April 24

Estate of Former Tenant Sues Landlord for Buyout Payment

A New York City landlord and the estate of one of the landlord’s tenants are tussling over whether the landlord is required to continue paying on a buyout of the tenant now that the tenant is deceased.

Walter Blomeyer, a black-cab driver, lived for decades in a single-room apartment in a building owned by Icon Realty Management, according to a recent article in the New York Post. When Icon decided to convert the building into luxury condominiums, it offered to pay Mr. Blomeyer $525,000 to get him to move. Mr. Blomeyer accepted the deal, which required Icon to pay Mr. Blomeyer $300,000 and allow him to live rent-free in another one of their buildings for a year before making the final $225,000 payment.

Unfortunately, Mr. Blomeyer died in February of a heart attack before the final payment was made, and Icon has refused to make the payment to Mr. Blomeyer’s estate. Mr. Blomeyer’s estate has filed suit against Icon for $225,000. According to the Post, Icon’s attorney argues it doesn’t have to pay the estate because there was nothing in the agreement about the estate benefiting.  “His estate is entitled to nothing,” the lawyer said.

For the article about this case from the New York Post, click here. 

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April 21

Medicaid Applicant Received Proper Notice of Estate Recovery

A Michigan appeals court rules that a Medicaid recipient who was already enrolled in Medicaid received proper notice about the state’s right to estate recovery when the state provided notice in the recipient’s second application.  In re Estate of Keyes (Mich. Ct. App., No. 320420, April 16, 2015).

In 2007, Michigan amended its Medicaid law to include estate recovery, pending approval by the federal government. Esther Keyes entered a nursing home and began receiving Medicaid benefits in 2010. In 2011, the federal government approved the estate recovery plan. In 2012, Ms. Keyes submitted a Medicaid application that included a statement acknowledging that Ms. Keyes’ estate was subject to estate recovery. Ms. Keyes died, and the state sought recovery against her estate.

The estate argued that the state could not recover benefits because state law requires the state to notify a Medicaid recipient about the possibility of estate recovery at the time the recipient enrolls in Medicaid. The trial court ruled that the state did not notify Ms. Keyes at the time of enrollment and granted the estate summary judgment. The state appealed. 

The Michigan Court of Appeals reverses, holding the state properly notified Ms. Keyes that she was subject to estate recovery. According to the court, state law requires notice when the applicant seeks Medicaid benefits, not when the applicant enrolls. The court rules that because Ms. Keyes sought benefits in 2012 after receiving notification of the state’s right to estate recovery, the state provided proper notice.

For the full text of this decision, go to: http://publicdocs.courts.mi.gov:81/OPINIONS/FINAL/COA/20150416_C320420_38_320420.OPN.PDF

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April 1

NAELA Says the VA Could Be Sued If Proposed Transfer Regs Are Enacted

In its response to the Department of Veterans Affairs’ proposed regulations that would establish a look-back period and asset transfer penalties for pension claimants, the National Academy of Elder Law Attorneys’ (NAELA) raises the prospect that the VA could be sued if the rules take effect.  

Proposed § 3.276 would establish a 36-month look-back period and a penalty period of up to 10 years for those who dispose of assets to qualify for a VA pension. Currently, there is no prohibition on transferring assets prior to applying for needs-based benefits, such as Aid and Attendance. 

“[W]e express the serious concern that the proposed rule’s 3-year look-back period and transfer of assets penalty exceed statutory authority, opening up VA to future litigation and causing additional uncertainty for Veterans and their families,” write Bradley J. Frigon, NAELA’s president, and Victoria Collier, Chair of NAELA’s VA Task Force, in March 17, 2015, comments on the proposed rules.

Frigon and Collier argue that the proposed rules do not meet the standard of either an explicit or implicit delegation by congressional statute that the U.S. Supreme Court set forth Chevron USA, Inc. v. NRDC, Inc., 467 U.S. 837 (1984).  They point out that Congress had the opportunity from 2012 to 2014 to create Medicaid-like transfer rules but that each proposal died in session.

NAELA’s comments also maintain that the proposed transfer penalties exception is too narrow.  “Veterans and their surviving spouses will be unjustly penalized for prior transfers that had absolutely nothing to do with VA pension eligibility,” Frigon and Collier write. “Gifts to children at holidays and birthdays will be penalized. Donations to places of worship will be penalized. Contributions to charities will be penalized. All because there is a presumption that the transfer was made for the purpose of qualifying for VA pension. . . . The final rule should require that transfers only made for the sole purpose of qualifying for VA pension be penalized.”

The 27-page comments highlight a number of other flaws in the proposed regulation, including that it should allow for partial cures, that the time allowed to cure transfers should be expanded, that the rule disproportionately harms surviving spouses of veterans, and that the proposed net worth limits are harsher than Medicaid’s limits.

To read NAELA’s comments, click here.

For the VA’s proposed regulations, click here.  Comments must be received no later than Tuesday, March 24.

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