State v. Hammans
| Decision Date | 02 August 2007 |
| Docket Number | No. 55A04-0606-CV-294.,55A04-0606-CV-294. |
| Citation | 870 N.E.2d 1071 |
| Parties | The STATE of Indiana, Morgan County Office of the Department of Child Services, Appellant-Intervenor, v. Roland W. HAMMANS and Sue E. Hammans, Co-Trustees of the Nicholas Hammans Disability Trust and The Nicholas Hammans Disability Trust, Appellees. |
| Court | Indiana Appellate Court |
Arend J. Abel, Cohen & Malad, LLP Indianapolis, IN, Roger T. Coffin, Coffin, Coffin & Mayfield, Martinsville, IN, Attorneys for Appellees.
The State of Indiana, Morgan County Office of the Department of Child Services, appeals the order authorizing payment to Roland W. Hammans and Sue E. Hammans ("the Hammanses"), co-trustees of the Nicholas W. Hammans Disability Trust ("the Disability Trust"), for their administrative services as co-trustees and for personal services rendered to their son, Nicholas. We affirm.
The State raises one issue, which we restate as whether the trial court's order granting the Hammanses' petition for co-trustee fees and personal services rendered to Nicholas is clearly erroneous.
On December 28, 1994, Nicholas was in an automobile accident. He sustained a traumatic brain injury, leaving him completely disabled and requiring twenty-four-hour supervision and care. Upon his discharge from the hospital in March of 1995, the Hammanses received the necessary training to care for him. This care included, but was not limited to, performing physical therapy, delivering medications via IV or injection, feeding him through a feeding tube, changing his tracheotomy tube, suctioning phlegm, and respiratory therapy.
On Nicholas's behalf, the Hammanses brought a lawsuit based on the accident, and the proceeds from the resulting settlement were placed in a guardianship estate supervised by the trial court. On April 17, 1996, the trial court established the Disability Trust, appointed the Hammanses as co-trustees, and funded it with $200,000 transferred from the guardianship estate. The Disability Trust was specifically set up so that Nicholas would remain eligible for Medicaid.1 To qualify for Medicaid in Indiana, an applicant must meet both an income eligibility test and a resources eligibility test. If either the applicant's income or the value of the applicant's resources is too high, then the applicant does not qualify for Medicaid. Sanders v. State Family & Soc. Servs. Admin., 696 N.E.2d 69, 71 (Ind.Ct.App.1998). To insure that Nicholas retained Medicaid eligibility, the Disability Trust was structured to meet the requirements of 42 U.S.C. § 1396p(d)(4)(A). This statute permits the creation of a trust, often referred to as "supplemental needs trust," "special needs trust," or "disability trust," the assets of which are excluded from determining an individual's Medicaid eligibility. 42 U.S.C. § 1396p(d)(4)(A) provides,
(4) This subsection [governing treatment of trust assets in determining Medicaid eligibility] shall not apply to any of the following trusts:
(A) A trust containing the assets of an individual under the age 65 who is disabled (as defined in section 1382c(a)(3) of this title) and which is established for the benefit of such individual by a parent, grandparent, legal guardian of the individual, or a court if the State will receive all amounts remaining in the trust upon the death of such individual under a State plan under this subchapter.
(Emphasis added.)
The Disability Trust provides, in relevant part:
Whereas, the Grantor, Nicholas W. Hammans, remains unconscious and is unlikely to ever be self-supporting, however, [Nicholas] may have a normal life expectancy;
. . .
Whereas, [Nicholas] acknowledges that in accordance with the provisions of this Trust, and in order to comply with 42 USCS § 1396p(d)(4), the State of Indiana or any other domiciliary State of [Nicholas] will receive all amounts remaining in the Trust upon the death of [Nicholas] up to an amount equal to the total medical assistance paid on behalf of [Nicholas] under a State Plan under 42 USCS §§ 1396 et seq.
IT IS THEREFORE AGREED UPON AS FOLLOWS:
1. Trust Purpose. The purpose of this Trust is to protect [Nicholas's] long term interests and to generally provide supplemental care during his lifetime, to make available to him such restorative and rehabilitation services that are or will become available to achieve as normal a physical and mental functioning as is possible and to increase the quality of his life after utilizing available assistance from governmental and private agencies and when such assistance or benefits are incomplete or insufficient, and not to replace assistance or benefits or to render [Nicholas] ineligible for any assistance or benefits to which he would otherwise be entitled or eligible, including Medicaid benefits.
. . . .
4. Administration of Trust During [Nicholas's] Lifetime.
. . . .
c. Guidelines for the Co-Trustees' Exercise of Power of Distribution. The [Hammanses] shall arrange for [Nicholas] to have services to enhance his quality of life to the greatest extent possible. [Nicholas] may require life-long rehabilitation services and the Trust is intended to allow [Nicholas] to receive such services. The expenditures that are contemplated are services provided for [Nicholas's] mental and physical rehabilitation, education, and training. Examples of such services include but are not limited to the following:
. . .
(7) Expenditures for family members or other persons who provide special care or supervision to the extent of the reasonable value of services provided;
. . .
d. Death of [Nicholas]. Upon the death of [Nicholas], the [Hammanses] shall terminate the Trust and distribute the entire remaining balance of the Trust estate as follows:
(1) The [Hammanses] shall pay to the State of Indiana (or any other State that provided Medicaid benefits to [Nicholas]), such amount of the Trust estate which is equal to the total medical assistance paid on behalf of [Nicholas] under a State plan (i.e. Medicaid) under 42 USCS §§ 1396 et seq., or whatever the amount of the Trust estate is necessary to meet the requirement of 42 U.S.C. § 1396p(d)(4)(A) or the corresponding provision of any successor Medicaid law.
Appellant's App. at 130-35 (emphasis added).
The trial court supervised the Disability Trust and approved all disbursements. On December 7, 2005, Nicholas unexpectedly died following a two-day illness. The Disability Trust had a balance of $143,860. The State's payments for Nicholas's medical care though Medicaid totaled $355,632.15.
On January 9, 2006, the Hammanses filed a verified petition seeking fees associated with the administration of the Disability Trust and compensation for the care they rendered to Nicholas and a petition to pay the Disability Trust's final attorney fees. On January 27, 2006, the trial court issued a notice of hearing to the Morgan County Division of Family and Resources. On February 24, 2006, the State moved to intervene, which the trial court granted.
On March 1, 2006, a hearing on the Hammanses' petitions was held. On March 16, 2006, the parties filed memoranda of law. On March 22, 2006, the Hammanses amended their petition for attorney fees.
On March 27, 2006, the trial court issued an order authorizing payment of attorney fees of $2,500. On April 4, 2006, the trial court issued an order authorizing payment of $140,000 to the Hammanses for their administrative services as co-trustees of the Disability Trust and for personal services they provided to Nicholas. In relevant part, the order states:
8. The Court finds that the allegations of the petition filed herein are true and accurate and the testimony of the [Hammanses] . . . was creditable and uncontroverted. The Courts finds that no testimony was offered by the State.
9. The Court finds that the personal care and services provided by the [Hammanses] for the benefit of their disabled son from March 1995 until his death on December 7, 2005 was extraordinary and was performed with the expectation that compensation would eventually be authorized for the [Hammanses] prior to the death of the disabled beneficiary. The Court further finds that the [Hammanses], upon receiving special training, performed all of the tasks and services specified and set forth in paragraph 4 of their petition.
10. The Court finds that from the date the disability trust was established until the death of [Nicholas] on December 7, 2005, [Nicholas] was cared for by the [Hammanses] in their home on a continuous "round the clock" basis, except for brief periods of hospitalization.
11. The Court finds that from the date the disability trust was established until the death of [Nicholas], the [Hammanses] provided and coordinated [Nicholas's] care for a continuous period of 3,519 days or a period of approximately 502 weeks. During this period, the [Hammanses] were away from [Nicholas] for only 2 days.
12. The Court finds that the testimony presented during the...
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