Court Opinion

ID: 9391221
Source: CourtListenerOpinion
Date Created: 2023-05-01 16:06:05.011133+00
Date Added: 2024-06-11T17:18:39.054517
License: Public Domain

[Cite as Natl. Church Residences First Community Village v. Kessler, 2023-Ohio-1437.]

                      IN THE COURT OF APPEALS OF OHIO
                          THIRD APPELLATE DISTRICT
                               UNION COUNTY

NATIONAL CHURCH RESIDENCES
FIRST COMMUNITY VILLAGE,

       PLAINTIFF-APPELLEE,                                         CASE NO. 14-22-22

       v.

KATHY KESSLER,
                                                                   OPINION
       DEFENDANT-APPELLANT.

                  Appeal from Union County Common Pleas Court
                           Trial Court No. 2020-CV-0128

                       Judgment Reversed and Cause Remanded

                              Date of Decision:        May 1, 2023

APPEARANCES:

        Vincent P. Zuccaro for Appellant

        David S. Brown for Appellee
Case No. 14-22-22

ZIMMERMAN, J.

          {¶1} Defendant-appellant, Kathy Kessler (“Kessler”), appeals the October 5,

2022 judgment of the Union County Court of Common Pleas granting summary

judgment in favor of defendant-appellee, National Church Residences First

Community Village (“National Church”). We reverse.

          {¶2} On September 8, 2020, National Church filed a breach-of-contract and

promissory-estoppel complaint seeking damages from Kessler for services provided

to Kessler’s mother, Rosa McGlone (“McGlone”), for McGlone’s nursing-facility

care from November 1, 2017 through March 31, 2018.1 McGlone was admitted to

National Church’s First Community Village nursing home on August 15, 2016.

Because McGlone “suffered from dementia and was unable to care for herself or

handle her own finances,” Kessler executed National Church’s Nursing Facility

Admission Agreement (the “agreement”) on August 24, 2016. (Doc. No. 57). (See

also Doc. No. 2, Ex. 1). Importantly, the parties do not dispute that Kessler did not

execute the agreement in her personal capacity; rather, they agree that she executed

the agreement in her representative capacity for McGlone. (See Doc. No. 57);

(Appellee’s Brief at 7).

          {¶3} On August 25, 2016, the Ohio Department of Job and Family Services

(“ODJFS”) informed the parties that it approved McGlone’s Medicaid benefits. The

1
    McGlone died on June 8, 2019.

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Case No. 14-22-22

benefits included the cost of McGlone’s nursing-facility care. Pertinently, that

notice informed the parties that McGlone was eligible for a category of Medicaid

benefits with a resource limit of $2,000.00.2

        {¶4} Even though Kessler retained primary access to McGlone’s account

with US Bank as her attorney in fact, National Church “was authorized to sign

[McGlone’s] Social Security checks for deposit only to be applied to [her] balance.”

(Doc. No. 57). In 2016 and 2017, McGlone received monthly direct deposits from

the Social Security Administration (for $727.00) into her US Bank account. As a

result of those deposits, McGlone’s US Bank account accumulated a balance of

$7,164.67 as of August 15, 2017. Consequently, on August 15, 2017, ODJFS sent

Kessler a “Medicaid Eligibility Review Verification Request List, seeking

information related to [McGlone’s] assets” to which Kessler responded on August

30, 2017 by providing McGlone’s bank statements. (Id.). Because McGlone’s

assets exceeded the $2,000.00 threshold, her Medicaid benefits were terminated.

However, ODJFS notified only Kessler and McGlone (on August 31, 2017) of its

termination of McGlone’s Medicaid benefits (without providing a reason).

        {¶5} Even though McGlone’s benefits had been terminated, Medicaid

continued to pay for her care through September 30, 2017. National Church became

aware of the termination of McGlone’s Medicaid benefits on November 14, 2017

2
 “In August 2016, [McGlone] maintained a checking account at US Bank with a balance of $838.98.” (Doc.
No. 57).

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Case No. 14-22-22

when it “ran an Eligibility Search * * * .” (Id.). “The Eligibility Search did not

indicate why [McGlone’s] Medicaid terminated.” (Id.). Critically, National Church

failed to contact ODJFS (between November 14, 2017 and February 2018) or

Kessler (between November 14, 2017 and January 8, 2018) to discuss McGlone’s

Medicaid-benefit termination. Nevertheless, on January 8, 2018, National Church

issued a statement for McGlone’s care for $42,620.99 (for October 2017 through

January 2018) to Kessler, but sent the statement to a wrong address.

      {¶6} On February 20, 2018, National Church emailed Kessler requesting that

she execute “another Authorized Representative Form, so that [National Church]

could reapply for Medicaid for [McGlone].” (Id.). Kessler responded to that email

that same day, and National Church submitted “a new Medicaid application on

behalf of [McGlone]” that same day. (Id.). On April 2, 2018, Kessler “spent down

[McGlone’s checking account] by issuing National Church two checks [from

McGlone’s account] totaling $10,483.67.” (Id.).

      {¶7} ODJFS approved McGlone’s re-application for Medicaid benefits on

February 29, 2019 “retroactive to April 1, 2018.” (Id.). “ODJFS’s determination

on the February 20, 2018, [sic] Medicaid application was delayed because of a

communication error between ODJFS’s system, and the Central Ohio Area Agency

on Aging’s system.” (Id.).

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Case No. 14-22-22

       {¶8} The parties stipulated that “[t]he $10,483.67 payment was used to

satisfy [McGlone’s] private pay balance for the month of October.”             (Id.).

Consequently, the parties agree that McGlone’s private pay balance for the care that

she received from November 1, 2017 through March 31, 2018 is $50,116.82 and

that the Medicaid reimbursement rate for that time period is $33,861.06.

       {¶9} Kessler filed her answer to National Church’s complaint on October 15,

2020. Thereafter, on December 29, 2020, Kessler filed a motion for a judgment on

the pleadings under Civ.R. 12(C), arguing that she cannot be held personally liable

for McGlone’s debt. On January 11, 2021, National Church filed a memorandum

in opposition to Kessler’s motion for a judgment on the pleadings, arguing that

Kessler’s liability stems from the breach of her duty “to pay from the resident’s

funds and to obtain and maintain Medicaid on behalf of the resident.” (Doc. No.

12). Kessler filed her reply to National Church’s memorandum in opposition to her

motion for a judgment on the pleadings on February 18, 2021. On April 1, 2021,

the trial court denied Kessler’s motion for a judgment on the pleadings after

concluding “that there are a set of facts that would support” National Church’s

breach-of-contract and promissory-estoppel claims against Kessler. (Doc. No. 16).

       {¶10} On November 15, 2021, National Church filed a motion for summary

judgment in which it argued there are no genuine issues of material fact that Kessler

breached the agreement “because she failed to take necessary action to ensure that

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Case No. 14-22-22

[McGlone’s] assets remained within allowable limits for Medicaid, resulting in the

termination of [McGlone’s] Medicaid benefits for being over resourced.” (Doc. No.

37). On December 20, 2021, Kessler filed a memorandum in opposition to National

Church’s motion for summary judgment along with a motion for leave to file a

motion for summary judgment instanter, which the trial court denied. On January

14, 2022, National Church filed its reply to Kessler’s memorandum in opposition to

its motion for summary judgment. On February 10, 2022, the trial court denied

National Church’s motion for summary judgment after concluding that “[b]oth

[National Church] and [Kessler] failed to timely address the notice from Medicaid

regarding the later ineligibility of [McGlone] for Medicaid benefits.” (Doc. No. 48).

           {¶11} Kessler filed a motion for summary judgment on March 25, 2022,

arguing that there is no genuine issue of material fact that she did not agree to be

personally liable for McGlone’s debt.3 (Doc. No. 59). On October 5, 2022, the trial

court granted National Church’s request for reconsideration of its motion for

summary judgment, denied Kessler’s motion for summary judgment, and granted

summary judgment in favor of National Church. (Doc. No. 60). Specifically, the

trial court concluded that there are no genuine issues of material fact that Kessler

breached McGlone’s admission agreement by failing to maintain McGlone’s

Medicaid eligibility.            Consequently, the trial court awarded National Church

3
    The parties filed joint stipulations of fact on March 16, 2022. (Doc No. 57).

                                                       -6-
Case No. 14-22-22

$33,861.06—“[t]he Medicaid reimbursement rate for” “the care provided to

[McGlone] from November 1, 2017 through March 31, 2018”—in damages. (Id.).

       {¶12} Kessler filed her notice of appeal on November 2, 2022. She raises

two assignments of error for our review, which we will address together.

                            Assignment of Error No. I

       The Trial Court erred in denying Defendant’s Motion for
       Summary Judgment.

                           Assignment of Error No. II

       The Trial Court erred in granting Plaintiff’s Motion for
       Summary Judgment.

       {¶13} In her assignments of error, Kessler argues that the trial court erred by

denying her motion for summary judgment and granting summary judgment in favor

of National Church because there is no genuine issue of material fact that the

agreement constitutes “an unlimited, involuntary, and unlawful personal

guarantee.” (Appellant’s Brief at 9). Similarly, Kessler contends that there is no

genuine issue of material fact that she did not agree to be personally liable for

McGlone’s debt.

                                Standard of Review

       {¶14} We review a decision to grant summary judgment de novo. Doe v.

Shaffer, 90 Ohio St.3d 388, 390 (2000). “De novo review is independent and

without deference to the trial court’s determination.” ISHA, Inc. v. Risser, 3d Dist.

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Case No. 14-22-22

Allen No. 1-12-47, 2013-Ohio-2149, ¶ 25, citing Costner Consulting Co. v. U.S.

Bancorp, 195 Ohio App.3d 477, 2011-Ohio-3822, ¶ 10 (10th Dist.). Summary

judgment is proper where there is no genuine issue of material fact, the moving party

is entitled to judgment as a matter of law, and reasonable minds can reach but one

conclusion when viewing the evidence in favor of the non-moving party, and the

conclusion is adverse to the non-moving party. Civ.R. 56(C); State ex rel. Cassels

v. Dayton City School Dist. Bd. of Edn., 69 Ohio St.3d 217, 219 (1994).

       {¶15} “The party moving for summary judgment has the initial burden of

producing some evidence which demonstrates the lack of a genuine issue of material

fact.” Carnes v. Siferd, 3d Dist. Allen No. 1-10-88, 2011-Ohio-4467, ¶ 13, citing

Dresher v. Burt, 75 Ohio St.3d 280, 292 (1996). “In doing so, the moving party is

not required to produce any affirmative evidence, but must identify those portions

of the record which affirmatively support his argument.” Id., citing Dresher at 292.

“The nonmoving party must then rebut with specific facts showing the existence of

a genuine triable issue; he may not rest on the mere allegations or denials of his

pleadings.” Id., citing Dresher at 292 and Civ.R. 56(E).

                                      Analysis

       {¶16} In this case, the trial court granted summary judgment in favor of

National Church after concluding that Kessler breached McGlone’s admission

agreement by failing to “promptly act to maintain [McGlone’s] eligibility for

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Case No. 14-22-22

Medicaid.” (Doc. No. 60). Specifically, the trial court concluded that Kessler

breached the admission agreement by failing to (1) “manage [McGlone’s] checking

account * * * in a manner that would ensure continued Medicaid eligibility from

November 3, 2016 through April 1, 2018”; (2) “take any action until [National

Church] contacted [her] via email in February 2018” “upon receipt of the notice of

termination”; and (3) “timely address the Medicaid termination once [National

Church] became aware of the same.” (Id.). Based on that conclusion, the trial court

also denied Kessler’s motion for summary judgment.

       {¶17} “A cause of action for breach of contract requires the claimant to

establish the existence of a contract, the failure without legal excuse of the other

party to perform when performance is due, and damages or loss resulting from the

breach.” Lucarell v. Nationwide Mut. Ins. Co., 152 Ohio St.3d 453, 2018-Ohio-15,

¶ 41. However, “‘“[a] contract is binding only upon parties to a contract and those

in privity with them.”’” Gilchrist v. Saxon Mtge. Servs., 10th Dist. Franklin No.

12AP-556, 2013-Ohio-949, ¶ 23, quoting DVCC, Inc. v. Med. College of Ohio, 10th

Dist. Franklin No. 05AP-237, 2006-Ohio-945, ¶ 19, quoting Samadder v. DMF of

Ohio, Inc., 154 Ohio App.3d 770, 2003-Ohio-5340, ¶ 25 (10th Dist.). “Privity is

defined as ‘[t]he connection or relationship between two parties, each having a

legally recognized interest in the same subject matter.’” Bohan v. Dennis C.

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Case No. 14-22-22

Jackson Co., L.P.A., 188 Ohio App.3d 446, 2010-Ohio-3422, ¶ 12 (8th Dist.),

quoting Shoemaker v. Gindlesberger, 118 Ohio St.3d 226, 2008-Ohio-2012, ¶ 10.

       {¶18} In this case, the parties do not dispute that Kessler executed

McGlone’s admission agreement in her capacity as McGlone’s representative.

(Doc. No. 57). In other words, there is no dispute that Kessler did not execute the

agreement in her personal capacity. Accord Vancrest Mgt. Corp. v. Mullenhour, 3d

Dist. Allen No. 1-18-59, 2019-Ohio-2958, ¶ 14.

       {¶19} An “agent” is a person “‘who is authorized to act for or in place of

another; a representative.’” (Emphasis added.) Marion v. Cendol, 3d Dist. Marion

No. 9-12-59, 2013-Ohio-3197, ¶ 16, quoting Black’s Law Dictionary 72 (9th

Ed.2009), and citing John Hancock Mut. Life Ins. Co. v. Luzio, 123 Ohio St. 616

(1931), syllabus (proposing that, “[i]n the absence of statutory definition, the term

‘agent,’ * * * should be given its legal meaning, as being one who is acting within

the scope of his authority in the business intrusted [sic] to him by his principal”).

See also R.C. 1337.22(A) (defining an agent as “a person granted authority to act

for a principal under a power of attorney, whether denominated an agent, attorney

in fact, or otherwise”). Generally, “‘[w]here an agent acts for a disclosed principal,

in the name of such principal, and within the scope of authority, such agent is

ordinarily not liable on the contracts the agent makes.’” Whitt Sturtevant, LLP v.

NC Plaza LLC, 10th Dist. Franklin No. 14AP-919, 2015-Ohio-3976, ¶ 96, quoting

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Case No. 14-22-22

Oelberg v. Skaggs, 10th Dist. Franklin No. 97APE10-1383, 1998 WL 292231, *2

(June 4, 1998).

       {¶20} Because Kessler is not a party to the agreement (in her individual

capacity), she could not have breached it. Accord Gilchrist, 2013-Ohio-949, at ¶ 23

(“Because appellee was not a party to the TPP, it could not have breached it.”). As

a result, National Church’s ability to recover from Kessler for debt incurred by

McGlone is limited since Kessler (in her personal capacity) is not a party to the

contract. See Vancrest at ¶ 14, citing Huntington Natl. Bank v. A & J Plumbing,

Inc., 11th Dist. Geauga No. 2011-G-3021, 2012-Ohio-526, ¶ 27, Extendicare Health

Servs., Inc. v. Dunkerton, 11th Dist. Portage, 2017-Ohio-427, ¶ 28, and Gilchrist at

¶ 23. See also Classic Healthcare Sys., LLC v. Faun Miracle, 12th Dist. Warren

No. CA2017-03-029, 2017-Ohio-8540, ¶ 33 (Powell, P.J., dissenting) (“Under

traditional agency principles, the agent (David) is never liable for the obligations of

the principal (Faun) unless the agent enters into an obligation but fails to disclose

his role as an agent for the principal.”).

       {¶21} Importantly, “R.C. 1337.092(A) precludes personal liability when a

party enters into a contract in a representative capacity as attorney in fact and

discloses that representative capacity in the contract * * * .” Gilchrist at ¶ 18. See

also Vancrest at ¶ 15 (noting that R.C. 1337.092 provides “that ‘the attorney in fact

is not personally liable on the contract, unless the contract otherwise specifies’”),

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Case No. 14-22-22

quoting R.C. 1337.092(A). R.C. 1337.092 “sets forth exceptions to that general rule

and provides, in its relevant part, as follows:

       (B) An attorney in fact is not personally liable for a debt of the
       attorney in fact’s principal, unless one or more of the following
       applies:

       (1) The attorney in fact agrees to be personally responsible for the
       debt.

       ***

       (3) The negligence of the attorney in fact gave rise to or resulted in
       the debt.”

Vancrest at ¶ 15, quoting R.C. 1337.092(B)(1), (3). Critically, because National

Church failed to raise the applicability of R.C. 1337.092 in the trial court, it waived

any argument relative to the statue for purposes of appeal. Accord Village at the

Greene v. Smith, 2d Dist. Montgomery No. 28762, 2020-Ohio-4088, ¶ 18; Vancrest

at ¶ 17; Extendicare at ¶ 31. See also Gilchrist at ¶ 21-22.

       {¶22} For these reasons, we conclude that Kessler cannot be held liable for

breaching McGlone’s admission agreement since she has no contractual privity to

the agreement and because National Church failed to allege an alternative means

for recovery under its breach-of-contract claim under R.C. 1337.092. See Gilchrist

at ¶ 26 (concluding that because “no contract existed between appellant and appellee

pursuant to R.C. 1337.092(A),” there was no breach).

                                         -12-
Case No. 14-22-22

       {¶23} Even if Kessler was in privity to McGlone’s admission agreement, we

conclude that there is no genuine issue of material fact that Kessler did not breach

the agreement in the manner described by National Church. That is, contrary to

National Church’s argument, there is no triable issue that Kessler did not breach the

provision of the agreement requiring her “‘to act promptly to establish and maintain

[McGlone’s] eligibility for Medicaid, including, but not limited to, taking any and

all necessary action to ensure that [McGlone’s] assets are appropriately reduced to

and remain within allowable limits for Medicaid as established by applicable law.’”

(Appellee’s Brief at 19, quoting Doc. No. 37, Ex. 1). See HCF of Findlay, Inc. v.

Bishop, 3d Dist. Hancock No. 5-18-20, 2019-Ohio-319, ¶ 8 (assuming “without

deciding that the parties executed a valid contract, * * * there [was] no genuine issue

of material fact that [the resident’s representative] did not breach the contract in the

manner described by [the nursing facility]”).

       {¶24} “In order to determine whether there was a breach of the contract, we

must interpret the terms of the contract.” HCF of Findlay at ¶ 9. “When confronted

with an issue of contract interpretation, our role is to give effect to the intent of the

parties.” Id. “‘Courts presume that the intent of the parties to a contract resides in

the language they chose to employ in the contract.’”           Id., quoting Judson v.

Lyendecker, 10th Dist. Franklin No. 12AP-615, 2013-Ohio-1060, ¶ 12. “‘Ordinary

words in a written contract must be “given their ordinary meaning unless manifest

                                          -13-
Case No. 14-22-22

absurdity results, or unless some other meaning is clearly evidenced from the face

or overall contents of the instrument.”’” Id., quoting Nippon Life Ins. Co. of Am. v.

One Source Mgt., Ltd., 6th Dist. Lucas No. L-10-1247, 2011-Ohio-2175, ¶ 22,

quoting Alexander v. Buckeye Pipe Line Co., 53 Ohio St.2d 241 (1978), paragraph

two of the syllabus.

       {¶25} “‘“If a contract is clear and unambiguous, then its interpretation is a

matter of law and there is no issue of fact to be determined.”’” Id. at ¶10, quoting

Barhorst, Inc. v. Hanson Pipe & Prods. Ohio, Inc., 169 Ohio App.3d 778, 2006-

Ohio-6858, ¶ 10 (3d Dist.), quoting Inland Refuse Transfer Co. v. Browning-Ferris

Industries of Ohio, Inc., 15 Ohio St.3d 321, 322 (1984). “In that case, we apply a

de novo standard of review.” Id.

       {¶26} Without addressing the validity of the agreement here, we conclude

that the agreement is clear and unambiguous. Accord id. at ¶11 (concluding that the

terms of the contract at issue in that case requiring the resident’s representative to

cooperate in the Medicaid application process were clear and unambiguous).

Indeed, the agreement designates, in its relevant part that “the Representative agrees

to pay from his/her own resources any unpaid charges due to Facility as a result of

the Representative’s failures to cooperate in the Medicaid eligibility or

redetermination process.” (Doc. No. 2, Ex. 1). Regarding Medicaid, the agreement

instructs, in its relevant part, as follows:

                                           -14-
Case No. 14-22-22

       E4. Medicaid Residents.

       ***

       b. Responsibility for Payment if Medicaid Coverage Denied or
       Terminated. You are responsible for applying or renewing the
       Resident’s Medicaid coverage. While Facility may assist You in
       applying for Medicaid coverage, Facility does not guarantee that
       Medicaid coverage will be available to the Resident. If the Resident’s
       application for Medicaid coverage is denied or if the Resident
       becomes ineligible at any time for Medicaid coverage, You shall be
       required to pay Facility the private-pay rate for all charges incurred
       by the Resident.

       ***

       E5. Medicaid Applications.

       a. Notification for Advance Planning. You agree to inform Facility
       when the Resident’s assets reach $20,000. In addition, if the Resident
       does not have monthly income sufficient to pay for the cost of care
       and services (e.g., Basic Rate and for Additional Services), You agree
       to apply for Medicaid or to promptly make arrangements to pay for
       the Resident’s continued stay at Facility when the Resident’s assets
       reach $5,000.

(Id.). Significantly, the agreement defines “cooperate” to mean:

       d. Cooperation in Application Process. You are obligated to make
       full and complete disclosure regarding all financial resources and
       income during the Medicaid application process, and to cooperate
       fully in providing all requested information. You agree to act
       promptly to establish and maintain the Resident’s eligibility for
       Medicaid, including, but not limited to, taking any and all necessary
       action to ensure that the Resident’s assets are appropriately reduced
       and remain within allowable limits for Medicaid as established by
       applicable law.

(Emphasis sic.) (Id.).

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Case No. 14-22-22

       {¶27} Based on our review of the record, we disagree with the trial court’s

conclusion that Kessler “failed to comply with the Admission Agreement insomuch

as [she] did not promptly act to maintain McGlone’s eligibility for Medicaid.” (Doc.

No. 60). Rather, reasonable minds can conclude only that Kessler cooperated in the

Medicaid eligibility process in the manner described in the contract. Indeed, based

on the facts and circumstances of this case, there is no genuine issue of material fact

that Kessler acted promptly to establish McGlone’s eligibility for Medicaid as

required under the agreement. Compare HCF of Findlay at ¶ 13 (concluding “that

there [was] no genuine issue of material fact that [the resident’s representative]

acted promptly to establish [the resident’s] eligibility for Medicaid”).

       {¶28} Likewise, there is no triable issue that Kessler made a full and

complete disclosure of McGlone’s financial resources and income during the

Medicaid application process and that she cooperated fully by providing all

requested information. Compare id. at ¶ 14 (concluding “that there [was] no

genuine issue of material fact that [the resident’s representative] made a full and

complete disclosure of [the resident’s] financial resources and income during the

Medicaid application process and cooperated fully in providing all requested

information”).

       {¶29} To illustrate, the record reflects that, in each instance that Kessler was

instructed to take specific action, she timely responded. Specifically, Kessler

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Case No. 14-22-22

responded (with the requested information) to ODJFS’s August 15, 2017 request for

information regarding McGlone’s assets on August 30, 2017. See id. at ¶ 18.

ODJFS notified only Kessler and McGlone (on August 31, 2017) that it denied

McGlone’s application for Medicaid benefits. Significantly, ODJFS did not provide

a reason to Kessler or McGlone for its decision to terminate McGlone’s benefits.

       {¶30} Even though ODJFS notified only Kessler and McGlone of its

decision terminating McGlone’s Medicaid benefits, Medicaid continued to pay for

McGlone’s care through September 30, 2017. Moreover, National Church did not

conduct “an Eligibility Search” until November 14, 2017 to ascertain McGlone’s

Medicaid-eligibility status. Notwithstanding the results of the search reflecting that

McGlone’s Medicaid benefits were terminated, National Church waited to attempt

to contact Kessler for nearly two months (when it sent a statement to the wrong

address on January 8, 2018).

       {¶31} Nevertheless, National Church further waited until February 20, 2018

to again try to contact Kessler. On that day, National Church emailed Kessler

requesting that she execute “another Authorized Representative Form, so that

[National Church] could reapply for Medicaid for [McGlone].” (Emphasis added.)

(Doc. No. 57). Kessler responded to National Church’s email that same day, and

National Church submitted “a new Medicaid application on behalf of [McGlone]”

that same day. (Id.). Consequently, viewing the evidence in favor of Kessler (as

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Case No. 14-22-22

the non-moving party here), reasonable minds can conclude only that Kessler

cooperated in the Medicaid-eligibility process in the manner described in the

agreement.

       {¶32} Furthermore, reasonable minds can conclude only that Kessler acted

promptly to establish McGlone’s Medicaid eligibility as required under the

agreement. Critically, neither the notice sent to Kessler and McGlone by ODJFS

nor National Church’s eligibility search provided a reason for the decision

terminating McGlone’s benefits.       Nevertheless, shortly after National Church

established communication with Kessler, Kessler “spent down [McGlone’s

checking account] by issuing National Church two checks totaling $10,483.67” on

April 2, 2018. (Doc. No. 57). Consequently, we conclude that the record reflects

that Kessler cooperated in the Medicaid-eligibility process by acting within a

reasonable amount of time to establish or maintain McGlone’s Medicaid eligibility.

Compare HCF of Findlay at ¶ 15 (concluding that the resident’s representative

“cooperated in the Medicaid redetermination process in the manner described in the

contract” because she “took the necessary action to appropriately reduce [the

resident’s] assets to the allowable limit to be eligible for Medicaid benefits”).

       {¶33} For these reasons, we conclude that there is no genuine issue of

material fact that Kessler did not breach the agreement by failing to cooperate in

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Case No. 14-22-22

the Medicaid-eligibility process in the manner described in the agreement. Accord

id. at ¶19.

       {¶34} Notwithstanding our conclusions, it is judicious for this court to

address the argument presented under Kessler’s second assignment of error. In sum,

Kessler contends that the trial court erred by denying her motion for summary

judgment because there is no genuine issue of material fact that the agreement

constitutes “an unlimited, involuntary, and unlawful personal guarantee” and that

there is no genuine issue of material fact that she did not agree to be personally

liable for McGlone’s debt. (Appellant’s Brief at 9). We agree. Importantly, it is

undisputed that Kessler did not expose herself to individual liability for the expenses

incurred for McGlone’s care when she executed the agreement as McGlone’s

representative. Accord Village at the Greene, 2020-Ohio-4088, at ¶ 19 (concluding

“that Smith, in executing the contract with Village as Father’s representative

(whether through his power of attorney or otherwise), did not become subject to

individual liability for the expenses incurred for Father’s care”).

       {¶35} Generally, federal and state regulations under the Nursing Home

Reform Act “provide that a nursing home cannot make a third-party guarantee a

requirement for admission or for a continued stay in the facility.”            Classic

Healthcare, 2017-Ohio-8540, at ¶ 32 (Powell, P.J., dissenting). See also Cook

Willow Health Ctr. v. Andrien, 54 Conn. L. Rptr. 729, 2012 WL 5200369, *3 (Sept.

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28, 2012) (noting that a nursing-facility agreement “unambiguously complies with”

federal regulations when “‘it expressly prohibits personal liability on the part of the

defendant for payments made to [a nursing facility] from [a resident’s] account,’

and second, ‘the contract obligates the defendant to use [the resident’s] assets for

the payment of services’”), quoting Sunrise Healthcare Corp. v. Azarigian, 76

Conn.App. 800, 808 (2003). See generally Manahawkin Convalescent v. O’Neill,

217 N.J. 99, 116, 85 A.3d 947 (2014) (characterizing the Nursing Home Reform

Act as “Congress’s statutory scheme intended to protect nursing home residents and

their families”), citing Omnibus Budget Reconciliation Act of 1987, Pub.L. No.

100203, § 4211, 101 Stat. 1330, 182, 182-221 (1987). “Indeed, ‘federal law has

long barred nursing homes accepting either Medicaid or Medicare from compelling

third party guarantees of resident payment, but permits such facilities to require

individuals with legal access to the resident’s assets to pay for the resident’s care

with such assets.’” Vancrest at ¶ 18, quoting Manahawkin Convalescent at 116.4

         {¶36} In particular, one component of the federal-statutory scheme provides,

“[w]ith respect to admissions practices a nursing facility must * * * not require a

third party guarantee of payment to the facility as a condition of admission (or

4
  See Pearson, The Responsible Thing to Do About “Responsible Party” Provisions in Nursing Home
Agreements: A Proposal for Change on Three Fronts, 37 U. Mich. J.L. Reform 757, 777-778 (2004)
(discussing the application of traditional-agency theory to third-party liability provisions of nursing-facility
agreements); Heiby Oil Co. v. Pence, 3d Dist. Auglaize No. 2-99-02, 1999 WL 378370, *2 (June 3, 1999)
(discussing traditional agency law).

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Case No. 14-22-22

expedited admission) to, or continued stay in the facility.”                                42 U.S.C.

1396r(c)(5)(A)(ii). However,

        [s]ubparagraph (A)(ii) shall not be construed as preventing a facility
        from requiring an individual, who has legal access to a resident’s
        income or resources available to pay for care in the facility, to sign a
        contract (without incurring personal financial liability) to provide
        payment from the resident’s income or resources for such care.

(Emphasis added.) 42 U.S.C. 1396r(c)(5)(B)(ii).5 See Manahawkin Convalescent

at 116 (suggesting that the regulation distinguishes “between a nursing home

resident’s assets in the control of a third party, which may be pursued by the facility,

and that third party’s personal funds, which are beyond the facility’s reach”).

Somewhat more restrictively, the Code of Federal Regulations provides, in its

relevant part, as follows:

        (3) The facility must not request or require a third party guarantee
        of payment to the facility as a condition of admission or expedited
        admission, or continued stay in the facility. However, the facility may
        request and require a resident representative who has legal access to a
        resident’s income or resources available to pay for facility care to sign
        a contract, without incurring personal financial liability, to provide
        facility payment from the resident’s income or resources.

(Emphasis added.) 42 C.F.R. 483.15(a)(3).6 Finally, Ohio’s regulation provides, in

its relevant part, as follows:

        (C) A provider of a [Nursing Facility] shall not:

5
  “Similar language appears in [42 U.S.C. 1395i-3(c)(5)(A)(ii) and (B)(ii)], which govern skilled nursing
facilities that accept Medicare.” Manahawkin Convalescent v. O’Neill, 217 N.J. 99, 116, 85 A.3d 947 (2014).
6
  “42 C.F.R. 483.15(A)(3) * * * was amended in October 2016 to prohibit facilities from requesting a third-
party guarantee of payment.” Montefiore Home v. O’Donnell, 8th Dist. Cuyahoga No. 107074, 2018-Ohio-
5238, ¶ 6.

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Case No. 14-22-22

         ***

         (4) Require a third party to accept personal responsibility for paying
         the facility charges out of his or her own funds. However, the facility
         may require a representative who has legal access to an individual’s
         income or resources available to pay for facility care to sign a contract,
         without incurring personal financial liability, to provide facility
         payment from the individual’s income or resources if the individual’s
         medicaid application is denied and if the individual’s cost of care is
         not being paid by medicare or another third-party payor. A third-party
         guarantee is not the same as a third-party payor (i.e., an insurance
         company), and this provision does not preclude the facility from
         obtaining information about medicare and medicaid eligibility or the
         availability of private insurance. The prohibition against third-party
         guarantees applies to all individuals and prospective individuals in all
         certified [nursing facilities] regardless of payment source. This
         provision does not prohibit a third party from voluntarily making
         payment on behalf of an individual.

(Emphasis added.) Ohio Adm.Code 5160-3-02(C)(4).7 8

         {¶37} Here, there is no genuine issue of material fact that Kessler did not

personally guarantee payment for McGlone’s care under the agreement. Indeed, the

parties (as well as the trial court) agree that Kessler did not assume personal liability

for McGlone’s debt under the agreement. See Extendicare, 2017-Ohio-427, at ¶ 28

7
  “‘Resources’ means cash, funds held within a financial institution, investments, personal property, and real
property an individual and/or the individual’s spouse has an ownership interest in, has the legal ability to
access in order to convert to cash, and is not legally prohibited from using for support and maintenance.”
Ohio Adm.Code 5160:1-1-01.
8
  See Pearson, 37 U. Mich. J.L. Reform at 782-783 (suggesting that the “roles” of third-party signers can be
susceptible to “alternative, inconsistent means” and that roles identified, for instance, as “attorney in fact”;
“responsible party”; “representative”; “guarantor;” or “sponsor” are not mutually exclusive). See also
Meadowbrook Center, Inc. v. Buchman, 149 Conn.App. 177, 201-203, 90 A.3d 219 (2014) (addressing the
nuances of third-party identifiers in admission agreements); Manahawkin Convalescent, 217 N.J. at 120
(concluding that the “cause of action was not defined in sufficient detail * * * and was not properly pled”
because it was unclear whether the nursing home was asserting its claim against O’Neill in her fiduciary
capacity or against her individually).

                                                     -22-
Case No. 14-22-22

(emphasizing that “[a]ppellant signed the admission agreement and the payor

confirmation as his father’s attorney-in-fact, and neither document provides that

appellant was [his father’s] voluntary guarantor”). See also Village at the Greene,

2020-Ohio-4088, at ¶ 19 (noting that “Smith specifically disclaimed in writing any

intent or willingness to assume personal responsibility for Father’s charges”).

       {¶38} Notwithstanding the parties’ agreement that Kessler did not personally

guarantee payment for McGlone’s care, National Church maintains that Kessler is

personally liable for breaching the provisions of the agreement requiring her to

cooperate in the Medicaid-eligibility process.      Importantly, in support of its

argument, National Church directs this court to the provision of the agreement

providing, in relevant part, that “‘the Representative agrees to pay from his/her own

resources any unpaid charges due to Facility as a result of the Representative’s

failure to cooperate in the Medicaid eligibility or redetermination process.’”

(Emphasis added.) (Appellee’s Brief at 7, quoting Doc. No. 2, Ex. 1).

       {¶39} We previously addressed our concern with the inclusion of provisions

in nursing-facility agreements imposing personal liability on a resident’s

representative, but ultimately determined that the issue was not ready for review.

See Vancrest, 2019-Ohio-2958, at ¶ 19 (resolving that “we are constricted by the

notions of due process from addressing the applicability of the Federal Nursing

Home Reform Act and corresponding Ohio regulations” in that case since it was not

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Case No. 14-22-22

properly before the court). We are not so constrained here. Therefore, we conclude

that provisions in a nursing-facility agreement purporting to impose “personal

liability on a resident’s representative who does not voluntarily agree to assume that

responsibility” violates federal and Ohio law. Village at the Greene at ¶ 24.

       {¶40} To be clear, the provision of the agreement providing that “the

Representative agrees to pay from his/her own resources any unpaid charges due to

Facility as a result of the Representative’s failure to cooperate in the Medicaid

eligibility or redetermination process” is unenforceable. (Doc. No. 2, Ex. 1). See

Village at the Greene at ¶ 25 (concluding that the nursing home was “not entitled to

enforce [the] provision” it “required Smith to sign in order to admit Father to

Village’s care[, which] provided that Smith ‘agree[d] to pay from his/her own

resources any unpaid charges due to [Village] as a result of the Representative’s

[Smith’s] failure to cooperate in the Medicaid eligibility process’”). Specifically,

such contract provision directly contravenes “the provisions of 42 U.S.C.

1396r(c)(5)(A)(ii), 42 C.F.R. 483.15(a)(3), and Ohio Adm.Code 5160-3-02(C)(4) *

* * .” Id.

       {¶41} Critically, the bounds of Ohio and federal law authorize nursing

facilities to only request and require the resident’s representative (with legal access

to the resident’s assets) to pay for the resident’s care with such assets (without

incurring personal-financial responsibility). See Inova Health Systems Services,

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Case No. 14-22-22

Inc. v. Bainbridge, 81 Va.Cir. 39, 2010 WL 7765105, *4 (July 19, 2010) (“It is clear

* * * that Congress did not want nursing homes to force others not in privity, such

as a resident’s family member, to assume personal financial responsibility for the

care of the resident.”), citing H.R. Rep. No. 104-651 (1996).

         {¶42} In this case, it is undisputed that Kessler complied with federal and

state law by paying for McGlone’s care by exhausting McGlone’s assets after her

Medicaid benefits were terminated. See, e.g., Ohio Adm.Code 5160-3-02(C)(4)

(authorizing, in relevant part, that “the facility may require a representative who has

legal access to an individual’s income or resources available to pay for facility care

to sign a contract, without incurring personal financial liability, to provide facility

payment from the individual’s income or resources if the individual’s medicaid

application is denied”). That is, the parties agree that Kessler paid National Church

$10,483.67 from McGlone’s checking account in April 2018. Consequently, there

is no genuine issue of material fact that Kessler fulfilled her statutory

responsibilities.9 Thus, we conclude that any provision of the agreement imposing

9
  There is no evidence in the record whether National Church pursued the debt from McGlone’s estate. See
Classic Healthcare Systems, LLC v. Faun Miracle, 12th Dist. Warren No. CA2017-03-029, 2017-Ohio-8540,
¶ 35 (Powell, P.J., dissenting) (noting that “[w]ithout the ability to proceed against [the resident’s
representative], [the nursing facility] was limited to pursuing the debt from [the resident]. However, the
record reflects that [the resident] died shortly before the trial commenced and [the nursing facility] voluntarily
dismissed its claims against her instead of substituting her estate” and that “[t]he record contains no indication
whether an estate was opened for [the resident”] but the nursing facility, “as [the resident’s] creditor, had the
ability to open her estate and present claims within the time permitted by statute”).

                                                      -25-
Case No. 14-22-22

personal liability is void and any claim that Kessler is liable for McGlone’s debt is

without merit.

       {¶43} Nevertheless, National Church maintains that it “has not sought to

hold [Kessler] personally liable for the expenses incurred by Ms. McGlone. If it

had, it would have sought damages in the amount of $50,858.87. Instead [National

Church] simply sought” $33,861.06. (Appellee’s Brief at 13). National Church’s

argument—being raised for the first time on appeal—is not only disingenuous but

does not change the outcome of our analysis.

       {¶44} It is well-settled that a party cannot change their theory of the case and

present new arguments for the first time on appeal. Brewer v. Brewer, 10th Dist.

Franklin No. 09AP-146, 2010-Ohio-1319, ¶ 23. Indeed, in its motion for summary

judgment National Church unequivocally demanded that the trial court award it

$50,806.82 in damages as a result of its claim that Kessler breached the agreement.

(See Doc. No. 37).

       {¶45} Moreover, National Church’s argument contradicts the term of its

agreement reflecting that the resident “shall be required to pay Facility the private-

pay rate for all charges incurred by the Resident” “[i]f the Resident’s application for

Medicaid coverage is denied or if the Resident becomes ineligible at any time for

Medicaid coverage.” (Doc. No. 37, Ex. 1). Thus, based on our conclusions

regarding Kessler’s privity to the agreement and the propriety of any provision in

                                         -26-
Case No. 14-22-22

the agreement purporting to personally obligate Kessler to pay McGlone’s debt,

National Church’s argument is feckless.

       {¶46} For these reasons, Kessler’s assignments of error are sustained.

       {¶47} Having found error prejudicial to the appellant herein in the particulars

assigned and argued, we reverse the judgment of the trial court and remand for

further proceedings consistent with this opinion.

                                                            Judgment Reversed and
                                                                 Cause Remanded

MILLER, P.J. and WALDICK, J., concur.

/jlr

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