South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
Estate of Jeanne M. Orcutt vs. South Carolina Department of Health and Human Services

AGENCY:
South Carolina Department of Health and Human Services

PARTIES:
Appellant:
Estate of Jeanne M. Orcutt

Respondent:
South Carolina Department of Health and Human Services
 
DOCKET NUMBER:
03-ALJ-08-0192-AP

APPEARANCES:
n/a
 

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, Footnote 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, Footnote 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, Footnote 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. Footnote

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


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