Knight v. John Knox Manor, Inc.
| Decision Date | 16 March 2012 |
| Docket Number | 2100782. |
| Citation | 92 So.3d 111 |
| Parties | Richard KNIGHT v. JOHN KNOX MANOR, INC. |
| Court | Alabama Court of Civil Appeals |
OPINION TEXT STARTS HERE
John C. Craft, Montgomery, for appellant.
Mark N. Chambless of Chambless Math Carr, P.C., Montgomery, for appellee.
Richard Knight (“Richard”) appeals from a judgment in favor of John Knox Manor, Inc. (“John Knox Manor”). We reverse and remand.
Richard's mother, Susie Knight (“Susie”), began living in an independent-living apartment at a facility owned and operated by John Knox Manor (“the facility”) in 2003. Subsequently, she moved to an assisted-living unit at the facility. At some point before January 15, 2008, Susie required hospitalization and, when she was discharged from the hospital, she was moved into the nursing-home unit at the facility.
On January 15, 2008, shortly after Susie had been moved into the nursing-home unit, Richard met with Patricia Burnett, an employee of John Knox Manor who handles admissions to the nursing-home unit. The record indicates that, when Richard met with Burnett, Susie was incompetent to sign a contract, although the record does not contain any specific information regarding the cause of her incompetence or its duration. No guardian or conservator had been appointed for Susie when Richard met with Burnett. Although Susie had executed a durable power of attorney (“the durable power of attorney”) appointing Richard her attorney-in-fact with the power to make health-care decisions for her and to pay for her health care if she should become incapacitated, Richard was not authorized to act on Susie's behalf by the durable power of attorney when he met with Burnett on January 15, 2008, because the durable power of attorney conditioned the exercise of his powers as her attorney-in-fact on Susie's incapacity being certified by two physicians and two physicians had not certified that she was incapacitated.
Burnett presented Richard with an admission contract (“the contract”), which John Knox Manor required Richard to sign as a “Responsible Party” as a condition of Susie's admission to the nursing-home unit. On cross-examination, Burnett testified:
“
In pertinent part, the contract provided:
“AGREEMENT OF PATIENT OR RESPONSIBLE PARTY:
“....
“6. To pay the basic room and board rate agreed upon with the facility, at specified intervals.
“The patient or responsible party agrees to pay $139.00 daily and the facility will accept this payment in full consideration for care and services rendered, as follows:
Richard signed the contract during his meeting with Burnett on January 15, 2008. The line for Richard's signature was designated as the signature line for the “Resident/Sponsor/Responsible Party.” Burnett signed the contract on behalf of John Knox Manor.
Susie remained in the nursing-home unit at the facility until she died 22 months later. During the 22 months she was a resident in the nursing-home unit, Susie received monthly Social Security benefits, monthly retirement benefits from the Kansas Public Employees Retirement System, and monthly retirement benefits from the United States government; those benefits totaled $31,326.76.1 In addition, the record indicates that Susie received dividends totaling $23.89 from Wachovia Corporation in 2008. The record contains no evidence regarding whether she received any dividends in 2009.
The record indicates that on February 5, 2008, Richard sold 450 shares of stock in Wachovia Corporation owned by Susie; however, the record does not contain any evidence indicating the amount of the proceeds that resulted from the sale of those 450 shares. The record indicates that, on June 16, 2008, Susie owned 22.124 shares of stock in Wachovia Corporation and that those shares had a value of $410.57 on that date. In June 2008, Richard sold 70 shares of stock in MetLife, Inc., owned by Susie and received a total of $4,715.86. In September 2008, Richard surrendered two MetLife policies on Susie's life and received the cash-surrender value of those policies, which totaled $4,194.14. The record also indicates that Susie owned three shares of stock in Navistar International Corporation while she was in the nursing-home unit, but the record does not contain any evidence indicating the value of those shares.
The record also indicates that, before she became a resident in the nursing-home unit, Susie had opened a bank account at Regions Bank in her name and the name of her granddaughter and that she had deposited an unspecified sum of money in that account to be used for her granddaughter's education, that an unspecified amount of funds belonging to the granddaughter were subsequently deposited into that account, and that Susie's name was taken off of the account after she became a resident in the nursing-home unit.
In addition, the record indicates that, in 1992, Susie opened a checking account at Wachovia Bank in her name and Richard's name (“the Wachovia account”), that both her income and Richard's income were deposited into that account, and that both her expenses and Richard's expenses were paid with funds from that account.
Richard made the following payments to John Knox Manor for charges incurred by Susie:
+-----------------------------------------+
¦March 6, 2008 ¦$ 8,118.10¦
+------------------------------+----------¦
¦April 10, 2008 ¦4,588.70 ¦
+------------------------------+----------¦
¦May 9, 2008 ¦1,379.24 ¦
+------------------------------+----------¦
¦May 13, 2008 ¦128.00 ¦
+------------------------------+----------¦
¦June 16, 2008 ¦4,400.00 ¦
+------------------------------+----------¦
¦Aug. 15, 2008 ¦2,100.00 ¦
+------------------------------+----------¦
¦Sept. 30, 2008 ¦6,550.00 ¦
+------------------------------+----------¦
¦Dec. 3, 2008 ¦2,550.00 ¦
+------------------------------+----------¦
¦Dec. 5, 2008 ¦1,000.00 ¦
+------------------------------+----------¦
¦Feb. 25, 2009 ¦1,000.00 ¦
+------------------------------+----------¦
¦March 23, 2009 ¦2,500.00 ¦
+------------------------------+----------¦
¦Aug. 6, 2009 ¦1,052.00 ¦
+------------------------------+----------¦
¦Aug. 6, 2009 ¦7,347.06 ¦
+------------------------------+----------¦
¦Total ¦$42,713.10¦
+-----------------------------------------+
After Susie's admission to the nursing-home unit, Richard applied twice for Medicaid to pay John Knox Manor's charges; however, the Alabama Medicaid Agency denied both applications on the ground that Richard had failed to submit sufficient information. John Knox Manor then petitioned the probate court to appoint the county guardian and conservator to serve as Susie's guardian and conservator. The probate court granted John Knox Manor's petition and appointed the county guardian and conservator to serve as Susie's guardian and conservator. Thereafter, the county guardian and conservator attempted to obtain information regarding Susie's finances from Richard in order to satisfy the Alabama Medicaid Agency. The guardian and conservator submitted two applications for Medicaid on Susie's behalf; however, both of those applications were denied on the ground that necessary information had not been provided. The record indicates that the primary reason all four applications were denied was that Richard was unable to meet a requirement imposed by the Alabama Medicaid Agency that he account for (1) every deposit into the Wachovia account that was from a source other than Susie's Social Security benefits, Kansas Public Employees Retirement System retirement benefits, and United States government retirement benefits and (2) every disbursement from the Wachovia account that was for an expense other than the fees charged by John Knox Manor.
On September 1, 2009, John Knox Manor and the county guardian and conservator sued Richard. However, when Susie died a short time later, the county guardian and conservator moved the trial court to strike him as a party plaintiff on the ground that Susie's death had terminated his authority to represent her interests, and the trial court granted that motion.
John Knox Manor stated claims of breach of contract, account stated, conversion, and breach of fiduciary duty against Richard, and it sought a total of $58,857.12 in damages, which represented the unpaid balance of the fees Susie had incurred.
Answering, Richard denied the material allegations of the complaint and denied that he was liable to John Knox Manor. In addition, Richard asserted as an affirmative defense that the contract was void and unenforceable because, he said, it was illegal, unconscionable, lacked consideration, and violated public policy....
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