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Under Mental Hygiene Law, Claim Made for Payment from Nursing Home Resident’s Guardianship Account During Resident’s Life Had Priority over Claim by Department of Social Services After Resident’s Death

The First Department, in a full-fledged opinion by Justice Acosta, over a dissent, determined that a nursing home (Eastchester) which had submitted a claim for the resident’s (Shannon’s) care to the resident’s guardianship account during the resident’s life had priority over the Department of Social Services, which submitted a claim for the resident’s care (Medicaid) to the resident’s estate after death:

Eastchester, a skilled nursing facility, admitted Edna Shannon into its care in 2005. In 2008, due to Shannon’s need for assistance, and concerns about the proper handling of her finances by third parties, Eastchester commenced a proceeding pursuant to Mental Hygiene Law article 81 to have a guardian appointed for her person and property. It also filed an application for medical assistance for Shannon’s nursing home costs. In 2009, DSS determined that Shannon was eligible for Medicaid, effective September 1, 2008. By order and judgment entered April 24, 2009, Supreme Court appointed Family Service Society of Yonkers as her guardian. Among other things, the court conferred on Family Service Society the authority to pay Shannon’s nursing home expenses and to pay bills after her death. Shannon died in December 2011 at age 87. * * *

As Eastchester was to be paid out of the guardianship account before any funds passed to the estate, its claim had priority over DSS’s claim.  MHL § 81.44(d) provides that, within 150 days of the death of an incapacitated person, the guardian must serve on the personal representative of the decedent’s estate, or if none, the public administrator or chief fiscal officer, a statement of assets and notice of claim, and “except for property retained to secure any known claim, lien or administrative costs of the guardianship,” deliver all guardianship property to the personal representative, public administrator, or chief fiscal officer (emphasis added). Matter of Shannon, 2014 NY Slip Op 04452, 1st Dept 6-17-14

 

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