Department of Public Welfare v. Anderson

• Decision Date: 04 January 1979
• Citation: 377 Mass. 23,384 N.E.2d 628
• Parties: DEPARTMENT OF PUBLIC WELFARE v. Henry A. ANDERSON, executor (and a companion case between the same parties).
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 628

384 N.E.2d 628

377 Mass. 23

DEPARTMENT OF PUBLIC WELFARE v. Henry A. ANDERSON, executor (and a companion case between

the same parties).

Supreme Judicial Court of Massachusetts, Essex and Suffolk.

Argued Sept. 15, 1978.

Decided Jan. 4, 1979.

Jeffrey S. Ogilvie, Special Asst. Atty. Gen., for the Dept. of Public welfare.

John S. Legasey for Henry A. Anderson, executor.

Before HENNESSEY, C. J., and QUIRICO, BRAUCHER, KAPLAN and LIACOS, JJ.

LIACOS, Justice.

The Department of Public Welfare (department) seeks to recover from the estate of Aini Anderson, under G.L. c. 118E, § 16, the cost of medical assistance provided her during the last five and one-half years of her life. For this purpose the department presented a claim to the executor of the estate and also commenced an action at law now before the Superior Court. The executor declined to pay the claim. The Probate Court allowed the first and final account, which made no provision for such payment, over the objection of the department. The department claimed an appeal from that judgment and applied for direct appellate review, which we have allowed. Meanwhile, the action was still pending in the Superior Court. After the Probate Court judge's decision, the Superior Court judge reported several questions of law. The appeal and report have been consolidated for hearing.

Both the Probate Court judgment and the report by the Superior Court rest on effectively identical stipulations of fact. The agreed facts are: In January, 1967, the testatrix (Aini Anderson) suffered a stroke and thereafter was confined to a nursing home. On August 4, 1967, at age seventy-five, she applied for medical assistance benefits, which the department provided from that date until the date of her death, December 23, 1972. The total amount of the benefits provided was $20,155.81. After the testatrix's death, the Probate Court appointed her son, Henry A. Anderson, and his wife, Jessie B. Anderson, executors and approved their bond without sureties on February 8, 1973. On April 7, 1973, Jessie B. Anderson died.

At the time of the testatrix's death, her sole asset was a house located at 15 Jasper Street, Beverly, Massachusetts, which the executor duly sold for $22,900 on March 21, 1973.

General Laws c. 118E, § 16, inserted by St.1969, c. 800, § 1, approved August 24, 1969, and effective ninety days thereafter, provides: "There shall be no adjustment or recovery of medical assistance correctly paid, except from the estate of an individual who was sixty-five years of age or older when he received such assistance, and then only after the death of his surviving spouse, if any, and only at a time when he has no surviving child who is under age twenty-one or is blind or permanently and totally disabled. In no event shall any action to recover be brought except with the written approval of the department . . . ."

On January 9, 1973, the Beverly Welfare Service Office sent a memorandum to the division of legal services for the department captioned, "Recovery from Estate of Aini Anderson, b. 8/5/92." On March 26, 1973, the then Commissioner of the Department of Public Welfare transmitted to welfare service offices medical assistance letter 71 instructing workers that "(w)henever a recovery (of medical assistance funds) is possible the worker shall complete a Probate Information Form (LEG-2) and mail it to the Legal Division . . .. This referral must be made promptly because time for Probate Court action is limited." No such completed form appeared in the record. On December 14, 1973, ten months after the executor gave bond, the department filed a notice of claim in the amount of $20,155.81 with the executor and Probate Court for medical assistance provided the testatrix. On that same day, it also commenced an action on its claim in the Municipal Court of the City of Boston, which was then removed to the Superior Court in Suffolk County by the defendant executor.

The executor refused the department's claim on the grounds that neither the notice of claim nor the commencement of the civil action occurred before the expiration of the nine-month limitation set by G.L. c. 197, § 9. ¹ He thus proceeded to apply the assets of the estate to the payment of debts, expenses, fees of administration, and distribution to the heirs. On April 27, 1977, the executor moved in Probate Court for the allowance of his first and final account. After receiving proper notice, the department filed an objection, and argued against the allowance of the account. The Probate Court judge nevertheless allowed the account. On September 1, 1977, the department filed a notice of appeal maintaining that the judge erred in allowing the final account while the department's claim was pending in the Superior Court.

Thereafter, the Superior Court judge reported the following five questions to the Appeals Court: 1. Whether the Essex Probate judgment is res judicata of the issues before this court; 2. Whether G.L. c. 206, §§ 22 and 24, require a finding for the defendant; 3. Whether the department has complied with G.L. c. 118E, § 16; 4. Whether the instant action is barred by the provisions of G.L. c. 197, § 9, the short statute of limitations in favor of estates; 5. Whether the department can recover medical assistance paid prior to enactment of G.L. c. 118E, § 16.

The primary question before us is whether the short statute of limitations bars the department's claim. The department argues that the obligation it holds is not subject to G.L. c. 197, § 9. Alternatively, it maintains that the short statute does not apply to actions brought by the Commonwealth unless the Legislature has indicated that it intends for the Commonwealth to be so bound. Since G.L. c. 118E, § 16, does not explicitly make claims brought thereunder subject to G.L. c. 197, § 9, the department argues that the statute does not bar the claim. We are unpersuaded by either argument and therefore answer question 4 affirmatively. Because this holding permits affirmance of the Probate Court's judgment and dismissal of the proceeding in the Superior Court, ² resolution of the other questions reported is unnecessary. ³

1. General Laws c. 197, § 9, as appearing in St.1972, c. 256, the short statute of limitations, provides in part that "an executor or administrator shall not be held to answer to an action by a creditor of the deceased which is not commenced within nine months from the time of his giving bond for the performance of his trust, or to such an action which is commenced within said nine months unless before the expiration thereof the writ in such action has been served by delivery in hand upon such executor or administrator or service thereof accepted by him or a notice stating the name of the estate, the name and address of the creditor, the amount of the claim and the court in which the action has been brought has been filed in the proper registry of probate. . . ." The obvious purpose of this provision is to expedite the settlement of estates and thereby protect the substantial interests of creditors as well as distributees. See, e. g., Downey v. Union Trust Co., 312 Mass. 405, 408, 45 N.E.2d 373 (1942).

In construing the scope of the short statute, this court has held that the term "creditor of the deceased" applies only to claimants holding obligations that arose while the decedent was alive. The term does not reach so called creditors of the estate, namely claimants holding obligations that arise after death and are enforceable only against the decedent's personal representative. Compare Milford v. Casamassa, 339 Mass. 702, 162 N.E.2d 284 (1959), and Dallinger v. Davis, 149 Mass. 62, 20 N.E. 696 (1889), with Levin v. Commissioner of Corps. & Taxation, 349 Mass. 20, 206 N.E.2d 69 (1965), Bartlett v. Tufts, 241 Mass. 96, 134 N.E. 630 (1922), and Rich v. Tuckerman, 121 Mass. 222 (1876). These latter obligations include, for example, taxes on income received by the estate after the decedent's death, taxes on property held by the estate, Dallinger v. Davis, supra, and debts and liabilities incurred in the course of settling the estate. See Geldert v. Usher, 248 Mass. 323, 326, 142 N.E. 926 (1924). See generally 1 G. Newhall, Settlement of Estates § 189 at 555 (4th ed. 1958). Creditors of the estate other than the Commonwealth must enforce their claims within the period set by G.L. c. 260, § 11. ⁴

The distinction between the two classes of creditors has had the following consequence: if a claimant is a creditor of the decedent, then the short statute applies unless a clear statement to the contrary appears in a statutory provision on which the claimant bases its claim. Cf. Levin v. Commissioner of Corps. & Taxation, supra. If, on the other hand, a claimant is a creditor of the estate, then the short statute does not apply unless a clear statement to the contrary appears in the provision enabling recovery.

The authority of the Commonwealth to recover c. 118E assistance arises from the operation of § 16. ⁵ Section 16 contains no provision relevant to the applicability of G.L. c. 197, § 9, nor does it clearly indicate whether the obligation held by the Commonwealth is of the deceased or of the estate. Nevertheless, we conclude that the department stands as a creditor of the deceased for the reasons here stated.

Unlike income received after death or services provided a decedent's estate, the benefit of c. 118E funds is given while the recipient is alive. Only in Milford v. Casamassa, supra, have we found that, even though the events giving rise to the obligation had occurred before the decedent's death, the obligation was a debt of the estate. There we considered the applicability of the short statute to recovery under G.L. c. 59, § 5A (since repealed by St.1965, c. 620, § 3), of relieved property taxes. ⁶ Section 5A, as amended by St.1948, c. 541, read: "In the event that a person is relieved of taxation (under the appropriate...