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Classic Healthcare Systems, L.L.C. v. Miracle

Court of Appeals of Ohio, Twelfth District, Warren

July 1, 2019

FAUN MIRACLE, et al., Appellees.


          Rolf Goffman Martin Lang LLP, W. Cory Phillips, for appellant

          Ruppert, Bronson & Ruppert Co., LPA, Ronald W. Ruppert, for appellee.


          S. POWELL, J.

         {¶ 1} Classic Healthcare Systems, L.L.C. d.b.a. Franklin Ridge Healthcare Center ("Franklin"), appeals from the decision of the Warren County Common Pleas Court, which awarded it damages against appellee David Miracle. For the reasons discussed below, this court affirms the damage award.

         {¶ 2} This is a second appeal following a remand ordered by this court in Classic Healthcare Sys., LLC. v. Miracle, 12th Dist. Warren No. CA2017-03-029, 2017-Ohio-8540 ("Classic I"). The case involved Faun Miracle - David's mother - who was a resident of Franklin's nursing home from 2010 to 2014. Id. at ¶ 2, 4-5. At the time of Faun's admission, David, acting as her attorney-in-fact, signed a document in which he agreed to "utilize" Faun's assets over which he had control to pay for Franklin's nursing services. Id. at ¶ 7. David also agreed to the terms of a document that required him to "act as quickly as possible to establish and maintain [Faun's] eligibility for Medicaid." Id. at ¶ 8. Essentially, David agreed to (1) pay Franklin's invoices with Faun's available resources, and (2) spend down Faun's resources and apply on her behalf for Medicaid assistance.

         {¶ 3} Franklin charged approximately $5, 000 per month for nursing services and sent monthly invoices to David. Id. at ¶ 5. David paid Franklin's invoices infrequently and always for less than what was owed. Ultimately, Franklin evicted Faun after her unpaid balance exceeded $100, 000. Id.

         {¶ 4} Franklin sued Faun and David. Id. at ¶ 6. Faun passed away before trial and Franklin dismissed its claims against her. Id. at ¶ 7. Franklin pursued its claims against David, asserting a contract claim alleging that he breached his agreement to use Faun's resources to pay Franklin. Id. at ¶ 6-7. Franklin alleged that they were owed approximately $50, 000 at the time of filing of the complaint. See id. at ¶ 13.

         {¶ 5} The matter proceeded to a bench trial where David testified and Franklin introduced various financial documents concerning Faun's assets under David's control. The court found that over Faun's four-year residency, David had expended approximately $70, 000 of Faun's funds on expenses other than Franklin's invoices. Id. at ¶ 13. The court determined that David expended roughly $57, 000 on "authorized" expenses and around $13, 000 towards "unauthorized" expenses. Accordingly, the court awarded damages to Franklin equaling the unauthorized expenses. Id. at ¶ 14.

         {¶ 6} Franklin appealed the damage award.[1] This court held that the trial court erred by focusing on whether David's expenditures were authorized or unauthorized. Id. at ¶ 22. Instead, the plain language of the agreement contemplated that David would act quickly to spend down Faun's resources so that Faun could obtain Medicaid coverage. The agreement did not prohibit David from using Faun's resources on other expenses so long as he used the available "liquid assets" he controlled to pay Faun's account with Franklin. Id.

         {¶ 7} This court also held that the trial court erred in viewing the damage calculation as one transaction spanning the length of Faun's residency. Id. at ¶ 23. Instead, the court should have assessed damages on a month-to-month basis to determine whether David had control over liquid assets which could be used to pay towards Faun's outstanding bills. Id. This court remanded the matter with instructions that the trial court recalculate damages. Id. at ¶ 24. Neither party appealed this court's remand opinion.

         {¶ 8} On remand, Franklin presented the court with its damage calculation totaling $52, 930.37. Therefore, it requested a damage award for the full amount of its unpaid invoice, or $49, 602.91. David set forth his calculations of liquid assets and argued for a damage award of $23, 818.11. The magistrate's separate calculation yielded a damage award of $31, 414.92.[2]

         {¶ 9} Both parties objected to the magistrate's decision. The court issued its own decision calculating that David had access to liquid assets that were not paid to Franklin totaling $26, 979.42. The court then reduced this amount by $7, 743.95 to account for automatic withdrawals and real estate taxes paid from Faun's funds. Thus, the court awarded Franklin damages of $19, 235.47. Franklin appeals the damage award and raises a single assignment of error.

         {¶ 10} ...

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