Opinion
No. CV 06 5001147 S.
December 11, 2006.
MEMORANDUM OF DECISION ON THE PLAINTIFF'S APPLICATION FOR A PREJUDGMENT REMEDY
STATEMENT OF THE CASE
This is an action instituted by the plaintiff, Bishop Wicke Health Center, against the defendant, Thomas Suba, alleging breach of contract. Pending before the court is the plaintiff's application for prejudgment remedy. The parties presented evidence on the application and submitted post-hearing memoranda. Two witnesses were called to testify: Sandy Divirgillio, an employee of the plaintiff who works as an accounts receivable specialist, and the defendant, Thomas Suba. Based on the evidence presented, the application for prejudgment attachment is denied.
The plaintiff is a skilled nursing facility. The defendants' mother, Kathleen Suba, was a resident of the plaintiff's facility from March 11, 2004 through October 9, 2005. On March 11, 2004, the defendant signed a Resident Admission Agreement making him a "responsible party" under the terms of the agreement. As more particularly discussed below, the agreement imposed various obligations on him. These obligations included the payment of the plaintiff's bills from Kathleen Suba's assets and the filing of an application for Medicaid assistance on her behalf. From March 1994 to June 1994, through the power of attorney that he held on her behalf, the defendant paid the plaintiff's bills from Ms. Suba's assets. In July 1994, the defendant filed an application for Medicaid with the assistance of Debbie DelFranco, an employee of the plaintiff. In November 2004, the defendant was notified by the State of Connecticut Department of Social Services that Kathleen Suba's Medicaid application was approved, except for the months of July, August and September 2004. This notification indicated that eligibility was denied for these three months because "THE VALUE OF YOUR ASSETS IS MORE THAN THE AMOUNT WE ALLOW YOU TO HAVE." The evidence established that in order to satisfy the eligibility requirement for Medicaid assistance, Kathleen Suba's assets were required to be $1,600 or less. As more particularly described below, the Resident Admission Agreement requires the responsible party to ensure that the resident's assets are reduced to satisfy Medicaid eligibility requirements, but nothing in the agreement expressly indicates that this eligibility rule requires the assets to be diminished to $1,600. During the months of July, August and September 2004, the plaintiff provided services to Kathleen Suba costing a total of $12,714.19. The plaintiff seeks a prejudgment remedy for the amount of these unpaid bills. The preceding facts are undisputed.
The Medicaid application itself was not submitted as an exhibit.
The defendant testified that when he received the plaintiff's bills for the months in question, he contacted Debbie DelFranco each time. According to his testimony, Ms. DelFranco informed him that (because of the pending Medicaid application) these bills would be paid by Medicaid. He was also informed that he was not personally responsible for the bills. The defendant testified that he relied on the assistance and information received from Ms. DelFranco regarding the Medicaid application and the plaintiff's billing procedures. The defendant also testified that he was unaware of the $1,600 Medicaid asset requirement until after receiving the notice of denial in November 2004. He explained that when he contacted Ms. DelFranco concerning the defendants' bills received by him while the Medicaid application was pending, she did not say anything to him about the $1,600 requirement. He further testified that had he been aware of this requirement, he would have promptly paid the bills owed to the plaintiff or satisfied other expenses in order to meet the eligibility requirement. No evidence was submitted refuting or contesting the defendant's testimony.
DISCUSSION
General Statutes § 52-278d(a) provides in relevant part that a hearing on a prejudgment remedy "shall be limited to a determination of (1) whether or not there is probable cause that a judgment in the amount of the prejudgment remedy sought, or in an amount greater than the amount of the prejudgment remedy sought, taking into account any defenses, counterclaims or setoffs, will be rendered in the matter in favor of the plaintiff . . ."In acting on a prejudgment remedy motion, the trial court must evaluate the arguments and evidence produced by both parties to determine whether there is probable cause to sustain the validity of the plaintiff's claim . . . [T]he trial court, vested with broad discretion, need determine only the likely success of the plaintiff's claim by weighing probabilities . . . Civil probable cause constitutes a bona fide belief in the existence of the facts essential under the law for the action and such as would warrant a person of ordinary caution, prudence and judgment, under the circumstances, in advancing the action . . . The plaintiff does not have to establish that he will prevail, only that there is probable cause to sustain the validity of the claim." (Citations omitted; internal quotation marks omitted.) Tyler v. Schnabel, 34 Conn.App. 216, 219 (1994).
As previously stated, the plaintiff seeks a prejudgment attachment based on the defendant's alleged breach of the Resident Admission Agreement. Although not ideally clear in its language, the Admission Agreement does not appear to make the defendant personally liable for the costs of the services provided by the plaintiff to his mother, and the plaintiff makes no such claim. See Sunrise Healthcare Corp. v. Azarigian, 76 Conn.App. 800 (2003) (noting that the Social Security Act precludes a nursing facility from requiring a personal guarantee from a resident's representative). The plaintiff's agreement, however, does impose various obligations on the defendant as a "responsible person," and he can be held liable to the plaintiff nursing home for damages caused by his breach of these obligations. Id. More specifically, the agreement requires the defendant to: use the assets of Ms. Suba to pay for the plaintiff's services; apply for Medicaid assistance when Ms. Suba's assets approach $10,000 and her income is insufficient to pay the cost of the plaintiff's services; and reduce her assets in order to meet the criteria for Medicaid eligibility. The agreement further provides that the plaintiff's bills for services are to be paid from the resident's assets while any Medicaid application is pending.
Section III "I" of the Admissions Agreement includes the following provisions:
(1) At the time that the resident's assets approach ten thousand ($10,000), if the resident does not have monthly income sufficient to pay for the cost of care and services, the resident and responsible party agree to inform the facility of the status of the resident's assets and to make prompt application for Medicaid assistance to the Connecticut Department of Social Services.
. . .
(4) The resident and responsible party agree to act promptly and expeditiously to establish and maintain eligibility for Medicaid assistance, including but not limited to, taking any and all necessary action to ensure that the resident's assets are appropriately reduced to, and remain within allowable limits for Medicaid assistance as established by the Connecticut Department of Social Services.
. . .
(6) The filing of an application for Medicaid assistance does not excuse the resident or responsible party from continuing to make payment to the facility in accordance with the terms of this agreement and applicable law. If payment is made for any period during which the resident is later determined eligible for Medicaid assistance, a prompt refund will be made by the facility as required by law.
. . .
(8) If the responsible party has control of or access to the resident's income and/or assets, the responsible party agrees that these funds shall be used for the resident's welfare, including but not limited to making prompt payment for care and services rendered to the resident in accordance with the terms of this agreement.
The evidence indicates that the defendant failed to comply with the terms of the Admission Agreement: during the months in question when he was in control of Ms. Suba's assets, he did not pay the plaintiff's bills, and although he applied for Medicaid benefits, he did not reduce her assets sufficiently to meet Medicaid requirements. However, this seemingly straightforward breach of contract case is complicated by the evidence indicating that the defendant was misled as to his responsibilities under the agreement by the plaintiff's authorized employee in these matters. According to the defendant's testimony, he relied on Ms. DelFranco's assistance and guidance regarding the Medicaid application, and he did not know and was not informed about the $1,600 eligibility requirement during the months at issue. His testimony also indicates that when he called her regarding the plaintiff's bills, she informed him that the bills would be paid by state Medicaid and that he did not have to pay them. This information proved to be inaccurate and at variance with the terms of the Admission Agreement, but the question is whether the defendant was so misled by the plaintiff's employee that the plaintiff should be estopped from its enforcement of the agreement. A leading treatise succinctly explains waiver by estoppel based on detrimental reliance in the following way: CT Page 22228
To prove waiver by estoppel one need only show that he or she was misled to his or her prejudice by the conduct of the other party into the honest and reasonable belief that the other party was not insisting upon some right. It is the justifiable belief of the party relying on the waiver which is the essential element. The waiver and the effect of the conduct upon the party relying on the conduct may have been unintentional, but a finding of waiver is nevertheless justified because the estopped party reasonably should have expected that his or her actions would induce the reliance of the other who claims that a waiver occurred.
Williston on Contracts (4th Ed.), § 39:29, pp. 630-31.
The prejudgment statute provides that in determining whether to grant a prejudgment remedy, the court must consider not only the plaintiff's claims, but also the defenses raised by the defendant. The plaintiff has not contested the defendant's evidence, and on the basis of the court's review of this preliminary record, there is nothing to suggest that the defendant's testimony should be discredited. The defendant testified that he relied on the assistance of the plaintiff's authorized employee in completing and understanding the Medicaid application process, that he received information from her that she knew or should have known he would rely on, and that he relied on this information to his detriment. The full trial of this case may reveal additional evidence, for example, refuting this testimony or the reasonableness of the defendant's reliance on Ms. DelFranco's guidance. However, on the existing record, the defendant has established a bona fide defense of waiver by estoppel based on detrimental reliance, and the court cannot find that in weighing the probabilities, the plaintiff has met its burden of proving probable cause that a judgment in the amount of the prejudgment remedy sought will be rendered in its favor.
CONCLUSION
Therefore, for the foregoing reasons, the plaintiff's application for a prejudgment remedy is hereby denied.