Nursing home has no standing in suit against resident’s daughter.

A New Jersey appeals court ruled that a nursing home has no standing to lodge a conversion claim or infringement of fiduciary duty against the daughter of a resident who transferred the resident’s cash to herself, resulting in a Medicaid penalty period.

M.D. is the daughter of B.S. In 2010, She started helping her mom financially. When she suspected that her mom’s husband had dementia and was spending her mom’s money “recklessly” she transferred money from a joint account into M.D.’s personal account. Over the next three years, she used some of the money transferred to provide care for her mom.

In 2013, her mom became a resident in a nursing home and M.D., acting as her mom’s attorney-in-fact under a power of attorney, signed the admission papers for her mom, but did not sign anything naming M.D. individually as the responsible party. After applying for Medicaid, the state applied a 224 day penalty period due to the transfers from B.S.’s account to M.D.

The nursing home sued M.D. for conversion and breach of fiduciary duty, seeking reimbursement of the money M.D. withdrew from B.S.’s account. M.D. filed a motion to dismiss based on lack of standing. The trial court granted the motion to dismiss because there was no contract between M.D. and the nursing home. The nursing home appealed.

The New Jersey Superior Court, Appellate Division, agreed, holding that the nursing home did not have standing to bring a claim of conversion or breach of fiduciary duty against M.D.

According to the court, because the nursing home never had ownership or possession of the transferred funds, it could not assert a claim of conversion. The court concludes that “there was no written contract between the parties that imposes any liability” on M.D. or creates a fiduciary duty.

Click here for the full text of the case.

Source: Elderlawanswers.com

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