SUPREME COURT OF THE STATE OF NEW YORK

Appellate Division, Fourth Judicial Department

66 

TP 15-01033 

PRESENT: CENTRA, J.P., PERADOTTO, LINDLEY, DEJOSEPH, AND SCUDDER, JJ. 

 

IN THE MATTER OF FRANCES FLANNERY, PETITIONER, 

V MEMORANDUM AND ORDER

HOWARD Z. ZUCKER, M.D., J.D., ACTING 

COMMISSIONER, NEW YORK STATE DEPARTMENT OF 

HEALTH, NEW YORK STATE DEPARTMENT OF HEALTH, 

EILEEN TIBERIO, COMMISSIONER, ONTARIO COUNTY 

DEPARTMENT OF SOCIAL SERVICES, AND ONTARIO 

COUNTY DEPARTMENT OF SOCIAL SERVICES, 

RESPONDENTS. 

 

LACY KATZEN LLP, ROCHESTER (RACHELLE H. NUHFER OF COUNSEL), FOR

PETITIONER.

ERIC T. SCHNEIDERMAN, ATTORNEY GENERAL, ALBANY (JONATHAN D. HITSOUS OF

COUNSEL), FOR RESPONDENTS.

 

Proceeding pursuant to CPLR article 78 (transferred to the

Appellate Division of the Supreme Court in the Fourth Judicial

Department by order of the Supreme Court, Ontario County [William F.

Kocher, A.J.], entered May 28, 2015) to review a determination of

respondent New York State Department of Health. The determination,

after a fair hearing, denied the application of petitioner for chronic

care medical assistance. 

It is hereby ORDERED that the determination is unanimously

confirmed without costs and the petition is dismissed. 

Memorandum: Petitioner commenced this CPLR article 78 proceeding

seeking to challenge a determination, made after a fair hearing, that

she is ineligible for Medicaid coverage. We confirm that

determination. When reviewing a Medicaid eligibility determination

made after a fair hearing, we must determine whether the agency’s

decision is “supported by substantial evidence and [is] not affected

by an error of law,” bearing in mind that the petitioner “bears the

burden of demonstrating eligibility” (Matter of Albino v Shah, 111

AD3d 1352, 1354 [internal quotation marks omitted]). We will uphold

the agency’s determination when it is “premised upon a reasonable

interpretation of the relevant statutory provisions and is consistent

with the underlying policy of the Medicaid statute” (Matter of Golf v

New York State Dept. of Social Servs., 91 NY2d 656, 658; see Matter of

Peterson v Daines, 77 AD3d 1391, 1392-1393). 
-2- 66 

TP 15-01033 

Here, we conclude that the agency’s determination, which is based

on its conclusion that the principal of a trust of which petitioner is

a beneficiary is an “available resource,” is supported by substantial

evidence and is not affected by an error of law. The trust at issue

grants petitioner’s children, as cotrustees, “the authority to

distribute so much of the principal to [petitioner that they,] in

their sole discretion, deem advisable to provide for [petitioner’s]

health, maintenance and welfare.” Because the principal of the trust

may, in the discretion of petitioner’s children, be paid for

petitioner’s benefit, the agency did not err in concluding that the

principal of the trust is an available resource for purposes of

petitioner’s Medicaid eligibility determination (see 18 NYCRR 360-4.5

[b] [1] [ii]; Matter of Vitale v Woodhouse, 270 AD2d 951, 951-952;

Matter of Frey v O’Reagan, 216 AD2d 565, 566), despite the fact that

her children refuse to exercise their discretion to make such payments

of principal. Contrary to petitioner’s further contention, although

the trust was funded at the time of the grantor’s death, it is not a

testamentary trust for purposes of 18 NYCRR 360.45 (c) because it was

not “created by will” (SCPA 103 [48]; see 42 USC 1396p [d]). 

Finally, we conclude that petitioner failed to meet her burden of

demonstrating that the trust is an exempt third-party trust pursuant

to 18 NYCRR 360-4.5 (b) (3) (ii) or (b) (4) because the evidence at

the fair hearing failed to establish that none of petitioner’s assets

were used to fund the trust. 

Entered: February 11, 2016 Frances E. Cafarell

Clerk of the Court