Medicaid Recipient's Agent Under POA Liable for Damages to Nursing Home for Breach of Contract

An Ohio appeals court rules that a nursing home that is suing a resident's agent for breach of contract is entitled to damages if the agent had control of liquid assets at the time the nursing home invoice came due even though the assets were paid to maintain the resident's home. Classic Healthcare Systems, LLC v. Miracle (Ohio Ct. App., 12th Dist., No. CA2017-03-029, Nov. 13, 2017).

David Miracle was his mother's agent under a power of attorney. When his mother entered a nursing home, he signed the admission agreement on her behalf and agreed to use his mother's finances to pay the facility.  Mr. Miracle paid the nursing home infrequently, and his mother owed more than $100,000 by the time she was discharged.

The nursing home sued Mr. Miracle for breach of contract. Evidence showed that Mr. Miracle used $56,486.63 of his mother's resources to maintain her real estate and spent an additional $12,971.54 on payments not related to his mother. The trial court found that the additional payments were unauthorized and awarded the nursing home damages in that amount. The nursing home appealed, arguing that it was entitled to the money that was used to maintain Mr. Miracle's mother's home.

The Ohio Court of Appeals, 12th District, reverses and remands, holding that the nursing home is entitled to damages for breach of contract if Mr. Miracle "had control over liquid assets at the time an invoice came due." The court rules that the trial court improperly looked at the entire nursing home stay as one transaction. According to the court, if Mr. Miracle "had control of [his mother's] liquid assets on the due date that were not paid to [the nursing home] then that amount is damages properly payable to [the nursing home]."

For the full text of this decision, go to: https://www.supremecourt.ohio.gov/rod/docs/pdf/12/2017/2017-Ohio-8540.pdf

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