Statute of Limitations Does Not Apply to Estate Recovery Claim

Reversing a trial court, the Tennessee Court of Appeals rules that because the state's Medicaid program was carrying out a governmental function when it filed a claim against a Medicaid recipient's estate, the normally applicable statute of limitations period for claims against estates does not apply. In the Matter of Daughrity (Tenn. Ct. App., No. M2003-02244-COA-R3-CV, Nov. 16, 2004). unpublished opinion

Beginning January 1, 1999, Tennesse's TennCare program began making Medicaid payments on behalf of Lizzie Daughrity, who was living in a nursing home. Mrs. Daughrity died on July 30, 2002, at age 89. On September 11, 2002, Mrs. Daughrity's will was admitted to probate. Within a week, Mrs. Daughrity's son and executor, Charles, had mailed a creditor's notice to TennCare and published a Notice to Creditors in the local newspaper. On March 25, 2003, TennCare filed a claim against Mrs. Daughrity's estate seeking reimbursement of $97,871 in benefits paid on her behalf. Mr. Daughrity filed an exception to the claim, alleging that it had not been filed within the four-month period applicable to creditor's claims. The trial court found that TennCare's claim was time-barred.

TennCare appealed, arguing that the statutes establishing the limitations period for claims against estates do not apply to a state agency acting in a sovereign governmental capacity. Mr. Daughrity countered that the TennCare program is a state-run insurance program that provides coverage not only to those in financial need, but also to those who cannot obtain coverage elsewhere, and that therefore TennCare was acting in a proprietary, not a governmental, capacity in its effort to seek recovery.

The Court of Appeals of Tennessee agrees with TennCare and reverses. The court rules that TennCare was carrying out a governmental function when it filed a claim against Mrs. Daughrity's estate, and that therefore, absent an express legislative directive to the contrary, the common law doctrine of nullum tempus occurit regi ("time does not run against the king") prevents TennCare's action from being dismissed due to the expiration of the normally applicable statute of limitations period.

To download the full text of this decision in PDF format, go to: https://www.tsc.state.tn.us/opinions/tca/PDF/044/Daughrity.pdf.
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