noting that “the facts of this case stand in contrast to a situation in which a son or daughter possessed a power of attorney over the parent’s financial affairs, or where that adult child misappropriated his or her parent’s bank account funds rather than pay the nursing home facility”
How later courts described this case
- noting that “the facts of this case stand in contrast to a situation in which a son or daughter possessed a power of attorney over the parent’s financial affairs, or where that adult child misappropriated his or her parent’s bank account funds rather than pay the nursing home facility”
- in review of general judgment, questions of law reviewed de novo
Written by the judges who cited it.
The opinion
Jan 30 2014, 6:11 am
FOR PUBLICATION
APPELLANT PRO SE: ATTORNEY FOR APPELLEE:
ALEXIS HUTCHISON PAUL RICHARD RAUCH
Greenfield, Indiana Harrison & Moberly, LLP
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
ALEXIS HUTCHISON and )
MARTHA FARBER, deceased, )
)
Appellant-Defendant, )
)
vs. ) No. 30A01-1307-SC-316
)
TRILOGY HEALTH SERVICES, LLC, )
d/b/a SPRINGHURST HEALTH CAMPUS, )
)
Appellee-Plaintiff. )
APPEAL FROM THE HANCOCK SUPERIOR COURT
The Honorable Dan E. Marshall, Judge
The Honorable R. Scott Sirk, Commissioner
Cause No. 30D02-1209-SC-1030
January 30, 2014
OPINION - FOR PUBLICATION
KIRSCH, Judge
Alexis Hutchison (“Hutchison”) appeals a small claims court (“trial court”)
judgment in favor of Trilogy Health Services, LLC, d/b/a Springhurst Health Campus
(“Springhurst”), on Springhurst’s claim against Hutchison and her now-deceased mother,
Martha Farber (“Farber”), for payment of services provided to Farber while she was a
resident at Springhurst. Hutchison raises three issues that we consolidate and restate as:
whether the trial court erred when it entered a judgment in favor of Springhurst and against
Hutchison.
We reverse and remand.
FACTS AND PROCEDURAL HISTORY1
For a number of years, Farber was ill with cancer, requiring various trips to, and
stays at, hospitals. After one of her hospital visits, and finding that she was in need of
constant care, she became a resident at Springhurst, a skilled nursing facility. Farber was
admitted to Springhurst on November 11, 2011. She stayed at Springhurst through and
including February 5, 2012, when Farber moved into her own apartment.
On November 11, 2011, Hutchison signed Springhurst’s Move-In Agreement
(“Agreement”) as a “Responsible Party/Agent.” Appellant’s App. at 28. The Agreement
stated in pertinent part:
The Resident . . . may designate a person to act on the Resident’s behalf as a
Responsible Party/Agent. If the Resident so designates a Responsible
Party/Agent, the Resident shall provide the Facility with a copy of a written
agreement that authorizes such individual to manage, use, control or access
the Resident’s income, financial account(s) or other resources (i.e. real estate
or other property), inspect and copy the Resident’s records, and execute this
1
We note that on October 7, 2013, Springhurst filed with this court a Notice of Non-Filing of Brief
for Appellee, stating its intention not to file an appellate brief.
2
Agreement on the Resident’s behalf. . . . The Responsible Party/Agent
further agrees to assist in establishing a financial plan for payment of services
. . . and agrees to pay for the Resident’s services and supplies that are billed
by the Facility. The Responsible Party/Agent further agrees to pay the
Facility the full amount of the Resident’s income and resources that the
Responsible Party/Agent controls or accesses, and agrees to be personally
responsible and liable to the Facility for the income and resources of the
Resident that the Responsible Party/Agent withholds, misappropriates for
personal use, or otherwise does not pay over to the Facility for the Resident’s
benefit or apply towards payment of the Resident’s financial obligations to
the Facility under this Agreement.
Id. at 13.
On September 28, 2012, Springhurst filed a notice of claim (“Claim”) in the small
claims division of the Hancock Superior Court, naming as defendants Farber and Hutchison
(collectively “Defendants”). The Claim sought judgment against Defendants in the amount
of $1,716.90 for services rendered to Farber, plus interest, costs, and attorney’s fees. The
matter was set for trial on November 26, 2012. After continuances by both sides,2 the
matter was set for trial on February 19, 2013. On February 14, Hutchison wrote to the trial
court explaining Farber’s grave health, which had declined. On February 15, 2013, the
trial court denied what it interpreted as a motion to continue, stating that Defendants had
failed to serve Springhurst with the letter (motion), and on February 21, 2013, the trial
court entered a default judgment in favor of Springhurst; Farber passed away that same
day.3 However, in March 2013 Hutchison filed a Notice of Appeal, which the trial court
treated as a motion to set aside, and to it Hutchison attached verification that she faxed the
2
Defendants have proceeded pro se throughout all trial court and appellate proceedings.
3
According to Hutchison, Farber “left no estate . . . there was nothing to probate.” Appellant’s Br.
at 20; Tr. at 19 (“She had no assets.”).
3
February 15 letter to counsel for Springhurst and that it was received; thereafter, the trial
court set aside the previously-entered default judgment and set the matter for trial on May
24, 2013.
At the May 24 trial, Springhurst called as its only witness Dionne Fields (“Fields”),
who was the current business office manager4 and custodian of business records at
Springhurst. Fields testified to the above-cited language from the Agreement concerning
the Responsible Party/Agent, and she testified that the outstanding charges consisted of
bed hold fees, beauty shop services, and respiratory equipment. Upon cross examination,
Hutchison asked Fields, “Do you have in your documents any power of attorney giving me
any sort of financial authority for my mother?” Tr. at 17. Fields replied, “No I do not.”
Id. Fields also agreed she was not present when Hutchison signed the document and thus
was not present when “assurances” were made to Hutchison. Id.
During her case in chief, Hutchison testified that she was not Farber’s power of
attorney and “had no authority to manage her funds,” including her pension or social
security checks. Id. at 19. Hutchison reaffirmed, “I have no authority to use my mother’s
income for anything. I was not her power of attorney,” noting the only thing she could
have done was point out to her mother that a bill was owed. Id. at 21. Hutchison also
testified that her mother only became aware of the debt owed after she was no longer a
resident at Springhurst and that her mother disputed the bill, other than $167 in hair salon
services. Hutchison also called as a witness her husband, David Hutchison (“David”), who
4
Fields was not the business office manager when Farber was a resident at the facility.
4
was present at the meeting on November 11, 2011, when Hutchison signed the Agreement.
David testified that when Hutchison inquired whether signing the Agreement would make
her personally financially responsible, the Springhurst representative answered with “an
emphatic no.” Id. at 23.
The trial court took the matter under advisement. On June 13, 2013, the trial court
issued an entry finding in favor of Springhurst and against Hutchison in the amount of
$2,610.87 plus court costs. Hutchison filed a motion asking for clarification and an order
that would specify findings of fact with reference to evidence presented. In response to
this motion, the trial court thereafter issued another entry stating “the court found the
plaintiff proved the defendant liable pursuant to contract and Indiana case law for the sum
of $2,610.87.” Appellant’s App. at 10. Springhurst initiated proceedings supplemental to
collect the judgment, but the trial court granted Hutchison’s motion to stay further
proceedings pending her appeal. Hutchison now appeals.
DISCUSSION AND DECISION
This case was tried before the bench in small claims court, and in such cases, we
review for clear error. Trisler v. Carter, 996 N.E.2d 354, 356 (Ind. Ct. App. 2013). In our
review, we presume that the trial court correctly applied the law, and we will not reweigh
the evidence or determine the credibility of witnesses but will consider only the evidence
that supports the judgment and the reasonable inferences to be drawn therefrom. Id.
Although we are particularly deferential to the trial court in small claims actions, where
trials are informal, with the sole objective of dispensing speedy justice between the parties
according the substantive rules of law, we owe no deference to a small claims court’s legal
5
conclusions regarding questions of law, which we review de novo. Trinity Homes. LLC v.
Fang, 848 N.E.2d 1065, 1068 (Ind. 2006). A judgment is clearly erroneous when a review
of the materials on appeal leaves us firmly convinced that a mistake has been made. Trisler,
996 N.E.2d at 356. Here, the judgment rendered in favor of Springhurst was a general
judgment, unaccompanied by findings and conclusions; a general judgment will be
affirmed upon any legal theory consistent with the evidence. Clark v. Hunter, 861 N.E.2d
1202, 1206 (Ind. Ct. App. 2007). In this case, Springhurst elected not to file an appellee’s
brief. An appellee who does not respond to the appellant’s allegations of error on appeal
runs a considerable risk of reversal. Trisler, 996 N.E.2d at 356. Where an appellee has
not filed a brief on appeal, the appellant’s brief need only demonstrate prima facie
reversible error in order to justify a reversal. Id. at 356-57. Prima facie error in this context
is defined as, “at first sight, on first appearance, or on the face of it.” Trinity Homes, 848
N.E.2d at 1068.
In this case, Springhurst’s claim is that Hutchison is contractually liable for the
outstanding bill because she signed the Agreement as a Responsible Party and, therefore,
was required to use Farber’s money to pay the bill for amounts owed to Springhurst. As
Hutchison correctly asserts, Congress has imposed limitations on the concept of a family
member being financially responsible for a family member’s care. For instance, federal
law prohibits a nursing home certified as eligible for Medicare or Medicaid reimbursement
from requiring guarantees as a condition of admission or extended care: 42 U.S.C.
§§1396r(c)(5)(A)(ii) and 1395i-3(c)(5)(A)(ii) provide that with respect to admission to a
nursing facility, the facility “must not require a third party guarantee of payment to the
6
facility as a condition of admission . . . to, or continued stay in, the facility.” See also 42
C.F.R. § 483.12(d)(2) (same). These provisions plainly prohibit facilities from
conditioning admission upon a third party’s guarantee of private pay costs. However, the
analysis does not end there.
The federal statutes also state that Medicare-qualified and Medicaid-qualified
facilities are not precluded 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 the resident’s
income or resources for such care.” 42 U.S.C. §§ 1395i-3(c)(5)(B)(ii), 1396r(c)(5)(B)(ii);
42 C.F.R. § 483.12(d)(2). A section in the Indiana Administrative Code concerning
“admissions” to “comprehensive care facilities” provides likewise:
The facility must not require a third party guarantee of payment to the facility
as a condition of admission or expedited admission, or continued stay in the
facility. However, the facility may require an individual who has legal access
to a resident’s income or resources available to pay for facility care to sign a
contract, without incurring personal financial liability, to provide facility
payment from the resident’s income or resources.
410 Ind. Admin. Code 16.2-3.1-16.5
Admission documents often use the term “responsible party” for third-party
designations. See Katherine C. Pearson, The Responsible Thing to Do About “Responsible
Party” Provisions in Nursing Home Agreements: A Proposal for Change on Three Fronts,
5
We observe that the language of Indiana Code section 16-26-1-12(g), even though it does not
govern admission into a skilled nursing facility, nevertheless similarly reflects the intention to limit a family
member’s financial exposure for another’s care, stating that an individual appointed to consent to health
care of another person, i.e., a health care representative, “does not become personally liable for the cost of
the health care by virtue of that consent.”
7
37 U. Mich. J.L. Reform 757, 764 (2004). While resident rights advocates have taken the
position that third-party guarantee, or responsible party, provisions are inherently illegal,
inconsistent with the goal of federal law, and are unenforceable, some courts have
concluded that under federal law, third parties can “volunteer” to sign as guarantors of
payment to nursing homes. Id. It appears Indiana courts have not yet expressly spoken to
the legality of the responsible party provisions; although Hutchison urges us to declare that
such provisions are unenforceable, we find it unnecessary to reach that issue today.
The Agreement before us provided that the resident, in this case Farber, “may
designate” a person to act on her behalf as a Responsible Party/Agent. Appellant’s App. at
13. As such, Farber was permitted, but not required, to designate an individual to act on
her behalf. The Agreement continued,
If the Resident so designates a Responsible Party/Agent, the Resident shall
provide the Facility with a copy of a written agreement that authorizes such
individual to manage, use, control or access the Resident’s income, financial
account(s) or other resources (i.e. real estate or other property), inspect and
copy the Resident’s records, and execute this Agreement on the Resident’s
behalf.
Id. (emphasis added). There is no evidence that Farber, or anyone else, provided
Springhurst with any such document; indeed, the unrefuted evidence is that Springhurst
did not possess any such document. Simply stated, there was no evidence that Hutchison
ever had any authority to “manage, use, control or access” her mother’s income, financial
accounts, or other resources. Hutchison repeatedly testified that she was not and never had
been her mother’s power of attorney and never had any authority to access her mother’s
money. Tr. at 19, 20, 21, 24. Springhurst presented no evidence to the contrary.
8
The Agreement did not expressly define the term Responsible Party, but outlined
the responsibilities and obligations, stating that the Responsible Party agreed “to pay the
Facility the full amount of the Resident’s income and resources that the Responsible
Party/Agent controls or accesses.” Appellant’s App. at 13 (emphasis added). That is, the
Agreement obligated the Responsible Party to pay Springhurst only to the extent that the
Responsible Party had access or control of the Resident’s income and resources. Again,
the uncontroverted evidence presented here was that Hutchison possessed neither control
nor access to Farber’s income and resources. Under the Agreement, the Responsible Party
also agreed “to be personally responsible and liable to the Facility for the income and
resources of the Resident that the Responsible Party/Agent withholds, misappropriates for
personal use, or otherwise does not pay over to the Facility for the Resident’s benefit or
apply towards payment of the Resident’s financial obligations to the Facility[.]” Id.
(emphasis added). No evidence was presented to establish or even suggest that Hutchison
withheld or misappropriated Farber’s funds, and while Hutchison did not “pay over”
Farber’s income or resources to Springhurst, there was no evidence that, at any time, she
had any authority to do so.6
Under the circumstances of this case, we find that Hutchison has demonstrated
prima facie reversible error; Hutchison agreed “to pay the Facility the full amount of the
6
The facts of this case stand in contrast to a situation in which a son or daughter possessed a power
of attorney over the parent’s financial affairs, or where that adult child misappropriated his or her parent’s
bank account funds rather than pay the nursing home facility. See e.g., Sunrise Healthcare Corp. v.
Azarigian, 821 A.2d 835, 837 (Conn. App. Ct. 2003) (daughter, who held a power of attorney for her
mother, held liable for breach of contract for failing to comply with promise to use resident’s resources to
pay nursing home where nursing home knew daughter held power of attorney and where daughter made
gift transfers from her mother’s account of over $49,000).
9
Resident’s income and resources that the Responsible Party/Agent controls or accesses,”
and there was no evidence presented that she ever had access to or control of Farber’s
income or resources from which to make payment to Springhurst. Appellant’s App. at 13.
We hold that the trial court erred when it entered judgment against Hutchison in favor of
Springhurst, and we reverse the judgment of the trial court and remand with instructions to
enter judgment for Hutchison.
Reversed and remanded.
FRIEDLANDER, J., and BAILEY, J., concur.
10