Hines v. Department of Public Aid

• Decision Date: 20 May 2005
• Docket Number: No. 3-04-0162.,3-04-0162.
• Citation: Hines v. Department of Public Aid, 831 N.E.2d 641, 358 Ill.App.3d 225 (Ill. 2005)
• Parties: Betty J. HINES, as Executor of the Estate of Beverly Tutinas, Petitioner-Appellant, v. The DEPARTMENT OF PUBLIC AID, Barry S. Maram, Director, Respondent-Appellee.
• Court: Illinois Supreme Court

831 N.E.2d 641

Betty J. HINES, as Executor of the Estate of Beverly Tutinas, Petitioner-Appellant, v. The DEPARTMENT OF PUBLIC AID, Barry S. Maram, Director, Respondent-Appellee.

No. 3-04-0162.

Appellate Court of Illinois, Third District.

May 20, 2005.

Steven C. Perlis (argued), Tonya Z. Gabbard, Elder Law Office of Steven C. Perlis & Associates, Arlington Heights, for Betty J. Hines.

Lisa Madigan, Attorney General, Gary S. Feinerman, Solicitor General, Jan E. Hughes, Assistant Attorney General (argued), Chicago, for IDPA.

Justice McDADE delivered the opinion of the court:

Petitioner, Betty J. Hines, appeals the trial court's order finding that the Illinois Department of Public Aid may recover the value of Medicaid payments from the estate of Beverly Tutinas as a surviving spouse of a Medicaid recipient. For the reasons that follow, we reverse.

BACKGROUND

The pertinent facts are not in dispute. Beverly Tutinas, deceased, was married to Julius Tutinas, also deceased. Beverly and Julius held joint title to a home in Moline, Illinois, and to an automobile. In July 1994, respondent, the Illinois Department of Public Aid (Department), approved Julius for medical assistance (Medicaid). He began receiving assistance in August 1994. He was 66 years old at that time and he continued to receive assistance until his death in July 1997. No probate estate was created upon Julius's death. Beverly died in May 2001. Petitioner, Betty J. Hines, is the independent administrator of Beverly's estate, which consisted only of the home, which sold for $69,641.89, and the automobile, which sold for $2,000.

In July 2001, the Department filed a claim against Beverly's estate for $61,154.48, representing the total amount of medical assistance it had provided to Julius. (Beverly never received assistance from the Department.) In July 2003, petitioner filed a petition for instructions regarding the claim pursuant to section 28-5 of the Probate Act of 1975 (Probate Act) (755 ILCS 5/28-5 (West 2002)). The petition stated the dispute over the claim was based on whether Medicaid permits the Department to enforce its claim for reimbursement against the estate of the surviving spouse of a Medicaid recipient. Following briefing and argument, the circuit court determined that the issues were as follows:

"A. Whether 305 ILCS 5/5-13 and 89 Ill. Adm.Code 102.200 are in conflict with and preempted by 42 U.S.C. 1396p(b) in that, unlike the State statute and the administrative code provisions, the Federal estate recovery statute does not permit recovery against the estate of the second to die spouse of the Medicaid recipient.

B. Whether the amendment of 305 ILCS 5/5-13 on January 1, 1997, to limit `estate recovery' to the assets which are part of the Illinois Probate estate of the Medicaid recipient bars the State of Illinois' claim for estate recovery in this estate."

The circuit court held the Illinois statute and the Illinois Administrative Code provision did not conflict with 42 U.S.C. 1396p(b) because federal law permits states to include within the "estate" of a deceased Medicaid recipient:

"any other real and personal property and other assets in which the individual had any legal title or interest at the time of death, (to the extent of such interest), including assets conveyed to a survivor, heir or assign of the deceased individual through joint tenancy, tenancy in common, survivorship, life estate, living trust, or other arrangement. (42 U.S.C. § 1396p(b)(4)(B).)"

The court found that Illinois had exercised this option and included this definition in section 5-13 of the Illinois Public Aid Code (305 ILCS 5/5-13 (West 2002)), and, further, that "Congress intended that definition to be all inclusive as possible by its inclusion of the phrase `or other arrangement.'" See Bonta v. Burke, 98 Cal.App.4th 788, 793, 120 Cal.Rptr.2d 72, 76 (2002).

The circuit court also found that an amendment to section 5-13, "to limit `estate recovery' to the assets which are a part of the Illinois Probate Estate of the Medicaid recipient," did not bar the Department's claim for estate recovery in this case because the definition of "estate" under both the federal and state law includes real property

"`in which the individual had any legal title or interest at the time of death (to the extent of such interest), including such assets conveyed to a survivor, heir, or assign of the deceased individual through joint tenancy, tenancy in common, survivorship, life estate, living trust, or other arrangement' (42 U.S.C. § 1396p(b)(4); 305 ILCS 5/5-13.)'"

This appeal followed.

ANALYSIS

The circuit court based its decision on the legislature's inclusion of the broad definition of "estate" in section 5-13, concluding this definition authorized the Department to seek Julius's share of the assets that had passed through joint tenancy. Petitioner argues that, although the legislature did include this broad definition of "estate" in section 5-13, it restricted its application to the situation where the Medicaid recipient owned one of certain limited and specifically described long-term-care insurance policies at the time of death. In all other situations, petitioner argues, the recipient's "estate" for purposes of section 5-13 is as defined in the Probate Act. Petitioner notes that under the federal law, states may utilize the broad definition of the Medicaid recipient's "estate" in other situations, but they are only required to apply that definition when the recipient benefitted from the described long-term-care insurance coverage.

This case involves construction of certain statutory provisions. Construction of a statute is a matter of law, which is reviewed de novo. In re Estate of Riordan, 351 Ill.App.3d 594, 596, 286 Ill.Dec. 609, 814 N.E.2d 597, 599 (2004).

A. Appellate Court Jurisdiction

First, an issue exists as to the parties' statements of jurisdiction in this court. Petitioner asserts this court has jurisdiction pursuant to section 3-112 of the Administrative Review Law (735 ILCS 5/3-112 (West 2002)), which states that "[a] final decision, order, or judgment of the Circuit Court, entered in an action to review a decision of an administrative agency, is reviewable by appeal as in other civil cases." A "decision" by an administrative agency, for purposes of the Administrative Review Law, is one "which affects the legal rights, duties or privileges of parties and which terminates * * * proceedings before the administrative agency." 735 ILCS 5/3-101 (West 2002). Petitioner was not a party before the Department. The Department did not render a decision in this case, nor was any alleged decision by the Department the subject of the circuit court's order. Section 3-112 does not confer jurisdiction in this court.

The Department, on the other hand, claims this court has jurisdiction pursuant to Supreme Court Rule 301 (155 Ill.2d R. 301), which permits appeals from final judgments of the circuit court. However, the court did not render a final judgment on the Department's claim; the court merely ruled the claim was not barred.

Nonetheless, this court does have jurisdiction to hear the appeal. Jurisdiction properly lies pursuant to Supreme Court Rule 304(b)(1) (155 Ill.2d R. 304(b)(1)), which permits appeals from final judgments that do not dispose of an entire proceeding when "[a] judgment or order [is] entered in the administration of an estate * * * which finally determines a right or status of a party." "The Committee Comments to Rule 304(b)(1) offer the following examples of final appealable orders: admission or denial of a will to probate, appointment or removal of an executor, and allowance or disallowance of a claim. (134 Ill.2d R. 304(b), Committee Comments at 245-46.)" (Emphasis added.) In re Estate of Stepp, 271 Ill.App.3d 817, 819, 208 Ill.Dec. 198, 648 N.E.2d 1120, 1122 (1995). Here, the circuit court's order allows the Department's claim against the estate. Therefore, this court has jurisdiction to hear the appeal from that order.

B. The Department Cannot Sustain a Claim Against the Estate of Julius

Section 5-13 reads, in pertinent part, as follows:

"Claim against estate of recipients. To the extent permitted under the federal Social Security Act [(42 U.S.C. § 301 et seq. (2000))], the amount expended under this Article (1) for a person of any age who is an inpatient in a nursing facility * * * shall be a claim against the person's estate or a claim against the estate of the person's spouse, regardless of the order of death, but no recovery may be had thereon until after the death of the surviving spouse, if any * * *. * * * The term `estate', as used in this Section, with respect to a deceased person, means all real and personal property and other assets included within the person's estate, as that term is used in the Probate Act of 1975 [755 ILCS 5/1-1 et seq. (West 2002)]; however, in the case of a deceased person who has received (or is entitled to receive) benefits under a long-term care insurance policy * * *, `estate' also includes any other real and personal property and other assets in which the deceased person had any legal title or interest at the time of his or her death (to the extent of that interest), including assets conveyed to a survivor, heir, or assignee of the deceased person through joint tenancy, tenancy in common, survivorship, life estate, living trust, or other arrangement." (Emphases added.) 305 ILCS 5/5-13 (West 2002).

A plain reading of section 5-13 demonstrates that the legislature has defined "estate" for purposes of that section in two ways for two separate situations. In the first situation, which is applicable, generally "estate" for purposes of section 5-13 "means all real and personal property and other assets included within the person's estate, as that term is used in the Probate Act." Julius's interest in the home and automobile would not be included in his "estate" under the Probate Act. Those...