Cronin v. Commissioner of the Division of Medical Assistance

11 Mass. L. Rptr. 565
CourtMassachusetts Superior Court
DecidedApril 24, 2000
DocketNo. CV992853H
StatusPublished

This text of 11 Mass. L. Rptr. 565 (Cronin v. Commissioner of the Division of Medical Assistance) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cronin v. Commissioner of the Division of Medical Assistance, 11 Mass. L. Rptr. 565 (Mass. Ct. App. 2000).

Opinion

Lopez, J.

1. FACTS

The undisputed facts are as follows. The plaintiff, Lina E. Cronin, is an 87-year-old woman, who currently resides in County Manor Nursing Home in Newburyport, Massachusetts. The defendant, the Division of Medical Assistance (“DMA”) is a state agency within the Executive Office of Health and Human Services. The defendant, the Commissioner of the DMA (“Commissioner”) is charged with the supervision, direction and control of the DMA.

In August 1994, Mrs. Cronin executed The Lina B. Cronin Irrevocable Trust (the “Irrevocable Trust”) naming her daughter, Olivia A. Waterhouse, as Trustee. The applicant retamed an income-only interest in the Irrevocable Trust and named her daughter and her daughter’s issue as beneficiaries. Trust principal may not be paid to Mrs. Cronin.

Also in August 1994, the applicant’s daughter, Olivia A. Waterhouse, executed the L.E.C. Realty Trust (the (“Realty Trust”) naming the Irrevocable Trust as a 40 percent beneficiary and herself a 60 percent beneficiary. Mrs. Waterhouse is the sole trustee of the Realty Trust, and has the power to revoke or amend the trust with the approval of beneficiaries, namely, herself individually and herself as trustee of the Irrevocable Trust. Mrs. Cronin then transferred her home to her daughter’s Realty Trust reserving a life estate for herself. The home was subsequently sold and the Realty Trust now holds the remaining proceeds from the sale.

Mrs. Cronin filed an application with the defendant on October 6,1998, seeking Medical Assistance for the costs of her nursing home care as of September 1, 1998. The defendant denied her application in a notice dated October 30, 1998, including the assets of the Realty Trust as a “countable asset” to Mrs. Cronin and, therefore, determining that she had assets in excess of program limits. Mrs. Cronin then made a timely appeal on November 10, 1998, upon which, a full and fair hearing was held on January 11, 1999. The Hearing Officer issued a decision on April 12, 1999, revoking the DMA’s denial notice, and approving Mrs. Cronin’s application for Medical Assistance.

In a letter dated April 20, 1999, the then Commissioner of the DMA, Bruce Bullen, notified Mrs. Cronin of his intent to consider ordering rehearing of the appeal, and in a letter dated May 7, 1999, he ordered a rehearing to be held on May 17, 1999. At the rehearing, Mrs. Cronin’s representative objected to the validity of the rehearing order. After noting the objection, the Director of the Board of Hearings then held another hearing and issued a decision dated May 20,

1999, denying Mrs. Cronin's application.

The plaintiff timely filed this action for judicial review pursuant to M.G.L.c. 30A, §14 on June 18, 1999.

fi. ISSUES PRESENTED

A. Whether the rehearing decision was based on an error of law that the assets of the Realty Trust are countable for MassHealth eligibility purposes.

B. Whether the Commissioner’s order for a rehearing was valid.

III. BACKGROUND

MassHealth, also known as Medicaid, is a joint federal and state program established in 1965 by Title XIX of the Social Security Act, 42 U.S.C. §§1396 et seq. Although administered by the States, state programs [566]*566must comply with Federal statutes and regulations in order to receive Federal funding. Harris v. McRae, 448 U.S. 297 (1980). The Health Care Financing Administration (“HCFA”) issues interpretative federal guidelines which appear in the State Medicaid Manual. Massachusetts Hosp. Ass’n v. Department of Pub. Welfare, 419 Mass. 644 (1995).

The Division of Medical Assistance provides coverage for long-term institutional care for the elderly and disabled who meet eligibility requirements found at 130 CMR 520 et seq. Generally, the asset limit for such coverage is $2,000 of “countable assets” for individuals and $83,960 of “countable assets” when there is a spouse residing in the community. Assets held in trusts are “countable” or “available” to the applicant when the trust permits principal to be paid to the applicant or spouse. See 42 U.S.C. 1396p, HCFA Transmittal No. 64 (attached hereto), and 130 CMR 520.021 through 520.024.

IV. DISCUSSION

The party appealing an administrative decision bears the burden of demonstrating the decision’s invalidity. Merisme v. Bd. of Appeals of Motor Vehicle Liab. Policies & Bonds, 27 Mass.App.Ct. 470, 474 (1989). While the Court may set aside the decision of the agency only as permitted by G.L.c. 30A, §14(7), “to the extent that an agency determination involves a question of law, it is subject to de novo judicial review.” Haverill Municipal Hospital v. Comm’r of the Div. of Medical Assistance, 45 Mass.App.Ct 386, 390 (1998) (emphasis added) quoting Raytheon Co. v. Director of the Div. of Employment Security, 364 Mass. 593, 595 (1974). Further, although an administrative agency is entitled to some deference in interpreting the statute it is charged with enforcing, the Court will reverse an agency decision if the interpretation is unreasonable. See Martinez v. Comm’r of Pub. Welfare, 397 Mass. 386 (1986).

A. Availability of Trust Assets

The DMA’s decision in this case is erroneous as a matter of law. The Rehearing Officer concluded that the Realty Trust is a “countable asset” because circumstances exist under which the trustee could pay trust principal to Mrs. Cronin. The Rehearing Officer based this decision on the ground that “(there are no limitations or restrictions on the amendment power or authority of the trustee” of the Realty Trust, and that “[b]y its very terms, (the trustee) has the ‘unfettered authority to amend the Trust in any manner she desires.’ ” The rehearing officer’s decision, however, offers no Realty Trust citation for this quotation. The quotation is nowhere in the L.E.C. Realty Trust. In contrast, the trust terms state that the trustee has the power to “alter, amend, revoke or terminate the Trust . . . provided however that these powers may only be exercised with the approval of (the beneficiaries).” (Articles IV, paragraph 1.) Accordingly, as is the case with all nominee trusts, the trustee is completely limited in his or her ability to amend or revoke the trust and can only do so at the direction of those listed on the Schedule of Beneficiaries.1

Further, the rehearing officer misstated that “[b]y the very terms of the L.E.C. Realty Trust, there are circumstances where any portion of the principal or income from the principal could be paid to or for the benefit of the appellant.”2 This reading is exactly the opposite of the terms of the trust which, as all nominee trusts, limit the trustee to pay the principal only to the beneficiaries, and when exercised, only in the percentages of their beneficial interest. The trust states that the trustee is only authorized to pay the income or principal “among the beneficiaries in proportion to their respective interests.” (Article IV, paragraph 13.) The appellant, however, is not a beneficiary of the Realty Trust.

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Bluebook (online)
11 Mass. L. Rptr. 565, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cronin-v-commissioner-of-the-division-of-medical-assistance-masssuperct-2000.