Manahawkin v. O'Neill
426 N.J. Super. 143
| N.J. Super. Ct. App. Div. | 2012Background
- Plaintiff, Frances O'Neill, as Executrix of the Estate of Elise Hopkins, appeals from a summary judgment in favor of third-party defendants and against her counterclaims and third-party complaint.
- The issues centered on whether the Admission Agreement required a third-party to incur personal liability for Medicaid/Medicare residents.
- Hopkins was admitted February 2007; plaintiff signed the Admission Agreement as the Responsible Party, designating Medicaid payments to Manahawkin but did not sign a private-pay guarantor.
- The Admission Agreement contains a Failure to Pay clause, late charges, and a lien provision after 60 days of nonpayment.
- The Resident Rights form states third-party guarantees are not required for admission, but a person with legal access to a resident’s income may be asked to sign a contract to pay from the resident’s funds without personal liability.
- The trial court found the Admission Agreement lawful, and collection efforts against the Responsible Party did not violate state or federal law; CFA challenges were unfounded due to learned professional exception and regulatory regime.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Admission Agreement imposes personal liability on a responsible party | Hopkins contends the contract and related representations make plaintiff personally liable | Defendant argues the language shows no personal liability; only collection from resident income | No personal liability; contract lawful and compliant with law |
| Whether collection efforts against the responsible party violated CFA or NHA | Claim that collection violated CFA and NHA principles | Collection efforts authorized; not a CFA action against a professional service | Collection efforts lawful; CFA inapplicable to nursing homes under learned professional exception |
| Whether CFA applies given learned professional exception | CFA should apply to deceptive/unconscionable practices by nursing homes | Learned professional exception excludes hospitals and nursing homes from CFA | CFA does not apply to Manahawkin under learned professional exception |
| Whether federal and NJ law prohibit third-party guarantees for Medicaid patients | Admission Agreement violates federal/state law by forcing personal guarantees | Law permits non-liability contract with third-party payment from resident resources | Admission Agreement compliant with 42 U.S.C. § 1396r(c)(5) and N.J.S.A. 30:13-3.1a(2) |
| Whether captioning/joinder mattered for liability | Captioning as Ms. O'Neill rather than Estate of Elise Hopkins misled the court | Captioning is semantic; Responsible Party so notified | Captioning did not alter the court’s determination; no error in summary judgment |
Key Cases Cited
- Celanese Ltd. v. Essex Cnty. Improvement Auth., 404 N.J. Super. 514 (App.Div.2009) (contract interpretation standard; intention of the parties and surrounding circumstances)
- Macedo v. Dello Russo, 178 N.J. 340 (2004) (learned professional exception to CFA)
- Hampton Hosp. v. Bresan, 288 N.J. Super. 372 (App.Div.) (hospitals regulated; CFA applicability limited)
- DiCarlo v. St. Mary’s Hosp., 530 F.3d 255 (3d Cir.2008) (learned professional exception applied to hospital billing)
- Daaleman v. Elizabethtown Gas Co., 77 N.J. 267 (1978) (regulatory considerations in CFA scope)
- Lee v. First Union Nat’l Bank, 199 N.J. 251 (2009) (summary judgment standard and contract interpretation)
- Bosland v. Warnock Dodge, Inc., 197 N.J. 543 (2009) (elements of CFA claim)