Matthews v. South Dakota Department of Social Services
813 N.W.2d 130
| S.D. | 2012Background
- PAT I manages a Medicaid pooled trust and filed a declaratory judgment action against DSS about pooled-trust eligibility and transfers.
- In 2006 the circuit court ruled transfers to the pooled trust would not be penalized for Medicaid eligibility, and the trust was reformed accordingly.
- Fred (91) and Gladys (89) transferred assets to the pooled trust and later applied for Medicaid long-term care benefits; DSS imposed a transfer-penalty due to transfers by someone 65 or older.
- DSS notified PATI of its age-based policy; PATI sought further relief declaring that 65+ transfers could not be penalized, and the circuit court granted that relief.
- An ALJ upheld the penalty against Gladys; Fred and Gladys appealed; the circuit court affirmed the ALJ; DSS appeals the 2009 declaratory-judgment order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata or law of the case bars DSS from applying age-based penalties | PATI argues prior 2006 ruling forecloses age-based penalties | DSS contends new grounds and lack of direct ruling on age limit permit challenge | Law of the case does not bar; narrow age-penalty issue not previously decided; penalties may apply |
| Whether transfers into pooled trusts by beneficiaries 65 or older may be penalized | PATI argues no age-based transfer penalty should apply | DSS argues statute and CMS guidance require penalties for 65+ transfers | Transfers by 65+ beneficiaries may be subject to transfer penalties under federal and state law |
| What is the proper standard of review for the declaratory-judgment and administrative decisions | PATI seeks de novo review of legal questions | DSS argues de novo review is appropriate where reviewing a declaratory order on law | De novo review applies to statutory interpretation and related legal questions; agency findings reviewed for clear error |
| Whether agency interpretations (CMS memos, SMM, POMS) support penalties for pooled-trust transfers by 65+ | PATI urges statutory language controls, not agency memos | DSS relies on CMS memos and manuals supporting penalties | Agency interpretations are reasonable and support applying penalties to 65+ pooled-trust transfers |
Key Cases Cited
- Fraternal Order of Eagles No. 2421 of Vermillion v. Hasse, 2000 S.D. 139 (S.D. 2000) (de novo review and interpretation principles in declaratory actions)
- Mulder v. S.D. Dep’t of Soc. Servs., 2004 S.D. 10 (S.D. 2004) (Medicaid eligibility and trust provisions in SD statutes)
- In re Estate of Siebrasse, 2006 S.D. 83 (S.D. 2006) (law-of-the-case and res judicata considerations in successive appeals)
- Grynberg Exploration Corp. v. Puckett, 2004 S.D. 77 (S.D. 2004) (law-of-the-case considerations in finality of decisions)
- Brown v. Felsen, 442 U.S. 127 (U.S. 1979) (finality and stare decisis principles in law-of-the-case context)