Sargeant v. Commissioner of Public Welfare

• Decision Date: 30 June 1981
• Citation: 423 N.E.2d 755,383 Mass. 808
• Parties: Ruth SARGEANT et al. 1 v. COMMISSIONER OF PUBLIC WELFARE.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 755

423 N.E.2d 755

383 Mass. 808

Ruth SARGEANT et al. ¹ v. COMMISSIONER OF PUBLIC WELFARE.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Jan. 6, 1981.

Decided June 30, 1981.

Paul W. Johnson, Asst. Atty. Gen., for defendant.

Ellice Fatoullah, New York City (James A. Frieden, Boston, with her), for plaintiffs.

Before HENNESSEY, C. J., and BRAUCHER, WILKINS, LIACOS and ABRAMS, JJ.

LIACOS, Justice.

The defendant Commissioner of Public Welfare (commissioner) appeals from a judgment of the Superior Court. The commissioner alleges error in the award to the plaintiffs Ruth Sargeant (plaintiff) and Dolores Mixter (intervener) of interest on overdue medical assistance benefits. The plaintiffs cross-appeal from so much of the judgment as fails to award interest on payments for services provided prior to August 3, 1970, the date the plaintiff filed a written request for a fair hearing on the matter of the overdue payments. We ordered the case transferred to this court on our own motion for direct appellate review. We affirm the judgment of the Superior Court judge in so far as it awards interest to the plaintiffs. We reverse that judgment in so far as it fails to award the plaintiffs interest from November 23, 1966, the date of the first demand for payment by the intervener.

These are the events which gave rise to these appeals. As a result of a rare, chronic and progressive neurological disorder known as amyotrophic lateral sclerosis, the plaintiff has been paralyzed and bedridden for many years. In 1965 and 1966 the plaintiff, a medical assistance recipient, resided in a nursing home under the medical care of a physician and her own nurse, the intervener, a licensed registered nurse. As a condition of admission, the nursing home required the plaintiff to provide her own nurse.

In December, 1965, a social worker assigned the plaintiff's case, an employee of the Brookline department of public welfare (department), ² advised the plaintiff and the intervener that if the intervener would establish a private home for the plaintiff and provide her with care, the department would reimburse the intervener at the maximum payment rate allowable for care by a registered nurse. In addition to being medically necessary the plaintiff required highly skilled care by a registered nurse for at least twelve hours a day, seven days a week this arrangement would be less costly to the department than maintaining the plaintiff in the nursing home.

At the department's urging and with its approval, the intervener set up an apartment and, after several trial visits of varying duration, the plaintiff moved in permanently on November 10, 1966. From that time and during all relevant periods afterwards the intervener has provided the plaintiff skilled nursing care at least twelve hours a day, seven days a week.

From the outset, the department failed to make payments as promised. Between November 23, 1966, and July, 1970, the intervener made numerous demands by telephone and in person for payments. The intervener received repeated assurances that the payments would be forthcoming until February 1, 1967, when the department ³ repudiated its obligation to provide the plaintiff or intervener any benefits in excess of the plaintiff's $147.10 monthly disability check. Contrary to State regulations, ⁴ the department failed to inform the intervener or the plaintiff of their right to request a fair hearing.

The plaintiff filed fair hearing requests on August 7, 1970, February 29, 1971, and June 14, 1971. She was finally afforded a hearing in July, 1973. At the hearing the intervener represented the plaintiff as her authorized agent. The plaintiff was awarded benefit payments from the first appeal date, August 7, 1970, but denied any payments for the period prior to that date, back to November, 1966. Payments were approved at rates substantially lower than the department's established assistance rates for care by a registered nurse during the relevant time periods. ⁵ The plaintiff filed a petition for judicial review of the agency determination in the Superior Court pursuant to G.L. c. 30A, § 14 (this appeal was not heard until 1975).

Pursuant to the agency decision of 1973, the intervener received payments at the reduced rates until July 31, 1974, when, without explanation or notice, the payments were abruptly stopped. The plaintiff then requested a fair hearing to appeal the suspension of her medical assistance, and, upon an adverse administrative determination of that appeal, she filed a second petition for judicial review pursuant to G.L. c. 30A, § 14, to the Superior Court on January 1, 1975. On March 20, 1975, the plaintiff was adjudged by the Superior Court "eligible to receive Medical Assistance payment for skilled nursing care in her home, 12 hours per day, 7 days per week ...." This ruling established the plaintiff's right to prospective benefits.

In April, 1975, the plaintiff's appeal in the Superior Court from the 1973 fair hearing was remanded to the department for rehearing by a department referee. The department did not contest the plaintiff's version of the facts. Thus, in June, 1975, the plaintiff's request for payments retroactive to November 23, 1966, in the amount of approximately $95,000 was approved by the department's appeals referee. ⁶ Once again the plaintiff appealed the agency decision on the ground that the fair hearing decision failed to rule on the plaintiff's claim for interest on the overdue payments and failed to find the subsidiary facts necessary to support the decision as required by the remand.

A judge of the Superior Court noted that "(a)fter years of bureaucratic fumbling and legal maneuvering in this Court, the department finally approved plaintiff's claim on June 19, 1975" and that "(i)t is plain that the department contracted for these services as of November 23, 1966." The judge thus ruled on May 10, 1979, that the plaintiff is entitled to interest from the date she first sought review to recover the overdue payments. The judge remanded the case to the department to determine the date the appeal was first initiated and the amount of interest due. He retained jurisdiction for the purpose of entering a final judgment. In May, 1979, the commissioner challenged the plaintiff's standing to seek interest payments on behalf of her nurse. On May 31, 1979, Miss Mixter moved to intervene as a plaintiff in the Superior Court proceeding. The motion was allowed on June 29, 1979. Judgment for the plaintiffs was entered on July 2, 1979, awarding the plaintiffs interest from August 3, 1970, in the amount of $27,941.42. It is from this judgment that the parties appeal.

1. Contentions of the parties. The commissioner challenges the award of interest to the plaintiffs on three grounds: (1) as a matter of substantive law neither the plaintiff nor the intervener is entitled to receive interest on the overdue medical assistance payments; or, in the alternative, if such interest is allowable, (2) the plaintiff, as a medical assistance recipient, has no standing to recover such interest on behalf of the intervener, her provider or vendor, and (3) the judge erred in allowing the intervener's petition to intervene.

The plaintiffs contend that the award of interest should run from the date of the first demand for payment or from the date of the department's repudiation of its obligation to pay for the intervener's services.

2. Entitlement to interest. We agree with the plaintiffs that this case is governed by our decision in Massachusetts Gen. Hosp. v. Commissioner of Pub. Welfare, 359 Mass. 206, 268 N.E.2d 654 (1971). In Massachusetts Gen. Hosp., the plaintiff hospital was, like the intervener, a "vendor of services which the ... department 'purchased' under the statute.... (The vendor) notified the ... department ... that it was furnishing care to a person receiving public assistance and received ... authorization to do so.... In no instance (was) the ... department's obligation to pay for the care in dispute." Id. at 208, 268 N.E.2d 654. Also similarly, the rate for the type of services provided was established and not in dispute. We held as follows: "(M)oney was owed by the ... department to (the vendor) either on an actual or implied contract, or a statutory liability, which gave rise to a contractual relationship when (the vendor) rendered services with the ... department's knowledge or approval, or in circumstances which bound it to pay for them. There was ... a detention of money, beyond the reasonable time which the statutes requiring payment to (the vendor) fairly should be interpreted as contemplating. Eventually (the vendor) was forced to take an administrative appeal in order to collect the principal sum due. Such an unreasonable detention ordinarily gives rise to a liability for interest ... in an appropriate proceeding by the creditor to recover the indebtedness." Id. at 209, 268 N.E.2d 654. Thus, we affirmed the trial judge's allowance of interest to the vendor.

The commissioner contends that this case is governed instead by our decision in Broadhurst v. Director of the Div. of Employment Security, 373 Mass. 720, 369 N.E.2d 1018 (1977), in which we rejected a plaintiff's claim for interest as compensation for delay in receiving unemployment benefits. In Broadhurst we observed as follows: "(T)he legislative silence as to interest in c. 151A (the Employment Security Law), which otherwise contains a rather detailed consideration of proceedings and remedy, indicates a legislative intent that interest not be payable on unemployment benefits.... Moreover, ... (t)he Commonwealth can be impleaded only to the extent that it has expressed its consent. In waiving its 'immunity' under G.L. c. 151A, the Commonwealth established certain rights of recovery as to unemployment benefits 'which cannot be extended beyond those expressly conferred by statute' " (citations omitted). Id. at 727, 369...