Presbyterian Medical Center v. Budd

• Decision Date: 29 August 2003
• Citation: 832 A.2d 1066
• Parties: PRESBYTERIAN MEDICAL CENTER, 1215 Hulton Road, Oakmont, Pennsylvania 15139, Appellant, v. Elizabeth G. BUDD, 173 Main Street, Apt. A, Sandwich, MA 02653-2284, Appellee.
• Court: Pennsylvania Superior Court

832 A.2d 1066

PRESBYTERIAN MEDICAL CENTER, 1215 Hulton Road, Oakmont, Pennsylvania 15139, Appellant, v. Elizabeth G. BUDD, 173 Main Street, Apt. A, Sandwich, MA 02653-2284, Appellee.

Superior Court of Pennsylvania.

Argued March 12, 2002.

Filed August 29, 2003.

Chris Lucas, Harrisburg, for appellant.

Martin A. Dietz, Pittsburgh, for appellee.

BEFORE: TODD, BENDER, and KELLY, JJ.

OPINION BY KELLY, J.:

¶ 1 Appellant, Presbyterian Medical Center ("PMC"), asks us to review the order entered in the Allegheny County Court of Common Pleas, which sustained the preliminary objections filed by Appellee, Elizabeth Budd ("Ms.Budd"), and dismissed with prejudice PMC's complaint alleging breach of contract, fraud, violations of the Uniform Fraudulent Transfer Act ("UFTA"), and equitable support and restitution. Specifically, PMC submits it has pleaded sufficient facts to hold Ms. Budd liable for the outstanding debt owed to PMC by Ms. Budd's mother, Betty S. Budd ("Mother"), who was a PMC resident at the time of her death. We hold that the trial court properly dismissed PMC's complaint on all counts except for PMC's count for equitable support and restitution. On that count, we hold that PMC has established a cause of action sounding in support under 62 P.S. § 1973. Accordingly, we affirm in part, reverse in part, and remand for further proceedings regarding PMC's support action against Ms. Budd.

¶ 2 The relevant facts and procedural history of this case have been gleaned from the certified record on appeal. PMC is a long term care nursing facility located in Oakmont, Pennsylvania. Mother was a resident of PMC at the time of her death on November 5, 1999. Mother owed PMC an outstanding balance of $96,000 at the time of her death.¹

¶ 3 Prior to Mother's death, PMC sought to collect Mother's outstanding medical bills, but was told by Ms. Budd that Mother's resources were exhausted. Ms. Budd then promised PMC she would filed an application for medical assistance with the Pennsylvania Department of Public Welfare ("DPW") on behalf of Mother. However, both PMC and Ms. Budd knew that Mother would not qualify for medical assistance because her available resources exceeded DPW's maximum resource limit. Consequently, Ms. Budd allegedly promised to "spend down"² Mother's resources on medical expenses until Mother's resources were depleted below the maximum resource limit. In exchange for this oral promise, PMC refrained from attempting to bring Mother's account current. However, Ms. Budd did not "spend down" Mother's resources on medical expenses; instead, PMC believes Ms. Budd used her power of attorney over Mother to transfer more than $100,000 to herself from Mother's various bank accounts. PMC also alleges that shortly after Mother's death, Ms. Budd transferred to herself an additional $60,000 from Mother's checking account. In fact, DPW eventually rejected Mother's application for medical assistance because Mother's available resources exceeded the available resource threshold. PMC appealed DPW's eligibility determination on behalf of Mother.³

¶ 4 On October 19, 2001, PMC filed a complaint against Ms. Budd alleging claims of fraud, negligent misrepresentation, intentional interference with contractual relations, and violations of the Uniform Fraudulent Transfer Act. Ms. Budd filed preliminary objections in the nature of a demurrer, and the court held a hearing on these preliminary objections on January 30, 2002. After the hearing, the court issued an order granting Ms. Budd's preliminary objections and dismissing PMC's complaint with leave to amend. PMC filed its first amended complaint on February 19, 2002, raising claims of breach of contract, fraud, violations of UFTA, and equitable support and restitution. Ms. Budd again filed preliminary objections in the nature of a demurrer. In an order dated June 26, 2002, the trial court granted Ms. Budd's preliminary objections and dismissed PMC's case with prejudice. This timely appeal followed.

¶ 5 PMC raises the following issues for our review:

WHETHER THE FACTS PLED IN THE ORIGINAL COMPLAINT OR THE FIRST AMENDED COMPLAINT FAIL TO ESTABLISH A CAUSE OF ACTION UNDER ANY THEORY OF THE LAW UPON WHICH RECOVERY COULD BE OBTAINED?

WHETHER THE TRIAL COURT VIEWED ALL FACTS IN THE LIGHT MOST FAVORABLE TO [PMC] WHEN FACED WITH DOUBTS AS TO THE LEGAL SUFFICIENCY OF THE CLAIMS ADVANCED?

(PMC's Brief at 4).⁴

¶ 6 Preliminary objections may be filed on the grounds that a pleading fails to conform to a rule of court, contains insufficient specificity, or is legally insufficient. Pa.R.C.P. 1028(a). When reviewing a trial court's grant of preliminary objections in the nature of a demurrer:

All material facts set forth in the pleadings as well as all inferences reasonably deducible therefrom are admitted as true for the limited purpose of this review. The question presented by the demurrer is whether, on the facts averred, the law says with certainty that no recovery is possible. Where a doubt exists as to whether a demurrer should be sustained, this doubt should be resolved in favor of overruling it. In reviewing the grant of a demurrer we are not bound by the inferences drawn by the trial court, nor are we bound by its conclusions of law. Furthermore, we will affirm the grant of such a motion only when the moving party's right to succeed is certain and the case is so free from doubt that further proceedings would clearly be fruitless.

Foflygen v. R. Zemel, M.D. (P.C.), 420 Pa.Super.18, 615 A.2d 1345, 1352 (1992), appeal denied, 535 Pa. 619, 629 A.2d 1380 (1993).

¶ 7 PMC argues that it formed a valid contract with Ms. Budd when she agreed to "spend down" Mother's account on medical expenses. PMC contends Ms. Budd breached this contract when she transferred Mother's money to herself instead of using the money to "spend down" Mother's resources. PMC maintains that Ms. Budd's breach of the agreement caused DPW to reject Mother's medical assistance application. Therefore, PMC concludes the trial court erred when it dismissed the breach of contract claim against Ms. Budd. We disagree.

¶ 8 To support a claim for breach of contract, a plaintiff must plead: 1) the existence of a contract, including its essential terms; 2) a breach of a duty imposed by the contract; and 3) resultant damage. Corestates Bank, N.A. v. Cutillo, 723 A.2d 1053 (Pa.Super.1999). Contracts are enforceable when parties reach mutual agreement, exchange consideration and have set forth terms of their bargain with sufficient clarity. Biddle v. Johnsonbaugh, 444 Pa.Super. 450, 664 A.2d 159, 163 (1995). "While not every term of a contract must be stated in complete detail, every element must be specifically pled." Corestates Bank, N.A., supra at 1058.

¶ 9 Additionally, "When any claim...is based on an agreement, the pleading shall state specifically if the agreement is oral or written." Pa.R.C.P. 1019(h). No action can be brought against a defendant for her promise to answer for the debt of another, unless it is in writing. 33 P.S. § 3. "When any claim...is based upon a writing, the pleader shall attach a copy of the writing, or the material part thereof, but if the writing or copy is not accessible to the pleader, it is sufficient so to state, together with the reason, and to set forth the substance in writing." Pa.R.C.P. 1019(i).

¶ 10 Here, PMC averred Ms. Budd agreed to apply for medical assistance on behalf of Mother in exchange for PMC's promise to refrain from bringing Mother's account current. The terms of the agreement involve PMC and Mother, not PMC and Ms. Budd, Mother's attorney-in-fact. Indeed, it is Mother who enjoyed the benefits of the care provided by PMC, and PMC who enjoyed the benefit of Mother's payments. Ms. Budd, operating as Mother's attorney-in-fact, agreed to "spend down" Mother's resources so that Mother could qualify for medical assistance, in exchange for PMC's promise not to bring Mother's account current. PMC simply has not pleaded sufficient facts to establish a contractual basis for holding Ms. Budd liable to any agreement between Mother and PMC. See Corestates Bank, N.A., supra. Moreover, Ms. Budd's liability to Mother's estate for any improper or fraudulent transfers is an issue properly raised in Orphan's Court during an accounting of Mother's estate.

¶ 11 Furthermore, any agreement whereby Ms. Budd promised to answer for Mother's debt would have had to be in writing. See 33 P.S. § 3. PMC's complaint does not indicate whether the alleged contract is written, does not attach a copy of any written contract, and does not explain why a written contract could not be obtained. See Pa.R.C.P. 1019(i). Thus, PMC has failed to plead the minimum information necessary to establish the existence of a contract between PMC and Ms. Budd. See Pa.R.C.P. 1028(a); Corestates Bank, N.A., supra. For these reasons, the trial court properly dismissed PMC's breach of contract claim. See Foflygen, supra.

¶ 12 Similarly, PMC has alleged that on November 4, 1999, Ms. Budd told Robert Macie ("Macie"), a DPW employee, she would use Mother's excess resources to pay Mother's medical bills. Macie subsequently informed PMC of Ms. Budd's statement regarding payment of Mother's medical bills. PMC believes it was foreseeable that Macie, a DPW employee, would share this information with PMC. PMC complains it detrimentally relied on Ms. Budd's representations to DPW. In other words, PMC suggests it is a third-party beneficiary to Ms. Budd's agreement with DPW.⁵ We cannot agree.

A party becomes a third-party beneficiary only where both parties to the contract express an intention to benefit the third party in the contract itself, ...unless, the circumstances are so compelling that recognition of the beneficiary's right is appropriate to effectuate the intention of the parties, and the performance satisfies an obligation of the promisee to pay money to the beneficiary or the circumstances indicate that the promisee

...