Estate of Marusich v. State ex rel., Department of Health

• Decision Date: 10 December 2013
• Docket Number: No. S–13–0036.,S–13–0036.
• Citation: 313 P.3d 1272
• Parties: The ESTATE OF Joan M. MARUSICH, Appellant (Petitioner), v. STATE of Wyoming, EX REL., DEPARTMENT OF HEALTH, OFFICE OF HEALTHCARE FINANCING/EQUALITYCARE, Appellee (Respondent).
• Court: Wyoming Supreme Court

313 P.3d 1272

The ESTATE OF Joan M. MARUSICH, Appellant (Petitioner),

v.STATE of Wyoming, EX REL., DEPARTMENT OF HEALTH, OFFICE OF HEALTHCARE FINANCING/EQUALITYCARE, Appellee (Respondent).

No. S–13–0036.

Supreme Court of Wyoming.

Dec. 10, 2013.

Representing Appellant: Craig C. Cook and Dennis C. Cook of Cook & Associates, P.C., Laramie, Wyoming. Argument by Mr. Craig C. Cook.

Representing Appellee: Gregory A. Phillips, Wyoming Attorney General; Robin Sessions Cooley, Deputy Attorney General; Kristin M. Nuss, Senior Assistant Attorney General. Argument by Ms. Nuss.

Before KITE, C.J., and HILL, VOIGT, BURKE, and DAVIS, JJ.

KITE, Chief Justice.

[¶ 1] After Joan M. Marusich died, the State of Wyoming ex rel. Department of Health, Office of Healthcare Financing/Equalitycare (Department) filed a lien against the home she owned with her husband, William Marusich, as tenants by the entirety. The Department sought to recover the cost of Medicaid benefits paid on behalf of Mr. Marusich, who had predeceased Mrs. Marusich. The Estate of Joan M. Marusich (Marusich Estate) filed a petition to remove a false lien. The district court granted summary judgment in favor of the Department, ruling that under the relevant federal and state laws, the lien was appropriate. After the district court entered a final judgment on the amount of the lien and denied the Marusich Estate's motion to amend the petition, the estate appealed.

[¶ 2] We affirm.

ISSUES

[¶ 3] The Marusich Estate presents the following issues on appeal:

1. Whether property owned by a married couple as tenants by the entireties may be subject to a lien against property in the estate of the surviving spouse for recovery of Medicaid expenses paid solely on behalf of the predeceased spouse.

2. Whether the remedial provisions of W.S. § 29–1–601(b) may be invoked against appellee as claimant on a legally groundless and impermiss[i]ble recorded claim of lien.

3. Whether the district court erred when it denied a motion to amend petition to conform the pleadings to the underlying cause of action in quiet title that was argued by the parties on cross motions for summary judgment.

The Department's issues are similar, though phrased differently.

FACTS

[¶ 4] The material facts of this case are undisputed. Mr. and Mrs. Marusich had been married almost forty-four years when Mr. Marusich died in 2005. At the time of his death and for several years before, Mr. Marusich was an inpatient in a nursing home, and he received Medicaid benefits to assist in paying for his care. Mrs. Marusich continued to live in the marital home, which they owned as “husband and wife.” Mrs. Marusich did not receive Medicaid benefits and died intestate in February 2012.

[¶ 5] On April 6, 2012, the Department filed a lien against the Marusiches' home to recover Medicaid expenses of $160,410.66 paid on behalf of Mr. Marusich. On April 11, 2012, the district court opened the Marusich Estate. Although notification of the probate was published in the local newspaper, the Marusich Estate did not send a notice to the Department and, accordingly, it did not file a claim in accordance with probate law. On April 19, 2012, the estate's attorney and co-administrator executed and recorded an Affidavit of Survivorship, stating that Mrs. Marusich had full survivorship interest in the marital property upon Mr. Marusich's death in 2005.

[¶ 6] On August 8, 2012, the Marusich Estate filed a Petition to Remove False Lien against the Department, pursuant to Wyo. Stat. Ann. § 29–1–601(b) (LexisNexis 2013).¹The Department answered asserting the lien was valid, counterclaimed for a judgment in the amount of the lien and requested an order allowing sale of the property to satisfy its lien. The parties filed competing motions for summary judgment, and, after a hearing, the district court granted summary judgment in favor of the Department and against the Marusich Estate on the validity of the lien but concluded there was a genuine issue of fact regarding the proper amount of the lien. The parties subsequently stipulated as to the amount of Medicaid benefits paid by the Department on behalf of Mr. Marusich and the district court entered a final judgment. The district court also denied the Marusich Estate's motion to amend its petition. The Marusich Estate filed a timely notice of appeal.

STANDARD OF REVIEW

[¶ 7] With regard to the district court's grant of summary judgment in favor of the Department, we look to W.R.C.P. 56(c):

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

We review a district court's summary judgment rulings de novo, using the same materials and following the same standards as the district court. The facts are reviewed from the vantage point most favorable to the party who opposed the motion, and we give that party the benefit of all favorable inferences that may fairly be drawn from the record.

Michael's Constr., Inc. v. American Nat'l Bank, 2012 WY 76, ¶ 8, 278 P.3d 701, 703–04 (Wyo.2012); Grynberg v. L & R Exploration Venture, 2011 WY 134, ¶ 16, 261 P.3d 731, 735–36 (Wyo.2011). This case requires interpretation of the relevant statutes which is a question of law subject to our de novo standard of review. Western Wyo. Constr. Co. v. Bd. of County Comm'rs of Sublette County, 2013 WY 63, ¶¶ 10, 15, 301 P.3d 512, 514–16 (Wyo.2013); Vogel v. Onyx Acceptance Corp., 2011 WY 163, ¶ 21, 267 P.3d 1057, 1063 (Wyo.2011).

[¶ 8] The district court has discretion in ruling on a motion to amend a pleading, and we will not reverse its decision unless it abused its discretion. Jasper v. Brinckerhoff, 2008 WY 32, ¶ 8, 179 P.3d 857, 862 (Wyo.2008). The core inquiry under the abuse of discretion standard is whether the district court could have reasonably concluded as it did. Fix v. South Wilderness Ranch Homeowners Ass'n, 2012 WY 96, ¶ 12, 280 P.3d 527, 531 (Wyo.2012); Magin v. Solitude Homeowner's, Inc., 2011 WY 102, ¶ 40, 255 P.3d 920, 932 (Wyo.2011).

DISCUSSION

1. Lien for Recovery of Medicaid Benefits

[¶ 9] Before discussing the specific aspects of this case, it is helpful to set out some general principles of Medicaid benefits recovery. Medicaid is a program that provides medical benefits to qualified recipients and is designed to be a “ ‘payer of last resort.’ ” Arkansas Dep't of Health & Human Servs. v. Ahlborn, 547 U.S. 268, 291, 126 S.Ct. 1752, 164 L.Ed.2d 459 (2006), quoting S.Rep. No. 99–146 at 313 (1985); Wyo. Stat. Ann. §§ 42–4–101, 102; State ex rel.Dep't of Health, Div. of Health Care Financing v. Dairyland Ins. Co., 11 P.3d 348, 350–51 (Wyo.2000). See also Poindexter v. State of Illinois, Dep't of Human Servs., 372 Ill.App.3d 1021, 311 Ill.Dec. 465, 869 N.E.2d 139, 149 (2006). The federal and state governmentsjointly fund Medicaid, and individual states administer the program. Cargill v. Dep't of Health, Div. of Health Care Financing, 967 P.2d 999, 1001 (Wyo.1998). Before a state can receive federal appropriations for Medicaid, a state plan must be approved by the appropriate federal agency. Id. See also42 U.S.C. § 1396; Dairyland, 11 P.3d at 351. The state plan must include provisions for collecting payment from any legally liable third party, including the estate of the Medicaid recipient or his or her spouse. In the Matter of the Estate of Campbell, 950 P.2d 557, 559 (Wyo.1997). See also Knori v. State of Wyoming ex rel. Dep't of Health, Office of Medicaid, 2005 WY 48, ¶ 5, 109 P.3d 905, 907 (Wyo.2005).

[¶ 10] 42 U.S.C. § 1396p(b)(4)(A) and (B)² allow the states to choose between defining the “estate” from which Medicaid recovery may be made by typical state probate law or by using an expanded definition which includes non-probate assets. Wyoming complied with the federal mandate to enact Medicaid benefits recovery provisions and adopted the expanded definition of “estate.” Knori, ¶ 5, 109 P.3d at 907.

[¶ 11] Wyo. Stat. Ann. § 42–4–206 (LexisNexis 2013) states in relevant part:

(a) If an individual receives any medical assistance pursuant to this chapter, upon the individual's death, if single, or upon the death of the survivor of a married couple, either of whom received medical assistance, the total amount paid for medical assistance rendered for the individual or the spouse shall be filed by the department as a claim against the estate of the individual or the estate of the surviving spouse in the court having jurisdiction to probate the estate. A claim shall be filed if medical assistance was rendered for either person under one (1) of the following circumstances:

(i) The person was fifty-five (55) years of age or older when he received medical assistance; or

(ii) The person was an inpatient in a nursing facility, intermediate care facility for people with intellectual disability or other medical institution when he received medical assistance.

....

(c) The claim shall include only the total amount of medical assistance rendered after the individual attains fifty-five (55) years of age or during a period of institutionalization as described in paragraph (a)(ii) of this section, and shall not include interest. A claim for medical assistance rendered for the predeceased spouse, against the estate of a surviving spouse who did not receive medical assistance, is limited to the value of the assets of the estate that were marital property or jointly owned property at any time during the marriage.

....

(g) As used in this section:

(i) “Asset” means as defined under W.S. 42–2–401(a)(i);

(ii) “Estate” shall include all real and personal property and other assets included within the individual's estate, as defined for purposes of this state's probate law, and includes any other real and personal property and other assets in which the individual had any...