Opinion
150031/2009.
Decided July 1, 2011.
The following papers numbered 1 through 6 were considered on these motions this 21st day of June, 2011:
[004]Notice of Motion(Affirmation in Support)(Defendant) ....................1 Affirmation in Opposition (Plaintiff) .......................................2 Reply Affirmation (Defendant) ...............................................3 [005]Notice of Motion(Affirmation in Support)(Plaintiff) ....................4 Affirmation in Opposition (Defendant) .......................................5 Reply Affirmation (Plaintiff) ...............................................6This action was commenced by the plaintiff New Vanderbilt Rehabilitation Care Center, Inc., [hereinafter "New Vanderbilt"] on or about March 2, 2009, seeking, inter alia, repayment of approximately $124,712.79, in services and care rendered to decedent resident William Dunker by his daughter, defendant Beverly Brown. The complaint alleges that the defendant Brown, inter alia, breached the "Admissions Agreement" entered into between plaintiff and defendant on or about July 31, 2005. Presently, discovery is complete, the case is on the trial calender and both parties are moving for summary judgment in their respective favors.
The Court initially notes that Letters of Limited Administration were issued by the Surrogate's Court of Richmond County on April 27, 2011, and the parties have proceeded with an expedited hearing in Surrogate's Court to determine the validity of claims as against the Estate of William Dunker.
In addition, this court is reluctantly constrained to address the totality of papers considered on these motions. This case was transferred by Justice Philip G. Minardo on February 22, 2011, after he recused on the matter. Justice Minardo had previously given the parties until April 28, 2011, to make summary judgment motions. In accordance with that Order, these motions were initially made returnable on May 10, 2011, this courts first motion calender after the deadline. On that date, the parties were notified that as a result of this case being "e-filed" they were to provide courtesy copies to the court of all papers and at the request of the parties, the motions were adjourned to June 7, 2011.
On June 7, 2011, both parties appeared and it was represented to the Court, and agreed by both parties that the only document not submitted was defendant's reply to his motion for summary judgment [motion 004]. The court was willing to adjourn the motions to June 21, 2011, however, plaintiff's attorney objected as he was unavailable on that date. In an effort to accommodate the parties unavailability, the court adjourned the motions to June 21, 2011, but required only submission of defendant's reply and no appearance from either side was necessary. Both parties agreed and the motions were adjourned to June 21, 2011, for submission only.
On June 21, 2011, the defendant's attorney appeared in chambers to submit the courtesy copy of his reply affirmation. Plaintiff's attorney telephoned the court and a conference with both sides was held, plaintiff's attorney telephonically participating. The court was made aware that plaintiff's attorney filed documents subsequent to the last motion calender proporting it to be "part of his reply". The papers were also filed by plaintiff after defendant had filed his reply.
The New York State Courts E-Filing system provides a list of all documents filed by the time/date. At the June 6, 2011, motion calender both parties indicated that all documents were submitted to the court except the defendant's reply on his motion for summary judgment [motion 004]. This is supported by the e-filing report which shows the last document filed (No. 73) as plaintiff's reply on June 6, 2011. Plaintiff's reply was filed the day before the June 7, 2011, motion calender thus rendering that motion complete and ready for submission. With respect to defendant's motion for summary judgment [004] the last document submitted was plaintiff's opposition with exhibits, on April 22, 2011, (numbered as documents 68 through 70) thus awaiting defendant's reply, as indicated.
Currently, the e-filing motion document list reflects defendant's reply, filed on June 20, 2011, as document 74. However, there are three other documents, 75, 76 77, filed after this submission, by plaintiff's attorney on his own motion [005] on June 20, 2011, which were never authorized by this court. In the plaintiff's letter, dated June 3, 2011, he informed the court that the reply had been submitted and no exhibits or further support was attached. The late filing, on June 20, 2011, is clearly untimely and unauthorized and as a result, there will be no consideration of any papers beyond those listed under "papers considered".
A fax transmittal by defendant to this court after the reply brief submission and after this court advised no further papers would be considered was also summarily dismissed by this court.
Summary Judgment
Plaintiff, New Vanderbilt, is a nursing home facility located at 135 Vanderbilt Avenue, Staten Island, New York, that provided services and care to the defendant, Beverly Brown's now deceased father, William Dunker. The relevant and undisputed time line is as follows; on September 7, 2004, the deceased William Dunker, sole owner of the premises located at 46 Montgomery Avenue, Staten Island, New York, [hereinafter referred to as "the premises"] transferred the ownership of the premises (while retaining a life estate) to his only living child defendant Beverly Brown by Bargain and Sale Deed. At that time defendant Brown was also given durable power of attorney by her father to act on his behalf.
The Court notes that William Dunker, as indicated by defendant Brown, had a previous child who predeceased him and had no children.
The Court notes that it is undisputed that defendant Beverly Brown was power of attorney for her father William Dunker. This is evidenced in her numerous affidavits and deposition testimony. However, defendant Brown admits to destroying this document in 2009 after her father's passing, as she knew it had expired. With respect to plaintiff's contention for spoliation, it is well settled that "[u]nder the common-law doctrine of spoliation, when a party negligently loses or intentionally destroys key evidence, thereby depriving the non-responsible party of the ability to prove its claim, the responsible party may be sanctioned by the striking of its pleading" ( Gotto v. Eusebe-Carter , 69 AD3d 566 , 567 [2d Dept., 2010]). "However, a less severe sanction is appropriate where the absence of the missing evidence does not deprive the moving party of the ability to establish his or her case" and "[t]he determination of a sanction for spoliation is within the broad discretion of the court" ( id.). The court, in determining the penalty for spoliation must consider "the degree to which the alleged spoliation prejudiced the aggrieved party" ( Shayovich v. 800 Ocean Parkway Apt. Corp. , 77 AD3d 814 , 815 [2d Dept., 2010]).
Here, this Court finds that while defendant Beverly Brown admits to destroying the power of attorney form, she did admit to possessing such powers in numerous affidavits and her deposition. In addition, the parties have not indicated whether they are able to obtain a copy of the form from the law firm which defendant Brown contends prepared such paperwork. As a result, this court finds plaintiff's request for striking of the defendants answer too stringent a penalty and finds no prejudice to plaintiff, as defendant does not dispute that she was power of attorney for her now deceased father William Dunker at the time of his admission ( Gotto v. Eusebe-Carter, 69 AD3d at 567; Shayovich v. 800 Ocean Parkway Apt. Corp., 77 AD3d at 815). As a result, the plaintiff's requests for penalties based upon spoliation are hereby denied.
In February 2005, William Dunker was diagnosed with Alzheimer's disease and his health continued to deteriorate until his eventual admission to plaintiff's facility in or about June 2005. Thereafter, on July 31, 2005, the defendant Beverly Brown signed the "Admissions Agreement" with the plaintiff. This admission was approximately nine months after the transfer of the premises and unquestionably within the three year look-back period for Medicaid. While William Dunker resided at the plaintiff's facility, his wife resided at the premises until September 2007, when she entered a different nursing home and passed away on March 27, 2008. Later that year, on December 12, 2008, William Dunker passed away while a resident at plaintiff's facility.
The look-back period for Medicaid is three years for any transfers made prior to February 8, 2006, and five years for any transfers made subsequent ( 42 USCS § 1396p). The three year look-back period applies in this case as the transfer occurred prior to February 8, 2006.
With respect to the Medicaid application, in a letter dated October 4, 2005, the defendant Brown responded to plaintiff's request for additional documents in order to submit a Medicaid application. An application for Medicaid was submitted on December 20, 2005, to the New York City, Human Resources Administration [hereinafter "HRA"] as the local agency that administers medicaid coverage. In February of 2006, HRA sent a letter requesting further information/clarification on several items, including an appraisal of the premises and indicated that "[w]e are requesting market value of property because of [sic] transfer within the 36 month look-back period. You may submit proof that transfer was made for a purpose other than to qualify for MA coverage". (Plaintiff's Exhibit E, pg. 1). Defendant Brown responded to the request on March 13, 2006, explaining that "although the transfer was made during the 36-month look-back period, I have provided documentation that the asset was not transferred in order for my father to become eligible for Medicaid and that he was a reasonably healthy 79 year-old at the time of transfer. Therefore, I feel that my father should not be sanctioned for the transfer" (Plaintiff's Exhibit G, pg. 2-3).
It was on December 22, 2008, shortly after William Dunker's passing and over three years since admission to the facility, that Medicaid made its final determination, that it would cover expenses from September 1, 2006, through July 31, 2009. Medicaid assessed a `penalty period' of 23.41 months due to the transfer of the premises during the look-back period. The decision also provided: No NAMI from October 1, 2006, through September 30, 2007, because William Dunker's wife resided in the community and she was entitled to retain all of the income, but NAMI in the amount of $1,536.83, once Mrs. Dunker was admitted to a nursing home and upon her death NAMI in the amount of $1,506.56.
NAMI: Net Available Monthly Income.
On December 26, 2008, New Vanderbilt sent defendant a letter with the Medicaid decision and bill for services not covered. The defendant did not appeal the decision and has made no payment to plaintiff. As a result, the plaintiff filed this lawsuit seeking payment of the approximately $125,000.00 due and owing for care and services rendered to William Dunker. Presently, both parties are seeking summary judgment.
A "proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact" ( Alvarez v. Prospect Hosp., 68 NY2d 320, 324). Once the movant has satisfied this burden, "the burden shifts to the [opponent] to lay bare his or her proof and demonstrate the existence of a triable issue of fact" ( Chance v. Felder , 33 AD3d 645 , 645-646 [2d Dept 2006]; Zuckerman v. City of New York, 49 NY2d 557). In this regard, the court is enjoined to accept the evidence tendered by the opposing party as true, and "must deny the motion if there is even arguably any doubt as to the existence of a triable issue" ( Fleming v. Graham , 34 AD3d 525 [2d Dept 2006] quoting Barker v. Briarcliff School Dist., 205 AD2d 652, 653 [2d Dept 1994] [internal quotations omitted]).
"Nursing homes that accept residents whose charges will be paid in whole or in part by the Medicaid program are governed by the federal Nursing Home Reform Act and federal and state regulations" ( 42 USC § 1396r; 42 CFR Part 483; 10 NYCRR Part 415). Federal statues provide that "a nursing facility must not require a third party guarantee of payment to the facility as a condition of admission (or expedited admission) to, or continued stay in, the facility" but also provides, that "shall not be construed as preventing a facility from requiring 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 a resident's income or resources for such care" ( 42 USC § 1396r[c][5][B][ii]; Prospect Park Nursing Home, Inc. v. Goutier, 12 Misc 3d 1192A (Civ. Ct., Kings Cty., 2006]). In other words, "[a] nursing home facility may require an individual who has legal access to a resident's resources to agree to provide payment from such income or resources" ( Fulton Commons Care Ctr. v. Belth ___ NYMisc. ___, 2010 NY Slip Op 32533U [Nassau Cty., 2010]).
Here, plaintiff has established its prima facie entitlement to summary judgment as a matter of law by submitting evidence that defendant Beverly Brown signed the Admissions Agreement and breached her obligations under said Agreement by failing to use her father's resources (which she had legal access to) to pay the sum due for services rendered ( Putnam Nursing Rehabilitation Ctr. v. Bowles, 239 AD2d 479 [2d Dept., 1997]; Prospect Park Nursing Home, Inc. v. Goutier, 12 Misc 3d 1192A [Civ. Ct., Kings Cty., 2006]; Fulton Commons Care Ctr. v. Belth ___ NYMisc. ___, 2010 NY Slip Op 32533U [Nassau Cty., 2010]; Pinegrove Manor v. Sheperd, 30 Misc 3d. 1239A [Nassau Cty., 2010]). Plaintiff has established that on July 31, 2005, the defendant Brown signed the "Admissions Agreement" with plaintiff as the "Designated Representative" and it provided, inter alia, the following:
MEDICAID
Residents for whom the facility does not have a valid Medicaid approval, and for whom an application for Medicaid has been filed, will remit any and all income to the facility effective with the date of admission. Income may include pension, Social Security, interest payments, etc. When the Medicaid application is approved, this "income" plus the Medicaid payments become payment for the facility's room and board and other service charges.
Medicaid Program-Resident Information
At the request of the resident or designated representative, an application for Medicaid benefits will be filed by the facility. The resident or responsible party must agree to assist in every way necessary to provide all information as required by law for the application process. For residents determined to be eligible under the Medicaid program, the State of New York Department of Social Services will pay room and board, medications, and other basic services.
. . . .
In the event the resident is not eligible for Medicaid benefits, the resident retains full responsibility for charges incurred by resident. Charges are calculated in accordance with the Facility's applicable prevailing private daily rate for basic services and any additional charges incurred by the resident shall be billed by the providers rendering these services on a fee-for service basis. (Plaintiff's Exhibit B, "Admission Agreement", page 19).
The Agreement also provides that the resident or designated representative has an obligation to (1) make a timely Medicaid Application and
Payment to the Facility During Processing of Medicaid Application : Residents whose Medicare/HMO benefits have been exhausted, or who are not eligible for Medicare coverage, must transfer or pay their income to the facility on a monthly basis, unless a spouse resides in the community. When a Spousal case is approved, the Budget Letter prepared by the Nursing Home Eligibility Division of the Medicaid Office, will state the NAMI, (Net Available Monthly Income) amount.
When Medicaid Eligibility Is Established : Once Medicaid eligibility is established, the resident or designated representative personally guarantees payment to the facility of the Resident's monthly NAMI. . . ." (Plaintiff's Exhibit B, "Admissions Agreement", page 19).
Further, page 28 of the Agreement, entitled "FINANCIAL AGENT'S PERSONAL AGREEMENT FOR THE BENEFIT OF RESIDENT" (signed by defendant Beverly Brown) delineates:
The Agent agrees to provide the following assistance to the Facility in the event such assistance is needed and requested:
A. Without incurring the obligation to pay for the cost of the Resident's care from the Agent's own personal funds, and in recognition that the Agent is currently the Responsible Party for the Resident, the Agent personally agrees to use the Agent's access to the Resident's funds to aid the Resident in meeting his/her obligations under the Admission Agreement if such assistance is necessary to enable the Resident to comply with the terms of such Agreement.
B. More specifically, the Agent personally agrees that, to the extent of his/her authority, the Agent will use his/her access to the Resident's payment obligations to the Facility and agrees not to transfer the Resident's assets that may result in the denial of Medicaid reimbursement.
If the Resident becomes eligible and if the Agent has access to the Resident's income, the Agent personally agrees to assure that the Facility is paid the NAMI amount which the Medicaid agency may direct the Resident to pay towards the cost of his/her care.
D. The agent personally agrees to assist in meeting the insurance obligations under this Agreement if necessary and if requested, by providing timely financial information and/or documentation of the Resident's assets to which the Agent has access; and
E. The Agent agrees to pay damages to the Facility for any breach of his/her personal obligations as set forth in this Agreement.
The Admissions Agreement was signed by defendant Beverly Brown in approximately 24 places. It is clear from the Admission Agreement that any proceeds or assets which were available to fund the resident's care (and were legally accessible) were to be utilized for such purpose and it was the designated representative's responsibility to ensure such compliance. The determination by Medicaid as to its coverage, made on December 22, 2008, finalized the amount obligated by the resident, and pursuant to the Admission Agreement, defendant Brown who had legal access to the premises had the duty to use it to pay for the services. It is undisputed that defendant Beverly Brown did not appeal the decision. Thus, Medicaid's determination stands and plaintiff has established defendant's obligations pursuant to the Admissions Agreements and summary judgment is appropriate.
While defendant Brown, in her initial affidavit alleged the "Admissions Agreement" was not signed by her but actually forged by plaintiff, this was recanted in her subsequent affidavits and testimony where she admits to signing the Admissions Agreement with the contention that she never intended to be held personally liable.
In opposition, the defendant has failed to raise any triable issues of fact ( Chance v. Felder , 33 AD3d 645 , 645-646 [2d Dept 2006]; Zuckerman v. City of New York, 49 NY2d 557). Defendant Brown does not dispute that she possessed power of attorney for her father, William Dunker, that she signed the Admissions Agreement with the plaintiff, and that she did not appeal the decision of Medicaid. There are no questions for the trier of fact to resolve and as such summary judgment is awarded in favor the of the plaintiff, New Vanderbilt.
As a result, this court will address the plaintiff's claims under the applicable provisions of the Debtor and Creditor Law which permits the plaintiff to proceed against the defendants and seek to void the transfer of the property if plaintiff can demonstrate that the conveyance was made with the actual intend to defraud.
Pursuant to Debtor and Creditor Law § 273, a conveyance made by a person who will be rendered insolvent thereby is fraudulent as to creditors, without regard to his or her actual intent, if the conveyance is made without fair consideration. An individual is insolvent' within the meaning of the Debtor and Creditor Law when the present fair salable value of his [or her] assets is less than the amount that will be required to pay his [or her] probable liability on existing debts as they become absolute and matured'" ( Grace Plaza of Great Neck, Inc. v. Heitzler , 2 AD3d 780 , 781 [2d Dept., 2003]; Ruby Weston Manor v. Vidal, 18 Misc 3d. 1115A [Kings Cty., 2008]).
Further, "Debtor and Creditor Law § 275 provides that a conveyance is fraudulent as to both present and future creditors" and that a "conveyance made by a person who has a good indication of oncoming insolvency' is deemed to be fraudulent ( id.). With respect to intra-familial transfers,
[u]nder the Debtor and Creditor Law, a heavier burden is placed on the defendant to demonstrate fair consideration when the transaction involves family members and was made without any tangible consideration. The burden to demonstrate the giving of fair consideration shifts to the intra-family transferee where there is no tangible consideration and an oral promise of future support is insufficient to constitute fair consideration. Courts view intrafamily transfers made without any signs of tangible consideration as presumptively fraudulent ( Ruby Weston Manor v. Vidal, 18 Misc 3d. 1115A [Kings Cty., 2008]).
Here, the plaintiff has met its burden establishing that the conveyance of the premises from William Dunker to his daughter, defendant Beverly Brown was done with the intent to defraud medicaid and as such, will be deemed void (NYS Debtor and Creditor Law § 273, 274, 275, 276; ( Chance v. Felder , 33 AD3d 645 , 645-646 [2d Dept 2006]; Grace Plaza of Great Neck, Inc. v. Heitzler , 2 AD3d 780 , 781 [2d Dept., 2003][finding no fraudulent conveyance where resident retained enough assets to cover reasonable' medical care]). There is no dispute that the premises was not conveyed with fair consideration on September 7, 2004, within the three year look-back period for medicaid, applicable at the time. In addition, medicaid determined that the transfer was done for medicaid planning purposes (i.e., the intend to defraud a future creditor) and assessed a penalty period. There was no appeal of the medicaid decision. As a result, plaintiff has established that defendant Brown acted intentionally in an attempt to defraud medicaid by transferring the premises from her father to herself without fair consideration within the look-back period. Plaintiff has proven that the conveyance was fraudulent and it shall be deemed void.
In opposition, the defendant has failed to raise any triable issues of fact with respect to the conveyance of the premises ( id.).Defendant Brown, pursuant to the law, has a higher burden as an intra-familial tranferee to prove this conveyance was done without an intent to defraud. Defendant Beverly Brown contends that at the time of transfer, September 7, 2004, her father was a healthy 79 year-old man and the conveyance of the property was done to avoid probate or delay upon his death. However, this contention, along with a letter by her deceased father's physician (Dr. Louis Gianvito) proported to prove that her father was healthy was considered by the HRA and the decision that the transfer of the premises was made for medicaid planning purposes was still rendered.
Defendant Beverly Brown has failed to establish that she transferred the premises for reasons other than medicaid planning. As such, the transfer, without fair consideration, within the three-year look-back period renders it fraudulent. There was actual intent to defraud medicaid to render decedent William Dunker insolvent and thus able to have any potential nursing home care covered by medicaid. The transfer of the premises from William Dunker to Beverly Brown dated September 7, 2004, is rendered void.
Plaintiff's remaining causes of action including, but not limited to, unjust enrichment, conversion, request for an accounting and constructive trust, the court find unavailing and are dismissed.
Accordingly, it is hereby
ORDERED that motion 004 by plaintiff New Vanderbilt Rehabilitation Care Center, Inc., for summary judgment is hereby granted as indicated above, and it is further
ORDERED that plaintiff NEW VANDERBILT REHABILITATION CARE CENTER, INC., is awarded a judgment against defendant BEVERLY BROWN in the amount of $124,715.79, plus interest from December 22, 2008, and it is further
ORDERED that the conveyance of the premises located at 46 Montgomery Avenue in Staten Island, New York, on September 7, 2004, from deceased William Dunker to defendant Beverly Brown is deemed void, and it is further
ORDERED that plaintiff shall, pursuant to the CPLR, enforce the judgment against the premises located at 135 Vanderbilt Avenue, Staten Island, New York, and it is further
ORDERED that all other requests for relief are denied, and it is further
ORDERED that motion 005 by defendant Beverly Brown is hereby denied and all affirmative defenses and/or counterclaims are hereby dismissed, and it is further
ORDERED that the Clerk enter Judgment accordingly.
THIS IS THE DECISION AND ORDER OF THE COURT!