PRESBYTERIAN MEDICAL CENTER v. BUDD
832 A.2d 1066 (2003)
PRESBYTERIAN MEDICAL CENTER, 1215 Hulton Road, Oakmont, Pennsylvania 15139, Appellant, v. Elizabeth G. BUDD, 173 Main Street, Apt. A, Sandwich, MA 02653-2284, Appellee.
Superior Court of Pennsylvania.
Filed August 29, 2003.
Martin A. Dietz, Pittsburgh, for appellee.
BEFORE: TODD, BENDER, and KELLY, JJ.
¶ 1 Appellant, Presbyterian Medical Center ("PMC"), asks us to review the order entered in the Allegheny County Court of Common Pleas, which sustained the preliminary objections filed by Appellee, Elizabeth Budd ("Ms.Budd"), and dismissed with prejudice PMC's complaint alleging breach of contract, fraud, violations of the Uniform Fraudulent Transfer Act ("UFTA"), and equitable support and restitution. Specifically, PMC submits it has pleaded sufficient facts to hold Ms. Budd liable for the outstanding debt owed to PMC by Ms. Budd's mother, Betty S. Budd ("Mother"), who was a PMC resident at the time of her death. We hold that the trial court properly dismissed PMC's complaint on all counts except for PMC's count for equitable support and restitution. On that count, we hold that PMC has established a cause of action sounding in support under 62 P.S. § 1973. Accordingly, we affirm in part, reverse in part, and remand for further proceedings regarding PMC's support action against Ms. Budd.
¶ 2 The relevant facts and procedural history of this case have been gleaned from the certified record on appeal. PMC is a long term care nursing facility located in Oakmont, Pennsylvania. Mother was a resident of PMC at the time of her death on November 5, 1999. Mother owed PMC an outstanding balance of $96,000 at the time of her death.
¶ 3 Prior to Mother's death, PMC sought to collect Mother's outstanding medical bills, but was told by Ms. Budd that Mother's resources were exhausted. Ms. Budd then promised PMC she would filed an application for medical assistance with the Pennsylvania Department of Public Welfare ("DPW") on behalf of Mother. However, both PMC and Ms. Budd knew that Mother would not qualify for medical assistance because her available resources exceeded DPW's maximum resource limit. Consequently, Ms. Budd allegedly promised to "spend down"
¶ 4 On October 19, 2001, PMC filed a complaint against Ms. Budd alleging claims of fraud, negligent misrepresentation, intentional interference with contractual relations, and violations of the Uniform
¶ 5 PMC raises the following issues for our review:
(PMC's Brief at 4).
¶ 6 Preliminary objections may be filed on the grounds that a pleading fails to conform to a rule of court, contains insufficient specificity, or is legally insufficient. Pa.R.C.P. 1028(a). When reviewing a trial court's grant of preliminary objections in the nature of a demurrer:
Foflygen v. R. Zemel, M.D. (P.C.), 420 Pa.Super.18,
¶ 7 PMC argues that it formed a valid contract with Ms. Budd when she agreed to "spend down" Mother's account on medical expenses. PMC contends Ms. Budd breached this contract when she transferred Mother's money to herself instead of using the money to "spend down" Mother's resources. PMC maintains that Ms. Budd's breach of the agreement caused DPW to reject Mother's medical assistance application. Therefore, PMC concludes the trial court erred when it dismissed the breach of contract claim against Ms. Budd. We disagree.
¶ 8 To support a claim for breach of contract, a plaintiff must plead: 1) the existence of a contract, including its essential terms; 2) a breach of a duty imposed by the contract; and 3) resultant damage. Corestates Bank, N.A. v. Cutillo,
¶ 9 Additionally, "When any claim...is based on an agreement, the pleading shall state specifically if the agreement is oral or written." Pa.R.C.P. 1019(h). No action can be brought against a defendant for her promise to answer for the debt of another, unless it is in writing. 33 P.S. § 3. "When any claim...is based upon a writing, the pleader shall attach a copy of the writing, or the material part thereof, but if the writing or copy is not accessible to the pleader, it is sufficient so to state, together with the reason, and to set forth the substance in writing." Pa.R.C.P. 1019(i).
¶ 10 Here, PMC averred Ms. Budd agreed to apply for medical assistance on behalf of Mother in exchange for PMC's promise to refrain from bringing Mother's account current. The terms of the agreement involve PMC and Mother, not PMC and Ms. Budd, Mother's attorney-in-fact. Indeed, it is Mother who enjoyed the benefits of the care provided by PMC, and PMC who enjoyed the benefit of Mother's payments. Ms. Budd, operating as Mother's attorney-in-fact, agreed to "spend down" Mother's resources so that Mother could qualify for medical assistance, in exchange for PMC's promise not to bring Mother's account current. PMC simply has not pleaded sufficient facts to establish a contractual basis for holding Ms. Budd liable to any agreement between Mother and PMC. See Corestates Bank, N.A., supra. Moreover, Ms. Budd's liability to Mother's estate for any improper or fraudulent transfers is an issue properly raised in Orphan's Court during an accounting of Mother's estate.
¶ 11 Furthermore, any agreement whereby Ms. Budd promised to answer for Mother's debt would have had to be in writing. See 33 P.S. § 3. PMC's complaint does not indicate whether the alleged contract is written, does not attach a copy of any written contract, and does not explain why a written contract could not be obtained. See Pa.R.C.P. 1019(i). Thus, PMC has failed to plead the minimum information necessary to establish the existence of a contract between PMC and Ms. Budd. See Pa.R.C.P. 1028(a); Corestates Bank, N.A., supra. For these reasons, the trial court properly dismissed PMC's breach of contract claim. See Foflygen, supra.
¶ 12 Similarly, PMC has alleged that on November 4, 1999, Ms. Budd told Robert Macie ("Macie"), a DPW employee, she would use Mother's excess resources to pay Mother's medical bills. Macie subsequently informed PMC of Ms. Budd's statement regarding payment of Mother's medical bills. PMC believes it was foreseeable that Macie, a DPW employee, would share this information with PMC. PMC complains it detrimentally relied on Ms. Budd's representations to DPW. In other words, PMC suggests it is a third-party beneficiary to Ms. Budd's agreement with DPW.
Deeter v. Dull Corp., Inc.,
¶ 13 Here, Ms. Budd allegedly told Macie, a DPW employee, she would "spend down" Mother's account on medical bills. However, PMC fails to identify what consideration Ms. Budd received in exchange for her "promise" to DPW. When assessing medical assistance eligibility, DPW is statutorily obligated to exclude medical expense payments from available income. 55 Pa.Code § 178.1(j). Certainly DPW's consideration could not have been its promise to perform what it was already legally bound to do. See Pennsylvania State University v. University Orthopedics, Ltd.,
¶ 14 PMC also argues it has sufficiently pleaded a cause of action for fraud against Ms. Budd. PMC asserts Ms. Budd misrepresented her intention to "spend down" Mother's resources on medical expenses. PMC further complains that Ms. Budd "sabotaged" Mother's application for medical assistance when she failed to "spend down" Mother's available resources. PMC submits that it justifiably relied on Ms. Budd's misrepresentations that she would attempt to qualify Mother for medical assistance. As a result, PMC believes it was denied a possible source of payment for Mother's outstanding medical bills. Thus, PMC concludes the trial court erred when it dismissed PMC's fraud claim. We disagree.
¶ 15 The elements of fraud, or intentional misrepresentation, are (1) a representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) the resulting injury was proximately caused by the reliance. Gibbs v. Ernst,
Bata v. Central-Penn National Bank of Philadelphia,
New York State Elec. and Gas Corp. v. Westinghouse Elec. Corp.,
¶ 16 In the instant matter, the crux of PMC's fraud claim seems to be that Ms. Budd lied about her intention to "spend down" Mother's resources by paying outstanding medical expenses. However, PMC fails to establish every element of its fraud claim with sufficient particularity. We have already concluded that PMC did not establish the existence of a contract between it and Ms. Budd. Thus, regarding the second element of fraud, PMC does not indicate how Ms. Budd's representation about "spending down" Mother's resources was material to any "transaction" between Ms. Budd and PMC. See Gibbs, supra; New York State Elec. and Gas Corp., supra. Moreover, PMC does not elucidate to whom Ms. Budd's alleged representations were made. See Gibbs, supra. To the extent Ms. Budd promised a DPW employee she would "spend down" Mother's resources, it is not clear how Ms. Budd could have intended that PMC would rely on a statement she made to DPW. See id. For these reasons, we agree with the trial court that PMC has failed to state a claim for fraud against Ms. Budd, and affirm the court's dismissal of this claim. See New York State Elec. and Gas Corp., supra.
¶ 17 PMC next argues that Ms. Budd is liable under UFTA. PMC contends Ms. Budd, during Mother's stay at PMC, inappropriately used her power as Mother's attorney-in-fact to remove more than $100,000 from Mother's various bank accounts. This money could have been used to pay PMC, Mother's creditor. PMC contends that Ms. Budd's status as Mother's attorney-in-fact qualifies her as a "debtor" under UFTA, making Ms. Budd liable to PMC for the allegedly fraudulent withdrawals. Therefore, PMC concludes the trial court erred in dismissing the UFTA claim. We disagree.
¶ 18 A fraudulent transfer under UFTA is defined as follows:
12 Pa.C.S.A. § 5104. A "debtor" is defined as "one who is liable on a claim." 12 Pa.C.S.A. § 5101(b). A "creditor" is a person who has a claim. Id.
¶ 19 In the instant appeal, PMC asks us to recognize an UFTA cause of action against Ms. Budd for allegedly fraudulent transfers she made as Mother's attorney-in-fact. This Commonwealth has not recognized a UFTA claim targeting the attorney-in-fact of a debtor. To permit such an action we would have to conclude that Ms. Budd's status as attorney-in-fact qualifies her as a "debtor" under UFTA. In other words, we would have to conclude an attorney-in-fact of a debtor is liable on the debtor's claim to a creditor.
¶ 20 PMC presents no Pennsylvania legal authority to support or explain its novel proposition. Instead, PMC relies extensively on Aristocrat Lakewood Nursing Home v. Mayne,
¶ 21 The facts in Aristocrat are similar to the present case. Moreover, Ohio and Pennsylvania have substantially similar UFTA codifications. See Oh. St. §§ 1336.01 et seq.; 12 Pa.C.S.A. §§ 5101 et seq. However, the Aristocrat court does not explain the particulars of its finding that the attorney-in-fact of a debtor qualified as a "debtor" for purposes of Ohio's UFTA. We conclude that PMC has not pleaded sufficient facts to establish that link under
¶ 22 Finally, PMC advances a claim against Ms. Budd based on Pennsylvania
¶ 23 In pertinent part, Pennsylvania law on support of an indigent relative reads:
62 P.S. § 1973. Although the support statute does not define "indigent," this Court has explained:
Savoy v. Savoy,
¶ 24 A nursing home providing an indigent parent with shelter, sustenance, and care has sufficient "interest" under 62 P.S. § 1973 to bring a support action against the parent's child. See Albert Einstein Medical Center v. Forman,
Id. at 184. Consequently, this Court concluded the hospital had a valid assumpsit action for reimbursement from a child for expenditures the hospital made on behalf of an indigent parent. Id.
¶ 25 Here, PMC is a nursing home that provided Mother with shelter, sustenance, and care. PMC incurred approximately $68,000 of unreimbursed expenses while caring for Mother. Accordingly, PMC had standing to bring a support action against Ms. Budd under 62 P.S. § 1973. See Albert Einstein Medical Center, supra; Home for the Jewish Aged, supra. We now address whether PMC has sufficiently pleaded a support action against Ms. Budd.
¶ 26 PMC asserts Mother became "indigent" during her stay at the nursing home when Ms. Budd removed more than $100,000 from Mother's various bank accounts. PMC avers that Ms. Budd transferred this money to her own account, leaving Mother with insufficient funds to pay PMC for their services. Consequently, Mother owed PMC an outstanding balance of approximately $96,000
¶ 27 Furthermore, PMC's claim against Ms. Budd for reimbursement of the expenditures it made on behalf of her indigent Mother is nearly identical to the action this Court permitted in Albert Einstein Medical Center, supra. Importantly, both cases involved children who used their power of attorney status to deplete their parents' assets to the point that their parents were unable to pay their nursing home expenses. In both cases, the children did not "spend down" their parents' resources on medical bills to qualify them for public medical assistance. Also, the plaintiffs in both cases are nursing homes seeking reimbursement from the children of indigent parents for whom the nursing home had cared. However, there is one notable difference between these cases— the mother in Albert Einstein Medical Center was alive at the time the court recognized her son's support obligation. In the present case, PMC's February 19, 2002 complaint was filed more than two years after Mother's death.
¶ 28 Certainly, Mother's death precludes PMC from seeking reimbursement for future support under the first method described in Albert Einstein Medical Center,
¶ 29 Based on the foregoing, we hold the trial court properly dismissed PMC's complaint on all counts except the support action under 62 P.S. § 1973. On that count, we reverse and remand for further proceedings. Thus, we affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.
¶ 30 Order affirmed in part and reversed in part; case remanded for further proceedings. Jurisdiction is relinquished.
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