Troy Nursing & Rehab. Ctr., LLC v. Naylor

• Court: New York Supreme Court — Appellate Division
• Writing for the Court: SPAIN
• Citation: Troy Nursing & Rehab. Ctr., LLC v. Naylor, 94 A.D.3d 1353, 944 N.Y.S.2d 323, 2012 N.Y. Slip Op. 3243 (N.Y. App. Div. 2012)
• Decision Date: 26 April 2012
• Parties: TROY NURSING & REHABILITATION CENTER, LLC, Doing Business as the Springs Nursing & Rehabilitation Centre, Respondent, v. Ernest NAYLOR, Defendant, and Diana Gaetano, Individually and as Responsible Party and Attorney–In–Fact for Ernest Naylor, Appellant.

94 A.D.3d 1353

944 N.Y.S.2d 323

2012 N.Y. Slip Op. 03243

TROY NURSING & REHABILITATION CENTER, LLC, Doing Business as the Springs Nursing & Rehabilitation Centre, Respondent,

v. Ernest NAYLOR, Defendant,andDiana Gaetano, Individually and as Responsible Party and Attorney–In–Fact for Ernest Naylor, Appellant.

Supreme Court, Appellate Division, Third Department, New York.

April 26, 2012.

Matthew C. Hug, Troy, for appellant.

Tuczinski, Cavalier, Gilchrist & Collura, P.C., Albany (Alison M. Coan of counsel), for respondent.

Before: MERCURE, J.P., LAHTINEN, SPAIN, McCARTHY and GARRY, JJ.

SPAIN, J.

Appeals (1) from an order of the Supreme Court (Hummel, J.), entered March 24, 2011 in Rensselaer County, which, among other things, granted plaintiff's motion for summary judgment, and (2) from the judgment entered thereon.

In this action to collect fees due plaintiff for nursing home care rendered to defendant Ernest Naylor, now deceased (hereinafter decedent), at plaintiff's Springs Nursing & Rehabilitation Centre in the City of Troy, Rensselaer County, Supreme Court awarded summary judgment to plaintiff on its account stated and breach of contract causes of action, holding decedent's daughter, defendant Diana Gaetano (hereinafter defendant) personally liable to plaintiff for failing to use her access to decedent's property to pay his nursing home bills. Since suffering a massive stroke in December 2005 until his death in October 2008, decedent was a full-time resident of the Springs, except for periods of hospitalization. On two occasions when decedent was readmitted to the Springs after spending time in the hospital, defendant executed agreements with plaintiff in which she promised to utilize her access to decedent's assets—by virtue of her power of attorney—to pay for his care.¹ DEFENDANT ALSO AGReed to pay damages to plaintiff for any breach of that obligation. Defendant now appeals from Supreme Court's order and judgment holding her personally liable to plaintiff for $80,509.55, plus interest, reflecting the unpaid balance due to plaintiff for decedent's care at the time of his death.

Decedent died soon after the commencement of this action and prior to Supreme Court's issuance of the judgment on appeal, yet no estate representative has been substituted for decedent. As we find that decedent's estate is a necessary party to this action, we must modify Supreme Court's judgment and remit the matter for further proceedings ( see Sorbello v. Birchez Assoc., LLC, 61 A.D.3d 1225, 1226, 876 N.Y.S.2d 789 [2009];Matter of Romeo v. New York State Dept. of Educ., 41 A.D.3d 1102, 1104–1105, 839 N.Y.S.2d 297 [2007] ). Indeed, as the account stated cause of action necessitates an assessment of the debt owned to plaintiff by the estate ( see Jim–Mar Corp. v. Aquatic Constr., 195 A.D.2d 868, 869–870, 600 N.Y.S.2d 790 [1993],lv. denied82 N.Y.2d 660, 605 N.Y.S.2d 6, 625 N.E.2d 591 [1993] ), we find that summary judgment on that issue cannot be awarded without the estate's participation.

We do, however, reach the issue of defendant's personal liability for breach of contract and conclude that Supreme Court correctly held that defendant accepted personal responsibility to utilize her access to decedent's funds to pay for his care and then breached that agreement by failing to apply available assets to pay decedent's nursing home bills. In so holding, we reject defendant's assertions that the agreements that she executed to secure decedent's residency at plaintiff's facility violate the Federal Nursing Home Reform Act. Although that act prohibits a nursing facility from “requir [ing] a third party guarantee of payment to the facility as a condition of [a resident's] admission” (42 USC § 1396r [c][5][A][ii]; see also10 NYCRR 415.3[b][1] ), it also expressly permits a nursing facility to “require[ ] an individual, who has legal access to a resident's income or resources available to pay for care in the facility, to sign a contract (without incurring personal financial liability) to provide payment from the resident's income or resources for such care” (42 USC § 1396r [c][5][B][ii]; see also10 NYCRR 415.3[b] [6] ). The agreements in question here clearly fall into the latter category ( see generally Putnam Nursing & Rehabilitation Ctr. v. Bowles, 239 A.D.2d 479, 481, 658 N.Y.S.2d 57 [1997] ).

Further, we reject defendant's contention that one of the two agreements she signed cannot be enforced against her in her personal capacity because she executed the agreement with the letters “POA” following her signature. The agreement's clear terms define defendant's obligations as the responsible party by means of her control over decedent's assets, leaving no room to suggest that the document was signed on decedent's behalf. Indeed, defendant did not sign the agreement on the line reserved for the “SIGNATURE OR MARK OF RESIDENT” but on the line expressly reserved for the “SIGNATURE OF RESPONSIBLE PARTY.” As defendant's claims that the agreements were the product of fraud or are otherwise invalid are wholly unsupported, no issues of fact preclude a finding that plaintiff was obligated to use her authority to access decedent'sproperty to pay his debts to plaintiff.

Likewise, the record is replete with evidence of defendant's breach of her agreement to use decedent's funds to pay his debts to plaintiff. Specifically, we...