Nursing Home Can Pursue Breach-of-Contract Claim Against Resident's Son

A New York trial court rules that a nursing home can pursue a breach-of-contract claim against a resident's son who signed the admission agreement, agreeing to use his mother’s funds to pay for her care or apply for Medicaid on her behalf. Jewish Home Lifecare v. Ast (N.Y. Sup. Ct., New York Cty., No. 161001/14, July 17, 2015).

Ernest Ast admitted his mother to a nursing home and signed the admission agreement as the responsible party. According to the court, the responsible party was personally liable for ensuring Medicaid coverage, but was not required to use his or her own funds to pay for care. Ernest Ast also signed his brother's name to the agreement.

After Ernest's mother died, the nursing home sued Ernest and his brother, Mark, for breach of contract, among other things. The nursing home argued the brothers failed to apply for Medicaid or use their mother's money to pay the nursing home and that they fraudulently transferred her money to themselves. Mark argued that he could not be liable because he did not sign the contract, and Ernest argued that he couldn't be personally liable because the contract provided that he was not required to use his own funds to pay for care. The brothers filed a motion to dismiss.

The New York Supreme Court, New York County, denies the motion to dismiss in part, holding that the nursing home could proceed with its breach-of-contract claim against Ernest, but not against Mark. According to the court, "while the agreement does not require [Mark and Ernest] to guarantee payment from their own resources, it requires that they ensure that [the nursing home] is paid from [their mother's] assets, to the extent that they had control over them, and provides that a failure to do so constitutes a breach of the contract." The court rules that because Mark did not sign the contract, the nursing home could not pursue a breach-of-contract claim against him.  

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