In re Butler, 734-2021

CourtCourt of Special Appeals of Maryland
Writing for the CourtBEACHLEY, J.
PartiesIN THE MATTER OF JOE LOUIS BUTLER
Decision Date10 June 2022
Docket Number734-2021

IN THE MATTER OF JOE LOUIS BUTLER

No. 734-2021

Court of Special Appeals of Maryland

June 10, 2022


Circuit Court for Prince George's County Case No. CAE 19-27124

Reed, Beachley, Eyler, Deborah S. (Senior Judge, Specially Assigned), JJ.

OPINION [*]

BEACHLEY, J.

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This case comes to us in an unusual procedural posture. Appellant, First Maryland Disability Trust ("FMDT"), is a non-profit corporation that specializes in the administration of "self-settled special needs trusts" ("SSNT"), which are trusts created for beneficiaries with disabilities. FMDT, which was never made a party to the proceedings in the Circuit Court for Prince George's County, entered its appearance for the first time when it noted an appeal so that it could challenge an order awarding appellee Lolita Oglesby reimbursement for certain legal fees she paid to the Elder and Disability Law Center ("EDLC"). According to the appealed order, that reimbursement is to come from an SSNT for which FMDT is the trustee. FMDT asks us to vacate and remand the court's order awarding Ms. Oglesby $16, 989.98 for legal fees.

We agree with FMDT that we must vacate the court's order and remand for further proceedings because FMDT, a necessary party, was never served with process nor given an opportunity to participate.

FACTS AND PROCEEDINGS

Because FDMT was not a party to the proceedings in the circuit court, it relies on the pleadings and orders contained in the record for its recitation of facts. Accordingly, our factual and procedural background will similarly rely on those documents.[1]

In June 2019, Joe Butler was admitted to FutureCare Pineview ("FutureCare"), a long-term care facility, in order to receive nursing and ventilator care. Apparently, Mr.

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Butler required a ventilator and was entirely dependent on medical staff for his daily needs. In August 2019, Ms. Oglesby, Mr. Butler's niece, petitioned the circuit court for appointment as guardian of the person and property of Mr. Butler.

In November 2019, while Ms. Oglesby's petition was pending, Medicare terminated Mr. Butler's coverage, meaning that there was no source to pay for his medical care. Consequently, on December 6, 2019, FutureCare filed an application for Long Term Care Medical Assistance ("MA") seeking Medicaid eligibility for Mr. Butler's cost of care both retroactively and going forward. FutureCare expected the MA to cover most, if not all, of the costs for Mr. Butler's care. Thus, securing the MA was mutually beneficial to both FutureCare and Mr. Butler.

The Department of Social Services ("DSS") was tasked with reviewing the MA Application. In order to verify Mr. Butler's Medicaid eligibility, DSS sent FutureCare a Request for Information to Verify Eligibility (the "DSS Request") on December 29, 2019. Unfortunately for FutureCare, it did not possess all of the information needed to complete the DSS Request. Accordingly, FutureCare made efforts to contact Ms. Oglesby in order to obtain the required information. Those efforts were unsuccessful.

In the meantime, the circuit court granted Ms. Oglesby's petition for guardianship on January 24, 2020, and shortly thereafter, Ms. Oglesby filed her own MA application with DSS while FutureCare's MA application was still pending. This apparently caused confusion, which resulted in DSS voiding Ms. Oglesby's application because FutureCare's application remained open and pending.

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FutureCare became concerned that it would not be able to obtain the necessary information from Ms. Oglesby before its MA application expired on May 31, 2020.[2]Accordingly, in April 2020, FutureCare hired the law firm Bodie, Dolina, Hobbs, Friddell & Grenzer, P.C. (the "Bodie Firm") to contact Ms. Oglesby and obtain the information necessary to complete the DSS Request for the MA application.

By April 30, with the MA application still incomplete, FutureCare hired the law firm Holloway and Sullivan LLC (the "Holloway Firm") to file a Motion to Remove Ms. Oglesby as the Guardian of Joe Butler. On May 11, with the MA Application still not complete, the Bodie Firm filed a Complaint for Injunctive Relief and Motion for Temporary Restraining Order in order to compel Ms. Oglesby to produce the information necessary to complete the DSS Request. The circuit court granted the request for a temporary restraining order ("TRO") and ordered Ms. Oglesby to respond to the DSS Request.

In response to the court's order, communications commenced between FutureCare and Ms. Oglesby. Ms. Oglesby thereafter hired the EDLC to help her comply with the court's order. In addition to helping her complete the MA application, the EDLC also helped Ms. Oglesby spend down Mr. Butler's assets to comply with the $2, 500 limit for eligibility.

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With only a few weeks remaining before the MA application was set to expire, the Bodie Firm and the EDLC worked together to obtain all the necessary information for the DSS Request and the MA application. During this timeframe, Mr. Butler's remaining cash assets of $27, 160.30 were paid to FutureCare as a spend down.

As a result of the efforts of FutureCare and its attorneys, as well as Ms. Oglesby and her attorneys, the MA application (including the DSS Request) was successfully and timely submitted, resulting in a full approval of Medicaid coverage for Mr. Butler. Notably, this coverage applied both prospectively and retroactively. Consequently, FutureCare owed Mr. Butler a refund for the $27, 160.30 spend down he paid prior to being granted Medicaid eligibility.

Apparently anticipating this refund, on June 29, 2020, Ms. Oglesby established an SSNT for Mr. Butler through FMDT with FMDT as trustee. As noted above, SSNTs are trusts established for people with disabilities or special needs using the person's own assets and income for funding. Typically, such trusts are established and managed by a nonprofit association. 42 U.S.C. § 1396p(d)(4)(C)(i). "A separate account is maintained for each beneficiary of the trust, but, for purposes of investment and management of funds, the trust pools these accounts." 42 U.S.C. § 1396p(d)(4)(C)(ii). Generally, parents, grandparents, or legal guardians will establish accounts within these trusts for the benefit of a disabled person. 42 U.S.C. § 1396p(d)(4)(C)(iii). Upon the death of the beneficiary, whatever funds remain in the account are paid to the State to cover the costs of medical assistance which

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the State paid on behalf of the beneficiary. 42 U.S.C. § 1396p(d)(4)(C)(iv). Notably, the SSNT at issue in this case contains the following language:

[FMDT] Establishes This Supplemental Needs Trust. [FMDT] establishes this First Maryland Disability Trust as a supplemental needs trust for management and investment purposes pursuant to Section 1917(d)(4)(C) of the Social Security Act, as amended, 42 U.S.C. § 1396p(d)(4)(C), for the benefit of individuals with disabilities. Notwithstanding any other provision of this Restated Declaration of Trust, the following provisions apply:
3.1.1 No power to compel. No person shall enjoy any right, title, interest or privilege to compel [FMDT] to make a distribution of assets or income from the Trust estate or from a Trust Sub-Account to the Beneficiary thereof or for his or her benefit.
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