Friday, September 30, 2016
Filial Friday: PA Trial Court Rules that New Jersey's Law Controls Outcome of "Reverse" Filial Support Claim
I've been following for some time an interesting "reverse filial support law" case in Delaware County, Pennsylvania. A key issue in Melmark v. Shutt is whether New Jersey parents of a New Jersey, disabled, indigent adult son are liable for his costs of his care at a private, nonprofit residential facility specializing in autism services, Melmark Inc., in Pennsylvania. Since most of the modern filial support claims I see involve facilities (usually "nursing homes") suing children over the costs of their elderly parents' care, I describe cases where the facility is suing parents of an adult child as a "reverse filial support" law claim.
In a September 2016 opinion that followed a June nonjury trial, the Pennsylvania trial court used a "choice of law" analysis to determine which state's substantive "filial support" law controlled the parents' liability. The court ultimately ruled that New Jersey's statutes applied. N.J. filial support obligations are more limited than those affecting families under Pennsylvania law. Under N.J. Stat. Ann. Section 44:1-140(c), the state exempts parents over the age of 55 from support obligations for their adult children (and vice versa). By contrast, Pennsylvania does not place age limits on filial support, either for adult children or elderly parents. See Pa.C.S.A. Section 4603. In the Melmark case, the father was 70 and the mother was 68 years old during the year in question. The disabled son was 29.
The court decided that New Jersey had the "most significant contacts or relationships" to the dispute. That's classic conflict-of-laws analytical language. At issue was more than $205,000, for costs of residential services between April 1 2012 and May 14, 2013.
Several key facts, largely the subject of stipulation for the June 2016 trial, made a difference to the nuanced ruling. Indeed, I could probably teach classroom sessions in courses on contract law, family law, conflict of laws and elder law using the facts of this case. Change one or more facts, and the outcome could be reversed.
The parents, who became legal guardians for their son after he turned 18, had no contractual relationship with Melmark. The disabled son was placed at Melmark by the New Jersey Department of Developmental Disabilities (NJ DDD), as the most appropriate place for his state-financed care in 2007. He resided there successfully for several years. Involuntary changes of a disabled person's home are undoubtedly traumatic. Eventually New Jersey, probably as part of its "Return Home to New Jersey" campaign to keep state money inside the state, decided the man could be adequately served in New Jersey. Despite objections by the parents and Melmark, New Jersey terminated Pennsylvania funding for the son as of April 1, 2012. Based on this history, the court viewed New Jersey, not the parents, as calling the shots on where the son resided.
The parties stipulated that the parents -- and the son -- were each legal residents of New Jersey at all relevant times. Melmark attempted to offset the weight of such "legal status" facts with evidence the parents regularly visited their son in Pennsylvania, "voluntarily left their son" at Melmark for more than a year when the state withdrew payment, and paid for supplemental Pennsylvania classes outside the Melmark facility, including therapeutic horse back riding lessons, speech and art classes. While not directly addressed in the court opinion, it appears Melmark was arguing the Schutts were financially able to pay for their son's care and could (or should) have moved him to New Jersey if they were relying on State-financed care. Eventually Melmark made an "emergency" transfer of the man to New Jersey (a move that was the subject of separate litigation between the family and the facility, conducted in federal court as explained here).
Ultimately, after deciding the controlling law was that of New Jersey, the Pennsylvania trial court concluded that the parents had no support duty:
The State of New Jersey is certainly concerned with the responsibility of support of its indigent residents and concerned with holding parents responsible when appropriate under its state laws, but the New Jersey law also has interest in protecting elderly parents from caring for adult children.
Further, the court ruled the parents were not liable under common law theories of unjust enrichment or quantum meruit:
The claim for quantum meruit or unjust enrichment must establish that there are "benefits conferred on defendant by plaintiff, appreciation of such benefits by defendant, and acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value." AmeriPro Search, Inc., v. Fleming Steel Co., 787 A.2d 988, 991 (Pa Super. 2001) (citations omitted). This Court finds that any benefit conferred by Melmark was appreciated by [the son], by and through his legal guardians, not by his parents who individually and personally did not receive the benefit as they had no legal obligation to pay for services rendered to their son and no legal obligation to support him after he turned 18 years of age and/or they turned 55 years of age.
Melmark recently filed notice of intention to appeal this decision to Pennsylvania's Superior Court. This is a "tough facts" case. Parents of disabled adult children often face tough threshold financial decisions, such as whether to try to self-fund their child's care needs for the rest of their lives or rely primarily on public benefits for their child. While it is understandable that states might try to keep state money in-state, care for severely disabled adults can be enormously challenging and the "right" place can make all the difference. Not every state has the right place for every disabled adult, triggering cross-border placements. I've watched other families struggle to find the right place for autism care, and public funding going "with" the resident to the best place is important. Finally, at the same time, facilities cannot be expected to provide quality care without any payments, and "nonprofit" facilities have real costs of care that are rarely funded by charitable donations.