March 31

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

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.

January 14

Bank Not Liable for Improper Withdrawals Made Under a Power of Attorney

A New Jersey appeals court holds that a bank is not liable for improper withdrawals made by a nursing home resident’s caregiver under a power of attorney because the resident’s signature was on the power of attorney. In re Estate of Yahatz (N.J. Super. Ct., App. Div., No. A-0099-14T1, Dec. 14, 2015).

Michael Yahatz opened a bank account and signed an agreement that provided that the bank would not be liable if Mr. Yahatz failed to notify the bank of suspected problems within 60 days of receiving a bank statement. Mr. Yahatz entered a nursing home where Nydia Davalia was one of his caretakers. Mr. Yahatz signed a power of attorney appointing Ms. Davalia as his attorney-in-fact and authorizing her to make withdrawals from his bank account. Ms. Davalia withdrew $80,000 from the account.

After Mr. Yahatz died, his estate filed a claim against the bank, arguing that it was negligent when it accepted the power of attorney. The trial court granted the bank summary judgment, ruling that the claims were time-barred because Mr. Yahtaz did not notify the bank about the contested withdrawals until more than 60 days after he received the bank statement. The estate appealed, arguing that the power of attorney was invalid on its face because of the way it was signed.

The New Jersey Superior Court, Appellate Division, affirms, holding that the bank was not negligent when it accepted the power of attorney from Ms. Davila because the signature on the power of attorney was Mr. Yahatz’s signature. According to the court, “there can be no violation of a duty of ordinary care, or a finding of bad faith, where a bank fails to take action to confirm the authenticity of a signature the customer does not dispute is his own.”

For the full text of this decision, go to: