| Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions |
|
|
|
| Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions |
|
|
|
|
You can search the entire site. or go to the recent opinions, or the chronological or subject indices. In the Matter of the Estate of Fe Perez Abad, In the Matter of the Estate of Sandra Lee Boatner (12/22/2023) sp-7678
Notice: This opinion is subject to correction before publication in the Pacific Reporter.
Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
corrections@akcourts.gov.
THE SUPREME COURT OF THE STATE OF ALASKA
In the Matter of the Estate of )
) Supreme Court Nos. S-18380/18450
E PEREZ ABAD (Consolidated)
F )
)
)
________________________________ Superior Court No. 3KO-20-00057 PR
)
)
In the Matter of the Estate of O P I N I O N
)
) No. 7678 - December 22, 2023
SANDRA LEE BOATNER
)
) Superior Court No. 4FA-20-00520 PR
Appeal in File No. S-18380 from the Superior Court of the
State of Alaska, Third Judicial District, Kodiak, Stephen B.
Wallace, Judge. Appeal in File No. S-18450 from the
Superior Court of the State of Alaska, Fourth Judicial
District, Fairbanks, Earl A. Peterson, Judge.
Appearances: Karen L. Lambert, Lambert Law LLC,
Kodiak, for Estate of Abad. Heather M. Brown, Franich
Law Office, LLC, Fairbanks, for Estate of Boatner. Laura
Fox, Senior Assistant Attorney General, Anchorage, and
Treg R. Taylor, Attorney General, Juneau, for State of
Alaska.
Before: Maassen, Chief Justice, and Carney, Borghesan, and
Henderson, Justices. [Pate, Justice, not participating.]
BORGHESAN, Justice.
INTRODUCTION
----------------------- Page 2-----------------------
Under Alaska's probate code the deadline for filing a claim against a
decedent's estate depends on when the claim arose. For claims arising "before the death
of the decedent, . . . whether due or to become due, absolute or contingent," the creditor
must file within four months after the representative of the estate first published notice
1
to creditors. For claims arising "at or after the death of the decedent," the creditor must
2
file within four months after the claim arose. The question in these consolidated
appeals is which deadline applies to the State's claim against the decedent's estate for
reimbursement for Medicaid services provided to the decedent while alive.
We hold that Medicaid estate recovery claims arise before death and
therefore must be filed within four months after notice to creditors. Although the State
may not pursue these claims until after the Medicaid beneficiary has died, these claims
arise when Medicaid services are provided, not when the claims become enforceable.
FACTS AND PROCEEDINGS
A. Statutory Framework
"The Medicaid program is 'a cooperative federal-state partnership under
which participating states provide federally-funded medical services to needy
3
individuals.' " In determining who qualifies for Medicaid, federal law excludes the
4 As a result some people receive Medicaid services despite
value of a person's home.
owning a valuable asset. Congress addressed this "anomaly" by authorizing states to
1
AS 13.16.460(a)(1).
2
AS 13.16.460(b)(1).
3
Smart v. State, Dep't of Health & Soc. Servs., 237 P.3d 1010, 1012
(Alaska 2010) (quoting Hidden Heights Assisted Living, Inc. v. State, Dep't of Health
& Soc. Servs., 222 P.3d 258, 261 (Alaska 2009)).
4
The Medicaid Act generally excludes an individual's principal residence
for purposes of calculating Medicaid eligibility. West Virginia v. U.S. Dep 't of Health
& Hum. Servs., 289 F.3d 281, 284 & n.3 (4th Cir. 2002) (citing 42 U.S.C. §§
1382b(a)(1), 1396a(a)(10)(A)(i)(II), 1396a(a)(10)(A)(ii)(V), 1396a(a)(10)(C)(i)(III)).
-2- 7678
----------------------- Page 3-----------------------
seek reimbursement for the cost of certain Medicaid services from the estates of
5 Estate recovery was initially optional for state Medicaid
deceased beneficiaries.
programs.6 But in the face of rapidly escalating Medicaid costs, Congress amended the
law to require states to conduct estate recovery.7 Because the State of Alaska has
chosen to participate in Medicaid, it is obliged to comply with this federal statutory
requirement.8
Accordingly the Alaska Legislature enacted AS 47.07.055, authorizing
the State's Division of Health Care Services to seek reimbursement from the estates of
deceased Medicaid recipients. Under this statute, "after an individual's death, the
individual's estate is subject to a claim for reimbursement for [Medicaid] payments
made on behalf of the individual . . . to the extent that those services were provided
9 The claim "may be made only after
when the individual was 55 years of age or older."
the death of the individual's surviving spouse, if any," and only if the individual has no
surviving child who is younger than 21, blind, or totally and permanently disabled.10
Regulations adopted under AS 47.07.055 provide that the State will pursue estate
recovery claims only if "the potential recovery amount would result in twice the
administrative and legal cost of pursuing the claim, with a minimum pursuable net
5
Id. at 284.
6
Id.
7
See Omnibus Budget Reconciliation Act of 1993, Pub. L. No. 103-66,
§ 13612, 107 Stat. 312, 627-28 (codified at 42 U.S.C. § 1396p(b)(1)).
8
Smart, 237 P.3d at 1012 (quoting Hidden Heights, 222 P.3d at 261).
9
AS 47.07.055(e). Only certain kinds of services, such as "services
received while an inpatient in a nursing facility" and "home and community-based
services provided through waiver," give rise to a claim for reimbursement by the State.
AS 47.07.055(e)(1)-(2).
10
42 U.S.C. § 1396p(b)(2)(A); AS 47.07.055(f).
678
-3- 7
----------------------- Page 4-----------------------
11
amount of $10,000." The State may also waive estate recovery where it would cause
12
undue hardship.
B. Abad Proceedings
Fe Perez Abad passed away on August 19, 2020 after receiving Medicaid
home and community-based services. Her daughter opened an informal probate case
approximately two months later and was appointed the personal representative of
Abad's estate. Abad's estate issued its first notice to creditors on October 19, 2020.
On December 30, 2020 - less than four months after the estate published its first notice
to creditors, but more than four months after Abad's death - the State filed a claim
against the estate for $200,621.62 in Medicaid reimbursement. The estate disallowed
the State's claim.
The State then petitioned the superior court to allow its Medicaid
reimbursement claim. The estate objected, arguing the claim was time-barred. The
estate reasoned that because the claim could be asserted only against Abad's estate, and
not against Abad herself while alive, the claim arose at the time of Abad's death for
purposes of AS 13.16.460. Because the claim had not been filed within four months of
her death, the estate argued, it was untimely. The State argued that its claim arose
before Abad's death, triggering the "before death" notice-based filing deadline under
AS 13.16.460. Accordingly, the State argued, it was timely because it was filed within
four months of when notice to creditors was first published.
The superior court agreed with the estate, holding that the State 's
Medicaid recovery claim did not arise during Abad's lifetime and should have been
brought within four months of her death. Noting that no published Alaska decision
addressed the interaction of AS 47.07.055 and AS 13.16.460, the superior court
11
7 Alaska Administrative Code (AAC) 160.210(c).
12
7 AAC 160.240(a)-(b).
-4- 7678
----------------------- Page 5-----------------------
examined decisions from the Nebraska, Iowa, and Washington supreme courts. The
superior court also rejected the State's policy argument that a deadline tethered to death,
rather than notice to creditors, would hamper the State's ability to pursue estate
recovery in accordance with federal law.
The State filed a motion for reconsideration, which the superior court
denied.
The State then appealed.
C. Boatner Proceedings
Sandra Lee Boatner passed away on September 1, 2020. During her life
she was the beneficiary of Medicaid services. Roughly two months after her death,
David E. Cook opened an informal probate case; he was appointed the personal
representative of her estate. The estate issued its first notice to creditors on December
22, 2020. On March 24, 2021 - less than four months after the estate published its
first notice to creditors, but more than four months after Boatner's death - the State
filed a claim against the estate for $300,647.29 in Medicaid reimbursement.
In May of that year the estate disallowed the claim, maintaining that it was
not timely filed. The State petitioned the superior court to permit its claim against
Boatner's estate, asserting that its claim was timely filed under AS 13.16.460(a)(1).
The parties each moved for summary judgment. Their arguments paralleled those in
the Estate of Abad litigation.
A standing master recommended that the superior court adopt the State's
reading of Alaska's probate filing deadlines. The standing master acknowledged that
Medicaid estate recovery claims become enforceable after death. But because these
claims concerned medical expenses that Boatner incurred during her lifetime, the
standing master concluded they arose before her death. The superior court adopted the
standing master's recommendation.
-5- 7678
----------------------- Page 6-----------------------
Boatner 's estate filed a motion for reconsideration, and the superior court
denied it. The court explained that the State seeks to recover debt arising from medical
expenses, and that "[a]ll medical expenses occur while the person is still deemed alive."
The court further explained that the provision of AS 47.07.055(a) limiting recovery
until after the recipient's death "does not shift the accrual date" or "change the fact that
the person still received that care during her lifetime." Rather, the court described this
provision as "an offer of grace for the benefitted person to live out her life without
worry of being refused care for lack of payment."
Boatner's estate appealed. We consolidated the Boatner estate's appeal
with the Abad estate's appeal for purposes of oral argument and decision.
DISCUSSION
These two cases present a single question of statutory interpretation: For
purposes of the probate code's claim filing deadlines under AS 13.16.460, does a
Medicaid estate recovery claim under AS 47.07.055(e) arise "before death" or "at or
after death"? The answer determines the deadline for the State to present its claim for
reimbursement to the estate.
13
Statutory interpretation is a question of law that we review de novo.
"We apply our independent judgment to the interpretation of Alaska statutes and will
interpret statutes 'according to reason, practicality, and common sense, taking into
account the plain meaning and purpose of the law as well as the intent of the
14
drafters.' " "Statutory interpretation begins with the plain meaning of the text, but it
15
does not stop there." Instead, we subscribe to a "sliding scale approach to statutory
13
Rosauer v. Manos, 440 P.3d 145, 147 (Alaska 2019).
14
In re Est. of Rodman, 498 P.3d 1054, 1062 (Alaska 2021) (quoting Taylor
v. Wells Fargo Home Mortg., 301 P.3d 182, 188 (Alaska 2013)).
15
Am. Marine Corp. v. Sholin , 295 P.3d 924, 926 (Alaska 2013) (citing
State, Com. Fisheries Entry Comm'n v. Carlson, 270 P.3d 755, 762 (Alaska 2012)).
-6- 7
678
----------------------- Page 7-----------------------
16
interpretation,"
under which "[t]he plainer the statutory language is, the more
17
convincing the evidence of contrary legislative purpose or intent must be."
We conclude that Medicaid estate recovery claims arise before death for
purposes of the probate code's filing deadline. This conclusion is supported by
statutory text, the underlying legislative purpose of the Medicaid estate recovery statute,
and the weight of precedent from other jurisdictions.
A. Statutory Text Suggests That Medicaid Estate Recovery Claims Arise
Before A Beneficiary's Death Even Though They Cannot Be Enforced
Until After Death.
The estates emphasize the text of the estate recovery statute. They argue
that because the State may bring a Medicaid estate recovery claim only "after an
18 the State's claim
individual's death" and only against the deceased individual's estate,
for reimbursement arises "at or after" the individual's death.19 The State instead
emphasizes the text of the probate code. It points out that the probate code refers to
when claims "arise," rather than when they "accrue," and recognizes that claims arising
20
before death include those that are "due or to become due, absolute or contingent."
Accordingly the State argues that a Medicaid estate recovery claim arises when the
services are provided to the beneficiary, even if it is not enforceable and therefore
remains contingent until the beneficiary's death. The State also asserts that other
language in the probate code suggests that claims arising "at or after" death are related
16
McDonnell v. State Farm Mut. Auto. Ins. Co., 299 P.3d 715, 721 (Alaska
2013) (citing Peninsula Mktg. Ass'n v. State, 817 P.2d 917, 922 (Alaska 1991)).
17 Id. (alteration in original) (quoting Gov't Emps. Ins. Co. v. Graham-
Gonzalez, 107 P.3d 279, 284 (Alaska 2005)).
18 AS 47.07.055(e) ("[A]fter an individual's death, the individual's estate is
subject to a claim for reimbursement . . . .").
19 AS 13.16.460(b).
20 AS 13.16.460(a).
-7- 7678
----------------------- Page 8-----------------------
to estate administration, rather than to obligations incurred by the beneficiary while
alive. The State's position is ultimately more persuasive.
The probate code's use of "arise" rather than "accrue" does not, on its
own, resolve the dispute. According to the State, a claim arises when the underlying
events take place, but a claim only accrues when it is enforceable. Yet the dictionary
21
does not suggest such a clear distinction between these terms. The Revised Fourth
Edition of Black's Law Dictionary, which would have been available to the legislature
when it enacted AS 13.16.460, states that "[a] cause of action 'accrues' when a suit may
22
The entry for
be maintained thereon" or "[w]henever one person may sue another."
23
"arise" notes that the term is not a synonym for "accrue." It defines "arise" as "[t]o
spring up, originate, to come into being or notice, to become operative, sensible, visible,
24
This definition tends to support the State's position, as
or audible; to present itself."
the Medicaid estate recovery claim "came into being" or "originated" with the provision
of Medicaid services. But Black's Law Dictionary also states that a cause of action or
suit " 'arises,' so as to start running of limitation, when a party has a right to apply to
25
Because AS 13.16.460 is a statute of limitation, this
the proper tribunal for relief."
second definition of "arise" is more on-point and therefore tends to support the estates'
position.
21
"In the absence of a [statutory] definition, we construe statutory terms
according to their common meaning[;] [d]ictionaries provide a useful starting point for
this exercise." State v. Recall Dunleavy , 491 P.3d 343, 359 (Alaska 2021) (alterations
in original) (quoting Alaska Pub. Def. Agency v. Superior Ct., 450 P.3d 246, 253
(Alaska 2019)).
22
Accrue , BLACK 'S LAW DICTIONARY (4th ed. 1968).
23 LACK 'S LAW DICTIONARY (4th ed. 1968).
Arise , B
24
Id.
25
Id.
-8- 7678
----------------------- Page 9-----------------------
However, the legislature's decision to explain that a claim may arise
whether it is "due or to become due" and whether "absolute or contingent" favors the
26 These qualifiers suggest that the legislature meant that a claim might
State's position.
arise even before the claimant could enforce it. A "contingent claim" is, according to
Black's, "[o]ne which has not accrued and which is dependent on some future event
27
that may never happen." This language supports the conclusion that a claim may
"arise" before it becomes enforceable. A Medicaid estate recovery claim, though
contingent and unenforceable before the beneficiary's death and the death of a surviving
spouse, can therefore fall in the category of claims arising before death.
The probate code's definition of "claim" reinforces the conclusion that
Medicaid estate recovery claims arise before death for purposes of
AS 13.16.460(a)(1)'s filing deadline. The probate code defines "claims" in a way that
mirrors AS 13.16.460's distinction between claims arising before death and claims
28
arising "at or after" death. " '[C]laims,' in respect to estates of decedents," include
both "liabilities of the decedent . . . , whether arising in contract, in tort, or another way,
and liabilities of the estate that arise at or after the death of the decedent . . . , including
29
funeral expenses and expenses of administration." A Medicaid estate recovery claim
is akin to a contract claim: in exchange for receiving services, the beneficiay incurs a
contingent obligation to repay after death, with funds from the beneficiary's estate. It
26
AS 13.16.460(a)(1) (emphasis added). These qualifiers are used both for
claims that arose before death under AS 13.16.460(a)(1) and for claims that arise at or
after death under AS 13.16.460(b)(1).
27
Contingent Claim, BLACK 'S LAW DICTIONARY (4th ed. 1968).
28
AS 13.06.050 (providing definitions for AS 13.06-.36, "[s]ubject to
additional definitions contained in AS 13.06-AS 13.36 that are applicable to specific
provisions of AS 13.06-AS 13.36").
29
Id. (emphasis added).
-9- 7678
----------------------- Page 10-----------------------
is far less similar to "funeral expenses and expenses of administration," the kinds of
30
claims the statute offers as examples of claims arising at or after death.
Secondary sources support this distinction and confirm that Medicaid
estate recovery claims fall in the category of claims arising before death for probate
purposes. Richard Wellman 's Uniform Probate Code Practice Manual, which we have
31
found useful in the past, explains that claims that "arise at or after death" are
32
"commonly classified as expenses of administration." The Stein on Probate treatise
agrees, explaining that "[b]ecause claims arising after death usually originate from acts
33
by the personal representative, they occur primarily during administration."
The Stein treatise illustrates the distinction between claims arising before
death and claims arising after death with helpful examples.34 Before-death claims
include "last illness charges, charges for illness during the year immediately preceding
death, personal service charges during lifetime, recovery on warranties, liability as a
surety or guarantor, claims of the state or county for support in state or county mental
35 Claims that arise
institutions, equitable claims, and other general contract claims."
after death include "accountants' fees, representative's and attorneys' fees, repair and
maintenance expenses of property of the estate, insurance premiums, storage costs,
30
AS 13.06.050(6).
31
See In re Est. of Baker, 386 P.3d 1228, 1234 (Alaska 2016)
(acknowledging that "members of the Alaska House Judiciary Committee found
Richard Wellman's writings on the Uniform Probate Code to be helpful in clarifying
the concepts underlying the code," and citing to Richard Wellman's Uniform Probate
Code Practice Manual).
32
1 UNIFORM PROBATE CODE PRACTICE MANUAL 343 (Richard V.
Wellman, ed., 2d ed. 1977).
33
1 STEIN ON PROBATE, § 6.01(c), at 117 (Robert A. Stein, ed., 3d ed. 1995).
34
Id .
35
Id.
-10- 7678
----------------------- Page 11-----------------------
platting costs, and charges for all services rendered to the personal representative for
36 Medicaid estate recovery claims, which are based on healthcare costs
the estate."
incurred prior to a recipient's death rather than estate administration expenses, are
similar to the kinds of claims that the treatise describes as claims arising before death.
B. Classifying Medicaid Estate Recovery Claims As Claims Arising
Before Death Is More Consistent With Legislative Purpose.
The parties argue that their respective interpretations are more consistent
with the purposes underlying the probate code and the Medicaid statutes. The estates
argue that classifying Medicaid estate recovery claims as claims arising at or after death
will cause the claims to be asserted earlier, furthering the goal of speedier estate
administration. The State does not agree that classifying probate claims this way will
necessarily expedite probate administration. It also argues that subjecting Medicaid
estate recovery claims to a potentially more restrictive filing deadline is inconsistent
with the priority the Legislature has assigned these claims vis-Ã -vis the claims of other
37
creditors. Again we find the State's arguments on these points more persuasive.
Alaska's probate statutes are intended to "promote a speedy and efficient
38
system for liquidating the estate of the decedent" and "facilitate the prompt settlement
39 among other purposes. Abad's estate contends that treating Medicaid
of estates,"
estate recovery claims as arising at or after death would expedite probate administration.
Generally, the decedent's heirs and creditors have up to three years after death to open
40
a probate proceeding. The estates argue that if the State's claim arises "at or after"
36
Id.
37
See AS 13.16.470(a); AS 47.07.055(g).
38
AS 13.06.010(b)(3).
39
AS 13.16.005.
40
AS 13.16.040(a). But see AS 12.16.040(a)(1)-(5) (providing exceptions to
the general rule).
-11- 7678
----------------------- Page 12-----------------------
41
death, then its claim will expire unless filed within four months after death. If by that
time no one has stepped forward to administer the decedent's estate, then the State will
be forced to seek appointment as the personal representative of the estate in order to
42
preserve its claim. Accordingly, the estates argue, the probate process will unfold
more quickly, which is more consistent with the goal of the probate code.
Though the estates' theory may be correct in some cases, it is not
universally true. In other cases treating Medicaid estate recovery claims as arising at
or after death could prolong estate administration. For example, a claim cannot be made
43
If a
against the decedent's estate if there is a surviving spouse or child under 21.
Medicaid estate recovery claim does not arise until it becomes enforceable, then the
claim could arise several years after the beneficiary's death, upon the death of the
surviving spouse or the 21st birthday of a child. If the estate were still in the process of
probate, the State would have four more months from that point to present its claim,
even if all other creditors' claims had been filed long ago. For that reason classifying
Medicaid estate recovery claims as arising at or after death does not necessarily mean
that the probate process will unfold more quickly. The uncertain and marginal effect
on the speed of probate administration is not a persuasive reason to interpret Medicaid
estate recovery claims as arising at or after death when the statutory text clearly places
them in the category of claims arising before death.
The State argues that classifying Medicaid estate recovery claims as
arising before death furthers the underlying purpose of estate recovery: "recovering
from those with an ability to pay so as to make future funds available for those having
41
See AS 13.16.460(b).
42
See AS 13.16.065(a) (establishing order of priority for personal
representative of estate, with creditor lowest priority).
43
See 42 U.S.C. § 1396p(b)(2); AS 47.07.055(f).
-12- 7678
----------------------- Page 13-----------------------
44
the most need." Abad's estate essentially argues that federal legislative intent is
irrelevant because the Alaska legislature passed AS 47.07.055 to comply with federal
requirements and access federal Medicaid funding - not necessarily to recover costs.
But in order to access federal funding, Alaska needed a program that effectuates the
45
federal act. We must assume that legislature's purpose was consistent with that of the
federal law it implemented.
Interpreting Medicaid estate recovery claims as arising at or after death
would undermine this legislative purpose by making it more expensive to pursue estate
recovery. It is true, as the estates point out, that the State could prevent its claim from
expiring four months after death by applying to be the personal representative within
that time. But doing so would require the State to incur additional costs in administering
44
Est. of Melby v. Lohman, 841 N.W.2d 867, 875-76 (Iowa 2014) ("Our
interpretation creating the debt immediately upon provision of assistance rather than at
the death of the recipient, and allowing recovery from the corpus of the trust, is
consistent with the Medicaid program's goal . . . ."); see also Belshe v. Hope, 38 Cal.
Rptr. 2d 917, 925 (Cal. App. 1995) (explaining that Medicaid estate recovery "furthers
the broad purpose of providing for the medical care of [a state's] needy; the greater
amount recovered by the state allows the state to have more funds to provide future
services"); Jon M. Zieger, The State Giveth and the State Taketh Away: In Pursuit of a
LDER L.J. 359, 374 (1997) ("The
Practical Approach to Medicaid Estate Recovery, 5 E
foremost consideration behind estate recovery is the reduction of the ove rall cost of
Medicaid to states by recouping some portion of Medicaid expenditures. ").
45
See ch. 102, § 1, SLA 1994 (stating that purpose of the act was to, among
other things, "bring the state into compliance with federal law with respect to the
recovery of Medicaid payments from the estates and trusts of individuals under certain
circumstances"); Sen. Steve Frank, Sponsor Statement for S.B. 366, 18th Leg. 2d Sess.
(Mar. 26, 1994) ("In large part, the statutory changes proposed in this bill relating to
. . . estate recoveries by Medicaid, and Medicaid-qualifying trusts are required by the
federal Omnibus Budget Reconciliation Act of 1993 . . . , and DHSS will face a penalty
- loss of federal financial Medicaid participation - if legislation is not adopted by
July 1, 1994."); 42 U.S.C. § 1396p(b)(1)(B) ("In the case of an individual who was 55
years of age or older when the individual received such medical assistance, the State
shall seek adjustment or recovery from the individual's estate . . . .").
-13- 7678
----------------------- Page 14-----------------------
the decedent's estate. These additional costs would diminish the State's net recovery,
undermining the goal of recovering funds to be made available for other needy people.
Classifying Medicaid estate recovery claims as arising at or after death
would also subject the State to a risk of nonrecovery not faced by other creditors. One
reason creditors whose claims arise before death are given four months from the date
on which the estate publishes notice to creditors is that these creditors may not be aware
that the person who owes them money has died:
It is foreseeable that holders of [pre-death] contractual
claims may be unaware of the death of the decedent and thus
could lose their right to assert their claim due to no fault of
their own, unless notice is given to them . . . . On the other
hand, individuals with claims arising after death, largely due
to expenses arising out of the administration of the estate, do
not encounter similar difficulties. Because [the latter group
of creditors] know[s] of the death of the decedent, [the state
probate statute] does not require notice and sets forth only a
four-month limitation period from the time the claim
[46]
arose.
The State concedes that administrative processes make it more likely than other
creditors to learn of a Medicaid beneficiary's death. But if Medicaid is not providing
services to the beneficiary at the time of death, it may not immediately become aware
of the death. Applying the deadline for claims arising at or after death risks precluding
the State from pursuing legitimate claims when other creditors still can, with no clear
policy justification.
Subjecting the State to these costs and risks would be directly at odds with
the legislature's decision to give Medicaid estate recovery claims priority over other
creditors' claims. The legislature designated Medicaid estate recovery claims as "debts
46
In re Est. of Hadaway, 668 N.W.2d 920, 924 (Minn. App. 2003).
-14- 7678
----------------------- Page 15-----------------------
47
with preference."
An estate is required to pay such debts before "all other claims" -
48
excluding estate administration, funeral expenses, and a few other debt categories.
Creditors whose claims are based on obligations incurred by the decedent while alive
(like doctors, lenders, or business partners) are subject to the deadline for claims arising
before death: four months after notice to creditors is published, or three years after
49
death if no notice is published. Medicaid estate recovery claims are also based on
obligations incurred by the decedent while alive. Making these claims subject to a
different and sometimes more restrictive deadline (four months after death if the
decedent had no surviving spouse or qualifying child) than other creditors' claims
would be inconsistent with the legislature's decision to give Medicaid claims priority.
In light of the overall purpose of Medicaid estate recovery claims and the
express priority these claims are assigned, it is more logical to classify these claims as
arising before death.
C. Decisions From Other States Support The Conclusion That Medicaid
Estate Recovery Claims Arise Before Death.
The parties cite opinions from other state appellate courts supporting their
respective positions on whether a Medicaid estate recovery claim arises before or after
death. These opinions fall into three sets: (1) opinions deciding when claims that
become enforceable after death arise for purposes of the probate code; (2) opinions
deciding when Medicaid estate recovery claims arise generally; and (3) opinions
deciding when Medicaid estate recovery claims arise for purposes of probate filing
deadlines. On balance, these decisions support the conclusion that Medicaid estate
recovery claims arise before death for purposes of probate claim deadlines.
47
AS 47.07.055(g) ("For purposes of AS 13.16.470, the claims authorized
under this section are debts with preference under the laws of the state.").
48 AS 13.16.470(a).
49 AS 13.16.460(a)(1)-(2).
-15- 7678
----------------------- Page 16-----------------------
The first set of decisions establishes that, generally speaking, claims
against an estate can arise before death even if they are only enforceable after death. In
In re Estate of Hadaway, a Minnesota court discussed a claim based on a divorce
settlement agreement that the decedent had entered into during his life, but that was
50
payable only a fter he died. The court concluded that the claim for payment arose
51
during the decedent's life for the purpose of Minnesota's probate claim deadlines,
52
which are similar to Alaska's. "Simply because the payment was made absolute when
decedent died," the court held, "it does not follow that the contractual duty necessarily
arose at the time of decedent's death. Rather, it is apparent that from the time of the
53
settlement agreement . . . decedent was obligated [to fulfill his contract obligations]."
Estate of Evitt v. Hiatt also concerned a divorce settlement agreement
54
executed years before death but not enforceable until after death. The Arizona Court
55
of Appeals, applying Arizona's probate code,
held "that when a person enters into a
contract obligating him to act while living to ensure a payment to the claimant at or
56
And Ader v.
after his death, a claim for breach arises before the decedent's death."
50
668 N.W.2d at 920-21.
51
Id. at 923.
52
Minnesota Statutes §§ 524.3-803(a) and (b)(2), like AS 13.16.460(a) and
(b)(2), require creditors whose claims against an estate "arose before the death of the
decedent" to file within four months after a notice to creditors and claims that "arise at
or after the death of the decedent" to be filed within four months after they arise.
53
In re Est. of Hadaway, 668 N.W.2d at 923 (emphasis in original).
54
429 P.3d 1146, 1147-48 (Ariz. App. 2018).
55
Ariz. Rev. Stat. Ann. § 14-3803 likewise assigns a different filing deadline
to creditors whose claims arose "before the death of the decedent" than to those whose
claims "arise at or after the death of the decedent."
56
Est. of Evitt, 429 P.3d at 1147; see also Spohr v. Berryman, 589 So. 2d
225, 227-28 (Fla. 1991) (holding that a claim against the decedent's estate based on a
-16- 7678
----------------------- Page 17-----------------------
Estate of Felger distinguished the terms "accrue" and "arise" when extending this logic
57 While "[a] cause of action accrues . . . when one party is able to sue
to fraud claims.
another," the Felger court explained, "in the context of a nonclaim statute, 'arise' refers
to the decedent's act or conduct upon which a claim is based."58
These cases support the idea that when a claim arises, for purposes of the
probate code's claim filing deadlines, depends on the timing of the events that give rise
to the claim, rather than when that claim becomes enforceable.
The second set of decisions addresses the distinct but related issue of when
59 Most of these decisions support
a claim for Medicaid estate recovery arises in general.
the State's view that Medicaid reimbursement claims arise when caretakers provide
services rather than when a recipient passes away.
Most jurisdictions that have addressed the issue have concluded that
Medicaid estate recovery claims arise when caretakers provide services to a living
Medicaid recipient. In Estate of Melby v. Lohman, for example, the Iowa Supreme
divorce agreement "arose before the death of the decedent" because the claim "was
based upon an agreement which was made many years before [the decedent 's] death").
57 375 P.3d 97, 103-04 (Ariz. App. 2016).
58
Id . at 104 (quoting Gust, Rosenfeld & Henderson v. Prudential Ins. Co. of
Am., 898 P.2d 964, 966 (Ariz. 1995)).
59 Two cases the estates cite - In re Est. of Baker, 627 S.W.3d 523 (Tex.
App. 2021) and In re Est. of Hutchinson , 577 P.2d 1074 (Alaska 1978) - are
inapposite. In re Est. of Baker distinguishes two kinds of claims: (1) an equitable right
of reimbursement arising from the dissolution of marriage and (2) a debt to one's
spouse. See 627 S.W.3d at 532. It does not discuss "reimbursement" in the Medicaid
recovery context. Id. at 527 ("The right of reimbursement is not an interest in property
or an enforceable debt, per se, but an equitable right which arises upon dissolution of
the marriage."). In re Est. of Hutchinson examines whether family allowances qualify
as claims against an estate. 577 P.2d at 1074-76. It is unclear that there is any
connection to the matter at hand, other than a mere reference to the definition of
"claims" and the claim priority statute, AS 13.16.470(a). Id.
-17- 7678
----------------------- Page 18-----------------------
Court concluded that although the governing statute "mandat[es] the department will
refrain from collecting that debt until the death of the recipient," it nonetheless
"establishes a debt owed by the recipient of medical services when the services are
60 Courts reached the same conclusion in Arkansas, Nebraska, and
provided."
Washington.61
Only one state, California, appears to have reached the opposite
conclusion outside of the probate claim deadline context. The holding of Kizer v.
Hanna - that California's Medicaid recovery statute applied to care that took place
60
841 N.W.2d 867, 877 (Iowa 2014). Abad's estate attempts to distinguish
Iowa's Medicaid recovery statute from Alaska's, pointing out that the Iowa statute
conceptualizes Medicaid recovery as debt collection rather than reimbursement.
Compare Iowa Code § 249A.53(2) (formerly Iowa Code § 249A.5(2)) ("The provision
of medical assistance to an individual . . . creates a debt due the department from the
individual's estate . . . ."), with AS 47.07.055(e) ("[T]he individual's estate is subject to
a claim for reimbursement for medical assistance payments . . . ."). But the slightly
different language used does not seem to indicate a different underlying legislative
intent. The two statutes arise from the same federal mandate to implement state
Medicaid recovery programs, and therefore share the same purpose. See Est. of Melby,
841 N.W. at 875-76 ("Our interpretation creating the debt immediately upon provision
of assistance rather than at the death of the recipient, and allowing recovery from the
corpus of the trust, is consistent with the Medicaid program's goal of recovering from
those with an ability to pay so as to make future funds available for those having the
most need.").
61
See, e.g., Est. of Wood v. Ark. Dep 't of Hum. Servs., 894 S.W.2d 573, 576
(Ark. 1995) (explaining that the relationship created by Arkansas 's estate recovery
statute "was as if [the recipient] had a loan from [the department] to be repaid from the
assets of her estate"); Est. of Reimers v. Neb. Dep't of Health & Hum. Servs., 746
N.W.2d 724, 728 (Neb. 2008) ("While the debt arising under [the estate recovery]
statute accrues during the recipient 's lifetime, it is held in abeyance for payment until
the recipient's death."); In re Est. of Burns, 928 P.2d 1094, 1099 (Wash. 1997) ("The
precipitating event [of a Medicaid reimbursement claim] is . . . the receipt of the
benefits giving rise to the contingent indebtedness, and not the creation of the
decedent's estate.").
-18- 7678
----------------------- Page 19-----------------------
62
before the statute went into effect
- is irrelevant here. But the Kizer court reached
that conclusion by reasoning that "[t]he plain language of the statute dictates that the
[state agency's] right to reimbursement is against the recipient's estate. Consequently,
the [state agency's] right to reimbursement arises, if at all, at the time of the recipient's
63
death."
The third set of decisions addresses the precise question at hand: For
purposes of probate code filing deadlines, do Medicaid estate recovery claims arise
before death, or "at or after" death? These two opinions - Estate of Hooey v.
64 65
Mowbray and Estate of Tvrz v. Tvrz - reached opposite conclusions.
In Estate of Hooey the Supreme Court of North Dakota held that "[t]he
requirement that the [state agency] refrain from pursuing its claim until after the death
66
Rather, the court viewed this
of the recipient does not define when that claim arose."
requirement as one of several contingencies that must occur before the government may
62
767 P.2d 679, 686 (Cal. 1989).
63
Id . at 683 (emphasis in original). Boatner's estate cites to another
California decision, Maxwell-Jolly v. Martin , for the proposition that the reimbursement
right is strictly a statutory right to recover from a decedent recipient's estate and is not
based on any promise or agreement to repay by the still-living recipient. 129 Cal. Rptr.
3d 278 (Cal. App. 2011). The Maxwell-Jolly court relied on the California Supreme
Court's reasoning in Kizer in reaching that conclusion. Id. at 288. But the majority of
jurisdictions have taken the opposite approach, and we find the reasoning of those
courts more persuasive.
64
521 N.W.2d 85 (N.D. 1994).
65
620 N.W.2d 757 (Neb. 2001), superseded by statute, 2001 Neb. Laws,
L.B. 257, § 1, Neb. Rev. Stat. § 68- 1036.02(2) (2001), as recognized in Est. of Cushing
v. Neb. Dep't of Health & Hum. Servs., 810 N.W.2d 741, 745 (Neb. 2012) ("In re Estate
of Tvrz is no longer authoritative on when DHHS' claim arises.").
66
521 N.W.2d at 86 (citations omitted).
-19- 7678
----------------------- Page 20-----------------------
67
recover Medicaid funds.
The court reasoned that "the obligation to repay, if any,
arises upon receipt of the benefits, i.e., prior to the decedent's death," whereas the
decedent's death and the death of any surviving spouse merely determined when the
68
government's "right to recover ripens."
In Estate of Tvrz the Supreme Court of Nebraska adopted the opposite
69
interpretation of Nebraska's Medicaid estate recovery statute. That court deemed it
significant that Nebraska's statute "specifically provide[d] that '[n]o debt to the
department shall exist' if the recipient is survived by a spouse or by a child who is under
70
The court reasoned that
the age of 21, blind, or totally and permanently disabled."
"the existence of indebtedness on the part of a [Nebraska] recipient's estate depends
upon factors which can be determined only after the recipient 's death" and that a
71
Nebraska Medicaid estate recovery claim therefore arises only at or after death.
Despite this seemingly even tally, the scale ultimately tips in the State's
favor. One year after the Estate of Tvrz decision, the Nebraska legislature effectively
abrogated it by amending Nebraska's Medicaid estate recovery statute to provide that
the debt "arises during the life of the recipient but shall be held in abeyance until death
72
of the recipient." The Nebraska legislature's response to the court's ruling suggests
67
See id. at 86-87 (quoting Dep' t of Pub. Welfare v. Anderson , 384 N.E.2d
628, 633-34 (Mass. 1979)).
68
Id . at 87 (quoting Anderson , 384 N.E.2d at 633-34).
69
620 N.W.2d at 762-63.
70
Id . (quoting former Neb. Rev. Stat. § 68- 1036.02(2)).
71
Id . at 763 (emphasis in original).
72
Est. of Cushing v. Neb. Dep't of Health & Hum. Servs. , 810 N.W.2d at
745-46 (quoting Neb. Rev. Stat. § 68-919) (holding, in light of statutory change, that
Medicaid estate recovery claim arose before beneficiary's death).
-20- 7678
----------------------- Page 21-----------------------
that subjecting Medicaid estate recovery claims to the "before death" probate claim
deadline is more consistent with the underlying purpose of the program.
Overall, the decisions from other jurisdictions confirm our analysis of the
text and purpose of Alaska's probate and Medicaid statutes. A Medicaid estate recovery
claim arises before the death of the decedent. Such a claim is timely if presented to the
estate within four months after notice to creditors is first published, or within three years
of death if no notice is published.
CONCLUSION
For the reasons above, we REVERSE the superior court's decision in
Estate of Abad and AFFIRM the superior court's decision in Estate of Boatner.
-21- 7678
 |
| Case Law Statutes, Regs & Rules Constitutions Miscellaneous |
|
