Stutz v. Ohio Dep't of Job & Family Servs.
96 N.E.3d 963
| Ohio Ct. App. | 2017Background
- Appellant Barbara Stutz entered a nursing home in March 2014 and was approved for Medicaid July 1, 2014. She owned a preexisting life estate in real property; her sons held the remainder interest.
- Agency later determined the life estate must be valued for Medicaid. County-auditor value of the property was $51,170; using the life-estate table in Ohio Adm.Code 5160:1-3-05.17(F) the Agency calculated the life estate at $24,941.
- Stutz obtained appraisals valuing her life estate at about $2,000 and sold it to her sons for $1,800 in November 2014.
- Medicaid concluded the sale was for less than fair market value and imposed a Restricted Medicaid Coverage Period (RMCP); Stutz appealed administratively and then to the common pleas court, which affirmed the Agency.
- On appeal to the court of appeals Stutz argued (1) there is a mechanism to rebut the improper-transfer presumption, (2) she presented evidence challenging the life-estate value, and (3) she was not required to attempt to sell at the statutory value. The court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper method to value a life estate for Medicaid | Stutz: Agency should use general "fair market value" definition (Adm.Code 5160:1-3-05.1(B)(4)) and her appraisals/supporting sale rebut the transfer presumption | Agency: Specific life-estate valuation formula in Adm.Code 5160:1-3-05.17(F) controls valuation and presumption analysis | Held: Specific formula controls; Agency reasonably used 5160:1-3-05.17(F) to value the life estate |
| Whether Stutz rebutted the presumption of improper transfer | Stutz: documented appraisals and sale to sons demonstrate fair market value and rebut the presumption | Agency: Rebuttal requires following Adm.Code 5160:1-3-07.2(D) procedures, including attempts to dispose at the statutory fair market value; Stutz did not comply | Held: Stutz failed to follow the rebuttal procedure and did not rebut the presumption by clear and convincing evidence |
| Requirement to attempt to sell at statutory value | Stutz: asserted experts showed the life estate was not salable at the Agency value, so she should not have to sell at that value | Agency: rebuttal requires showing attempts to dispose at fair market value as calculated under the specific rule; sale for well under the statutory value is insufficient | Held: Court found attempt/sale at the statutory value was required under the rebuttal framework; Stutz did not meet that burden |
| Reasonableness of the administrative rule/formula | Stutz: statutory formula yields an unreasonable valuation in practice | Agency: administrative regulation is presumed reasonable; challenger must show irrationality or unreasonableness | Held: Court upheld the reasonableness of the regulation and found Stutz did not carry the burden to show it unreasonable |
Key Cases Cited
- Roosevelt Props. Co. v. Kinney, 12 Ohio St.3d 7 (1984) (administrative regulations presumed reasonable; challenger bears burden to prove otherwise)
- Big Bob’s, Inc. v. Ohio Liquor Control Comm’n, 151 Ohio App.3d 498 (2003) (distinguishes review scopes and deference to agencies)
- Summerville v. Forest Park, 128 Ohio St.3d 221 (2010) (specific statute controls over general statute absent contrary intent)
- Williams v. Ohio Dept. of Job & Family Servs., 978 N.E.2d 1260 (2012) (discussing standards of review for administrative decisions)