The United States Bankruptcy Court for the Eastern District of Kentucky held that the wife of a nursing home resident was contractually bound through a nursing home admissions agreement to apply for Medicaid benefits on behalf of her husband and who failed to do so, could not discharge the amount due to the nursing home through her bankruptcy. In re Plybon (U.S. Bankr. E.D. Ky., No. 11–10146, March 9, 2012).
Glenna Plybon admitted her husband to a nursing home and signed the admission agreement as his responsible party. The admission agreement required her to file a Medicaid application for him and stated that she “may become liable for failure to perform duties” under the agreement. Mrs. Plybon applied for Medicaid on behalf of her husband. The application was denied, because she did not provide all the information required. No payments were made to the nursing home and the nursing home discharged her husband. The nursing home sued her and earned a judgment against her in the amount of $47,692.02.
Later, Mrs. Plybon filed for bankruptcy and tried to discharge the amount due to the nursing home. The nursing home argued that its debt should not be discharged because it was incurred by fraud or the willful neglect of one’s duty and the bankruptcy laws provide that those debts will not be discharged.
The Court held that Mrs. Plybon was contractually bound to take the steps necessary to obtain Medicaid coverage for her husband. The Court found that her “failure to obtain the Medicaid benefits and the subsequent failure to meet the financial obligations for Mr. Plybon’s care were a breach of her obligations under the admissions agreement as the party responsible for Mr. Plybon’s financial assets and liabilities.”
Should you have any questions, please contact:
Todd Selby at 317.977.1440 or tselby@wp.hallrender.com;
Brian Jent at 317.977.1402 or bjent@wp.hallrender.com;
David Bufford at 502.568.9368 or dbufford@wp.hallrender.com; or
Sean Fahey at 317.977.1472 or sfahey@wp.hallrender.com,
or your regular Hall Render attorney.
