American Healthcare Center v. Randall

513 N.W.2d 566 (1994)

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Nature of the Case

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Facts

Juanita created an irrevocable trust agreement in 1981 with her son Robert Randall (D) as the trustee and residual beneficiary. The trust had a house worth $30,000 and $100,000 in mutual funds. The trust did not grant the trustee authority to invade the principal for the benefit of Juanita. Juanita was 92 when she executed the documents in 1985. Juanita had an accident and D admitted her to a nursing home for individuals with Alzheimer's disease. D paid for the care two months in advance and then applied for financial assistance under Medicaid. That application was denied, as Juanita had not exhausted all of her assets. The bill became two month's delinquent, and American (P) contacted D about the unpaid bills. D filed for Chapter 11 on Juanita's behalf, but that was rejected. D then filed for Chapter 7. The bill due P was discharged in October 1991. P sued to collect the unpaid bills. The trust made about $5-6K per year in income but that money was used to pay legal fees, the bankruptcy proceedings, and the unsuccessful pursuit of Medicaid benefits. In June 1991, D was requested to remove his mother from P. Juanita remained there until her death in December 1991. The unpaid balance for her care was $36,772.30. P sued D for the unpaid balance in three different capacities; individually, as trustee and as guardian. D moved for summary judgment as to the guardian and it was granted. The court denied summary judgment on him as an individual and as trustee of the trust. P then raised a claim under SDCL 25-7-27, which required children to provide and care for parents who are unable to provide for themselves (South Dakota) upon notice and refusal to care for them. At trial, D moved for a directed verdict on the statutory claim as P failed to produce any evidence that D had the financial ability to pay. A directed verdict was issued on his personal liability. P appealed.