Melmark, Inc. v. Schutt by and Through Schutt

206 A.3d 1096

MELMARK, INC., Appellant

v.Alexander SCHUTT, an Incapacitated Person, BY AND THROUGH Clarence E. SCHUTT and Barbara Rosenthal Schutt, his Legal Guardians, and Clarence E. Schutt and Barbara Rosenthal Schutt, Individually, Appellees

No. 78 MAP 2017

Supreme Court of Pennsylvania.

Argued: December 4, 2018

Decided: April 26, 2019

Michael E. Gehring, Esq., Alissa Beth Gorman, Esq., Anthony L. Marone, Esq., Dennis Craig McAndrews, Esq., McAndrews Law Offices, P.C., for Melmark, Inc., Appellant.

James J. Byrne Jr., Esq., Kelly Christine Hayes, Esq., McNichol, Byrne & Matlawski, P.C., for Schutt, Alexander et al., Appellee.

SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.

OPINION

CHIEF JUSTICE SAYLOR

This matter arises due to the failure of a New Jersey couple to pay for their adult son's stay at a Pennsylvania nonprofit residential facility. It primarily raises a choice-of-law issue in relation to the two states' filial-support statutes.

I. Background

Alexander Schutt ("Alex"), born in 1986, is an individual with severe mental and physical disabilities, including autism and obsessive-compulsive disorder. He exhibits maladaptive behaviors such as extreme aggression, noncompliance, elopement, and pica (eating non-food items). Alex cannot care for himself and requires continual one-on-one assistance with the activities of daily life including toileting, bathing, medication management, recognizing dangerous situations, behavioral issues, and mobility issues. He suffers from grand mal seizures during which oxygen is often administered. He has received Medicaid and Social Security Disability benefits since 2004.

Alex's parents, appellees Dr. Clarence Schutt and Barbara Schutt ("Parents"), born in 1945 and 1947, respectively, live in Princeton, New Jersey. They were appointed as Alex's guardians in 2004. They have both been at least 55 years old at all relevant times. There is no suggestion that they lack the ability to support Alex.¹

In 2001, Alex was placed at Melmark, a non-profit residential care facility for intellectually and physically disabled persons, located in Delaware County, Pennsylvania. Melmark is owned and operated by appellant Melmark, Inc., a Pennsylvania nonprofit corporation. During his stay there, Alex received residential, educational, and vocational services. While Alex was under 21, his costs were paid by the Princeton Regional School District. Starting in July 2007, Alex was no longer entitled to school district funding. At that point, responsibility for the cost of Alex's care shifted to the New Jersey Department of Human Services, Division of Developmental Disabilities ("NJ-DDD"). Also at that time, Alex began attending Melmark's adult residential program, which included residential and vocational services.

In July 2011, NJ-DDD informed Parents that Alex would have to be relocated on August 7, 2011, because the agency disapproved Melmark's rates. NJ-DDD stated that Parents, as guardians, should pick Alex up at Melmark and NJ-DDD would provide him with an emergency placement pursuant to New Jersey law. Parents did not retrieve Alex from Melmark on that date, however. Thereafter, in December 2011, NJ-DDD wrote to Parents, stating it would fund Alex's residence on a permanent basis at an identified facility in New Jersey beginning on January 16, 2012. Unsatisfied with this offer, Parents asked NJ-DDD instead to continue paying for Alex's care at Melmark. NJ-DDD disapproved that request and advised Parents it would cease paying Melmark as of December 31, 2011. Parents lodged an administrative appeal in New Jersey in an effort to keep Alex at Melmark. NJ-DDD granted extensions of time to allow for Alex's transfer to a New Jersey facility, but the agency ultimately informed Parents it would make no further payments to Melmark after March 31, 2012.

When that date arrived, neither Parents nor NJ-DDD accepted custody of Alex, leaving Melmark to care for him uncompensated. Nevertheless, Parents continued to pay for off-campus speech classes, art classes, and equestrian therapy for Alex, all of which took place in Pennsylvania. In addition, Parents continued to visit Alex at Melmark almost every weekend even after NJ-DDD's payments ceased. See, e.g. , N.T. July 21, 2014, at 23 (reflecting Mrs. Schutt's deposition testimony to this effect).

In August 2012, Parents filed an "Application for Emergent Relief" in New Jersey, requesting restoration of New Jersey state funding for Alex's care at Melmark pending the outcome of their administrative appeal. Meanwhile, Melmark filed a petition in the Delaware County common pleas court, requesting a determination that Alex needed placement for residential care as an incapacitated person. See 50 P.S. § 4406 ; 55 Pa. Code § 6250.11. Parents appeared and opposed Melmark's petition, representing that Parents and NJ-DDD were involved in a mere funding dispute over Alex's care. The court denied relief on that basis, noting that the funding dispute might be resolved at a New Jersey hearing scheduled for January 2013 concerning Parents' administrative appeal. See In re Involuntary Commitment of Alexander Schutt , No. 456 of 2012, slip op . at 4 (C.P. Delaware Nov. 15, 2012), appeal dismissed as moot , In re A.S. , No. 3365 EDA 2012, 2013 WL 11255021 (Pa. Super. Aug. 23, 2013).

Thereafter, on December 21, 2012, Parents voluntarily withdrew their New Jersey administrative appeal, causing the January 2013 hearing to be cancelled. This development eliminated any opportunity Parents had previously alleged was available to obtain an adjudication requiring NJ-DDD to pay Melmark for its services to Alex.²

Alex continued to live at Melmark until May 15, 2013, when Melmark transported him to a crisis center in New Jersey due to his increasingly aggressive behaviors.³ Thus, Melmark provided uncompensated residential and day program services to Alex from April 1, 2012, to May 14, 2013. Melmark and the trial court calculated the cost of these services at approximately $ 205,000.00.

Melmark filed a complaint in the Delaware County Court of Common Pleas, seeking recovery of the cost of services as outlined above. In Counts I and II of the complaint, Melmark asserted equitable claims under the doctrines of unjust enrichment and quantum meruit . In Count III, Melmark included a cause of action based on Pennsylvania's common law and filial support statute. That statute provides:

(a) Liability.–

(1) Except as set forth in paragraph (2), all of the following individuals have the responsibility to care for and maintain or financially assist an indigent person, regardless of whether the indigent person is a public charge: (i) The spouse of the indigent person. (ii) A child of the indigent person. (iii) A parent of the indigent person.

(2) Paragraph (1) does not apply in any of the following cases: (i) If an individual does not have sufficient financial ability to support the indigent person....

(b) Amount.–

(1) [With certain exceptions], the amount of liability shall be set by the court in the judicial district in which the indigent person resides.

* * *

(c) Procedure.– A court has jurisdiction in a case under this section upon petition of:

(1) an indigent person; or(2) any other person or public body or public agency having any interest in the care, maintenance or assistance of such indigent person.

* * *

23 Pa.C.S. § 4603(a) - (c).

In their amended new matter, Parents averred that the court should apply New Jersey's filial support statute, not Pennsylvania's. Parents posited that, under such law, liability is limited to individuals less than 55 years old unless the indigent person is the party's spouse or minor child. The substantive aspect of the New Jersey statutory scheme provides, in relevant part:

44:1-139. Obtaining or compelling assistance of relatives

Upon application for the relief of a poor person [a municipal director of welfare] shall ascertain if possible the relatives chargeable by law for his support and proceed to obtain their assistance or compel them to render such assistance as is provided by law.

44:1-140. Relatives chargeable

a. The father and mother of a person under 18 years of age who applies for and is eligible to receive public assistance, and the children, and husband or wife, severally and respectively, of a person who applies for and is eligible to receive public assistance, shall, if of sufficient ability, at his or their charge and expense, relieve and maintain the poor person or child in such manner as shall be ordered, after due notice and opportunity to be heard, by any county or municipal director of welfare, or by any court of competent jurisdiction upon its own initiative or the information of any person.

* * *

c. The provisions of this section shall not apply to any person 55 years of age or over except with regard to his or her spouse, or his or her natural or adopted child under the age of 18 years.

44:1-141. Compelling support by relatives

If any of the relatives mentioned in section 44:1-140 of this Title shall fail to perform the order or directions of the director of welfare of a municipality with regard to the support of the poor person, or if the poor person is supported at public expense, the Superior Court in the county wherein the poor person has a legal settlement, or the municipal court of the municipality wherein the person has a legal settlement, upon the complaint of the director of welfare or two residents of the municipality or county may summon the persons chargeable before it as in other actions, summon witnesses, and adjudge that the able relatives pay such sum for each poor person as the circumstances may require in the discretion of the court, and as will maintain him or them and relieve the public of that burden.... Any child now under an order to support a poor person may apply to the court which issued said order for the revocation or reduction of said order in accordance with the terms of this proviso. Violation of any such order

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