ORDERS:
ORDER
STATEMENT OF THE CASE
In the above-captioned matter, the Department of Health and Human Services (DHHS or
Department) filed a claim against the estate of Jeanne M. Orcutt to recover $18,537.58 paid to her
under South Carolina’s Medicaid program. In particular, the Department seeks to recoup medical
assistance paid to Ms. Orcutt for community long-term care and nursing home care between
December 2000 and her death on May 5, 2002, by collecting against the value of her home at 1110
Pine Street in Cayce, South Carolina. William Thomas (Thomas), Ms. Orcutt’s son and personal
representative for her estate, filed for an undue hardship waiver of the Department’s claim against the
estate, contending that he met the eligibility requirements for such a waiver under the recovery
statute. By a letter dated December 27, 2002, the Department denied Thomas’s claim for a waiver,
and, after holding a hearing on March 27, 2003, a DHHS Hearing Officer upheld the denial of the
waiver in an order dated April 2, 2003. Thomas now appeals that decision before this tribunal. Upon
careful consideration of the record, the briefs filed,
and the applicable law, I find that the
Department’s decision to deny Thomas’s request for a hardship waiver of the Department’s claim
against his mother’s estate must be affirmed.
BACKGROUND
Due to her increasingly failing health, Ms. Jeanne M. Orcutt began receiving community long-term care services in December 2000, and later was moved into a nursing home, where she remained
until her death in May 2002. To pay the costs of these services, Ms. Orcutt received medial
assistance totaling $18,537.58 from South Carolina’s Medicaid program. In order to recoup these
expenses, as required by S.C. Code Ann. § 43-7-460 (Supp. 2002), the Department filed a claim with
the Lexington County Probate Court against Ms. Orcutt’s estate, including her property at 1110 Pine
Street in Cayce, South Carolina.
By letter received by the Department on December 5, 2002, William Thomas (Thomas), Ms.
Orcutt’s son and the personal representative of her estate, sought an “undue hardship” waiver of the
Department’s claim against his mother’s estate under Section 43-7-460(C), which allows an
immediate family member living in the decedent’s house to exempt the property from Medicaid
recovery in certain circumstances. However, by letter dated December 27, 2002, the Department
denied Thomas’s request for a waiver on the ground that he did not meet the residency requirements
of the waiver statute. Prior to the date on which his mother entered the nursing home, Thomas split
time between a residence at 1908 Middleton Street in Cayce, South Carolina, where his wife and
children resided,
and his mother’s home at 1110 Pine Street. At a hearing on the waiver request,
Thomas testified that, while he lived periodically at both residences during the time in question due
to marital difficulties, he considered his mother’s home to be his primary residence. DHHS, however,
produced documents suggesting that Thomas’s principal residence was 1908 Middleton Street until
his decision to move his family into the house at 1110 Pine Street after his mother’s death.
In an Administrative Decision dated April 2, 2003, the Department’s Hearing Officer found
that Thomas’s “legal address and residence and ‘where he was living,’ prior to moving his family into
the Pine Street address after his mother’s death, was 1908 Middleton Street.” (Administrative
Decision at 3.) The Hearing Officer therefore concluded that Thomas had not met the residency
requirements for an undue hardship waiver under Section 43-7-460. On appeal of that decision,
Thomas contends that he did, in fact, have his primary residence at 1110 Pine Street for the requisite
time period so as to qualify for a hardship waiver of the Department’s claim against his mother’s
estate.
ISSUE
The sole issue raised in the instant appeal is whether Thomas’s periodic occupancy of his
mother’s home satisfies the residency requirements for an “undue hardship” waiver of the
Department’s claim against his mother’s estate under S.C. Code Ann. § 43-7-460(C) (Supp. 2002).
STANDARD OF REVIEW
When sitting in its appellate capacity, the Administrative Law Judge Division reviews agency
decisions under the standard of review set up in S.C. Code Ann. § 1-23-380(A)(6) (Supp. 2002).
Under that standard, this tribunal is not entitled to “substitute its judgment for that of the agency as
to the weight of the evidence on questions of fact.” Id. However, this tribunal may reverse or modify
the agency’s decision if substantial rights of the appellant have been prejudiced because
the administrative findings, inferences, conclusions or decisions are:
(a) in violation of constitutional or statutory provisions;
(b) in excess of the statutory authority of the agency;
(c) made upon unlawful procedure;
(d) affected by other error of law;
(e) clearly erroneous in view of the reliable, probative and substantial evidence on the whole record; or
(f) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.
Id. “Substantial evidence” as used under this standard of review “is not a mere scintilla of evidence
nor the evidence viewed blindly from one side of the case, but is evidence which, considering the
record as a whole, would allow reasonable minds to reach the conclusion that the administrative
agency reached or must have reached in order to justify its action.” Lark v. Bi-Lo, Inc., 276 S.C.
130, 135, 276 S.E.2d 304, 306 (1981). This substantial evidence “is something less than the weight
of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does
not prevent an administrative agency’s finding from being supported by substantial evidence.” Id. at
136, 276 S.E.2d at 306. Accordingly, “[t]he findings of an administrative agency are presumed
correct and will be set aside only if unsupported by substantial evidence.” Rodney v. Michelin Tire
Co., 320 S.C. 515, 519, 466 S.E.2d 357, 359 (1996). Further, the party challenging an agency action
has the burden of proving convincingly that the agency’s decision is unsupported by substantial
evidence. Waters v. S.C. Land Res. Conservation Comm’n, 321 S.C. 219, 226, 467 S.E.2d 913, 917
(1996).
DISCUSSION
Under S.C. Code Ann. § 43-7-460 (Supp. 2002), DHHS is required to seek recovery of
medical assistance paid under Title XIX of the State Plan for Medical Assistance from the estates of
certain individuals who received such Medicaid benefits for nursing facility services or community-based services. See S.C. Code Ann. § 43-7-460(A) (Supp. 2002). However, the statute further
provides that this recovery “must be waived by the [D]epartment upon proof of undue hardship,
asserted by an heir or devisee of the property claimed,” S.C. Code Ann. § 43-7-460(C) (Supp. 2002),
and sets forth several circumstances that “are considered instances of undue hardship in which
recovery must be waived.” Id. Two of these circumstances are relevant to the instant case.
Under the first instance of undue hardship, a surviving child of a Medicaid recipient may seek
a waiver of recovery with respect to the decedent’s “home property,” if the child, among other
requirements,
has “lived in the home for a period of at least two years immediately before the
decedent became institutionalized and who provided care which allowed the decedent to delay
institutionalization.” S.C. Code Ann. § 43-7-460(C)(1)(d) (emphasis added). The second instance
of hardship allows an immediate family member of the deceased to protect the decedent’s home and
one acre of land surrounding the house from recovery if that family member: “(a) has resided in the
home for at least two years prior to the recipient’s death; (b) is actually residing in the home at the
time the hardship is claimed; (c) owns no other real property or agrees to sell all other interest in real
property and give the proceeds to the department; and (d) has annual gross family income that does
not exceed one hundred eighty-five percent of the federal poverty guidelines.” S.C. Code Ann. § 43-7-460(C)(2) (emphasis added). As is clear from the text cited above, under these provisions, an
individual seeking to exempt a home from recovery must have continuously resided in the home for
at least two years before either the institutionalization or death of the Medicaid recipient in order to
qualify for the undue hardship waiver.
The term “reside” as used in these provisions of Section 43-7-460(C) must be construed to
mean more than merely living occasionally at the home in question, and must be understood as
implicating the legal concept of “domicile.” As the commentary to the Restatement (Second) of
Conflict of Laws notes,
Statutes in the United States rarely speak in terms of domicil but use “residence”
instead. Residence is an ambiguous word whose meaning in a legal sense must be
determined in each case. Frequently it is used in a sense equivalent to domicil.
Restatement (Second) Conflict of Laws § 11 cmt. k (Supp. 1988). Accordingly, the Restatement
further states that, “[i]n the absence of evidence of a contrary legislative intent, ‘residence’ in a statute
is generally interpreted . . . [a]s being the equivalent of domicil in statutes relating to judicial
jurisdiction, voting, eligibility to hold office, exemptions (other than homestead) from the claims of
creditors, liability for inheritance and poll taxes, and certain personal property taxes.” Id. (emphasis
added); see also, e.g., Phillips v. S.C. Tax Comm’n, 195 S.C. 472, 485, 12 S.E.2d 13, 19 (1940)
(finding that “the word ‘residing’ as used in the income tax act refers to legal residence in this State,
which is equivalent to domicile”) (emphasis in original); Gasque v. Gasque, 246 S.C. 423, 426, 143
S.E.2d 811, 812 (1965) (holding that “[t]he term ‘reside’ as used in the foregoing [divorce] statute
is equivalent in substance to ‘domicile’”). Similarly, the “residence” requirement for the exemption
of a decedent’s home from a Medicaid claim for undue hardship should be construed as requiring the
individual seeking the waiver to have established his domicile, or legal residence, in the home.
Under South Carolina law, domicile is “the place where a person has his true, fixed and
permanent home and principal establishment, to which he has, whenever he is absent, an intention of
returning.” Gasque, 246 S.C. at 426, 143 S.E.2d at 812 (quoting from Bradley v. Lowery, 17 S.C.
Eq. (Speers Eq.) 1 (1842)). Therefore, “[t]he question of domicile is largely one of intent to be
determined under the facts and circumstances of each case.” Id. at 427, 143 S.E.2d at 812. Here,
the facts and circumstances set forth in the record indicate that, prior to his mother’s death, Thomas
was domiciled with his wife and family at 1908 Middleton Street, and not at his mother’s house at
1110 Pine Street. While Thomas spent time at both homes throughout the relevant time period, his
wife and children lived continuously in the home at 1908 Middleton Street, he listed 1908 Middleton
Street as his address on his South Carolina Identification Card issued in 2000 and in official
correspondence with government entities, and he testified that he generally returned to his mother’s
home only while he was having difficulties in his marriage. (Hr’g Tr. at 33.) The record in this
matter clearly indicates that, during the two years prior to his mother’s institutionalization and the
two years prior to her death, Thomas had his fixed and permanent home with his wife and family at
1908 Middleton Street, even though he occasionally stayed at his mother’s home at 1110 Pine Street
to assist her during her illness and to avoid his wife during times of marital discord. In short, when
he was staying in his mother’s home at 1110 Pine Street, Thomas’s intention was always to return
to his wife and children at his principal residence at 1908 Middleton Street.
Therefore, as Thomas was not domiciled in his mother’s house at 1110 Pine Street for either
two years prior to her placement in a nursing home or two years prior to her death, he is not eligible
to secure an undue hardship waiver to the Department’s claim against that property under Section
43-7-460(C). This tribunal understands and is sympathetic to Thomas’s desire to retain ownership
of his mother’s home. Nevertheless, this tribunal cannot substitute its judgment for that of the
Department except where a “manifest or gross error of law has been committed by the administrative
agency.” Lark v. Bi-Lo, Inc., 276 S.C. 130, 134, 276 S.E.2d 304, 307 (1981). No such error has
been established here, as the substantial evidence in the record and the applicable law plainly support
the Department’s decision to deny Thomas’s application for a hardship waiver. Accordingly, the
Department’s decision must be affirmed. ORDER
Based upon the record and applicable state and federal law,
IT IS HEREBY ORDERED that the Department’s decision to deny William Thomas’s
application for a hardship waiver of the Department’s recovery claim against his mother’s property
is AFFIRMED.
AND IT IS SO ORDERED.
______________________________
JOHN D. GEATHERS
Administrative Law Judge
September 18, 2003
Columbia, South Carolina |
