Keith v. Rizzuto

212 F.3d 1190, 2000 Colo. J. C.A.R. 2717, 2000 U.S. App. LEXIS 10138, 2000 WL 620906
CourtCourt of Appeals for the Tenth Circuit
DecidedMay 15, 2000
Docket99-1560
StatusPublished
Cited by24 cases

This text of 212 F.3d 1190 (Keith v. Rizzuto) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Keith v. Rizzuto, 212 F.3d 1190, 2000 Colo. J. C.A.R. 2717, 2000 U.S. App. LEXIS 10138, 2000 WL 620906 (10th Cir. 2000).

Opinion

TACHA, Circuit Judge.

Appellant Rodney Keith, representing his parents Clancy and Shirley Keith, appeals from the district court’s order dismissing his claim. We exercise jurisdiction pursuant to 28 U.S.C. § 1291 and affirm.

I.

Clancy Keith, a retiree, resides in a Colorado community care facility. He suffers from dementia associated with Alzheimer’s disease and is expected to require extensive care for the remainder of his life. Mr. and Mrs. Keith subsist solely on Mr. Keith’s income, which consists of a civil service pension of $4800 gross ($3868.73 net) per month and a Veteran’s Administration pension of $67 per month.

In April 1999, Mr. Keith applied for Medicaid benefits from the Mesa County Department of Social Services (“Department”). Shortly thereafter, he executed an income trust in order to prevent his pension income from disqualifying him from' Medicaid eligibility. 1 The Department denied Mr. Keith’s application for Medicaid benefits pursuant to a regulation promulgated under Colo.Rev.Stat. §§ 15-14-409.7 and 38-10-111.5 by appellee Riz- *1192 zuto’s department. 2 These provisions mandate that only those individuals whose monthly incomes fall short of the average cost of nursing home care in the regions where they reside may establish valid income trusts. In Mr. Keith’s region, the average cost of nursing home care was $3034 per month. Because Mr. Keith’s income exceeded this rate, the Department determined that his income trust was invalid under Colorado law, and that he therefore was ineligible for Medicaid.

Appellant filed suit for declaratory and injunctive relief under 42 U.S.C. § 1983, arguing that Colorado law violates the federal guidelines for creation of a valid income trust. Appellee filed a motion to dismiss under Fed'.R.Civ.P. 12(b)(6). The district court granted the motion, finding that federal law does not require states to recognize income trusts at all and thus that states are free to place limits or conditions upon the recognition of such trusts.

II.

We review a 12(b)(6) dismissal de novo. Sutton v. Utah State Sch. for the Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir.1999). We accept all well pled allegations in the complaint as true and view them in the light most favorable to the nonmoving party. Id. “A 12(b)(6) motion should not be granted unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Id. (internal quotation marks and citation omitted).

Colorado has elected to participate in the Medicaid program through enactment of the Colorado Medical Assistance Act, Colo.Rev.Stat. Ann. §§ 26-4-101 to -904. To receive federal Medicaid dollars, Colorado must provide specified medical services to certain classes of citizens through its state Medicaid plan. See 42 U.S.C. §§ 1396 and 1396a(a)(10)(A)(i). Mr. Keith does not fall within any of these classes. However, a state may opt to cover additional individuals, such as Mr. Keith, who remain in medical institutions for periods in excess of 30 days, provided that these persons’ incomes do not exceed a federally specified ceiling.. Id. § 1396a(a)(10)(A)(ii)(V). Colorado has elected conditionally to cover such individuals through enactment of Colo.Rev.Stat. Ann. § 26—4—301(1)(g).

42 U.S.C. .§ 1396a(a)(18) requires that state Medicaid plans comply with 42 U.S.C. § 1396p. Section 1396p(d) lays out the federal rules governing how trusts should be counted in determining an individual’s income-eligibility for Medicaid. If an individual who establishes a trust is able to revoke or benefit from the trust, then the trust’s corpus and payments must be counted respectively as resources available and income accruing to that individual. Id. § 1396p(d)(3). However, these rules do not apply to the following:

(B) A trust established in a State for the benefit of an individual if—
(i) the trust is composed only of pension, Social Security, and other income to the individual (and accumulated income in the trust),
(ii) the State will receive all amounts remaining in the trust upon the death of such individual up to an amount’ equal to the total medical assistance paid on behalf of the individual ..., and
(iii) the State makes medical assistance available to individuals [pursuant to the optional extended care program allowed under 42 U.S.C. § 1396a(a)(10)(A)(ii)(V) ].

Id. § 1396p(d)(4)(B) (emphasis added). Thus, § 1396p(d) does not apply to income trusts.

*1193 Appellant contends that, since Colorado elected to provide optional Medicaid coverage for nursing home care and to recognize income trusts for purposes of determining eligibility for such coverage, it is barred from conditioning that recognition on the amount of a settlor’s income. In support of this contention, he argues first that § 1396p(d)(3) “allows” states to count trust income and assets in determining Medicaid eligibility. Since § 1396p(d)(4) exempts income trusts from § 1396p(d)(3), appellant concludes that states are not allowed to count income trusts in determining Medicaid eligibility.

Appellant’s argument misapprehends the mandatory force of § 1396p(d)(3). Section 1396p(d)(3) does not merely “allow” states to count trusts in determining Medicaid eligibility; it requires them to do so. 3 Section 1396p(d)(4) therefore provides an exception to a requirement. States accordingly need not count income trusts for eligibility purposes, but nevertheless may, like Colorado, opt to do so. Appellant’s first argument is therefore without merit.

Appellant next argues that Colorado law is invalid under the doctrine of conflict preemption. Congress may preempt state law under the Supremacy Clause, U.S. Const, art. VI, cl. 2. Southwestern Bell Wireless Inc. v. Johnson County Bd. of County Comm’rs, 199 F.3d 1185, 1189-90 (10th Cir.1999).

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Bluebook (online)
212 F.3d 1190, 2000 Colo. J. C.A.R. 2717, 2000 U.S. App. LEXIS 10138, 2000 WL 620906, Counsel Stack Legal Research, https://law.counselstack.com/opinion/keith-v-rizzuto-ca10-2000.