Opinion
No. A03-527.
Filed January 13, 2004.
Appeal from the District Court, Blue Earth County, File No. P8-98-1021. Willis, Judge. Affirmed.
Suzette E. Johnson, Johnson Anderson, LLC, Mankato, Mn (for appellant Kaye Allen).
Robert H. Chesley, Chesley, Kroon, Chambers Harvey, Pllp, Mankato, Mn (for respondent Habilitative Services, Inc.).
Christopher Eric Sandquist, Gislason Hunter, Llp, (for respondent Jill Peterson).
Mark Allen Lindahl, Assistant Blue Earth County Attorney, (for respondent Blue Earth County).
Considered and decided by Klaphake, Presiding Judge; Willis, Judge; and Anderson, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
On appeal from the denial of a motion for a new trial or amended findings of fact and an amended order, appellant argues that the district court erred by finding that (1) the sale of the conservatee's house would improve the conservatee's quality of life and was in her best interests, (2) the conservator did not breach its duty to preserve the conservatee's estate, and (3) the sale of the conservatee's house was not contrary to law and against public policy. Because we conclude that the district court did not err, we affirm.
FACTS
Evalyn Klawitter, the conservatee, is a 93-year-old woman suffering from Alzheimer's disease. She has had a conservator of her estate since 1998 and a conservator of her person since July 2000. In July 2002, the district court appointed Habilitative Services, Inc. as the conservator of Klawitter's estate and person. Habilitative Services then moved Klawitter from her house into the nursing home where she currently resides. While Klawitter still owns the house, it is undisputed that she will not be able to live there again and will continue to live in the nursing home because of her medical condition. Appellant Kay Allen, Klawitter's daughter, has lived in Klawitter's house since 1993.
Klawitter has less than $3,000 in liquid assets and pays for her nursing-home costs with medical assistance. Her only remaining assets are her house, which has a fair market value of $75,200, and her automobile, which has a fair market value of $2,630.
In December 2002, the conservator petitioned the district court for authority to sell Klawitter's house, arguing that Klawitter had exhausted her other property and that liquidating her assets was in her best interests. Allen, who wishes to remain living in Klawitter's house, opposed the conservator's petition. In January 2003, the district court granted the petition, and Allen moved for a new trial or amended findings of fact and an amended order. In March 2003, the district court denied Allen's motion, and she now appeals.
DECISION I.
In January 2003, the district court granted the conservator's petition to sell Klawitter's house, finding that
Ms. Klawitter's assets should be utilized to fund care for her personally, not for members of her family. Ms. Klawitter's care must take precedent over the needs of others. Absent extreme circumstances, it is inappropriate to allow Ms. Klawitter to receive reduced care or to compel the taxpayers to pay for her care when there are assets available to her Conservator.
In March 2003, the district court denied Allen's motion for a new trial or amended findings of fact and an amended order, finding that it was clear that "converting the house to cash will benefit [Klawitter]." Allen contends that the district court erroneously found that the sale of the house would benefit Klawitter and was in her best interests.
A district court's decision to deny a new-trial motion is within its sound discretion and will not be disturbed on appeal absent a clear abuse of that discretion. Myers v. Hearth Techs., Inc., 621 N.W.2d 787, 790 (Minn. App. 2001), review denied (Minn. Mar. 13, 2001). The district court's findings of fact will not be set aside on appeal unless they are clearly erroneous. Minn. R. Civ. P. 52.01. And whether the sale of the homestead is proper is a fact question subject to the discretion of the district court. In re Guardianship of Fingerholtz, 357 N.W.2d 423, 428 (Minn. App. 1984), review denied (Minn. Feb. 6, 1985).
Allen argues that the sale of Klawitter's house was not in Klawitter's best interests because having additional funds will not improve her quality of life. In support of this argument, Allen submitted an affidavit from the supervisory nurse at Klawitter's nursing home, in which the nurse opined that Klawitter, who currently shares a room with another resident, would probably not benefit from or appreciate having a private room or her own telephone. The nurse further stated that Klawitter, whose care is funded by government medical assistance, receives the same standard of care as a private-pay patient.
The conservator argues that the district court did not abuse its discretion in ordering the sale of Klawitter's real estate because her personal property is insufficient to pay for her support. In its petition to the court asking for authority to sell Klawitter's real estate, the conservator states that it understands that Medical Assistance pays for goods and services that are medically necessary. Conservator believes things will come up that will enhance Conservatee's life but are not covered by Medical Assistance. Conservator needs money to pay for such things and, without selling these assets, there is no source of funds with which to do so.
The conservator further states that "[t]here are two reasons why the court should grant this petition. First, Conservatee's property is insufficient to provide for her support and maintenance. Second, selling her property is in her best interests as she will then be able to enjoy things not currently available to her." Unless Klawitter's house is sold, the conservator argues that it will not have funds to pay for items not covered by medical assistance, such as a private room, nonmedically related transportation, companionship services, clothing, and certain types of circulation aids.
The record does not indicate that Klawitter currently has any expenses that are not being met by medical assistance. But because the conservator has stated that additional funds could be used to improve Klawitter's quality of life and because the district court has discretion to determine when the sale of a conservatee's house is proper, the district court did not clearly err by finding that the sale of the house will benefit Klawitter. See Minn. Stat. § 524.5-418(a) (Supp. 2003) (stating court may direct sale of real estate when personal property is insufficient to provide for conservatee's support and maintenance and when sale is in best interests of conservatee).
Minn. Stat. § 525.63 was in effect at the time of the district court decision. Effective August 1, 2003, the Minnesota legislature repealed Minn. Stat. § 525.63 and replaced it with Minn. Stat. § 524.5-418, which was enacted as part of the Uniform Probate Code. 2003 Minn. Laws ch. 12, art. 2, § 9(a), provides that new articles 1 and 2 apply to any conservatorship proceeding pending in court on the effective date of the new law, unless the court finds that for good cause and in the interests of judicial economy, the proceeding should be completed under the repealed statute. Here, the new statute applies because the changes from the repealed statute that appear in Minn. Stat. § 524.5-418 are cosmetic only and there is no good cause to apply the repealed statute.
II.
Allen argues that the district court erred by finding that the conservator did not breach its duty to preserve Klawitter's estate under Minn. Stat. § 524.5-417(c)(1) (Supp. 2003). That statute provides, first, that a conservator has the duty to pay for the support and maintenance of a conservatee. Id. Next, the statute provides that, wherever possible and appropriate, the conservator should pay for such support and maintenance with the government benefits that the conservatee is entitled to, rather than with the conservatee's estate. Id. The purpose of the statute is to protect the conservatee's estate from depletion. In re Conservatorship of W.R.L., 396 N.W.2d 705, 707 (Minn. App. 1986).
In her brief, Allen cites Minn. Stat. § 525.56, subd. 4(1) (2002). In 2003, the Minnesota legislature repealed Minn. Stat. § 525.56 and replaced it with Minn. Stat. § 524.5-417, which was enacted as part of the Uniform Probate Code. Because the provisions of Minn. Stat. § 525.56, subd. 4(1) and Minn. Stat. § 524.5-417(c)(1) are materially similar, there is no good cause to apply the repealed statute.
In denying Allen's motion to reconsider the order to sell Klawitter's real estate, the district court stated:
In essence, [Allen] wants the conservator to maintain the house for [Allen's] benefit. The one and only duty of the conservator is to provide for the best interests of the conservatee. Regardless of the [medical assistance] exemption on the house, it is clear that converting the house to cash will benefit the conservatee.
Because Klawitter receives medical-assistance and social-security benefits, Allen maintains that the conservator is obligated to pay for Klawitter's care with these government benefits. Government-funded medical assistance is available for individuals who have insufficient assets to pay for their long-term care. When the government determines an individual's eligibility for medical assistance, certain assets are excluded. Under Minn. Stat. § 256B.056, subd. 2 (2002), a homestead is excluded if it is used as the primary residence of the owner's permanently and totally disabled child, or a child who resided in the home for at least two years before the date of the owner's admission to a long-term care facility and who provided care to the owner that permitted the owner to reside at home rather than in a facility. Here, Klawitter's house is an excluded asset because Allen uses it as a primary residence and is permanently and totally disabled because she has chronic debilitating fibromyalgia and dwarfism and also because Allen resided in Klawitter's home and provided her care for at least two years before Klawitter entered the nursing home.
The conservator argues that the sale of the homestead is necessary because not all of Klawitter's expenses are covered by government benefits. And because Klawitter has exhausted almost all of her liquid assets, the conservator argues that her non-liquid assets, namely her house and her car, must be sold to pay for her support. It is undisputed that Klawitter will remain living in the nursing home and will be not able to return to her residence. Because Klawitter does not need her home, the district court did not err by determining that "converting the house to cash will benefit [Klawitter]" because the proceeds from the sale of the residence could be used for expenses that are not covered by government benefits.
If Klawitter's house is sold, she will have assets of more than $3,000 and will no longer be entitled to receive medical assistance. See Minn. Stat. § 256B.056, subd. 3. Although the proceeds from the sale of Klawitter's residence would be used to fund her nursing-home care, the sale would not constitute a breach of the conservator's duty to conserve her estate under Minn. Stat. § 524.5-417(c)(1). The statute provides that the conservator should first pay for the conservatee's care with any government benefits that the conservatee is entitled to. Because Klawitter would not be entitled to receive medical assistance when she has assets exceeding $3,000, the conservator would not be paying for her care with her personal assets rather than available government benefits. Thus, the district court did not clearly err by finding that the conservator did not breach its duty to preserve Klawitter's estate under Minn. Stat. § 524.5-417(c)(1).
III.
Allen further argues that the district court's order was contrary to law and against public policy, asserting that the state does not require a "disabled child to be put out of their home to pay for the care of a parent." Citing In re Estate of Peck, 416 N.W.2d 158 (Minn. App. 1987), Allen asserts that, as Klawitter's disabled child, she should be able to retain the house after Klawitter's death and that the state should not be allowed to file a claim for medical-assistance reimbursement against Klawitter's estate. Under the former Minn. Stat. § 256B.15, subd. 3 (2002), the state was unable to make a claim for medical-assistance reimbursement against the estate of a decedent who is survived by a permanently and totally disabled child. The conservator points out, however, that according to the new Minn. Stat. § 256B.15, subd. 3 (Supp. 2003), the state will be able to file a claim for medical-assistance reimbursement against Klawitter's estate after her death, despite its current exempt status. But because Klawitter is not deceased, we need not address this issue.
The conservator agrees that Klawitter's house is an excluded asset for the purposes of determining medical-assistance eligibility but asserts that whether the house is an excluded asset is irrelevant because Klawitter's eligibility for medical assistance is not at issue here. Instead, the conservator contends, because Klawitter may have expenses that are not covered by medical assistance, the issue is whether it is in Klawitter's best interests to sell her residence in order to have funds to pay for such expenses.
Allen cites no legal authority, and we find none, stating that a conservator is forbidden to sell exempt real estate when a medical-assistance recipient needs additional funds for expenses not covered by medical assistance. Thus, the district court did not abuse its discretion by determining that the sale of Klawitter's house would be in her best interests.