Bleick v. N.D. Dep't of Human Servs.

• Citation: 861 N.W.2d 138
• Decision Date: 24 March 2015
• Docket Number: No. 20140103.,20140103.
• Parties: Shirley BLEICK, Appellant v. NORTH DAKOTA DEPARTMENT OF HUMAN SERVICES, Appellee.
• Court: United States State Supreme Court of North Dakota

861 N.W.2d 138

Shirley BLEICK, Appellant

v.NORTH DAKOTA DEPARTMENT OF HUMAN SERVICES, Appellee.

No. 20140103.

Supreme Court of North Dakota.

March 24, 2015.

Charles (Casey) L. Chapman, Bismarck, N.D., for appellant.

Jeanne M. Steiner, Office of Attorney General, Bismarck, N.D., for appellee.

Opinion

VANDE WALLE, Chief Justice.

[¶ 1] Shirley Bleick appealed from a district court order affirming a Department of Human Services' decision denying her application for Medicaid benefits. We affirm, concluding a preponderance of the evidence supports the Department's finding that the income stream from Shirley Bleick's life estate exceeds asset limits for Medicaid eligibility.

I

[¶ 2] In 1985, Shirley Bleick and her husband conveyed by warranty deed one quarter section of farmland to their son, Brian Bleick, and his wife. After Shirley Bleick's husband died in 1988, she conveyed the rest of the farmland, including a residence located on the land, to her son by warranty deed, but she reserved a life estate in that land. Shirley Bleick then left the farm and moved to Elgin.

[¶ 3] Brian Bleick lives in a house located on the land subject to a life estate. He farmed full-time until 1991, when he reduced his farming operation. He continues to farm a smaller portion of the property, including land that is part of Shirley Bleick's life estate.

[¶ 4] In 1992, Brian Bleick and his wife entered into a farm lease with Kerry Ulmer. Ulmer rents 410 acres of farmland from Brian Bleick, including some land subject to Shirley Bleick's life estate. The lease requires Ulmer pay Brian Bleick and his wife $8,200 in rent per crop year.

[¶ 5] In 1997, Shirley Bleick executed a durable power of attorney, naming Brian Bleick as her attorney-in-fact. Shirley Bleick suffers from dementia and Alzheimer's disease and Brian Bleick took over her finances in “the early 2000s.”

[¶ 6] In February 2007, Brian Bleick, as attorney-in-fact, applied for Medicaid benefits for Shirley Bleick. The application was granted and she began receiving benefits. In June 2011, the Department sent Shirley Bleick and her son a letter advising them that her Medicaid benefits would be discontinued effective June 30, 2011, because she failed to provide information to the county social service office to determine continued eligibility. The Department also advised Shirley Bleick that she needed to provide a copy of the 1992 farm lease and a current or updated rental agreement including a description of the land rented, the dates the payments are due, and the amount of gross rent for each parcel.

[¶ 7] Shirley Bleick's Medicaid benefits were discontinued, and Brian Bleick filed a new application on her behalf in July 2011. On August 18, 2011, the Department sent Shirley Bleick and her son notice that it was denying her application for benefits because her countable assets exceed the maximum limit. The letter explained:

Shirley Bleick was entitled to annual income from her son/POA from the life estate property. Imputed rents of $1533 for the pasture rent, plus the $8200 annual lease for rented lands, total unreported and uncounted income of $9,733 per year. Because that income was not provided to her, it is still considered as available to her, and is a countable asset. For the five years before the application was submitted in 03/2007, and for the years 2007 (application month 03/2007), 2008, 2009, 2010 and 2011, the total available asset is $97,330 ($9,733 times 10 years). These assets will need to be paid back to Mrs. Bleick, and she will need to spend them down before any further Medicaid coverage can be considered for her.

[¶ 8] Shirley Bleick appealed the Department's decision denying her application. After a hearing, an administrative law judge (“ALJ”) affirmed the denial of benefits. The Department issued an amended final order, rejecting some of the ALJ's findings and conclusions but affirming the denial of benefits. The Department found the farmland was rented starting in 1992, Brian Bleick kept the rental proceeds, Shirley Bleick was entitled to the rental income, and the transfer or assignment of the income to Brian Bleick is “best viewed as an annual gift.” The Department concluded Shirley Bleick was entitled to the rental income for her portion of the rented land, the annual rent was either $6,013.20 or $5,332 and in either case the rental income exceeded the asset limitation of $3,000 for Medicaid eligibility. The Department also concluded Shirley Bleick was entitled to rent from her son and his wife for the two quarters that they live on that are subject to her life estate. The Department concluded the income stream from the life estate was an available asset, and Shirley Bleick presented no evidence to establish a legal action against her son would be unsuccessful.

[¶ 9] Shirley Bleick appealed the Department's decision to the district court. The district court affirmed the Department's decision denying Shirley Bleick's application for benefits.

II

[¶ 10] When an administrative agency's decision is appealed from the district court, we review the agency's decision and the record before the agency in the same manner as the district court reviewed the decision. Makedonsky v. North Dakota Dep't of Human Servs., 2008 ND 49, ¶ 5, 746 N.W.2d 185; N.D.C.C. § 28–32–49. We affirm the agency's decision unless:

1. The order is not in accordance with the law.

2. The order is in violation of the constitutional rights of the appellant.

3. The provisions of this chapter have not been complied with in the proceedings before the agency.

4. The rules or procedure of the agency have not afforded the appellant a fair hearing.

5. The findings of fact made by the agency are not supported by a preponderance of the evidence.

6. The conclusions of law and order of the agency are not supported by its findings of fact.

7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.

8. The conclusions of law and order of the agency do not sufficiently explain the agency's rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.

N.D.C.C. § 28–32–46.

[¶ 11] Our review is limited, we do not make independent findings of fact or substitute our judgment for that of the agency, and we will not reverse the agency's decision unless its findings are not supported by a preponderance of the evidence. Makedonsky, 2008 ND 49, ¶ 6, 746 N.W.2d 185. “In considering whether an agency's findings of fact are supported by a preponderance of the evidence, we decide ‘only whether a reasoning mind reasonably could have determined that the factual conclusions reached were proved by the weight of the evidence from the entire record.’ ” Id. (quoting Power Fuels, Inc. v. Elkin, 283 N.W.2d 214, 220 (N.D.1979) ). Questions of law are fully reviewable on appeal. Makedonsky, at ¶ 6.

III

[¶ 12] Shirley Bleick argues the Department erred in denying her application and finding her assets exceed eligibility limits because she presented evidence at the administrative hearing proving that she would not be successful in a claim against Brian Bleick for reimbursement of the rental income. Shirley Bleick claims there was evidence the rent was gifted to Brian Bleick in 1988, she would not be successful in a claim against Brian Bleick to recoup those funds, she presented evidence supporting her assertion that she would be unsuccessful, and the Department failed to consider that evidence.

[¶ 13] In Makedonsky, 2008 ND 49, ¶ 9, 746 N.W.2d 185 (quoting Estate of Pladson v. Traill County Soc. Servs., 2005 ND 213, ¶¶ 10–11, 707 N.W.2d 473), we outlined the legal framework for determining an applicant's eligibility for Medicaid benefits:

Generally, a person without sufficient assets to meet the cost of necessary medical care and services is eligible for Medicaid benefits. Schmidt v. Ward County Soc. Servs. Bd., 2001 ND 169, ¶ 9, 634 N.W.2d 506. The Medicaid program is intended to be a payor of last resort, and available resources must be exhausted before Medicaid will pay for an individual's care. Wahl v. Morton County Soc. Servs., 1998 ND 48, ¶ 18, 574 N.W.2d 859. An applicant for Medicaid benefits must prove eligibility. Roberts [v. North Dakota Dep't of Human Servs.], 2005 ND 50, ¶ 7, 692 N.W.2d 922. Under the Department's rules for determining Medicaid eligibility, a one-person unit is eligible for Medicaid benefits if the total value of that person's assets does not exceed $3,000. N.D. Admin. Code § 75–02–02.1–26(1)(a) ; Linser v. Office of Attorney General, 2003 ND 195, ¶ 7, 672 N.W.2d 643. An “asset” is defined as “any kind of property or property interest, whether real, personal, or mixed, whether liquid or illiquid, and whether or not presently vested with possessory rights.” N.D. Admin. Code § 75–02–02.1–01(2). Although certain assets are ... excluded from consideration, see [N.D. Admin. Code § 75–02–02.1–28 ], other assets that are “actually available” must be considered in determining the applicant's eligibility for Medicaid. N.D. Admin. Code § 75–02–02.1–25(1) ; Estate of Gross v. North Dakota Dep't of Human Servs., 2004 ND 190, ¶ 8, 687 N.W.2d 460. Assets are “actually available” under N.D. Admin. Code § 75–02–02.1–25(1) when the assets are at the disposal of the applicant, recipient, or responsible relative who has a legal interest in a liquidated sum and that person has the legal ability to make the sum available for support, maintenance, or medical care. Estate of Gross, at ¶ 8.

Determining whether an asset is “actually available” for purposes of Medicaid eligibility is largely a fact-specific inquiry depending on the circumstances of each case. Linser, 2003 ND 195, ¶ 11, 672 N.W.2d 643. The “actually available” requirement must be interpreted reasonably, and the focus is on the applicant's actual and practical ability to make an asset available as a matter of fact, not legal fiction. Opp v. Ward County Soc. Servs. Bd., 2002 ND 45, ¶

...