Morgan v. White

• Decision Date: 15 April 1975
• Citation: 168 Conn. 336,362 A.2d 505
• Court: Connecticut Supreme Court
• Parties: Walter MORGAN v. Henry C. WHITE, Connecticut Commissioner of Welfare.

Page 505

362 A.2d 505

168 Conn. 336

Walter MORGAN v. Henry C. WHITE, Connecticut Commissioner of Welfare.

Supreme Court of Connecticut.

April 15, 1975.

Michael A. Arcari, Asst. Atty. Gen., with whom was Paige J. Everin, and with whom, on the brief, was Carl R. Ajello, Atty. Gen., for appellant (defendant).

Francis X. Dineen, New Haven, and, of the Colorado bar, Charles D. Calvin, Denver, Colo., for appellee (plaintiff).

Before HOUSE, C.J., and LOISELLE, MacDONALD, BOGDANSKI, and LONGO, JJ.

MacDONALD, Associate Justice.

This appeal by the defendant, the commissioner of welfare, hereinafter commissioner, from a judgment rendered by the Appellate Division of the Court of Common Pleas had its origin in the denial by the commissioner's hearing officer of the plaintiff's application for state medical assistance. The plaintiff, Walter Morgan, applied for medical assistance under that is commonly referred to as the 'Medicaid' program administered by the state welfare department under §§ 17-134a to 17-134l of the General Statutes. ¹ His eligibility to participate in the program having been denied by a caseworker, and having also been denied by a hearing officer after a statutory fair hearing, the plaintiff appealed to the Circuit Court under the then provisions of § 17-2b. ² The Circuit Court rendered judgment dismissing the plaintiff's appeal, whereupon the plaintiff sought review in the Appellate Division of the Court of Common Pleas which reversed the judgment of the Circuit Court and remanded the case with direction to sustain the plaintiff's appeal. Counsel entered into a stipulation to include as part of the record in this appeal the transcript of the fair hearing, the exhibits presented therein, and the finding of the fair hearing officer, hereinafter FHO.

The relevant facts, drawn mainly from the fair hearing transcript, ³ hereinafter FHT, which is not inconsistent with the synopsis of the evidence as printed in an appendix to the plaintiff's brief, are as follows: The plaintiff, who at the time of the hearing was a patient at Park Manor Convalescent Hospital in Waterbury, applied for medical assistance under the provisions of §§ 17-134a through 17-134l. As previously indicated, the medical assistance program consists of the administration by the commissioner of the federal medical aid program provided in Title XIX of the Social Security Amendments of 1965, 42 U.S.C. § 1396, commonly referred to as Medicaid. The plaintiff's application was filed on February 2, 1971, and denied on March 24, 1971, by a caseworker solely on the ground of the plaintiff's purported disposal of assets without fair value, in that, in October, 1969, the plaintiff had quitclaimed his interest, valued at $10,000 in his East Haven home to his daughter in consideration of her having lived with the plaintiff and having provided him with nursing care from July, 1966, to the spring of 1969. At the time of the filing of his application the plaintiff received a monthly pension in the amount of $192, and his wife was employed and had gross weekly earnings of $105. ⁴

In 1966 the plaintiff and his family determined the he needed professional assistance to care for him on a daily basis since he was suffering from multiple sclerosis. In-home professional care was financially impractical. Marilyn A. Felsted, the plaintiff's daughter, in 1963, had purchased property on which she had planned to build a home to accomodate herself and her parents. In 1966 the plaintiff's condition worsened and immediate action became necessary. The construction of her house not having yet been commenced, Mrs. Felsted thereupon entered into an oral agreement with the plaintiff whereby she would sell her property and the Morgans would sell their home. Together, with the proceeds of the two sales, they would purchase a house large enough to accommodate both Mrs. Felsted's family and the Morgans. Accordingly, in June, 1966, the Morgans and Mrs. Felsted purchased a house located at 600 Thompson Street in East Haven. The Morgans and Mrs. Felsted each contributed $10,000 toward the down payment on the purchase price, which was $33,000. Mrs. Felsted and her husband obtained a mortgage for $13,000 to cover the balance of the purchase price and assumed the payment of that note and all maintenance costs for the home.

The Felsteds then invested $2500 in remodeling the house to accommodate the two families. Under the oral agreement, Mrs. Felsted was to give up her full time employment as a nurse, in which she earned $105 weekly, in order to provide full time nursing care for her father. The parties agreed to value her services at $60 per week and further agreed that when the accrued value of her services approximated the amount of the Morgans' share of the down payment on the Thompson Street property, the Morgans would convey their interest in the property to Mrs. Felsted. Originally, title to the property was recorded only in the names of the Morgans for the reason that the parties apparently feared that should any of Mrs. Felsted's six stepchildren become involved in tortious conduct it might mean the loss of the house. The Morgans had once been the victims of a large civil suit and this was given as the reason for their apprehension. In October, 1969, the property was quitclaimed to Mrs. Felsted, the parties being satisfied that the accrued value of Mrs. Felsted's services to that date provided adequate consideration for the transfer. At that time the parties did not anticipate that the plaintiff would ever apply for welfare assistance.

As previously indicated, the record clearly shows that the application for medical assistance originally was denied solely on the basis of the conclusion of the caseworker that reasonable consideration had not been given for the transfer of the property. The FHO in her memorandum cited § 17-109 of the General Statutes, ⁵ and volume 1, Connecticut Welfare Manual §§ 326 and 326.1, ⁶ in concluding that the execution of the oral agreement was not fair value or reasonable consideration for the transfer. The Appellate Division of the Court of Common Pleas held that the executed oral agreement did constitute sufficient consideration for the transfer and that the conflicting sections in the manual must give way to this conclusion. ⁷

Section 17-134a of the General Statutes provides that the commissioner is to administer the Title XIX program 'in accordance with the requirements provided therein.' Section 17-134e states: 'All of the provisions of this chapter are extended to the medical assistance program except such provisions as are inconsistent with federal law and regulations governing Title XIX of the Social Security Amendments of 1965 and this part.' Thus, the legislature recognized the primacy of the applicable federal provisions and this court must be guided by those provisions. Stated in another way, the federal statutes and regulations set a limit upon the authority of the commissioner as well as furnishing a guide to his administration of the program. This limitation would apply, with particular force, to the eligibility requirements, and thus, where the state sets stricter standards for eligibility than those enumerated by the pertinent federal law, the state standards are tacitly inconsistent with those federal provisions.

Section 1396a of 42 U.S.C. states in pertinent part: 'A State plan for medical assistance must . . . (17) include reasonable standards . . . for determining eligibility for and the extent of medical assistance under the plan which (A) are consistent with the objectives of this subchapter, (B) provide for taking into account only such income and resources as are, as determined in accordance with standards prescribed by the Secretary, available to the applicant or recipient and . . . as would not be disregarded . . . in determining his eligibility for such aid, assistance, or benefits, (C) provide for reasonable evaluation of any such income or resources.' Section 1396a further states in subsection (19) that the state plan must 'provide such safeguards as may be necessary to assure that eligibility for care and services under the plan will be determined, and such care and services will be provided in a manner consistent with simplicity of administration and the best interests of the recipients.'

The federal regulations resently applicable, 45 C.F.R. 248.21 (1974), provide the following with regard to financial eligibility for medical assistance programs: '(a) State plan requirements. A State plan under Title XIX of the Social Security Act must: . . . (2) . . . (i) Provide that only such income and resources as are actually available will be considered and that income and resources will be reasonably evaluated; . . . (3) . . . (iv) Provide that only such income and resources will be considered as will be 'in hand' within a period, preferably of not more than 3 months, but not in excess of 6 months, ahead, including the month in which medical services were rendered, for which payment would be made under the plan.' (Emphasis added.)

The federal statutes and regulations were fully discussed in their relation to the state administration of Title XIX in Wilczynski v. Harder, 323 F.Supp. 509 (D.Conn.). The court there distinguished the eligibility requirements under the four state categorical assistance programs-dependent children, aged, blind, and disabled- -from eligibility requirements for participation in the Title XIX program, and found that, despite ineligibility for state relief under the four enumerated programs, those persons satisfying Title XIX requirements would be eligible for Medicaid benefits. Id., 514, 515. The court found three classes of eligible recipients for Title XIX. The first class consists of those receiving aid under any one of the four categorical assistance programs. The second class consists of those persons who would be eligible for aid under one of the categorical...