Estates of Nau v. State

• Decision Date: 15 November 2007
• Docket Number: No. 06CA0284.,06CA0284.
• Parties: In re the ESTATES OF Richard J. NAU, Ronald Martin, Lawrence Smith Jr., Jack M. Modig, Benigo Martinez, Vincent Loggins, Morris Montoya, Benjamin J. Muniz, Joseph C. Barrientes, and Albert Fetty, through Linda Gomez as next friend, Plaintiffs-Appellants, v. STATE of Colorado; Marva Livingston Hammons, in her official capacity as Executive Director of the Colorado Department of Human Services; Stephen Schoenmakers, in his official capacity as Superintendent of the Colorado Mental Health Institute in Pueblo and as Representative Payee of Veterans Administration benefits for plaintiffs; and James Duff, in his official capacity as the Chief Financial Officer of the Southern District Accounting Office of the Colorado Department of Human Services, Defendants-Appellees.
• Court: Colorado Court of Appeals

183 P.3d 626

In re the ESTATES OF Richard J. NAU, Ronald Martin, Lawrence Smith Jr., Jack M. Modig, Benigo Martinez, Vincent Loggins, Morris Montoya, Benjamin J. Muniz, Joseph C. Barrientes, and Albert Fetty, through Linda Gomez as next friend, Plaintiffs-Appellants, v. STATE of Colorado; Marva Livingston Hammons, in her official capacity as Executive Director of the Colorado Department of Human Services; Stephen Schoenmakers, in his official capacity as Superintendent of the Colorado Mental Health Institute in Pueblo and as Representative Payee of Veterans Administration benefits for plaintiffs; and James Duff, in his official capacity as the Chief Financial Officer of the Southern District Accounting Office of the Colorado Department of Human Services, Defendants-Appellees.

No. 06CA0284.

Colorado Court of Appeals, Div. V.

November 15, 2007.

Certiorari Denied May 12, 2008.

Jean E. Dubofsky, P.C., Jean E. Dubofsky, Boulder, Colorado; Kathleen Mullen, P.C., Kathleen Mullen, Denver, Colorado, for Plaintiffs-Appellants.

John W. Suthers, Attorney General, Wade S. Livingston, First Assistant Attorney General, Alicia R. Calderon, Assistant Attorney General, Denver, Colorado, for Defendants-Appellees.

R. Eric Solem, Englewood, Colorado, for Amicus Curiae Elder Law Committee of the Colorado Bar Association.

Opinion by Judge TERRY.

The estates of Richard J. Nau; Ronald Martin; Lawrence Smith, Jr.; Jack M. Modig; Benigno Martinez; Vincent Loggins; Morris Montoya; Benjamin J. Muniz; Joseph C. Barrientes; and Albert Fetty appeal the trial court's judgment holding that monies received from the Veterans Administration (VA) and the Colorado Old Age Pension Program (OAP) may be applied to cover costs incurred by the protected individuals (plaintiffs) while patients at the Colorado Mental Health Institute at Pueblo (Hospital). Because we conclude that, under the Charges for Patients Act, plaintiffs' VA and OAP benefits were properly deemed available for payment of the costs of their care, we affirm the judgment in part. However, because the trial court lacked jurisdiction over plaintiffs' breach of fiduciary duty claim, we vacate the portion of the judgment addressing that claim.

I. Facts

Defendants are the State of Colorado; Marva Livingston Hammons, in her official capacity as the Executive Director of the Colorado Department of Human Services; Stephen Schoenmakers (Superintendent), in his official capacity as Superintendent of the Hospital and as the representative payee of VA benefits for plaintiffs; and James Duff, in his official capacity as the Chief Financial Officer of the Southern District Accounting Office of the Colorado Department of Human Services.

Plaintiffs are patients at the Hospital, and reside there because they were found not guilty by reason of insanity of various criminal offenses.

All plaintiffs except Fetty receive pension benefits from the VA by virtue of their military service, and have been deemed by the VA to be incompetent to administer their benefits. As a result, the VA appointed a fiduciary to represent each of these plaintiffs in the administration of their VA benefits. The VA appointed the acting superintendent of the Hospital as the fiduciary for several of the plaintiffs.

Fetty receives Colorado OAP benefits under section 26-2-111(2)(a)(III), C.R.S.2007. His benefits are paid to the Superintendent as trustee, under the provisions of section 26-2-112(3)(a)(I), C.R.S.2007.

While plaintiffs have been patients at the Hospital, the major portion of their benefits has been paid to the Hospital to help cover costs associated with their care.

In 2005, plaintiffs sued defendants, alleging that payment of their VA and OAP benefits to the Hospital (1) violated sections 27-12-101 to -109, C.R.S.2007 (Charges for Patients Act), and section 13-54-102(1)(h) and (s), C.R.S.2007 (exempting certain pensions and retirement benefits from levy and sale under writ of attachment or execution); (2) constituted an unlawful taking of property in violation of their due process rights under the Colorado Constitution; and (3) amounted to breach of fiduciary duty.

After a bench trial, the court found in favor of defendants on all claims.

II. Application of VA and OAP Benefits to Payment of Patient Care Charges

Plaintiffs contend that the state unlawfully confiscated their VA and OAP benefits. We disagree. Our conclusion is based upon a close reading of the Charges for Patients Act, in conjunction with the governing federal statutes and regulations, as well as the exempt property statute.

As an initial matter, because we disagree with plaintiffs that the quality of the Hospital's services is implicated by the applicable statutes, we decline to address the allegations regarding the quality of those services.

A. Standard of Review

We interpret statutes de novo. Colo. State Bd. of Med. Exam'rs v. Roberts, 42 P.3d 70, 71 (Colo.App.2001). When construing a statute, our primary duty is to give effect to the intent of the General Assembly. Vigil v. Franklin, 103 P.3d 322, 327 (Colo. 2004). Accordingly, we first consider the statutory language and give words their plain and ordinary meaning. Town of Telluride v. Lot Thirty-Four Venture, L.L.C., 3 P.3d 30, 35 (Colo.2000). As long as the meaning is unambiguous, we need not rely on interpretive rules of statutory construction. Id.

However, if statutory language is ambiguous, to determine its meaning we may look at other factors, such as the consequences of a given construction and the objective sought to be obtained by the statutory scheme. Frazier v. People, 90 P.3d 807, 811 (Colo.2004); Grant v. People, 48 P.3d 543, 547 (Colo.2002). "[T]he General Assembly's intent and purpose must prevail over a literalist interpretation that leads to an absurd result." Grant, 48 P.3d at 547 (quoting Lagae v. Lackner, 996 P.2d 1281, 1284 (Colo. 2000)).

B. Charges for Patients Act

There is no dispute that plaintiffs are patients in a state hospital nor that the provisions of the Charges for Patients Act apply to them. See Schleiger v. State, 193 Colo. 531, 533, 568 P.2d 441, 442-43 (1977) (statutory scheme of Charges for Patients Act clearly imposes liability on persons admitted to a state hospital for the actual costs of their treatment). Rather, plaintiffs dispute the use of their VA and OAP benefits to satisfy the costs of their care incurred while patients at the Hospital.

Plaintiffs contend that we should look first to section 27-12-109(2), which excludes exempt property from claims under the Charges for Patients Act. Adopting plaintiffs' view would require us to read the latter portions of the Act without giving adequate consideration to the earlier sections establishing plaintiffs' liability under the Act. Because of the sequential manner in which the provisions of the Charges for Patients Act are organized, the Act should read and its provisions applied in the same sequence in which they are numbered. See Stefanik v. Nursing Educ. Comm., 70 R.I. 136, 37 A.2d 661, 664 (1944) (interpreting statute by reading pertinent chapters in sequence); Deshotel v. Travelers Indem. Co., 231 So.2d 448, 453 (La.Ct.App.1970) (interpreting statute by reading relevant articles in sequence), aff'd, 257 La. 567, 243 So.2d 259 (1971).

We begin by analyzing section 27-12-101, which establishes that plaintiffs are liable for the costs of the services provided to them by the Hospital:

Liability: When any person is . . . committed . . . to any public institution of this state supervised by the department of human services for the care, support, maintenance, education or treatment of persons with mental illness, the person . . . shall be liable for the costs of his or her care, support, maintenance, and treatment to the extent and in the manner provided in this article. . . .

§ 27-12-101(1) (emphasis added).

Section 27-12-101(2) states that the Charges for Patients Act applies to persons who, like plaintiffs here, were placed in the Hospital under the provisions of article 8 of title 16. Therefore, under section 27-12-101, plaintiffs are financially responsible for the costs of their care. Plaintiffs' liability for such costs is incurred as the day-to-day expenditures are made. Schleiger, 193 Colo. at 533, 568 P.2d at 443.

Section 27-12-102, C.R.S.2007, describes how the state is to determine the costs of care.

The extent of patients' liability is determined under section 27-12-103, which provides in pertinent part:

Extent of Liability. (1) There shall be assessed against the said patient . . . made liable by section 27-12-101 . . . all or such part of the cost as [he or she is] able to pay. . . .

Section 27-12-104 addresses the manner in which the state is to determine each patient's ability to pay. It provides:

Determination of ability to pay. (1) All insurance and other benefits payable for the care, support, maintenance, and treatment of a patient shall be considered available for payment of the cost determined under section 27-12-102.

(2) The department of human services shall determine the ability of a patient . . . to pay the balance of such cost by consideration of [enumerated factors].

(Emphasis added.)

Based on the premise that patients are liable for the costs of their care under section 27-12-101(1), section 27-12-103 provides that they are to be assessed the amount they are able to pay. The ability to pay is analyzed first under section 27-12-104(1), which specifies that "other benefits payable for the care, support, maintenance, and treatment of a patient shall be considered available" to pay the costs. See Schleiger, 193 Colo. at 533, 568 P.2d at 443 (in determining "ability to pay" under section 27-12-104(1), department of institutions is required to consider as "available for payment" of the actual costs all "insurance and other benefits payable"; the balance of costs not covered are passed on to patient and spouse, who are assessed according to their ability...