in Re Klein Estate
316 Mich. App. 329
| Mich. Ct. App. | 2016Background
- Catherine Klein died in December 2013; her only asset at death was a home valued (per the personal representative) at $45,521.77.
- Sharon Pumford, acting as Klein’s authorized representative and later as personal representative of the estate, signed Klein’s Medicaid application acknowledging that the Department of Community Health (DCH) could seek estate recovery and that a hardship waiver process existed.
- DCH filed a claim against the estate for Medicaid benefits paid to Klein totaling $133,768.90. The estate disallowed the claim, asserting the homestead exemption based on MCL 400.112g(3)(e)(i).
- DCH sued in probate court seeking judgment allowing estate recovery; DCH moved for summary disposition arguing the estate had to apply for a hardship waiver and had not done so.
- The probate court granted summary disposition for the estate, holding MCL 400.112g(3)(e)(i) created a mandatory exemption for homes of modest value and therefore disallowed DCH’s claim.
- The Court of Appeals reversed, holding (1) MCL 400.112g(3)(e)(i) instructs DCH to seek federal approval and does not itself create an automatic statutory waiver, and (2) the estate’s failure to apply for a hardship waiver was dispositive.
Issues
| Issue | Plaintiff's Argument (Estate/Pumford) | Defendant's Argument (DCH) | Held |
|---|---|---|---|
| Whether MCL 400.112g(3)(e)(i) creates an automatic, statutory homestead hardship exemption (no application required) | The statute’s “shall” language mandates an exemption for homes valued at or below 50% of county average; exemption is automatic | The provision directs DCH to seek federal waivers/approvals and provide application materials; it does not itself create an entitlement | The statute does not create an automatic exemption; it instructs DCH to seek federal approval and implement rules—no statutory entitlement to an automatic waiver |
| Whether failure to apply for a hardship waiver bars the estate from obtaining the exemption | No application should be required because the statute mandates the exemption | The estate must follow procedural rules and apply for the waiver; failure to apply forfeits the benefit | Failure to apply for the hardship waiver is dispositive; summary disposition for DCH was required |
Key Cases Cited
- United Parcel Serv., Inc. v. Bureau of Safety & Regulation, 277 Mich. App. 192 (discussing de novo review of statutory and administrative interpretation)
- Pohutski v. City of Allen Park, 465 Mich. 675 (statutory language given plain meaning)
- Karaus v. Bank of New York Mellon, 300 Mich. App. 9 (de novo review of summary disposition)
- Paris Meadows, LLC v. City of Kentwood, 287 Mich. App. 136 (persuasive effect of unpublished opinions)