Source: https://casetext.com/brief/3c659729-in-the-matter-of-edna-shannon-family-service-society-of-yonkers-petitionervwestchester-county-department-of-social-services-appellant-eastchester-rehabilitation-health-care-center-respondent-brief
Timestamp: 2020-04-05 16:22:31
Document Index: 330117712

Matched Legal Cases: ['§500', '§97', '§98', '§254', '§81', '§81', '§81', '§81', '§81', '§81', '§81', '§81', '§81', '§81', '§81', '§81', '§104', '§369', '§369', '§369', '§1', '§ 104', '§ 104', '§104', '§ 1', '§ 81', '§ 81', '§ 104', '§81', '§81', '§81', '§81', '§81', '§81', '§81', '§81', '§104', '§81', '§81', '§81', '§81', '§81', '§81', '§254', '§81', '§98', '§81', '§81', '§ 81', '§81', '§97', '§ 81', '§81', '§81', '§81', '§81', '§81', '§81', '§81', '§ 81', '§81', '§81', '§ 81', '§ 81', '§81', '§81', '§369', '§ 369', '§ 104', '§ 1', '§369', '§369', '§369', '§ 104', '§104', '§ 104', '§81', '§81', '§81', '§81', '§ 81', '§81', '§1', '§81']

In the Matter of Edna Shannon, Family Service Society of Yonkers, Petitioner,v.Westchester County Department of Social Services, Appellant, Eastchester Rehabilitation & Health Care Center, Respondent. | Brief | Casetext
In the Matter of Edna Shannon, Family Service Society of Yonkers, Petitioner,v.Westchester County Department of Social Services, Appellant, Eastchester Rehabilitation & Health Care Center, Respondent.
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N.Y.Apr 29, 2015
To be Argued by: SARAH C. LICHTENSTEIN (Time Requested: 30 Minutes) APL 2014-00244 Bronx County Clerk’s Index No. 92560/08 Court of Appeals of the State of New York   In the Matter of the Final Account of FAMILY SERVICE SOCIETY OF YONKERS as Guardian of the Person and Property of EDNA SHANNON, An Incapacitated Person Now Deceased. ———————————————————————————— FAMILY SERVICE SOCIETY OF YONKERS, Petitioner, – against – WESTCHESTER COUNTY DEPARTMENT OF SOCIAL SERVICES, Appellant, – and – EASTCHESTER REHABILITATION & HEALTH CARE CENTER, Respondent. RESPONDENT’S BRIEF ABRAMS, FENSTERMAN, FENSTERMAN, EISMAN, FORMATO, FERRARA & WOLF, LLP Attorneys for Respondent 1111 Marcus Avenue, Suite 107 Lake Success, New York 11042 Tel.: (516) 328-2300 Fax: (516) 328-6638 Date Completed: January 8, 2015 DISCLOSURE STATEMENT In accordance with the Rules of Practice of this Court, 22 N.Y.C.R.R. §500.1 (f), respondent Eastchester Rehabilitation and Health Care Center, LLC, sued herein as Eastchester Rehabilitation & Health Care Center, states that it is a limited liability company and has no parent, subsidiary or affiliate. TABLE OF CONTENTS TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 PRELIMINARY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 QUESTIONS PRESENTED ............................................. 2 NATURE OF THE ACTION AND THE FACTS .............................. 3 THE UNDERLYING FACTS .................................... 3 PROCEDURAL HISTORY OF THE CASE AND DECISIONS OF THE COURTS BELOW ............. .... . ... 5 ARGUMENT ....................................................... 8 I. EASTCHESTER WAS ENTITLED TO PAYMENT OF ITS CLAIM FROM SHANNON'S PROPERTY .................. 8 II. SHANNON'S DEATH DID NOT DEPRIVE FSSY OF AUTHORITY TO PAY EASTCHESTER'S CLAIM ....... . ...... 9 A. Certain Powers of a Guardian Survive the Incapacitated Person's Death ............................ 9 B. The Mental Hygiene Law Provides for Post-Death Adjudication of Lifetime Claims against the Incapacitated Person by the Guardianship Court . . . . . . . . . . . . 11 III. DSS WAS NOT ENTITLED TO PAYMENT FROM THE GUARDIANSHIP PROPERTY ...................... 23 IV. THE SPECTERS WHICH DSS SUGGESTS WILL RESULT FROM THE FIRST DEPARTMENT DECISION WILL NOT OCCUR AND HAVE NO BASIS IN REALITY .................... 26 CONCLUSION ..................................................... 29 11 TABLE OF AUTHORITIES I. CASES Baker v. Sterling, 39 N.Y.2d 397, 348 N.E.2d 584, 384 N.Y.S.2d 128 (1976) ........... 23 Barclay Knitwear Co. v. King'swear Enters. Ltd., 141 A.D.2d 241, 533 N.Y.S.2d 724 (1st Dep't 1988) ................. 13 Buffalo City Cemetery v. City of Buffalo, 46 N.Y. 506 (1871) .............................. ... . ........ . 14 Cahen v. Boyland, 1 N.Y.2d 8, 132 N.E.2d 890, 150 N.Y.S.2d 5 (1956) ................ . 15 Connors v. Hartford Fire Ins. Co., 138 A.D.2d 877, 526 N.Y.S.2d 254 (3d Dep't 1988) .. ..... ......... . 14 In re Estate of Baron, 180 Misc. 2d 766, 691 N.Y.S.2d 882 (Sur. Ct. N.Y. Co. 1999) ....... 9, 10 In re Estate of Buchwald, No. 2012-4336/A, 2013 WL 657891 (Sur. Ct. Feb. 8, 2013) ........... 9 In re Estate of Craig, 82 N.Y.2d 388, 624 N.E.2d 1003, 604 N.Y.S.2d 908 (1993) ....... 23, 25 In re Estate of Pierce, 106 A.D.2d 892,483 N.Y.S.2d 500 (4th Dep't 1984) .............. 19,21 Friedman v. Connecticut Gen. Life Ins. Co., 9 N.Y.3d 105, 877 N.E.2d 281, 846 N.Y.S.2d 64 (2007) ............. 16 111 In re Garcia, No. 12743/97,2007 WL 2318399 (Sup. Ct. Queens Co. Aug. 14, 2007) . . .. . ....... ...... . . .. . . . . .. . 28 Grant v. Humbert 114 A.D. 462, 100 N.Y.S. 44 (1 st Dep't 1906) . .... . ... . .. . ..... . ... 28 In re Lambert, 87 A.D.2d 818, 448 N.Y.S.2d 767 (2d Dep't 1982) .. . ... . . .. . . .. .. .. 21 In re Linden-Rath, 188 Misc. 2d 537, 729 N.Y.S.2d 265 (Sup. Ct. N.Y. Co. 2001) ........ 28 In re Robinson ex rei. Snell. 194 Misc. 2d 695, 754 N.Y.S.2d 525 (Sur. Ct. Nassau Co. 2003) .. ... . . 19 In re Swingeam, 59 A.D.3d 556, 873 N.Y.S.2d 165 (1st Dep't 2009) ..... ...... .. ..... 20 In re Warren, 53 N.Y.2d 118, 423 N.E.2d 32, 440 N.Y.S.2d 609 (1981) . .. ... ... .. . 21 Wright v. Sokoloff, 110 A.D.3d 989, 973 N.Y.S.2d 743 (2d Dep't 2013) ..... .. . ..... . ... 15 II. STATUTES CPLR Rule 5531 ........ .. .. . . . ... . ... . .. ... ...... . . . . . ... ... .. . . . . 2 McKinney's Consolidated Laws ofN.Y., Book 1, Statutes §97 . . . . ... . ... . . 16 McKinney's Consolidated Laws ofN.Y., Book 1, Statutes §98 . . . ........ .. 15 McKinney's Consolidated Laws of N.Y., Book 1, Statutes §254 ... . . . ...... 14 Mental Hygiene Law §81.21 . .. . ... ...... .. . ... ... . . ... .. . .. ... .. ... . 27 lV Mental Hygiene Law §81.21(a)(l4) ............................. .. .... 11 Mental Hygiene Law §81.21(a)(15) ................................... 27 Mental Hygiene Law §81.21(a)(l9) .............................. 9, 19, 27 Mental Hygiene Law §81.21(a)(20) ................................... 11 Mental Hygiene Law §81.29(c) ....................................... 26 Mental Hygiene Law §81.34(a) ....................................... 11 Mental Hygiene Law §81.36( e) .............. . ........................ 11 Mental Hygiene Law §81.44 ............................ . ..... . 10, 25, 28 Mental Hygiene Law §81.44(a)(4) ....... . ......................... 16, 17 Mental Hygiene Law §81.44(d) . . ............................. . 12-18, 27 Mental Hygiene Law §81.44(e) ....................... . ......... 13, 15, 18 Social Services Law §104 ...................... . ..... 2, 5, 6, 11, 21, 24,25 Social Services Law §369 ........................................ 11, 25 Social Services Law §369(2)(a) ............... . ...................... 20 Social Services Law §369(2)(b) ........................ . .......... 23, 24 Uniform Commercial Code §1-201(37) ................................ 27 v In the Matter of the Final Account ofF AMIL Y SERVICE SOCIETY OF YONKERS as Guardian of the Person and Property of EDNA SHANNON, An Incapacitated Person Now Deceased. FAMILY SERVICE SOCIETY OF YONKERS, Petitioner, -against- WESTCHESTER COUNTY DEPARTMENT OF SOCIAL SERVICES, Appellant, -and- EASTCHESTER REHABILITATION & HEALTH CARE CENTER, Respondent. RESPONDENT'S BRIEF PRELIMINARY STATEMENT This appeal addresses the interplay between the Mental Hygiene Law and the Social Services Law and their impact upon the disposition of the assets of an incapacitated person who died and for whom a guardian had been appointed. The claim of respondent Eastchester Rehabilitation and Health Care Center, LLC ("Eastchester") is a claim for services rendered to the incapacitated person and which arose during the incapacitated person's lifetime. The claim of appellant Westchester County Department of Social Services ("DSS") is a claim created by Social Services Law § 104 which only arose after the incapacitated person died and can only be asserted against the incapacitated person's estate. 1 The Appellate Division correctly concluded that because Eastchester's claim accrued during the decedent's lifetime against guardianship property with no competing creditors, Eastchester should be paid before any funds passed to the decedent's estate, if any. QUESTIONS PRESENTED 1. Is a creditor of an incapacitated person for whom a guardian was appointed, whose claim arose during the incapacitated person's lifetime, entitled to payment of its claim after the death of the incapacitated person from the guardianship property? 1In its Statement pursuant to CPLR Rule 5531, DSS incorrectly states that DSS and Eastchester "both had claims against the estate and disputed whose claim had priority." Eastchester's claim was not against the incapacitated person's estate, but was a claim which arose during her lifetime asserted against guardianship property. 2 The Appellate Division correctly answered this question "yes". 2. Does a payor enjoy a priority to recover medical assistance payments correctly made on behalf of a recipient, who is an incapacitated person for whom a guardian has been appointed, against guardianship property where the applicable statute limits such recovery to a claim against the recipient's estate? The Appellate Division correctly answered this question "no". STATEMENT OF THE NATURE OF THE ACTION AND THE FACTS THE UNDERLYING FACTS Edna Shannon ("Shannon") was admitted to Eastchester, a skilled nursing facility, on December 13, 2005. SA38.2 In November 2008, Eastchester commenced a proceeding pursuant to Article 81 of the Mental Hygiene Law for appointment of a guardian for Shannon's person and property because Eastchester believed Shannon was in need of assistance to manage her personal needs and financial affairs and because of Eastchester's concern regarding the handling of Shannon's financial resources by third-parties. SA38. By Order and Judgment, dated April 16, 2009, Family Service Society of Yonkers ("FS S Y") was appointed guardian for the person and property of Shannon. SA5 3-65. 2References to ''SA" are to the Supplemental Appendix submitted by Eastchester. 3 In December 2008, Eastchester filed an application for medical assistance benefits (Medicaid) on Shannon's behalf to secure a payment source for the cost of her nursing home care. SA38. DSS determined Shannon was eligible for Medicaid effective September 1, 2008. SA38, 49-52. Eastchester provided room, board and skilled nursing care services to Shannon from December 13, 2005 (the date she was admitted to Eastchester) through November 25, 2009, the date she was discharged to another skilled nursing facility. SA38. On June 2, 2010, Eastchester served on FSSY and filed with the Supreme Court a claim for care and services provided to Shannon not covered by Medicaid. SA39, 66-67.3 In October 2010, the guardianship court granted FSSY's motion authorizing the sale of real property which Shannon owned in New Rochelle, New York, noting that "the sale ofthis house is warranted so that the proceeds from the sale can be used to pay for her long term care." SA68. The net proceeds of$297,882.20 realized from 3These Supplemental Appendix pages are a letter from Eastchester' s attorney transmitting Eastchester's Notice of Appearance and Proof of Claim to the Supreme Court, Bronx County and the Affidavit of Service ofthe Notice of Appearance and Proof of Claim on FSSY. It is therefore inexplicable that DSS states "nowhere does the Respondent indicate that Notice of Appearance and Proof of Claim dated June 2, 2010 was ever filed with the Bronx County Clerk's Office." See DSS Brief at 10, n.5. In fact, FSSY's verified Petition Seeking Judicial Settlement of Account acknowledges that the Notice of Appearance and Proof of Claim were filed and served (SA6), and the Appellate Division itself noted that "By letter dated June 2, 2010, Eastchester also submitted the claim for filing with Supreme Court, Bronx County." A6 (References to "A" are to DSS's Appendix). 4 the sale of the property were deposited into a guardianship account for Shannon's benefit. See A30, SA39. In September 2010 and January 2011 , DSS wrote to FSSY stating that Shannon was indebted to DSS due to medical assistance paid, although DSS did not assert a claim or request payment at that time. A26, 27. Shannon died on December 10,2011. SAil . On July 5, 2012, DSS wrote to FSSY asserting a claim pursuant to Social Services Law § 104 against Shannon's estate for medical assistance rendered to Shannon. A28. PROCEDURAL HISTORY OF THE CASE AND DECISIONS OF THE COURTS BELOW By Order to Show Cause, dated August 6, 2012, FSSY commenced a proceeding to settle its final account as guardian of Shannon's person and property. SAl-4. FSSY listed Eastchester as a claimant for $164,208.00 and DSS as a claimant for $166,005.63. SA18. Eastchester opposed FSSY' s final account asserting that its claim for unpaid charges for Shannon's room, board and skilled nursing care for the period September 1, 2006 through August 31, 2008 in the aggregate amount of $222,650.00 should be paid, and DSS's claim should not. SA27-33. 5 DSS opposed FSSY's final account, asserting its Social Services Law §104 claim of$271,661.62 was entitled to priority over Eastchester's claim. SA24-26. Justice Howard Sherman determined that DSS was entitled to a priority of its lien pursuant to Social Services Law § 1 04 ( A24) and issued an order, dated January 31, 2013 (the "January 2013 Order") settling FSSY's final account. A21-22. In pertinent part, the January 2013 Order directed FSSY to tum over to DSS the balance of funds remaining in the guardianship estate after payment of guardianship fees and fees to the court examiner. A21. By check, dated February 22,2013, FSSY remitted payment to the New York State Department ofHealth in the amount of$179,276.10 apparently as payment of the DSS claim. A31-33. In March 2013, Eastchester moved to renew and reargue the January 2013 Order. SA34-72. By order, dated May 28, 2013, Justice Sherman denied Eastchester's motion, adhering to his prior determination that DSS was a preferred creditor. A34. Eastchester appealed from both orders. See A3. The Appellate Division reversed and held: "As Eastchester was to be paid out of the guardianship account before any funds passed to the estate, its claim had priority over DSS's claim." A8. The Appellate Division reasoned: 6 A8-10. MHL § 81.44( d) provides that, within 150 days of the death of an incapacitated person, the guardian must serve on the personal representative of the decedent's estate, or if none, the public administrator or chief fiscal officer, a statement of assets and notice of claim, and "except for property retained to secure any known claim, lien or administrative costs of the guardianship," deliver all guardianship property to the personal representative, public administrator, or chief fiscal officer (emphasis added). Indeed, consistent with § 81.44( d), the Order and Judgment Appointing Guardian authorized Family Service Society to "[a]pply [Shannon's] resources and income, if any, toward her outstanding and accruing nursing home expenses," and to "[p]ay bills after [Shannon's] death ... if incurred prior to said death, if authority to pay any such bills would otherwise have existed." In addition, the court order that authorized the sale of Shannon's home stated that the sale was warranted "so that the proceeds from the sale can be used to pay for her long term care." Although the court did not specifically refer to Eastchester, as opposed to DSS, DSS concedes that it did not assert a claim during Shannon's lifetime but asserted a claim against the estate only. . . . Eastchester's claim accrued during the decedent's lifetime, against the guardianship account, with no competing creditors. Thus, Eastchester should have been paid before any funds passed to the estate. DSS, as a preferred creditor pursuant to SSL § 104, had a priority claim only against the estate. 7 ARGUMENT I. EASTCHESTER WAS ENTITLED TO PAYMENT OF ITS CLAIM FROM SHANNON'S PROPERTY Eastchester provided room, board and skilled nursing care to Shannon during Shannon's lifetime. Eastchester had a claim against Shannon for such services for the period of time before Shannon became eligible for Medicaid. No party disputed the legitimacy of Eastchester's claim. 4 FSSY was appointed as a fiduciary to, among other things, marshal and invest Shannon's assets and apply the income and principal as necessary for her "comfort, support, maintenance and well-being." SA56. FSSY specifically had the power to "Apply [Shannon]'s resources and income, if any, toward her outstanding and accruing nursing home expenses and other valid debts". SA56. When the guardianship court granted FSSY's motion for an order authorizing it to sell Shannon's real property, the order granting the motion stated that "the sale of this house is warranted so that the proceeds from the sale can be used to pay for her long term care." SA68. In 2010, FSSY sold Shannon's real property and deposited the proceeds of the sale into a guardianship account for Shannon's benefit. The $297,882.20 sale 4The guardianship court did not make any finding that Eastchester's claim lacked merit, and neither FSSY nor DSS disputed Eastchester's claim before the guardianship court or on appeal. 8 proceeds were Shannon's property and available to pay Shannon's debts. Accordingly, FSSY could have paid Eastchester's claim for services provided to Shannon before Shannon died. II. SHANNON'S DEATH DID NOT DEPRIVE FSSY OF AUTHORITY TO PAY EASTCHESTER'S CLAIM A. Certain Powers of a Guardian Survive the Incapacitated Person's Death Everything related to a guardianship does not immediately and automatically end upon the incapacitated person's death. In re Estate of Buchwald, No. 2012--4336/A, 2013 WL 657891, at *1 (Sur. Ct. Feb. 8, 2013)(death of incapacitated person as general matter terminates guardianship but guardian does retain certain specific powers). For example, Mental Hygiene Law §81.21(a)(19) provides a guardian may be granted the power to pay bills after the incapacitated person's death that could have been paid during her lifetime. Significantly here, FSSY, was, in fact, authorized by court order to pay bills after Shannon's death that could have been paid during Shannon's lifetime. SA57. DSS's quote from In re Estate of Baron, 180 Misc. 2d 766, 691 N.Y.S.2d 882 (Sur. Ct. N.Y. Co. 1999) about termination of a guardian's authority upon the ward's death is taken out of context and misleading. See DSS Brief at 12. In that case, 9 decided nine years before the enactment of Mental Hygiene Law §81.44, the conservator for a recently deceased ward asked the court to determine whether she could retain her ward's assets pending settlement of the final account despite the request for turnover by the preliminary executor of the ward's will. Notably, an order had actually been signed directing the conservator to tum over estate assets in her possession except for a reserve of $1 million pending disposition of the final accounting. Surrogate Renee Roth observed that "Neither the statutes that govern guardianship nor case law provides any guidance as to which fiduciary is entitled to hold decedent's assets during such interim period." 180 Misc. 2d at 767, 691 N.Y.S.2d at 882. Significantly, Surrogate Roth indicated "a copy of this decision shall be sent to the Law Revision Commission to study the appropriateness of legislation that would facilitate the orderly turnover of the assets of a deceased incapacitated person, define the roles of the various fiduciaries and identify the persons to whom each is accountable." 180 Misc. 2d at 769-70, 691 N.Y.S.2d at 884. Mental Hygiene Law §81.44, enacted in 2008, is the legislation which Surrogate Roth called for. As discussed in Point II.B. of this Brief, Mental Hygiene Law §81.44 now makes clear that the guardianship court is to adjudicate lifetime claims against guardianship property and the guardian has the power to pay such adjudicated claims. 10 DSS is also incorrect when it states that FSSY was unable to act as guardian after Shannon's death because Article 81 ofthe Mental Hygiene Law only permits the guardian to pay for the incapacitated person's burial. DSS Brief at 13 (citing Mental Hygiene Law §81.36(e)). For example, Mental Hygiene Law §81.21(a)(14) also permits the guardian to "pay the funeral expenses of the incapacitated person." Mental Hygiene Law §81.21(a)(20) permits the guardian to "defend or maintain any judicial action or proceeding to a conclusion until an executor or administrator is appointed." Mental Hygiene Law §81.34(a) provides: "Upon the death of the incapacitated person, the guardian is authorized to pay the funeral expenses of the incapacitated person and, in the absence of a duly appointed personal representative of the estate, pay estimated estate and income tax charges, as well as other charges of emergent nature." B. The Mental Hygiene Law Provides for Post-Death Adjudication of Lifetime Claims against the Incapacitated Person by the Guardianship Court If Shannon had not been adjudicated to be an incapacitated person, whatever she owned at the time ofher death would have passed into her estate and been subject to DSS's after-death claim under Social Services Law §§104 and 369. But Shannon was adjudicated to be incapacitated and in need of a guardian, and a guardian was 11 appointed pursuant to court order. Therefore, the Mental Hygiene Law governs whether the guardian can pay claims asserted against guardianship property after Shannon died and what, if anything, thereafter passed into her estate. Most pertinent here, Mental Hygiene Law §81.44 provides: (d) Within one hundred fifty days of the death of the incapacitated person, the guardian shall serve upon the personal representative of the decedent's estate or where there is no personal representative, upon the public administrator or chief fiscal officer, a statement of assets and notice of claim, and, except for property retained to secure any known claim. lien or administrative costs of the guardianship pursuant to subdivision (e) of this section, shall deliver all guardianship property to: 1. the duly appointed personal representative of the deceased incapacitated person's estate, or 2. the public administrator or chief fiscal officer given notice of the filing of the statement of death, where there is no personal representative. Emphasis added. The statute carves out from the assets to be delivered to the estate representative or pub lie administrator "property retained to secure any known claim". The order appointing FSSY in this case provides this exact authority. SA62 ("ORDERED AND ADJUDGED, that in the event of the death of the Incapacitated Person, the Guardian, within 150 days of the date of death, shall deliver all 12 Guardianship assets, except for property retained by the Guardian to secure any known claim, lien or administrative costs of the Guardianship, to the duly appointed personal representative, or to the Public Administrator or Chief Fiscal Officer .... "). Eastchester's claim for payment of its uncovered nursing care services was indisputably a "known claim" to FSSY . . See SA18, 19-20, 66-67. The inquiry need go no further. As the Appellate Division ruled: "Eastchester was to be paid out ofthe guardianship account before any funds passed to the estate .... " A8. Nevertheless, DSS, relying on Justice Helen E. Freedman's dissent, argues that the "known claims" referred to in Mental Hygiene Law §81.44(d) are limited by Mental Hygiene Law §81.44(e) to expenses connected with the administration ofthe guardianship. As a result, DSS argues, FSSY was not required to retain property sufficient to pay Eastchester's claim. The argument is contradicted by several principles of statutory construction. First, as a matter of simple grammar, Mental Hygiene Law §81.44( e) is not a limitation on Mental Hygiene Law §81.44(d). In the Mental Hygiene Law §81.44(d) phrase "any known claim, lien or administrative costs of the guardianship pursuant to subdivision (e) of this section", the adjective "administrative" only modifies the noun "costs", not the preceding two words "claim" or "lien". See Barclay Knitwear Co. v. King'swear Enters. Ltd., 141 A.D.2d 241, 247, 533 N.Y.S.2d 724, 727 (1st 13 Dep't 1988)("Modifiers should come, if possible, next to the word they modify."). In contrast, an adjective which precedes a series of nouns generally modifies every noun in the series. See Buffalo City Cemetery v. City of Buffalo, 46 N.Y. 506, 509 (1871)(adjective "public" in clause "all public taxes, rates and assessments" applies to nouns "rates" and "assessments" as well as to noun "taxes"). Second, "Relative or qualifying words of clauses in a statute ordinarily are to be applied to the words or phrases immediately preceding, and are not to be construed as extending to others more remote, unless the intent of the statute clearly indicates otherwise." McKinney's Consolidated Laws ofN.Y., Book 1, Statutes §254. So, in Connors v. Hartford Fire Ins. Co., 138 A.D.2d 877, 878-79, 526 N.Y.S.2d 254, 255 (3d Dep't 1988), applying this rule of the "last antecedent", the court concluded that the underscored clause in the contract provision: "Such insurance as is afforded under Coverage E-Personal Liability, applies to property damage to an insured premises . . . if such property damage arose out of fire, explosion, or smoke or smudge caused by sudden. unusual and faulty operation of any heating or cooking unit" only qualified damage due to "smoke or smudge" and did not modify the preceding nouns "fire" or "explosion". Application of this doctrine to Mental Hygiene Law §81.44(d) corroborates that the underscored clause of the phrase "any known claim, lien or administrative 14 costs of the guardianship pursuant to subdivision (e) of this section", refers only to "administrative costs of the guardianship", the words immediately preceding it, and not to the more remote words "claim" or "lien." To conclude otherwise would run afoul of the "cardinal principle to be observed in construing legislation that ... whenever practicable, effect must be given to all the language employed." Cahen v. Boyland, 1 N.Y.2d 8, 14, 132 N.E.2d 890, 892, 150 N.Y.S.2d 5, 9 (1956)(intemal quotes and citation omitted); Wright v. Sokoloff, 110 A.D.3d 989, 990-91, 973 N.Y.S.2d 743, 745 (2d Dep't 2013); McKinney's Consolidated Laws ofN.Y., Book 1, Statutes §98 ("All parts of a statute must be harmonized with each other as well as with the general intent of the whole statute, and effect and meaning must, if possible, be given to the entire statute and every part and word thereof."). If the claims for which property is to be retained by the guardian pursuant to Mental Hygiene Law §81.44(d) are construed to be co-terminus with the "claims for administrative costs, liens and debts" ofMental Hygiene Law §81.44(e), there would be no need to list in any detail in Mental Hygiene Law § 81.44( d) the types of claims for which property is to be retained by the guardian. Mental Hygiene Law §81.44( d) would then only need provide: "the guardian ... except for property retained to secure any known clainr, lien m administrati"e costs ofthe guardianship pursuant to 15 subdivision (e) of this section, shall deliver all guardianship property to 1. the duly appointed personal representative of the deceased incapacitated person's estate, or 2. the public administrator .... " Such a construction would impermissibly render the words "to secure any known claim, lien" superfluous. Finally, "[a] court must consider a statute as a whole, reading and construing all parts of an act together to determine legislative intent." Friedman v. Connecticut Gen. Life Ins. Co., 9 N.Y.3d 105, 115, 877 N.E.2d 281, 286, 846 N.Y.S.2d 64, 69 (2007); McKinney's Consolidated Laws ofN.Y., Book 1, Statutes §97. This maxim confirms that under Mental Hygiene Law § 81.44( d) the guardian is to retain property sufficient to cover "any known claim", not just claims for administrative costs. Mental Hygiene Law §81.44(d) requires the guardian to do two things: (1) serve a statement of assets and notice of claim on the decedent's estate representative or public administrator and (2) deliver all guardianship property to the decedent's estate representative or public administrator, except for property retained to secure any known claim, lien or administrative costs of the guardianship. Mental Hygiene Law §81.44(a)( 4) defines "statement of assets and notice of claim" as: a written statement under oath containing ... a description of the nature and approximate value of guardianship property at the time of the incapacitated person's death; 16 with the approximate amount of any claims. debts or liens against the guardianship property, including but not limited to medicaid liens, tax liens and administrative costs, with an itemization and approximate amount of such costs and claims or liens. Emphasis added. The definition of"statement of assets and notice of claim" of Mental Hygiene Law §81.44(a)(4) informs the meaning of the words "any known claim, lien or administrative costs" in Mental Hygiene Law §81.44(d). Reading Mental Hygiene Law §81.44(a)(4) and Mental Hygiene Law §81.44(d) together, the guardian must first provide the estate representative or public administrator with a list "any claims" (not just administrative costs) against the guardianship property. Second, the guardian must retain sufficient guardianship property to cover the claims identified in the statement of assets and notice of claim when the guardian delivers the balance of the guardianship property to the estate representative or public administrator. It would make no sense to require the guardian to notify the estate representative or public administrator of" any claims, debts or liens against the guardianship property", but then not have the guardian retain sufficient property to pay such claims. As the Appellate Division reasoned, "This broader construction [of Mental Hygiene Law §81.44(d)] is consistent with MHL § 81.44(a)(4) .... Thus, section 81.44, read as a whole, does not limit 'any claims' to administrative costs. In fact, it does just the 17 opposite; it lists administrative costs as a type of claim that the guardian can pay off." All. Justice Rolando T. Acosta, writing for the Appellate Division majority (AlO- 12), offered additional reasoning rejecting the contention that Mental Hygiene Law §81.44(e) limits Mental Hygiene Law §81.44(d): Contrary to the dissent, nothing in MHL § 81.44( d) and (e) "limit[s] the guardian's right to retain property equal in value only to the expenses connected with the administration of the guardianship, such as those itemized in the guardian's petition for a final accounting." Had the Legislature intended that result, it would have clearly stated that the guardian could retain assets to secure any known claim or lien only insofar as it was associated with administrative expenses. Instead, consistent with its stated justification "to facilitate the transition between a guardianship for an incapacitated person and an estate after the death of such incapacitated person" (Sponsor's Mem, L 2008, ch 175, 2008 NY Legis Ann at 127), the Legislature gave the guardian broader rights to pay off "any known claim, lien or administrative costs of the guardianship pursuant to subdivision (e) of this section" (MHL § 81.44[ d] [emphasis added]). . . . Section 81.44( e) ... does not limit the guardian's authority pursuant to section 81.44( d) to retain property to pay off any known claims or liens in addition to administrative costs. 5 5Justice Freedman's conclusion is premised on additional faulty reasoning and a misunderstanding of the facts. First, she characterizes the dispute as "which of two creditors has the superior claim to the assets of the decedent's estate." A13. Eastchester's claim, however, is to guardianship property before any remainder passes to the decedent's estate. Second, she states that "while the decedent was still living, both respondents had presented the guardian with claims against her assets to cover her care." A16. DSS, however, did not present a claim until after Shannon's death (A28) and admits that it is prohibited from asserting a claim against the property of an 18 This result does not conflict with decisions from other Judicial Departments, as DSS argues. In In re Estate of Pierce, 106 A.D.2d 892, 483 N.Y.S.2d 500 (41h Dep't 1984), the court acknowledged that the government's claim against an estate was entitled to a preference over general creditors of a recipient of public assistance and the preference is subservient to a creditor with a prior specific lien. In that case, a hospital had docketed a judgment during the decedent's lifetime. But the decedent in that case had not been adjudicated an incapacitated person such that the hospital's claim was asserted against an estate and competed with the government's claim. Here, Shannon had been adjudicated an incapacitated person, and Eastchester did not assert a claim against Shannon's estate, but against Shannon personally and the guardianship property. In In re Robinson ex rei. Snell. 194 Misc. 2d 695, 754 N.Y.S.2d 525 (Sur. Ct. Nassau Co. 2003), which cites In re Estate of Pierce, a Department of Social Services individual prior to his or her death. DSS Brief at 9. Third, she states that "A guardian's authority terminates with the incapacitated person's death (Mental Hygiene Law §81.36[a][3])." A16. However, the Order Appointing Guardian in this case empowers the guardian to "(1) Pay bills after the death of the Incapacitated Person if incurred prior to said death, if authority to pay any such bills would otherwise have existed". SA57. See also discussion in Point II.A. of this Brief. Fourth, she states that "Despite the court's directive in the appointment order that after the decedent's death, the guardian could pay bills incurred while the decedent was still living, the guardian could not be given more authority than provided under section 81.44." Al9. However, Mental Hygiene Law §81.21(a)(19) provides: "the court may authorize the guardian to exercise those powers necessary and sufficient to manage the property and financial affairs of the incapacitated person; ... Those powers which may be granted include, but are not limited to, the power to: ... pay bills after the death of the incapacitated person provided the authority existed to pay such bills prior to death until a temporary administrator or executor is appointed." 19 asserted a claim against a deceased Medicaid recipient's estate. The executrix asserted that the estate had no assets because she had already paid a nursing home's claim. The decedent in that case had not been adjudicated an incapacitated person, either, and no guardian had been appointed, so the nursing home's claim was also a claim against the estate competing with the Department of Social Services's claim. Here, again, Shannon had been adjudicated an incapacitated person, and Eastchester did not assert a claim against Shannon's estate, but against Shannon personally and the guardianship property. In In re Swingeam, 59 A.D.3d 556, 873 N.Y.S.2d 165 (1st Dep't 2009), a Department of Social Services asserted a claim to recover benefits incorrectly paid. A different statute, Social Services Law §369(2)(a)(i), expressly permits that claim to be asserted before the death of the recipient. Here, DSS does not assert that it incorrectly paid benefits to Shannon. The Appellate Division, First Department itself distinguished the case law that DSS contends is in conflict with the decision in this case (A9-10): Unlike the claims inMatterofSwingearn (59 AD3d 556 [2d Dept 2009]), which were competing claims during the decedent's lifetime for benefits incorrectly paid (see SSL § 369[2][a][i]), and the claims inMatterofPierce (106 AD2d 892, 892 [4th Dept 1984], lv denied 64 NY2d 609 [1985]), which were competing claims against the estate, Eastchester's claim accrued during the decedent's lifetime, 20 against the guardianship account, with no competing creditors. Thus, Eastchester should have been paid before any funds passed to the estate. DSS, as a preferred creditor pursuant to SSL § 104, had a priority claim only against the estate. The fact that Eastchester did not reduce its claim to a judgment is irrelevant. Social Services Law § 1 04(1 ), on which DSS bases its claim and this contention, provides: "In all claims of the public welfare official made under this section the public welfare official shall be deemed a preferred creditor." The statute is construed as being intended to provide "a preference over the 'general creditors' of a recipient of public assistance." In re Warren, 53 N.Y.2d 118, 122, 423 N.E.2d 32, 34, 440 N.Y.S.2d 609, 611 (1981 ); In re Estate of Pierce, 106 A.D.2d 892, 483 N.Y.S.2d 500. However, that preference yields to specific prior liens of another creditor of the same debtor. In re Lambert, 87 A.D.2d 818,448 N.Y.S.2d 767, 768 (2d Dep't 1982). A docketed judgment constitutes a prior specific lien. In re Estate ofPierce, 106 A.D.2d 892, 483 N.Y.S.2d 500. But the issue of whether a general creditor has obtained a judgment is only relevant in the context of prioritizing like claims - either multiple lifetime claims or multiple claims against a deceased Medicaid recipient's estate. Therefore, whether Eastchester had previously reduced its claim against Shannon to a judgment would only matter if either DSS asserted a lifetime claim or Eastchester asserted a claim 21 against Shannon's estate. But, Eastchester asserted its claim against guardianship property, not against Shannon's estate and DSS asserted its claim against Shannon's estate, not guardianship property. The issue of the priority or subservience of Eastchester's claim to DSS's claim (and concomitantly whether Eastchester had obtained a judgment against Shannon) is accordingly not implicated. The Appellate Division reached the same conclusion: "Contrary to the court's conclusion, it was irrelevant that Eastchester had not reduced its lien to a judgment, which would have given it priority over competing creditors, because DSS had no viable competing claim against Shannon's guardianship account." AlO. Not all incapacitated persons are Medicaid recipients. Not all Medicaid recipients are incapacitated persons. DSS is improperly blurring these lines and trying to treat its claim and Eastchester's claim as though they were pari passu, on equal footing to be paid from the same pot. Yet, Eastchester's claim was to be assessed in the course of the proceeding brought by FSSY as guardian for judicial settlement of its final account (if not before). Notably, DSS admits it did not have a claim in that proceeding. See DSS Brief at 9-10 ("As the Department is prohibited from asserting a claim 'against the property of any individual prior to his or her death on account of medical assistance 22 paid ... ' SSL§369(2)(a), the Department ... made a claim to recover the Medicaid expended on behalf of the Decedent after her death."). Eastchester was entitled to have its claim paid from Shannon's property in FSSY's possession, even after Shannon died and before any remainder was delivered to her estate representative or the public administrator. As discussed in Point III of this Brief, DSS was only entitled to have its claim paid from Shannon's estate, if there was one, after the guardian's final account was conclusively settled. III. DSS WAS NOT ENTITLED TO PAYMENT FROM THE GUARDIANSHIP PROPERTY Under both Federal and New York State law, recovery for medical assistance from the property of a recipient is generally prohibited. In re Estate of Craig, 82 N.Y.2d 388, 391, 624 N.E.2d 1003, 1005, 604 N.Y.S.2d 908, 910 (1993). Accord Baker v. Sterling, 39 N.Y.2d 397,404, 348 N.E.2d 584, 589, 384 N.Y.S.2d 128, 132 (1976)(a recipient's property is generally immune from recovery for medical assistance). Recoveries can only be pursued for medical assistance correctly paid (as is the case here) upon the sale of real property subject to a lien imposed in certain specific instances inapplicable here and against the estate of the deceased person who received assistance. Social Services Law §369(2)(b) provides: 23 (i) Notwithstanding any inconsistent provision of this chapter or other law, no adjustment or recovery may be made against the property of any individual on account of any medical assistance correctly paid to or on behalf of an individual under this title, except that recoveries must be pursued: (B) from the estate of an individual who was fifty-five years of age or older when he or she received such assistance. Emphasis added. By reason of Social Services Law §369(2)(b )(i)(B), DSS, whose claim was to recover benefits correctly paid, had no claim against Shannon herself or guardianship property. DSS also relies on Social Services Law § 104 which provides: 1. A public welfare official may bring action or proceeding against a person discovered to have real or personal property, or against the estate or the executors, administrators and successors in interest of a person who dies leaving real or personal property, if such person, or any one for whose support he is or was liable, received assistance and care during the preceding ten years, and shall be entitled to recover up to the value of such property the cost of such assistance or care. Any public assistance or care received by such person shall constitute an implied contract. ... But, as this Court has made clear: "Section 104 is not applicable to recovery of medical assistance governed by section 369, which specifically precludes and 24 preempts the overarching reach of general provisions of Social Services Law by the explicit rules applicable to Medicaid recipients." In re Estate of Craig, 82 N.Y.2d at 392, 624 N.E.2d at 1005, 604 N.Y.S.2d at 910. Indeed, DSS concedes that it is only entitled to seek recovery of Medicaid payments against Shannon's estate under Social Services Law §§104 and 369. DSS Brief at 9 ("It is under SSL § § 104 and 369 that the Department, as a preferred creditor, sought recovery from the estate of the Decedent, Edna Shannon .... " Emphasis added.). At best, DSS might have had a priority claim against Shannon's estate if any assets remained to be delivered to her estate representative or the public administrator by FSSY, the guardian of her property, after the payment from guardianship property of Shannon's lifetime debts. But no assets passed into Shannon's estate because FSSY had been ordered to retain sufficient assets to cover known claims that had arisen during Shannon's lifetime. SA62. See also Mental Hygiene Law §81.44. Eastchester's claim was one ofthose claims and exhausted the funds in the guardianship. 25 IV. THE SPECTERS WHICH DSS SUGGESTS WILL RESULT FROM THE FIRST DEPARTMENT DECISION WILL NOT OCCUR AND HAVE NO BASIS IN REALITY DSS argues that as a result of the First Department's decision, "any debt claimed to be owed by the Decedent must now be paid by the guardian without exception" and "without court order". DSS Brief at 17. This hyperbole is belied by several significant facts: (1) The incapacitated person's property is subject to the possession of the guardian, but to the control of the court for the purposes of administration and disposition. Mental Hygiene Law §81.29( c )("The title to all property of the incapacitated person shall be in such person and not in the guardian. The property shall be subject to the possession of the guardian and to the control of the court for the purposes of administration, sale or other disposition only to the extent directed by the court order appointing the guardian."). Since the guardian does not control the incapacitated person's property, the guardian cannot dispose of the property without court order. (2) The guardian's powers are set by court order upon the guardian's appointment. In this case, for example, from the start FSSY was empowered to "apply so much of the income and principal [of the Incapacitated Person's assets] as necessary for the Incapacitated Person's comfort, support, maintenance and 26 well-being", "Apply the Incapacitated Person's resources and income, if any, toward her outstanding and accruing nursing home expenses and other valid debts" and "Pay bills after the death of the Incapacitated Person if incurred prior to said death, if authority to pay any such bills would otherwise have existed". SA56, 57. These powers derive from Mental Hygiene Law §81.21 generally and §81.21 (a)(15)("pay such bills as may be reasonably necessary to maintain the incapacitated person") and § 81.21 (a)( 19), specifically. Since the guardian's powers are constrained by statute and court order, the guardian's powers cannot be characterized as unfettered by reason of the Appellate Division decision. (3) Mental Hygiene Law §81.44(d) only provides for the guardian to retain property to secure known claims, liens and administrative costs of the guardianship to be available to pay such claims. Property being held as security assures payment of the known claims. See. e.g., Uniform Commercial Code §1-201(37)(" 'Security interest' means an interest in personal property or fixtures which secures payment or performance of an obligation."). The statute does not direct the guardian to pay the claims. (4) The process of settling the guardian's final account includes the guardianship court reviewing and approving claims and issuing an order settling the 27 guardian's final account. See. e.g., A23-25, A21-22; see also Grant v. Humbert, 114 A.D. 462, 464, 100 N.Y.S. 44, 47 (1st Dep't 1906)("The court, which by its committee takes possession of the property of the incompetent person, is clothed with full authority to pay all just claims against the incompetent to the extent of his estate, and to determine the validity of claims by reference if the facts are disputed."); In re Garcia, No. 12743/97, 2007 WL 2318399, at *3 (Sup. Ct. Queens Co. Aug. 14, 2007); In re Linden-Rath, 188 Misc. 2d 537, 543, 729 N.Y.S.2d 265, 270, (Sup. Ct. N.Y. Co. 2001). Thus, disposition of property retained to secure known claims is subject to Supreme Court review and adjudication. DSS also mistakenly argues that the First Department's decision "created an exception for creditors who have failed to reduce their claims to judgment". DSS Brief at 17. First, Mental Hygiene Law §81.44 embodies policy choices of the Legislature, and the First Department simply applied that statute as written. Second, as discussed in Point II.B. of this Brief, DSS improperly conflates adjudication of lifetime claims against an incapacitated person's guardianship property with adjudication of claims against the estate of a Medicaid recipient. The concept of reducing a claim to judgment remains intact regarding actual competing claims. 28 Dated: CONCLUSION For all the foregoing reasons, the order appealed from should be affirmed. January 8, 2015 ABRAMS, FENSTERMAN, FENSTERMAN, EISMAN, FORMATO, FERRARA & WOLF, LLP By~{!__