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Classic Healthcare Systems, LLC v. Miracle

Court of Appeals of Ohio, Twelfth District, Warren

November 13, 2017

CLASSIC HEALTHCARE SYSTEMS, LLC d.b.a. FRANKLIN RIDGE HEALTHCARE CENTER, Plaintiff-Appellant,
v.
FAUN MIRACLE, et al., Defendants-Appellees.

         CIVIL APPEAL FROM WARREN COUNTY COURT OF COMMON PLEAS Case No. 14CV86509.

          W. Cory Phillips, for plaintiff-appellant

          Ronald W. Ruppert and Rachel M. Ruppert, for defendant-appellee

          OPINION

          M. POWELL, P.J.

         {¶ 1} Plaintiff-appellant, Classic Healthcare Systems, LLC d.b.a. Franklin Ridge Healthcare Center ("Franklin"), appeals from the decision of the Warren County Common Pleas Court, which awarded it damages against defendant-appellee, David Miracle. For the reasons discussed below, we reverse the judgment of the trial court and remand for further proceedings.

         {¶ 2} In 2010, Faun Miracle, age 83, fell and injured herself. Faun's son, David, arranged for Faun to stay at Franklin's skilled nursing facility while she rehabilitated. David signed certain documents prepared by Franklin relating to Faun's admission to its facility.

         {¶ 3} Both parties concur that David did not agree to assume a personal financial responsibility for Faun's charges at Franklin's facility in any of the documents. However, David signed a document in which he agreed to "utilize" Faun's assets over which he had control to pay for Franklin's services.

         {¶ 4} Although Faun's stay was intended to be temporary, she remained at Franklin's facility for four years. David, who was Faun's attorney-in-fact pursuant to a power of attorney, managed Faun's financial resources during this time, including her checking account. David used Faun's checking account to make various payments on her behalf, including paying health insurance premiums and the maintenance costs of Faun's properties.

         {¶ 5} Franklin charged Faun approximately $5, 000 per month. Franklin sent monthly invoices to David. Over Faun's four-year stay, David paid Franklin infrequently and always less than the overdue balance. Ultimately, Faun owed Franklin over $100, 000 by the time she was discharged in or around April 2014.

         {¶ 6} In November 2014, Franklin sued Faun and David. Franklin asserted a breach of contract claim against Faun for nonpayment. Franklin asserted a breach of contract claim against David alleging that he breached a promise to utilize Faun's assets to pay for Franklin's services.

         {¶ 7} Faun passed away before the trial commenced. Franklin dismissed its claims against Faun and tried its claims against David before a magistrate in November 2015. At trial, Franklin introduced its written billing policy. David admitted signing the billing policy as the "Responsible Party." Paragraph six of the billing policy provided:

LIABILITY OF RESPONSIBLE PARTY FOR RESIDENTS CHARGES. A RESPONSIBLE PARTY DOES NOT ASSUME PERSONAL FINANCIAL RESPONSIBILITY OR LIABILITY FOR THE RESIDENT'S CHARGES, HOWEVER, THE RESPONSIBLE PARTY MUST UTILIZE THE RESIDENT'S ASSETS OVER WHICH THEY HAVE HAS [sic] CONTROL TO PAY FOR SERVICES RENDERED.

         {¶ 8} Franklin also introduced a copy of the admission agreement. David did not sign the admission agreement but the magistrate found that a Franklin representative reviewed the terms of the agreement with him, that Franklin upheld its obligations under the agreement to provide Faun with food, shelter, and skilled nursing, and that both parties agreed to the terms. Like the billing policy, the admission agreement provided that David "does agree, to the extent that they have control over the RESIDENT's assets/funds, to see that RESIDENT's charges are paid." The admission agreement also contained a provision requiring Faun and David to "make appropriate application" for Medicaid. Both Faun and David were required to:

act as quickly as possible to establish and maintain eligibility for Medicaid. These actions must include, but are not limited to, taking any and all steps necessary to ensure that the RESIDENT's assets are within the required limits and that these assets remain within the allowable limits for Medicaid assistance.

         {¶ 9} The record reflects that David repeatedly and unsuccessfully applied for Medicaid on Faun's behalf. However, Faun's available financial resources rendered her ineligible. Franklin could not legally discharge Faun during David's attempts to apply for Medicaid coverage for Faun.

         {¶ 10} David admitted that he signed another document that explained that Franklin billed 30 days in advance, that invoiced amounts were due upon receipt, and that payment must be made by the 10th of the month. In this respect, Franklin introduced into evidence monthly billing statements that it sent to David for Faun's charges. The first statement date is September 2010 and the final statement is May 2014. David agreed that he received these billing statements.

         {¶ 11} Franklin also introduced into evidence Faun's checking account statements from December 2011 through December 2013. These statements reflect account balances ranging from approximately $18, 000 to $3, 600. The account ...


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