Vencor v. Gray , 2003 MT 24N ( 2003 )

No. 01-677
IN THE SUPREME COURT OF THE STATE OF MONTANA
2003 MT 24N
VENCOR, INC., d/b/a PARK PLACE
HEALTH CARE CENTER, a corporation,
Plaintiff and Appellant,
v.
MARJORIE GRAY,
Defendant, Respondent and Cross-Appellant.
APPEAL FROM: District Court of the Eighth Judicial District, Cause No. BDV-00-174
In and for the County of Cascade,
The Honorable Julie Macek, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Karl K. Rudbach, McPherson & Hutchison, L.L.C., Great Falls, Montana
For Respondent:
Cresap S. McCracken, Attorney at Law, Highwood, Montana
Jeffrey S. Ferguson, Hoines & Ferguson, Great Falls, Montana
Submitted on Briefs: April 4, 2002
Decided: February 14, 2003
Filed:
__________________________________________
Clerk
Justice Jim Regnier delivered the Opinion of the Court.
¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court
1996 Internal Operating Rules, the following decision shall not be
cited as precedent but shall be filed as a public document with the
Clerk of the Supreme Court and shall be reported by case title,
Supreme Court cause number, and result to the State Reporter
Publishing Company and to West Group in the quarterly table of
noncitable cases issued by this Court.
¶2 Appellant Vencor, Inc., d/b/a Park Place Health Care Center
(“Park Place”), filed a complaint in Montana’s Eighth Judicial
District Court seeking payment from Defendant Marjorie Gray
(“Gray”) for the care it provided to Gray’s mother, Helen Harris
(“Harris”). Gray was the guardian of Harris and the conservator of
her estate.
¶3 The District Court granted Gray’s Motion to Dismiss for
Failure to State a Claim, Motion to Strike, Judgment on the
Pleadings/Motion for Summary Judgment. Park Place now appeals. We
affirm in part and reverse in part.
¶4 We address the following issues on appeal:
¶5 1. Did the District Court err in holding as a matter of law
that Gray, in her capacity as Harris’ guardian and conservator,
has no liability for Harris' debts to Park Place?
¶6 2. Did the District Court err in holding as a matter of law
that Gray, as Harris' adult child, has no liability for Harris'
debts to Park Place?
BACKGROUND
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¶7 In 1994, Gray was appointed guardian and conservator of her
mother's estate. At that time Harris' estate consisted of more
than $97,000.00. On August 25, 1994, in her capacity as guardian,
Gray signed an agreement with Park Place, an elder care facility,
for Park Place to provide resident care for Harris.
¶8 Over the ensuing years, Gray made payments on behalf of her
mother to Park Place. By April of 1997, however, Harris' estate
was nearly exhausted, and Gray so advised Park Place. Despite this
apparent lack of resources, both Gray and Park Place allowed Harris
to remain at its facility. Gray made the final payment of $675.00
on May 20, 1997. When Harris died ten days later on May 30, 1997,
there was an outstanding balance of $12,349.94 on her account with
Park Place, and the estate indeed was nearly depleted.
¶9 Park Place contends that Gray is legally responsible to pay
the remainder of her mother's debt to Park Place. Park Place
brought an action against Gray alleging breach of contract, unjust
enrichment, quantum meruit, equitable estoppel, breach of fiduciary
duty, deceit, negligence, negligence per se, and violations of §§
40-6-214 and 40-6-301, MCA. The District Court granted Gray’s
Motion to Dismiss for Failure to State a Claim, Motion to Strike,
Judgment on the Pleadings/Motion for Summary Judgment. Park Place
appeals.
STANDARD OF REVIEW
¶10 A motion for judgment on the pleadings pursuant to Rule 12(c),
M.R.Civ.P., must establish that no material issue of fact remains
and that the movant is entitled to judgment as a matter law. The
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pleadings are to be construed in the light most favorable to the
nonmoving party, whose allegations are taken as true. Because a
motion for judgment on the pleadings is decided as a matter of law,
we apply our standard of review for conclusions of law: whether the
decision was correct. Hedges v. Woodhouse, 2000 MT 220, ¶ 8, 301
Mont. 180, ¶ 8, 8 P.3d 109, ¶ 8.
¶11 Rule 12(c), M.R.Civ.P., which governs motions for judgment on
the pleadings, states: "If, on a motion for judgment on the
pleadings, matters outside the pleadings are presented to and not
excluded by the court, the motion shall be treated as one for
summary judgment and disposed of as provided by Rule 56 . . . .”
Our standard of review in appeals from summary judgment rulings is
de novo. Motarie v. N. Mont. Joint Refuse Disposal (1995), 274
Mont. 239, 242, 907 P.2d 154, 156. When we review a district
court’s grant of summary judgment, we apply the same evaluation as
the district court based on Rule 56, M.R.Civ.P. Bruner v.
Yellowstone County (1995), 272 Mont. 261, 264, 900 P.2d 901, 903.
In Bruner, we set forth our inquiry:
The movant must demonstrate that no genuine issues of
material fact exist. Once this has been accomplished,
the burden then shifts to the non-moving party to prove,
by more than mere denial and speculation, that a genuine
issue does exist. Having determined that genuine issues
of material fact do not exist, the court must then
determine whether the moving party is entitled to
judgment as a matter of law. We review the legal
determinations made by a district court as to whether the
court erred.
Bruner, 272 Mont. at 265, 900 P.2d at 903 (citations omitted).
DISCUSSION
ISSUE ONE
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¶12 Did the District Court err in holding as a matter of law that
Gray, in her capacity as Harris' guardian and conservator, has no
liability for Harris' debts to Park Place?
¶13 Gray was appointed as temporary guardian of her mother on
August 16, 1994, and later appointed as her guardian and
conservator on October 3, 1994. On August 25, 1994, acting in her
capacity as temporary guardian, Gray entered into a contract with
Park Place to provide assisted living, medical services, and goods
for Harris. When Gray signed the contract, she signed on the line
designated as “Resident or Conservator or Legal Guardian.” The
contract states that the “Resident agrees to pay for services and
supplies provided by the Center under the terms of this Agreement .
. . .”
¶14 Gray made payments to Park Place from August 25, 1994 to May
20, 1997. The checks Gray used had printed in the upper left
corner: “Helen I. Harris, Conservatee” and “Marjorie Ann Gray,
Conservator.”
¶15 In the Spring of 1997, Harris' account was delinquent and Gray
informed Park Place that her mother's estate was nearly depleted.
Park Place and Gray allowed Harris to remain at the facility even
though both were aware of Harris' deteriorating financial
situation. In conversations between Gray and Park Place, Gray
discussed an easement as a possible source of money that would be
available to pay Harris' bills. At no time did Gray sign any
document stating she would personally pay her mother's debts.
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¶16 Gray’s last payment was made on May 20, 1997. When Harris
died ten days later, on May 30, 1997, there was still $12,349.94
owing on the account. On June 29, 1997, Gray notified Park Place
that she would not be making further payments on Harris' account.
¶17 The District Court entered an order granting Gray's combined
motions, concluding that she was not personally liable to Park
Place for her mother's outstanding account. The court determined
that Gray properly entered into the contract for her mother's care
as a fiduciary and was not at fault or responsible for the
remaining balance of her mother's account. The District Court
further ruled that Gray was not statutorily obligated to satisfy
her mother's debt.
¶18 On appeal, Park Place asserts that the District Court erred in
ruling as a matter of law that Gray is not individually liable for
the outstanding balance on Harris' account. Park Place
acknowledges that as a general rule a conservator is not
individually liable on a contract properly entered into in her
fiduciary capacity. Section 72-5-436(1), MCA. Park Place directs
our attention to an exception to the general rule, however, that
being when the conservator is personally at fault. In such
instances, the conservator may be held individually liable.
Section 72-5-436(2), MCA.
¶19 Park Place contends that the District Court failed to consider
the application of this exception to the facts of this case.
Specifically it alleges the District Court erred in concluding that
no material question of fact exists as to whether Gray was at fault
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for allowing Park Place to continue providing services to Harris
when Gray knew the estate was nearly depleted. Among other things,
the nursing home contends that Gray was personally at fault in
requesting Park Place to continue care for her mother when Gray
knew there were insufficient assets in the estate to pay for the
services. Park Place also submitted affidavit testimony that Gray
personally promised to pay for the continued care. Also, Park
Place points to the fact that there was $1086.86 left in Harris'
estate which Gray refused to apply to the debt. Park Place
asserts that a trial was necessary to sort out these disputed
facts.
¶20 We agree with Park Place that there were issues of material
fact that should have been submitted to the trier of fact. The
District Court stated that there was no evidence that Gray was
anyway at fault in her control of her mother's estate. Questions
of fault, however, are not typically subject to summary
adjudication. Mills v. Mather (1995), 270 Mont. 188, 194, 890
P.2d 1277, 1281. It is clear that there was over $1000 remaining
in Harris' estate and available to apply to the Park Place account,
yet Gray failed to do so. The trier of fact may conclude that Gray
was at fault when she kept her mother in the nursing home, knowing
all along that there was no more money to pay for the services.
There was also affidavit testimony that could be interpreted as a
promise on Gray's part to pay the balance.
¶21 When viewed in the light most favorable to Park Place, we
conclude that there were questions concerning Gray's conduct that
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may have triggered the application of § 72-5-436(2), MCA. The
District Court erred when faced with this evidence by concluding as
a matter of law that there was no fault on Gray's behalf.
ISSUE TWO
¶22 Did the District Court err in holding as a matter of law that
Gray, as Harris' adult child, has no liability for Harris' debts to
Park Place?
¶23 Park Place contends that under the facts presented, Gray is
liable for Harris' debts as Harris' adult child. Park Place cites
§ 40-6-214, MCA, and § 40-6-301, MCA, in support of its argument.
Section 40-6-214, MCA, states:
It is the duty of the father, the mother, and the
children of any poor person who is unable to maintain
himself by work to maintain such person to the extent of
their ability. The promise of an adult child to pay for
necessaries previously furnished to such parent is
binding.
¶24 In its order, the District Court declined to apply § 40-6-214,
MCA, on public policy grounds stating:
The Court is unwilling to open Pandora's box and find
that, at the time § 40-6-214, MCA, was enacted, the
Legislature contemplated that the statute having (sic)
the application urged by the Plaintiff. To find that §
40-6-214, MCA, requires adult children to personally pay
for the nursing home care of their elderly parents would
prevent many families from seeking the care their parents
may require. This is especially so in a guardian or
conservatorship situation. No one would be willing to
serve in such a capacity if they thought that, once the
estate was depleted, they would be held personally liable
for the ensuing debts.
¶25 To this Court's knowledge, applying this statute to the
instant situation, is a case of first impression. The statute was
originally enacted in 1895, with periodic re-enactments through
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1947. The operative word in the provision is "maintain." We
conclude that the meaning of the word "maintain" in the context of
the statute is ambiguous. Certainly the legislature in 1895 would
not have entertained the idea that it included the obligation to
"maintain" a person in a nursing home. We conclude that the first
sentence of the statute does not apply to this situation.
¶26 The second sentence of § 40-6-214, MCA, provides that " [t]he
promise of an adult child to pay for the necessaries previously
furnished to such a parent is binding." As to the merits of the
application of this statutory obligation, the District Court held
that Gray could not be held responsible for breaching a personal
promise to pay because such a promise would be unenforceable. The
court noted that § 28-2-903(b), MCA, requires that a promise to
pay for the debt of another be in writing. Park Place persuasively
points out, however, that Gray was not being sued upon the promise
to pay a debt of another but to answer for her own debt, which
arguably arose from her promise and the application of § 40-6-214,
MCA. We agree with Park Place's analysis and conclude the District
Court erred in concluding the promise must be in writing.
¶27 Finally, we address Park Place’s argument based on § 40-6-301,
MCA. The statute states:
Duty of child to support indigent parents. (1) It is the
duty of every adult child, having the financial ability,
to furnish and provide necessary food, clothing, shelter,
medical attendance, and burial, entombment, or cremation
costs for an indigent parent, unless, in the judgment of
the court or jury, the child is excused by reason of
intemperance, indolence, immorality, or profligacy of the
parent.
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(2) If a county pays for burial, entombment, or cremation
costs under 53-3-116, the county may seek reimbursement
under this part, if applicable.
¶28 Section 40-6-303, MCA, provides for civil enforcement of § 40-
6-301, MCA. It provides that a child, parent or the county
attorney may institute an action for a violation of § 40-6-301,
MCA. The District Court held that Park Place did not have standing
as a creditor to bring an action under the section. We agree.
¶29 Gray cross-appeals for attorney fees. The District Court
denied Gray’s request for attorney fees without analysis. Based on
the foregoing and our decision to reverse the District Court, the
attorneys fee issue is not ripe for review.
¶30 Furthermore, Park Place points out that the District Court
failed to address its equitable claims for unjust enrichment,
quantum meruit, and deceit. The District Court is directed to
address these issues on remand.
¶31 Affirmed in part, reversed in part and remanded.
/S/ JIM REGNIER
We Concur:
/S/ KARLA M. GRAY
/S/ JAMES C. NELSON
/S/ PATRICIA COTTER
/S/ TERRY N. TRIEWEILER
/S/ JIM RICE
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Justice W. William Leaphart concurring in part and dissenting in part.
¶32 I concur with the Court’s conclusion that the first sentence
of § 40-6-214, MCA, does not apply to the situation presented here,
and I agree that Park Place does not have standing as a creditor to
bring an action under § 40-6-301, MCA. I dissent, however, on the
question of whether a promise to pay for the debt of another under
§ 40-6-214, MCA, must be in writing as required by § 28-2-903(b),
MCA.
¶33 The Court gives credence to Park Place’s contention that Gray
was not being sued upon the promise to pay a debt of another but to
answer for her own debt which arguably arose from the application
of § 40-6-214, MCA. A promise to pay arising from the application
of the second sentence of § 40-6-214, MCA, is, in my view, a
promise to pay for the debt of another. The statute only has
application to an after-the-fact promise to pay for “necessaries
previously furnished” to the parent. When the necessaries are
initially furnished to the parent, the parent owes the debt. The
debt is not initially the child’s. It is only later, after the
necessaries are furnished, that the statute contemplates a child
promising to pay for what was furnished to another, i.e. the
parent. Any promise to pay arising under § 40-6-214, MCA, is, by
necessity, a promise to pay for what was previously furnished to
“another,” the parent. As such, the law requires that the promise
is unenforceable unless it is in writing. Section 28-2-903(b), MCA.
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/S/ W. WILLIAM LEAPHART
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