NEW YORK CONG. NURSING CTR. v. GILCHRIST, 3966/07 (11-25-2008)
2008 NY Slip Op 52394(U)
NEW YORK CONGREGATIONAL NURSINGCENTER, Plaintiff, v. DORRITT GILCHRIST,
Defendant.
3966/07.
Supreme Court of the State of New York,
KingsCounty.
Decided November 25, 2008.
[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.]
Cye E. Ross, Esq., New York, NY, Attorney for Plaintiff.
Aaron M. Feldman, Esq., Goldfarb & Goldfarb, Brooklyn, NY, Attorney
for Defendant.
CAROLYN E. DEMAREST, J.
Plaintiff New York Congregational Nursing Center moves for summary
judgment pursuant to CPLR 3212(b). Defendant Dorritt Gilchrist
cross-moves for summary judgment dismissing the plaintiff's complaint
pursuant to CPLR 3212(b) based on documentary evidence demonstrating there
is no account stated between the parties.[fn1]
Page 2
BACKGROUND
This action arises out of defendant Dorritt Gilchrist's ("Gilchrist")
actions taken on behalf of non-party Violet Welsh ("Resident") who is a
resident of the nursing home operated by plaintiff New York
Congregational NursingCenter ("NYCNC"). The issue before the court is
whether Gilchrist can be held liable for the fees incurred by the
Resident at a nursing home based on Gilchrist's signature as a
"designated representative" of the Resident and Gilchrist's subsequent
improper distribution of the Resident's assets.
The Resident was married to Herman Welsh and, prior to his death, the
couple owned the property 840 Brooklyn Avenue in Brooklyn, New York
("Property"). The Resident and Herman Welsh took tile to the Property on
April 17, 1979 by the entireties as husband and wife. Gilchrist is the
daughter of Herman Welsh and step-daughter of the Resident.In the
affidavit submitted in support of the motion, the chief financial officer
of the New York Congregational Nursing Center ("NYCNC") alleged the
following: the Resident was admitted to NYCNC's facility on October 7,
2004 and an admissions agreement ("Agreement") was signed by Gilchrist as
"Designated Representative" of the Resident; Gilchrist advised NYCNC that
she held a power of attorney for the Resident and would pay the
Resident's bills from the proceeds of the sale of the Property owned by
the Resident; NYCNC sent the Resident's monthly statements to Gilchrist
and her attorney; on May 25, 2005, Gilchrist's attorney faxed a letter to
NYCNC indicating that "the proceedings are currently pending for the
appointment of an Administrator on the Estate of [the Resident's] husband"
and upon the completion of those proceedings, "arrangements can be made
to resolve [the Resident's] obligations"; on August 23, 2006, acting as
attorney in fact for the Resident, Gilchrist conveyed the Property to her
daughter and son in law, Beverly Gilchrist Hobson and Kendall Hobson, for
$245,000.00; on or about September 13, 2006, Gilchrist sent NYCNC a bank
check for $1400.00, the balance of the Resident's savings account, a
check for $108,830.34 from the IOLA account of Gilchrist's attorney, and
an undated letter stating that the check from the IOLA account
represented the Resident's "1/2 interest in the property after expenses"
and that "There is no more money, please file for Medicaid assistance for
my father's wife"; by December 31, 2006, after applying the $110,230.34
payment from Gilchrist, the Resident's outstanding balance was
$101,115.76.
The complaint alleges, "[NYCNC] rendered nursing home services to [the
Resident] at the special instance and request of [Gilchrist] who, acting
as responsible party for [the Resident], promised and agreed to pay,
from the funds of [the Resident]
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coming into her hands, the sum of $107,260.24, no part of which sum,
except $6,144.48, has been paid, although duly demanded, despite
[Gilchrist] having come into possession of funds belonging to [the
Resident] sufficient to pay the amount claimed." NYCNC argues in the
present motion that there is no defense to the causes of action in the
complaint and judgment should be directed in favor of NYCNC. NYCNC noted
that, although Medicaid accepted a pickup date of April 1, 2006 for the
Resident, Medicaid had not made any payments for services rendered to
the Resident at the time of this motion. Should Medicaid make any
payments to NYCNC in the interim, NYCNC indicated that they will refund
Medicaid any sum it recovers for the period of April 1, 2006 to December
31, 2006.
DISCUSSION
NYCNC moves for summary judgment pursuant to CPLR 3212 (b) on the
grounds that there is no defense to the causes of action set forth in
the complaint. NYCNC argues that Herman Welsh and the Resident took
title to the Property as husband and wife, thus creating a tenancy by
the entirety, and upon Herman Welsh's death, the Resident acquired
absolute ownership of the Property by operation of law. Thus, all of the
proceeds from the sale of the Property accrued to the Resident and were
available to satisfy her debt to NYCNC. Accordingly, NYCNC argues that
Gilchrist violated the Agreement by transferring only half of the
proceeds from the sale of the Property to NYCNC and claiming that the
Resident was insolvent.
Gilchrist argues she signed the Agreement solely because NYCNC forced
her to sign the Agreement as a condition of admission for the Resident
in violation of federal law and she should not be personally responsible
for the Resident's expenses under the terms contained within the
Agreement. Gilchrist argues that there was no account stated between
NYCNC and Gilchrist and the action should be dismissed as the Agreement
did not contain a promise to pay a stated sum. Gilchrist also argues
that the sale of the Property was not raised in the complaint and
therefore NYCNC should not be permitted to raise any arguments involving
the sale in support of their motion for summary judgment.
In order to obtain summary judgment, the movant must establish its
cause of action or defense sufficiently to warrant a court's directing
judgment in its favor as a matter of law, tendering sufficient evidence
to demonstrate the absence of any material issues of fact (Zuckerman v
City of New York, 49 NY2d 557, 562 [1980]; CPLR 3212 [b]). Where the
proponent of the motion makes a prima facie showing of entitlement to
summary judgment, the burden shifts to the party opposing the motion to
demonstrate by admissible evidence the existence of a factual issue
requiring a trial of the action (Vermette v Kenworth Truck Company,
68 NY2d 714, 717 [1986]). The parties' competing contentions are viewed in
the light most favorable to the party opposing the motion (Marine
Midland Bank, N.A. v Dino & Artie's Automatic Transmission Co.,
168 AD2d 610 [2d Dept 1990]).
Page 4
Based upon the deed dated April 17, 1979 conveying the Property to
"HERMAN WELSH and VIOLET WELSH, his wife," by operation of law, complete
ownership in the Property was conferred on the Resident upon Herman
Welsh's death thus making the Resident entitled to all of the proceeds
from the sale of the Property. "A matrimonial relationship between
parties at the time of acquisition of a premises creates a tenancy by the
entirety,' which is a special type of ownership that is not severable by
partition as long as the marriage exists. Further, [w]here persons live
and cohabit as husband and wife, and are reputed to be such, a
presumption arises that they have been legally married, and this
presumption . . . can be rebutted only by the most cogent and satisfactory
evidence.'" (Scarison, Inc. v Paracha, 7 AD3d 605, 606 [2d Dept 2004]
(citations omitted).) Tenancy by the entirety "confers on the surviving
spouse a right to absolute ownership of the property upon the other
spouse's death" (V.R.W., Inc. v Klein, 68 NY2d 560, 564 [1986]). Gilchrist
has not alleged or demonstrated that Herman Welsh and the Resident were
not married on April 17, 1979, the date the Property was acquired by
Herman Welsh and the Resident, or at the time of Herman's death, the date
of which has not been revealed. Gilchrist even referred to the Resident
as her "father's wife" in the undated letter addressed to NYCNC.
Therefore, as a tenant by the entirety, the Resident acquired absolute
ownership of the Property upon Herman Welsh's death (see V.R.W.,
68 NY2d at 564). Accordingly, NYCNC has demonstrated that the Resident
was entitled to all of the proceeds from the sale of the Property.
Gilchrist's contention that NYCNC is not permitted "to raise any matter
regarding the sale of the [Property]" in the summary judgment motion
because the sale of the Property was not raised in the complaint is
unfounded. The complaint alleges Gilchrist "promised and agreed to pay,
from the funds of [the Resident] coming into her hands" the Resident's
bills but failed to do so "despite Gilchrist having come into possession
of funds belonging to [the Resident] sufficient to pay the amount
claimed." NYCNC supported it's assertion in the complaint that Gilchrist
came into the possession of funds belonging to the Resident with proof of
the sale of the Property and correspondence indicating that Gilchrist
improperly applied only half of the proceeds of the sale of the Property
to NYCNC debts and did not intend to make any further payments.
NYCNC submitted the signed contract pursuant to which Gilchrist agreed
to pay the nursing home bills from the Resident's financial resources as
the Resident's designated representative. Pursuant to both Federal and
State law, while a nursing home may not require a third party guarantee
of payment to the facility as a condition of admission or continued stay
in the facility, a nursing home may require an individual with legal
access to a resident's financial resources to sign a contract to provide
payments for the facility from the resident's financial resources
without incurring personal financial liability (42 CFR 483.12 [d] [2];
10 NYCRR 415.3 [b] [1] and [6]). Gilchrist signed the Agreement on
October 7, 2004 as a "Designated Representative" above the signature of
a representative of NYCNC. The Agreement states, "The resident and/or
designated
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representative agree to pay these charges on presentation of monthly
bills." The Agreement also contains a description for "Designated
representative":
Designated representative: The resident is requested to appoint a
relative or other person to act as his/her "designated representative."
This person shall accept this responsibility in writing. In the event
that the resident cannot act on his/her own behalf in financial matters
the Home shall notify the designated representative and expect him/her
to act on the resident's behalf.
Gilchrist stated in an affidavit in support of the motion, "I signed
the admission agreement solely because I was forced to by [NYCNC] as a
condition of admission for [the Resident]. [NYCNC's] actions in forcing
my signature as a condition of admission was in violation of law."
However, contrary to Gilchrist's argument, the Agreement did not require
Gilchrist to personally guarantee payments to the facility for the
Resident's incurred debts. "In construing a contract, the document must
be read as a whole to determine the parties' purpose and intent . . .
giving a practical interpretation to the language employed so that the
parties' reasonable expectations are realized" (Sunrise Mall Assoc.,
211 AD2d 711 [2d Dept 1995]; see also Abramo v HealthNow NY, Inc.,
23 AD3d 986, 987 [4th Dept 2005]; Benderson v Wiper Check, 266 AD2d 903,
904 [4th Dept 1999], affd96 NY2d 855 [2001]). "Moreover, the contract
must be interpreted so as to give effect to, not nullify, its general or
primary purpose" (Vill. of Hamburg v Am. Ref-Fuel Co., 284 AD2d 85 [4th
Dept 2001]). The clear import of the language in the Agreement is that
Gilchrist, as a "designated representative" of the Resident, was to "act
on the resident's behalf . . . [i]n the event that the resident cannot
act on [her] own behalf in financial matters", paying debts incurred by
the Resident from the Resident's income or resources. Therefore, the
Agreement does not violate state or federal law with regards to a third
party acting as a designated representative of a nursing home resident
(see42 CFR 483.12 [d] [2]; 10 NYCRR 415.3 [b] [1] and [6]). Pursuant to
the plain language of the Agreement, Gilchrist agreed to act as a
representative of the Resident and pay NYCNC's monthly bills on the
Resident's behalf using the Resident's financial resources. In fact, this
is what Gilchrist did, but not to the full extent of the Resident's
resources. It appears that Gilchrist diverted some of the Resident's
resources to her own daughter and son in law. Whether this was done with
the knowledge and consent of the Resident is not known.
Although NYCNC demonstrated that the Resident maintained an interest in
all of the proceeds from the sale of the Property and the Resident was
apparently rendered insolvent and unable to pay NYCNC's bills as a result
of Gilchrist's transfer of the Property to her daughter and son in law,
NYCNC has not demonstrated that the Resident authorized Gilchrist to act
on the Resident's behalf in financial matters with NYCNC. The Agreement's
definition of "Designated representative" specifically gives the Resident
the authority "to appoint a relative or other person to act as his/her
designated
Page 6
representative'" and there is a line for the "Resident Signature" on the
Agreement (emphasis added). As the Resident did not sign the Agreement,
Gilchrist was not actually appointed as her "Designated representative"
pursuant to the terms of the Agreement and the Agreement did not authorize
Gilchrist to act on behalf of the Resident. Although the deed conveying
the Property, the Real Property Transfer Report, and the affidavit of
compliance with the smoke detector requirement dated August 23, 2006 are
all signed by Gilchrist as "atty-in fact" or "attorney in fact" for the
Resident, NYCNC has not provided the power of attorney confirming
Gilchrist's authority to act on behalf of the Resident. As the Agreement
does not itself authorize Gilchrist to act on the Resident's behalf with
respect to her property, and NYCNC has not established that Gilchrist
actually possessed a power of attorney, NYCNC's motion for summary
judgment must be denied since Gilchrist cannot be held personally liable
for the Resident's charges based solely on the Agreement (see Amsterdam
Nursing Home Corp. v Lang, 16 Misc 3d 1138A [Sup Ct, New York County
2007] (denying nursing home's motion for default judgment against
"legally authorized representative" of resident as the nursing home
presented no evidence that the representative had power of attorney or
other legal control over the resident's assets and income); see also
Prospect Park Nursing Home, Inc. v Goutier, 12 Misc 3d 1192A [Sup Ct,
Kings County 2006]).
However, the documentation submitted regarding the transfer of the
Resident's Property by Gilchrist as attorney in fact gives rise to a
question of fact as to the enforceability of the Agreement by Gilchrist
to apply the Resident's assets to the payment of NYCNC's bills (see
ProspectPark, 12 Misc 3d at 1192A (noting that a designated
representative's "use of power of attorney to transfer assets to himself
that could have been used for the resident's nursing home care would
constitute a breach of the [a]dmission [a]greement")). Gilchrist's motion
seeking dismissal of the complaint is therefore denied.
As this is an action for outstanding charges for nursing home services
rendered to the Resident who would be personally liable to NYCNC, NYCNC
is directed to amend the complaint to add the Resident, Violet Welsh, as
a necessary party defendant (see Putnam Nursing & Rehabilitation Ctr. v
Bowles, 239 AD2d 479 [2d Dept 1997] (holding that the nursing home was
allowed to proceed against the resident's representative in a breach of
contract action to void the transfer of the resident's property, but
directing that the estate of the resident be joined as a necessary
party)). There is no evidence that the Resident is not competent to
defend herself. Should the proceeds from the improperly distributed one
half interest in the Property sought by NYCNC be insufficient to satisfy
the damages demanded in the amended complaint, NYCNC is granted leave to
amend the complaint to add causes of action seeking equitable relief
pursuant to Putnam. Should NYCNC bring such a cause of action disputing
the transfer of the Property pursuant to Putnam, the current deed
holders of the Property must also be added as defendants since their
title may be directly affected by a judgment (see Putnam
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Nursing, 239 AD2d at 479; McLaughlin v McLaughlin, 155 AD2d 418 [2d Dept
1989]). As Medicaid has purportedly agreed to pay for a portion of the
Resident's outstanding fees, NYCNC is ordered to serve the New York
Department of Social Services with a copy of this decision.
CONCLUSION
The plaintiff's motion for summary judgment is denied. Defendant's
cross motion for summary judgment dismissing the complaint is also
denied. Plaintiff is granted leave to serve and file an amended complaint
consistent with this decision within 30 days. Plaintiff is directed to
serve a copy of this decision on the New York Department of Social
Services. The case will be calendared for February 18, 2009 to determine
the status of the action.
The foregoing constitutes the decision and order of the Court.
[fn1] The notice of cross motion indicates that the cross motion is made
"pursuant to CPLR 3215(c)" which is a provision regarding default
judgments and is inapplicable to this action. The affirmation states
that, "based upon the documentary evidence submitted by the Plaintiff in
support of their motion, . . . there is no account stated between the
parties based upon the account dated December 31, 2006. Since there is
no other cause of action pled, and no other statement of account
presented; there are no other issues to be determined. Defendant's Cross
Motion to dismiss this cause of action should be granted." However, the
affirmation in support of the cross motion is titled, "Affirmation in
Support of Cross Motion for Summary Judgment and in Opposition to Motion
for Summary Judgment" and the affidavit of the defendant is made "in
support of my Cross Motion for Summary Judgment." As the defendant
waived the motion to dismiss based on documentary evidence defense under
CPLR 3211 (a) (1) (see Masada Universal Corp. v Goodman System Co.,
121 AD2d 518, 519 [2d Dept 1986]; CPLR 3211 [e]), the Court is treating the
defendant's cross motion as a motion for summary judgment pursuant to
CPLR 3212 (b).