Thursday, July 29, 2021
Filial Friday? Court Holds Son Liable for Attorneys Fees Incurred While Securing Medicaid Coverage for Father's NH Care
Pennsylvania courts use "filial" responsibility laws in, shall we say, creative ways, especially when they catch any whiff that children helped themselves to their parent's money rather than using that money to pay for their parents' nursing home care. One of the key modern-era cases for filial support law in Pennsylvania is Presbyterian Med. Ctr. v. Budd, 832 A.2d 1066 (Pa. Superior Ct, 2003), where the court remanded a case for decision on filial support law grounds, in the absence of other viable theories, in order to hold a daughter liable for her mother's costs of nursing home care. The court was clearly annoyed by the evidence the daughter had transferred some $100k of her mother's funds to herself using a "valid" power of attorney, instead of paying the nursing home.
It probably doesn't make the court any happier if the defendant/child is also a lawyer.
In the latest Pennsylvania decision decided by the Court of Common Pleas in Montgomery County, Coates v. Salmon, No. 2018-16878, both the plaintiffs and the defendant are lawyers. The trial court was asked to determine whether a son was personally liable for attorneys fees incurred when the son "engaged" another attorney, one experienced in Medicaid issues, regarding a penalty period assessed against his father. The penalty made his father ineligible for 296 days in Medicaid funding for his nursing home care. The lawyer was able to negotiate a reduced penalty period, with a successful argument that certain pre-admission transfers were not made in anticipation of applying for Medicaid. The settlement reduced the dollar effect of the penalty by more than $68,000.
Nonetheless, the son declined to pay the attorney his requested fee of $7,606, arguing there was no contract as the attorney had failed to comply with Pennsylvania Rule of Professional Responsibility 1.5(b) that requires "the basis or rate of the fee" to be "communicated to the client in writing, before or within a reasonable time after commencing the representation." The lawyer-son seemed to be arguing, at least indirectly, that the only fee he'd "agreed" to pay was a $500 up-front "consultation" fee.
The court agreed with the defendant-son on the contract issue, but granted the full sum of the requested fees as "reasonable" under a theory of quantum meruit. And that's where Pennsylvania's filial support law came into play to support the court's decision on the son's liability:
Mr. Salmon [the defendant/son] contended, however, that any claim in quantum meruit could be asserted only against his Father, and not against Mr. Salmon personally. The argument was that Father was liable to the Nursing Home for any services not reimbursed by Medicaid and Father was therefore the sole beneficiary of the substantial reduction in the penalty. It is true that to establish a claim in quantum meruit against Mr. Salmon, Plaintiffs [the Elder Law attorney and his firm] were required to show that he benefited from Mr. Coates's services. . . . Plaintiffs clearly met that requirement, however, because Mr. Salmon himself would have been liable to the Nursing Home for the $86,786 penalty if it had not been successfully diminished by Mr. Coates.
The doctrine of filial responsibility is codified in Section 4603(a)(1)(ii) of the Domestic Relations Code, 23 Pa. C.A. Section 4603(a)(1)(ii). . . .
This provision and its predecessor statute have been repeatedly cited as authorizing a suit by a nursing home or other medical provider to recover fees for the care of an indigent patient from the patient's adult child with the means to make payment. . . . It is thus clear that without the reduction of the penalty to a relatively trivial sum, Mr. Salmon would have been liable for -- or, at the least, substantially at risk of liability for -- the amount of Nursing Home fees denied by Medicaid.
Further, the imposition of liability on Mr. Salmon in quantum meruit is fully consistent with principles of equity. The evidence clearly showed that Mr. Salmon, in engaging Plaintiffs' services, understood his obligation to pay for those services. . . . And, most significantly, in Mr. Salmon's letter of May 6, 2016, responding to Plaintiffs' bill, he disputed the reasonableness of Mr. Coates's fees and the quality of his services, but he never suggested that Plaintiffs were billing the wrong person. . . . [I]t was compelling evidence that Mr. Salmon understood his responsibility to pay Plaintiffs' legal fees and that his later contention that only his Father was responsible was a post hoc excuse for his unwillingness to pay.
The detailed, well-written opinion dated June 23, 2021 is available at the link above, and the case is on appeal to Pennsylvania's intermediate court of appeals, the Superior Court. In Pennsylvania, trial judges have the opportunity to write their full opinion, rather than just their final decision, after a party has appealed the ruling and after that party has identified all claims of errors. In my experience, a detailed, well-written Pennsylvania trial court opinion has a good chance of being affirmed on appeal. For an additional perspective on this case, see the Elder Law Answer summary here.