings, relief sought, and nature of the case" as well as "whether the court ruled on evidentiary objections." Nelson v. Agro Globe Eng'g, Inc., 578 N.W.2d 659, 661 (Iowa 1998).

Bethany Lutheran captioned its petition "at law," and it primarily asserts a contract claim, which is typically heard at law. See Van Sloun v. Agans Bros., 778 N.W.2d 174, 178 (Iowa 2010). Cumpston's petition does not specify at law or equity, though her claims-and Bethany Lutheran's unjust-enrichment claim-are typically heard in equity. See Mendenhall v. Judy, 671 N.W.2d 452, 454 (Iowa 2003) (finding a fiduciary-duty claim was heard in equity); Iowa Waste Sys., Inc. v. Buchanan Cnty., 617 N.W.2d 23, 30 (Iowa 2000) (finding "a claim for unjust enrichment is rooted solely in equitable principles" and is typically heard in equity). Both petitions primarily request money damages but also request any other relief the court deems appropriate. The court ruled on evidentiary objections at trial; however, the court sustained few objections, and those it did sustain were mostly directed at keeping the parties focused on the issues and the trial moving rather than excluding substantively inadmissible evidence.

While we are not convinced the proceeding was heard in equity, we will nevertheless apply de novo review because of the closeness of the question and

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the fact "our ultimate resolution of [the issues] is the same under a de novo review as it would be under a review for correction of errors of law." City of Davenport v. Shewry Corp., 674 N.W.2d 79, 82 (Iowa 2004). Applying de novo review, we give weight to the fact findings of the district court, especially regarding the credibility of witnesses, but we are not bound by them. Iowa R. App. P. 6.904(3)(g).

III. Analysis.

A. Liability Under Iowa Code Section 597.14

The district court awarded Bethany Lutheran damages under section 597.14, which states, "The reasonable and necessary expenses of the family . . . are chargeable upon the property of both husband and wife, or either of them, and in relation thereto they may be sued jointly or separately." Cumpston challenges whether this claim was properly before the court and whether the charges for which Bethany Lutheran sought damages were "reasonable and necessary expenses of the family."

1. Pleading the Section 597.14 Claim

Cumpston argues section 597.14 "was not properly before the court." The exact nature of Cumpston's argument is unclear. Cumpston asserts "[i]t...

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