LaPointe v. Rhode Island Department of Human Services

AGNES LAPOINTE v. RHODE ISLAND DEPARTMENT OF HUMAN SERVICES, GARY D. ALEXANDER, DIRECTOR

C.A. No. PC 11-1142

Superior Court of Rhode Island

April 26, 2013

For Plaintiff: Peter D. Nolan, Esq.

For Defendant: Kevin D. Tighe, Esq.

DECISION

MATOS J.

Agnes LaPointe (Ms. LaPointe) appeals from a decision of the Rhode Island Department of Human Services (DHS). That decision found that Ms. LaPointe does not qualify for Medical Assistance benefits (MA benefits) because she has access to assets that total over the resource level permitted by the Rhode Island Department of Human Services Code of Rules (DHS Regulations). Jurisdiction is pursuant to G.L. 1956 § 42-35-15.

The sole issue raised by this administrative appeal is whether Ms. LaPointe's disclaimers of her inherited one-half interest in a home she owned with her husband as joint tenants constitute uncompensated transfers of an asset under DHS Regulations. For the reasons set forth below, the Court affirms the DHS decision.

I Facts and Travel

Ms LaPointe and her husband, Charles W. LaPointe (Mr. LaPointe) owned real estate, consisting of a house and an associated parcel of land, at 26 Grant Drive, Coventry, Rhode Island 02816 (Grant Drive property), as joint tenants. When Mr. LaPointe died on June 22, 2008, his one-half interest in the Grant Drive property passed automatically by operation of law to Ms. LaPointe. Thereafter, on January 14, 2009, Ms. LaPointe executed two disclaimers of her interest in the Grant Drive property. (Admin. Hr'g Dec. 5, Feb. 11, 2011.) First, she disclaimed the one-half interest she had inherited from her husband as the surviving joint tenant. Second, she disclaimed all of her interest as sole beneficiary of her husband's estate. Id.; see also Appellant's Exs. B and C. As a result of these disclaimers, all of her interest in the Grant Drive property passed by intestacy to her two children, Stephen M. LaPointe (Stephen) and Shirley-Ann Hall (Shirley-Ann). (Admin. Hr'g Tr. 2, Oct. 4, 2010.) Also on January 14, 2009, Ms. LaPointe executed a quit-claim deed, transferring her own one-half interest in the Grant Drive property to Stephen and Shirley-Ann while reserving a life estate for herself. Id. at 2.

Approximately one year later, on January 5, 2010, Ms. LaPointe's declining health induced her to move out of the Grant Drive property and into the Coventry Skilled Nursing Center (the "NH ''), where she continues to reside today. In turn, her two children sold the Grant Drive property on February 25, 2010, for $137, 048.99, and divided the profits between themselves. Ms. LaPointe received approximately $29, 917.25 from Stephen as her share of the sale proceeds. Id. at 2.

On April 19, 2010, Ms. LaPointe applied for MA benefits from DHS. After reviewing and evaluating her application, DHS denied it because it determined that she had engaged in "an uncompensated transfer [of assets] in the amount of $128, 743.80 between 1/14/09 and 2/25/10, '' thus giving her access to assets over the required $4000 level. (Long-Term Care Medical Assistance Letter of Denial, June 25, 2010, (hereinafter, "Letter '') at 1.) Ms. LaPointe filed a timely appeal of DHS's denial on July 23, 2010.

At the hearing to consider the appeal, held on October 4, 2010, the DHS Appeals Officer (the "Appeals Officer '') took testimony from Social Worker Dana Denman (Denman) and Stephen. (Tr. at 1.) Ms. LaPointe was represented by counsel at the hearing. Denman filed a number of exhibits and testified that the DHS Legal Office, per DHS Senior Legal Counsel Kevin D. Tighe, considered Ms. LaPointe's disclaimers to be "transfers '' within the meaning of DHS Regulations, thus engendering a period of ineligibility for MA benefits. (Tr. at 6 ''7.) Denman testified that DHS calculated the value of the $128, 743.80 in uncompensated transfers as follows:

(1) $82, 500 (one-half of the appraised value of the Grant Drive property, or $165, 000, derived from Ms. LaPointe's disclaimer of her husband's one-half interest in the property) (Tr. at 2-3); see also Freddie Mac Second Mortgage Property Value Analysis Report, November 10, 2009 at 1;

(2) $45, 080 (the calculated value of Ms. LaPointe's retained life estate in the Grant Drive property) (Tr. at 4); see also DHS Life Estate Worksheet, June 25, 2010 at 1;

(3) $1, 163.80 (the difference between the net sale proceeds of the Grant Drive property that Ms. LaPointe received from her son, $29, 917.25, and the share she was entitled to, $31, 081.05).

(Tr. at 5.)

Counsel for Ms. LaPointe conceded that Ms. LaPointe's quit-claim deed and retained life estate in the Grant Drive property of January 14, 2009, constituted uncompensated transfers of an asset under DHS Regulations; therefore, Stephen was already in the process of reconveying to Ms. LaPointe her one-half interest in the property at the time of the hearing, amounting to approximately $68, 524.49. (Tr. at 11-15.)

However, counsel for Ms. LaPointe argued that Ms. LaPointe's disclaimers of her inherited interest were not transfers under DHS Regulations because the disclaimed interest never vested in her by operation of the Rhode Island Disclaimer Statute (RI Disclaimer Statute), G.L. 1956 § 34-5 et seq. (Tr. at 15-16.) As such, Ms. LaPointe could not transfer property in which she had no title. See id Counsel also cited case law in support of his contentions.^[1] Id at 16. The Appeals Officer held the hearing open for five weeks to allow the parties to file their final briefs before rendering a decision. (Tr. at 29.)

The Appeals Officer issued the Decision on the Administrative Hearing (the "Decision-) on February 11, 2011, and found in favor of the agency. After making findings of fact and summarizing the parties' positions, the Appeals Officer determined that Ms. LaPointe's disclaimers amounted to an uncompensated transfer of an asset under applicable DHS Regulations.^[2] She rejected Ms. LaPointe's reading of the RI Disclaimer Statute, finding that while Ms. LaPointe had the right to disclaim her inherited interest in the Grant Drive property, doing so forfeited her eligibility for MA benefits. (Dec. at 7-8.)

The Appeals Officer also determined that particular sections of the federal Social Security Act (SSA), 42 U.S.C. § 1396 et seq., supported her determinations. Id Finally, the Appeals Officer distinguished the facts of the case law cited by Ms. LaPointe from the facts of the instant case.^[3] See id. at 8-9. However, she recognized that because Stephen agreed to reconvey the quit-claim deed and life estate to Ms. LaPointe, the value of the assets transferred had been altered, thus requiring recalculation of the total transfer amount and penalty period at a later date. Id. at 9-10.

Upon receiving notice of the agency's final decision, Ms. LaPointe timely filed an appeal with this Court, pursuant to § 42-35-15, on February 28, 2011. On appeal, Ms. LaPointe argues that DHS erred in rejecting her construction of the RI Disclaimer Statute. She claims that the inherited interest in the Grant Drive property never vested in her pursuant to Section 34-5-8(c). Therefore, she contends, she could not have transferred an interest she never owned in the first instance. Ms. LaPointe also asserts that the case law she cited at the Administrative Hearing supports her position. Finally, Ms. LaPointe argues that Federal Medicaid laws cannot infringe on the rights afforded in Section 34-5-2 of the RI Disclaimer Statute. As a result, she concludes, her disclaimers do not constitute prohibited asset transfers under DHS Regulations.

In response, the agency contends that DHS Regulations, applicable Federal Medicaid laws, and their reading of the cited case law all support the Appeals Officer's determination that Ms. LaPointe's disclaimers constituted uncompensated transfers of assets engendering a penalty period of ineligibility for MA benefits. This Court agrees.

II Standard of Review

The ability of the Superior Court to review the decisions of administrative agencies is governed by the Rhode Island Administrative Procedures Act, § 42-35-1 et seq. See Rossi v. Employees' Retirement Sys. of R.I., 895 A.2d 106, 109 (R.I. 2006). The applicable standard of review, set forth in Section 42-35-15(g), provides in pertinent part:

The court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings or it may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inference, conclusions or decisions are:

(1) In violation of constitution or statutory provisions;

(2) In excess of the statutory authority of the agency;

(3) Made upon unlawful procedure;

(4) Affected by other error of law;

(5) Clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or

(6) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

Sec. 42-35-15(g).

Accordingly in reviewing an agency decision, this Court is limited to an examination of the certified record in deciding whether the agency's decision is supported by substantial evidence. Johnston Ambulatory Surgical Assocs. v. Nolan, 755 A.2d 799, 804-05 (R.I. 2000) (quoting Barrington Sch. Comm. v. R.I. State Labor Relations Bd., 650 A.2d 479, 485 (R.I. 1994)). Substantial evidence is "such relevant evidence that a reasonable mind might accept as adequate to support a conclusion and means an amount more than a scintilla but less than a preponderance. '' Town of Burrillville v. R.I. State Labor Relations Bd., 921 A.2d 113, 118 (R.I. 2007) (citations omitted). As such,...