Mar 31

Resident’s Son Who Made Improper Transfers Did Not Owe Nursing Home Fiduciary Duty

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A Massachusetts appeals court rules that the son of a nursing home resident who breached his fiduciary duty to his mother by transferring assets to himself is not liable to the nursing home for his mother’s unpaid bill because he did not owe the nursing home a fiduciary duty. Merrimack Health Group v. Heroux (Mass. App. Div., No. 15–ADMS–10024, Feb. 25, 2016).

Muriel Heroux named her son, Robert, as her agent under a power of attorney and he transferred money to himself. When Ms. Heroux entered a nursing home, she applied for Medicaid. The state denied benefits based on the transfers to her son.

After Ms. Heroux died without paying the nursing home for two months of care, the nursing home sued Mr. Heroux for breach of contract and breach of fiduciary duty, arguing that he was liable for the nursing home’s unpaid expenses. The trial court dismissed the breach of contract claim, holding that there was not a contract between the nursing home and son, but it found that Mr. Heroux breached his fiduciary duty to the nursing home by transferring money from his mother’s account to himself. Mr. Heroux appealed.

The Massachusetts Appellate Division reverses, holding that Mr. Heroux is not liable for breach of fiduciary duty because he did not have a fiduciary relationship with the nursing home. According to the court, while Mr. Heroux breached his fiduciary duty to his mother, the nursing home must show that Mr. Heroux owed it a fiduciary duty in order to succeed.

For the full text of this decision, click here.