New Jersey Nursing Home Cannot Sue Resident’s California-Based Son to Recover Unpaid Bill

A New Jersey appeals court holds that it does not have jurisdiction over a New Jersey nursing home’s lawsuit against the California-based son of one of its residents for the resident’s unpaid nursing home bill because the son’s contacts with the nursing home and Medicaid were not sufficient to confer jurisdiction. Egg Harbor Care Center v. Scheraldi (N.J. Super. Ct., App. Div., No. A-2956-16T4, July 11, 2018).

Patricia Scheraldi executed a power of attorney in Virginia, naming her son, Corey Pagano, as her agent. Mr. Pagano lived in California. Ms. Scheraldi moved to New Jersey, entered a nursing home and applied for Medicaid. The state denied benefits because Mr. Pagano had control of a California bank account in Ms. Scheraldi’s name with excess assets in it. Mr. Pagano attempted to contact the Medicaid agency to answer questions about the account. Mr. Pagano eventually spent down the assets, and the state approved Ms. Scheraldi’s Medicaid application, but the nursing home did not receive payment for five months of care.

The nursing home sued Mr. Pagano to recover the unpaid balance, claiming he was negligent and breached his fiduciary duty. Mr. Pagano filed a motion to dismiss for lack of jurisdiction. The trial court approved the motion, and the nursing home appealed, arguing that Mr. Pagano’s communications with the nursing home and Medicaid gave the court jurisdiction.

The New Jersey Superior Court, Appellate Division, affirms, holding that Mr. Pagano does not have the necessary minimum contacts with New Jersey to confer jurisdiction. According to the court, Mr. Pagano’s “relevant interactions with [the nursing home] and his attendant contacts to secure benefits for his mother were not affirmative choices that he could reasonably prevent.”

For the full text of this decision, go to: https://www.njcourts.gov/attorneys/assets/opinions/appellate/published/a2956-16.pdf?cacheID=kW6lYKr

For coverage of the case by the New Jersey Law Journal, click here (free registration required).

David Wingate is an elder law attorney at the Elder Law Office of David Wingate, LLC. The elder law office services clients with powers of attorneys, living wills, Wills, Trusts, Medicaid and asset protection. The Elder Law office has locations in Frederick and Montgomery Counties, Maryland.