Hickory Creek at Connersville v. Estate of Combs

Decision Date27 June 2013
Docket NumberNo. 21A04-1211-ES-600,21A04-1211-ES-600
PartiesHICKORY CREEK AT CONNERSVILLE, Appellant-Plaintiff, v. ESTATE OF OTTO K. COMBS, Appellee-Defendant.
CourtIndiana Appellate Court

FOR PUBLICATION

ATTORNEYS FOR APPELLANT:

PAUL (RICK) RAUCH

MARC A.W. STEARNS

Harrison & Moberly, LLP

Indianapolis, Indiana

ATTORNEY FOR APPELLEE:

JAMIE H. HARVEY

Smith Harvey Law Office

Connersville, Indiana

INTERLOCUTORY APPEAL FROM THE FAYETTE CIRCUIT COURT

The Honorable Eugene A. Stewart, Judge

Cause No. 21C01-1203-ES-048

OPINION - FOR PUBLICATION

VAIDIK, Judge

Case Summary

According to the doctrine of necessaries, each spouse is primarily liable for his or her independent debts. To the extent that the debtor spouse is unable to satisfy his or her own necessary expenses, the law will impose limited secondary liability upon the financially superior spouse by means of the doctrine of necessaries.

In this case, Marianne Combs, a Medicaid recipient, died in a nursing home, but no estate was opened for her. The nursing home did not open a creditor's estate for Marianne in order to preserve its claim. When Marianne's spouse died a little over a year later, the nursing home filed a claim for her expenses against his estate. We find that according to the doctrine of necessaries, a creditor must first seek satisfaction from the income and property of the spouse who incurred the debt and only if those resources are insufficient may a creditor seek satisfaction from the non-contracting spouse.

Facts and Procedural History

Marianne Combs and Otto Combs were married. Marianne was a resident of Hickory Creek, a long-term care facility in Connersville, Indiana. Appellant's App. p. 5, 45 (Joint Stipulation of Facts). Marianne's daughter, Wanda Ferriell, was Marianne's Durable Power of Attorney for Health Care; Wanda admitted Marianne into Hickory Creek, signing as her financial guarantor. Id. at 5, 35, 38. During her residency, Marianne received Medicaid,1 but she accrued a private-pay account balance of$5871.40. Id. at 45 (Joint Stipulation of Facts). Marianne died on December 22, 2010. Id. No estate was opened for Marianne.2 Id.

In July 2011, Hickory Creek filed a complaint against Wanda and Otto for Marianne's account balance. Appellant's Supp. App. p. 75. Hickory Creek's theory was that Wanda signed as Marianne's "financial guarantor" and Otto was Marianne's "surviving spouse." Id.

On January 12, 2012, Otto died. Id. An estate was opened for Otto on July 25, 2012. Appellant's App. at 2, 45 (Joint Stipulation of Facts). On August 1, 2012, Hickory Creek filed a claim against Otto's Estate for Marianne's account balance pursuant to Indiana's doctrine of necessaries. Id. at 2, 5, 45 (Joint Stipulation of Facts). Otto's Estate denied the claim and requested that the matter be set for trial. Following a hearing, the trial court denied Hickory Creek's claim against Otto's Estate. Id. at 59. The court reasoned that Hickory Creek's failure to file a claim upon Marianne's death was a bar to recovery under the doctrine of necessaries. Id. The court also reasoned that Wanda admitted Marianne into Hickory Creek, not Otto. Id.

This discretionary interlocutory appeal pursuant to Indiana Appellate Rule 14(B) now ensues.

Discussion and Decision

Hickory Creek contends that the trial court erred in denying its claim against Otto's Estate. Specifically, Hickory Creek argues that the doctrine of necessaries did not require it to open up and then make a claim against Marianne's estate, which it alleges would not have had any assets. Hickory Creek argues this is so because the doctrine of necessaries "allows a creditor to file a claim against a spouse for a decedent debtor's unpaid medical necessaries without wasting time, its money and the court's resources opening an insolvent debtor's estate to preserve its claim against the debtor's spouse." Appellant's Br. p. 4.

The doctrine of necessaries originated at a time in which married women had been stripped of virtually all means of self-support by their incapacity to contract. Bartrom v. Adjustment Bureau, Inc., 618 N.E.2d 1, 3 (Ind. 1993). During this time, married women were dependent on their husbands, who had a common-law duty to support their wives. Id. The doctrine of necessaries was developed to protect women whose husbands, despite their common-law duty, failed to provide necessary support. Porter Mem'l Hosp. v. Wozniak, 680 N.E.2d 13, 16 (Ind. Ct. App. 1997). Under the doctrine of necessaries, women were able to purchase necessary goods and services on their husband's credit, making the husband liable. Bartrom, 618 N.E.2d at 3. After women were given the legal ability to contract in their own name, the doctrine was infrequently invoked, but it did not die. Wozniak, 680 N.E.2d at 16. In Memorial Hospital v. Hahaj, 430 N.E.2d 412 (Ind.Ct. App. 1982), abrogated by Bartrom, 618 N.E.2d 1, this Court agreed with Jersey Shore Medical Center-Fitkin Hospital v. Estate of Baum, 417 A.2d 1003 (N.J. 1980), and ruled that the doctrine of necessaries should be applied in a gender-neutral manner to apply to debts created by both wives and husbands. Because of disagreement about the continued vitality of the doctrine among several states and concern over Memorial Hospital, our Supreme Court in Bartrom clarified how the doctrine of necessaries was to operate in Indiana.

That is, according to the doctrine of necessaries, each spouse is primarily liable for his or her independent debts. Bartrom, 618 N.E.2d at 8. Typically, a creditor may look to a non-contracting spouse for satisfaction of the debts of the other only if the non-contracting spouse has otherwise agreed to contractual liability or can be said to have authorized the debt by implication under the laws of agency. Id. Agency requires some indicia that the principal intended or authorized the agent to conduct business on his or her behalf. See Quality Foods, Inc. v. Holloway Assocs. Prof'l Eng'rs & Land Surveyors, Inc., 852 N.E.2d 27, 31-32 (Ind. Ct. App. 2006). Marriage alone is insufficient. A number of methods are available to prove this, such as a durable power of attorney, guardianship, or evidence of a conversation.

When, however, there is a shortfall between a dependent spouse's necessary expenses and separate funds, the law will impose limited secondary liability upon the financially superior spouse by means of the doctrine of necessaries. Bartrom, 618 N.E.2d at 8. The liability is characterized as "limited" because its outer boundaries are marked by the financially superior spouse's ability to pay at the time the debt was incurred. Id.It is "secondary" in the sense that it exists only to the extent that the debtor spouse is unable to satisfy his or her own personal needs or obligations. Id. These rules assist enforcement of the marital duty of support in both a workable and an equitable manner.3 Id. & n.14.

Otto's Estate argues that this case is "remarkably" similar to South Bend Clinic v. Estate of Ruffing, 501 N.E.2d 1114 (Ind. Ct. App. 1986). Appellee's Br. p. 7. In that case, Edna Ruffing and Frank Ruffing, Jr., were married. South Bend Clinic provided medical services to Edna, who passed away. South Bend Clinic did not file a claim against Edna's Estate, although Edna's Estate made a partial payment to South Bend Clinic for Edna's medical expenses. When Frank later died, South Bend Clinic filed a claim for the balance of Edna's medical expenses against Frank's Estate. Frank's Estate filed a motion for summary judgment alleging that South Bend Clinic's claim was barred because it failed to file a claim against Edna's Estate. The trial court entered summary judgment in favor of Frank's Estate.

On appeal, this Court, in explaining primary and secondary liability, held that "a creditor must first seek satisfaction from the income and property of the spouse who incurred the debt. Only if those resources are insufficient may a creditor seek satisfaction from the other income and property of the marital relationship." South Bend Clinic, 501 N.E.2d at 1116 (citing Jersey Shore Med. Ctr., 417 A.2d 1003). This Court explained that because it was Edna who incurred the medical expenses, South Bend Clinic had to first seek satisfaction from her income and property. But because South Bend Clinic didnot timely do so, its claim was forever barred. Id. at 1116-17. As for South Bend Clinic's argument that there were no assets in Edna's Estate and therefore it would have been a vain or useless act to file a claim, this Court noted that had South Bend Clinic filed a claim, it could have preserved its right to any newly discovered assets. Id. at 1117. This Court therefore affirmed the trial court. Id.

Hickory Creek argues that Otto's Estate's analogy to South Bend Clinic "comes up short" because it was decided before Bartrom, and South Bend Clinic relied on Memorial Hospital, which our Supreme Court abrogated in Bartrom.4 Appellant's Reply Br. p. 3. We note, however, that our Supreme Court did not mention South Bend Clinic in Bartrom and therefore South Bend Clinic still appears, at least facially, to be good law. See 25 Aline F. Anderson & Diane Hubbard Kennedy, Indiana Practice, Anderson's Probate Forms, § 2:205 (2012) (citing South Bend Clinic). But even if South Bend Clinic did not survive Bartrom, a creditor must first seek satisfaction from the income and property of the spouse who incurred the debt. And only if those resources are insufficient may a creditor seek satisfaction from the non-contracting spouse. This is because the doctrine of necessaries imposes secondary liability on the non-contracting spouse, not primary liability. And secondary liability exists only to the extent that the debtor spouse is unable to satisfy his or her own personal needs or obligations. Bartrom, 618 N.E.2d at 8.

Allowing a creditor to first pursue a non-contracting spouse erodes the concept of secondary liability in at least two ways. First, it allows a creditor to file suit against thenon-contracting...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT