Court Opinion

ID: 1045698
Source: CourtListenerOpinion
Date Created: 2013-10-08 02:29:08.760729+00
Date Added: 2024-06-11T12:51:09.512495
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                                AT KNOXVILLE
                                      November 8, 2012 Session

                         IN RE ESTATE OF FRED F. CRUMLEY, SR.

                     Appeal from the Chancery Court for Hamilton County
                      No. 09P712 Hon. Jeffrey M. Atherton, Chancellor

                 No. E2012-00030-COA-R3-CV-FILED-DECEMBER 18, 2012

The Bureau of TennCare filed a petition to open Fred F. Crumley, Sr.’s estate in order to file
a claim against the estate for medical assistance rendered. The court appointed an
administrator, and the Bureau of TennCare filed a claim. Administrator argued that the
statute of limitations barred recovery on any claim filed by the Bureau of TennCare. The trial
court agreed with Administrator and dismissed the claim. The Bureau of TennCare appeals.
We reverse the decision of the trial court.

    Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Reversed;
                                     Case Remanded

J OHN W. M CC LARTY, J., delivered the opinion of the court, in which C HARLES D. S USANO,
J R., J., and J AMES C URWOOD W ITT, J R., SP. J.,1 joined.

Robert E. Cooper, Jr., Attorney General and Reporter; William E. Young, Solicitor General;
Richard F. Clippard, Assistant Attorney General, General Civil Division, Nashville,
Tennessee, for the appellant, Tennessee Bureau of TennCare.

Jennifer Kent Exum, Chattanooga, Tennessee, for the appellee, G. Michael Luhowiak.

Fred F. Crumley, Jr., Harrison, Tennessee, appellee, pro se.

Mary Castleberry, Chattanooga, Tennessee, appellee, pro se.

1
    Judge on the Court of Criminal Appeals sitting by special designation.
                                               OPINION

                                        I. BACKGROUND

        On December 11, 2008, Fred F. Crumley, Sr. (“Decedent”) died while a resident at
Consulate Health Care of Chattanooga in Tennessee. Decedent’s heir, Fred Crumley, Jr., did
not attempt to administer Decedent’s estate, which was valued at approximately $94,600.
On December 30, 2009, the Bureau of TennCare (“the Bureau”) filed a petition to open the
estate as a creditor pursuant to Tennessee Code Annotated section 30-1-106. The court
appointed G. Michael Luhowiak (“Administrator”) as the administrator of the estate and
issued letters of administration on January 5, 2010. The court also waived Administrator’s
duty to file an affidavit of notice with the Bureau.

       Administrator filed a motion to dismiss, alleging that the Bureau “lack[ed] standing
as a creditor to open [the estate] after the expiration of the twelve (12) month absolute bar
date for the filing of claims.” Administrator did not file a notice of hearing, and the Bureau
did not appear at the hearing. The court initially dismissed the probate action but set aside
the dismissal when the Bureau complained that it had not received notice of the hearing.

      Another hearing was held on March 22, 2010, at which both parties were present.
Following the hearing, the court dismissed the probate action, stating,

        [T]he court finds that, under the current version of [Tennessee Code Annotated
        section 71-5-116], the one year statute of limitations found in [Tennessee Code
        Annotated section 30-2-310(b)] does apply to TennCare claims, even if no
        notice is provided to the [Bureau].

The Bureau filed a motion to alter or amend, arguing that the court failed to acknowledge
that Decedent, through his estate, owed the Bureau for services rendered, that the court failed
to consider the express condition precedent in Tennessee Code Annotated section 71-5-116,
that the court’s decision was against logic, and that the court engaged in reasoning that
caused an injustice to the Bureau. On June 28, 2010, a hearing was held on the Bureau’s
motion. Following the hearing, the court set aside the order of dismissal and directed the
Bureau to file its claim.2

2
 On August 5, 2010, two orders, signed by a chancellor who did not preside over the hearing, were entered
that reflected this ruling. These orders were subsequently stricken from the record and replaced by another
order, dated March 26, 2012, that was signed by the chancellor who presided over the hearing.
                                                   -2-
       On August 23, 2010, the Bureau submitted its claim of $186,886.78 against the estate.
Citing the applicable statute of limitations, the clerk and master returned the claim to the
Bureau. After reviewing the court’s order directing the Bureau to file the claim, the clerk and
master accepted the claim but did not actually file the claim until July 12, 2011.3

       Administrator renewed his motion to dismiss but inadvertently failed to serve the
Bureau’s counsel with the motion. The court dismissed the action without objection. After
learning of the dismissal, the Bureau filed a motion to set aside the dismissal. The court
granted the motion and held a new hearing. Relative to the Bureau’s delay in filing the claim
after opening the estate, the court stated, in pertinent part,

           Over 11 months [passed] before [the Bureau] complie[d] with the order that
           they fought so hard to get. I just can’t look beyond that action, or rather
           inaction, when considering that portion of the statute that says there has to be
           vigorous pursuit of an action on behalf of TennCare.

Following the hearing, the court dismissed the action for the fourth and final time, holding
that the claim was barred by Tennessee Code Annotated section 30-2-310. The court found
that the Bureau failed to comply with Tennessee Code Annotated section 71-5-116, which
tasked the Bureau with filing its claim against the estate within 12 months of Decedent’s
death. The court further found that “[t]he Bureau’s actions in this matter demonstrate a
failure to ‘vigorously pursue’ recovery efforts against this estate within the time allowed for
the filing of claims by creditors.” This timely appeal followed.

                                                 II. ISSUES

           We consolidate and restate the issues raised on appeal as follows:

           A. Whether the statute of limitations precluded the Bureau’s claim for the
           recovery of justly paid medical benefits.

           B. Whether the Bureau failed to “strive vigorously” in its effort to recoup
           TennCare funds from Decedent’s estate.

3
    It was not clear from the record why the clerk and master failed to file the claim in a timely manner.
                                                       -3-
                              III. STANDARD OF REVIEW

        The facts are not in dispute, and the issues before this court involve the interpretation
of statutes and case law. “Statutory construction is a question of law that is reviewable on
a de novo basis without any presumption of correctness.” In re Estate of Tanner, 295 S.W.3d
610, 613 (Tenn. 2009). Likewise, the trial court’s conclusions of law are subject to a de novo
review with no presumption of correctness. Blackburn v. Blackburn, 270 S.W.3d 42, 47
(Tenn. 2008); Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn. 1993).

       The Supreme Court of Tennessee has recapitulated the primary principles of statutory
construction as follows:

       [T]here are a number of principles of statutory construction, among which is
       the most basic rule of statutory construction: to ascertain and give effect to the
       intention and purpose of the legislature. However, the court must ascertain the
       intent without unduly restricting or expanding the statute’s coverage beyond
       its intended scope. The legislative intent and purpose are to be ascertained
       primarily from the natural and ordinary meaning of the statutory language,
       without a forced or subtle interpretation that would limit or extend the statute’s
       application.

Mooney v. Sneed, 30 S.W.3d 304, 306 (Tenn. 2000) (citations and internal quotation marks
omitted). This court is not permitted “to alter or amend a statute.” Gleaves v. Checker Cab
Transit Corp., Inc., 15 S.W.3d 799, 803 (Tenn. 2000). “The reasonableness of a statute may
not be questioned by a court, and a court may not substitute its own policy judgments for
those of the legislature.” Mooney, 30 S.W.3d at 306 (citing Gleaves, 15 S.W.3d at 803). “It
is presumed that the Legislature in enacting [a] statute did not intend an absurdity, and such
a result will be avoided if the terms of the statute admit of it by a reasonable construction.”
Epstein v. State, 366 S.W.2d 914, 918 (Tenn. 1963). “[C]ourts must ‘presume that the
legislature says in a statute what it means and means in a statute what it says there.’”
Gleaves, 15 S.W.3d at 803 (quoting BellSouth Telecomms., Inc. v. Greer, 972 S.W.2d 663,
673 (Tenn. Ct. App. 1997)).

                                     IV. DISCUSSION

                                               A.

       Tennessee imposes a one-year statute of limitations upon claims made by the Bureau
against an estate. See Tenn. Code Ann. § 30-2-310 (barring non-tax claims not filed within
12 months from the date of death of the decedent). The Bureau contends that the applicable

                                               -4-
statute of limitations found in Tennessee Code Annotated section 30-2-310 did not bar its
claim. The Bureau admits that it is obligated to file claims within the statute of limitations
when the personal representatives of an estate comply with the statutory notice requirements
but argues that the claim in this case is not barred because it did not receive any of the
statutory notices. Administrator asserts that the Bureau’s claim was properly dismissed as
untimely pursuant to section 30-2-310 because the claim was filed more than one year after
Decedent’s death. He argues that he was not required to issue a notice to the Bureau because
he was appointed to administer Decedent’s estate more than one year after Decedent’s death.
He contends that the Bureau had either actual or constructive notice of Decedent’s death
because the Bureau initiated the opening of the probate proceedings. Both parties argue that
their position is supported by the 2007 amendments to section 71-5-116.

       Prior to the applicability of the 2007 amendments to section 71-5-116, the Tennessee
Supreme Court was faced with answering a similar question in Tanner. 295 S.W.3d at 616-
17. In Tanner, decedent’s heir, who was acting as the conservator of the estate, sought a
release from the Bureau without initiating the administration of decedent’s estate. After its
attempt to file a claim in the conservatorship action was thwarted, the Bureau sought to open
decedent’s estate 19 months after decedent’s death. The court appointed an administrator,
and the Bureau filed its claim, which was dismissed as untimely. This court affirmed the trial
court’s dismissal, noting that the Bureau had actual notice of decedent’s death prior to the
expiration of the 12-month statute of limitations. On appeal to the Tennessee Supreme
Court, the Court held that the Bureau’s claim was not subject to the generally applicable one-
year statute of limitations. In so holding, the Court stated,

       Our conclusion, therefore, is that at the time of [decedent’s] death, section 71-
       5-116(c) permitted adjustment or recovery from an estate until a waiver or
       release was granted by the Bureau, regardless of any limitations on ordinary
       claims imposed by section 30-2-310(b). We further hold that, incident to its
       right to demand payment pursuant to the release and waiver provisions, the
       Bureau was permitted to file a formal claim against the estate, despite the fact
       that claims of most other types would have been barred.

Id. at 628-29 (footnote omitted).

       The amended statute at issue in this case provides, in pertinent part,

       (c)(1) There shall be no adjustment or recovery of any payment for medical
       assistance correctly paid on behalf of any recipient pursuant to this part from
       the recipient’s estate, except in the case of a recipient who was fifty-five (55)
       years of age or older at the time the recipient received medical assistance or

                                              -5-
services pursuant to this part. In that case, adjustment or recovery from the
recipient’s estate may be pursued only after the death of the individual’s
surviving spouse[.]

(c)(2) Before any probate estate may be closed pursuant to title 30, with
respect to a decedent, who at the time of death, was enrolled in the TennCare
program, the personal representative of the estate shall file with the clerk of the
court exercising probate jurisdiction a release from [the Bureau] evidencing
either:

       (A) Payment of all medical assistance benefits, premiums, or
       other costs due from the estate under law;

       (B) Waiver of the bureau’s claims; or

       (C) A statement from the bureau that no amount is due.

(d)(1) To facilitate and enhance compliance with subsection (c), the following
notices shall be provided:

       (A) Within thirty (30) days of receipt of notice of a person’s
       death, the department of health shall notify [the Bureau], in a
       format to be specified by the [B]ureau, of the death of any
       individual fifty-five (55) years of age or older. Each notification
       shall include the decedent’s name, date of birth and social
       security number;

       (B) Within sixty (60) days of the date of issuance of either
       letters of administration or letters testamentary, the personal
       representatives of decedents shall provide notice of the death of
       any individual age fifty-five (55) years of age or older to [the
       Bureau], in a format to be specified by the [B]ureau, shall state
       whether the decedent was a TennCare recipient and shall request
       a release from [the Bureau] pursuant to subdivision (c)(2), and
       an affidavit confirming notice shall be filed pursuant to § 30-2-
       301(b)(3);

       (C) Personal representatives of decedents shall provide notice to
       the court concerning whether or not decedent was a TennCare
       recipient pursuant to § 30-1-117; and

                                        -6-
              (D) Personal representatives of decedents shall provide notice
              to creditors specified in § 30-2-306 to [the Bureau], if the
              decedent was a TennCare recipient. If a notice to creditors is
              provided to the [B]ureau, the [B]ureau shall file a claim for
              recovery in accordance with the requirements of title 30, chapter
              2, part 3.

       (2) It is the legislative intent of subdivision (d)(1) that, after the date of death,
       [the Bureau] strive vigorously to recoup any TennCare funds expended for
       decedent during decedent’s lifetime.

Tenn. Code Ann. § 71-5-116(c), (d).

       This case is the last in a trio of cases that have made their way through this court
following the 2007 amendments to section 71-5-116. The first two cases were In re Estate
of Gregory, No. E2011-01369-COA-R3-CV, 2012 WL 2499502 (Tenn. Ct. App. June 29,
2012) and In re Estate of Omer Stidham, No E2011-02507-COA-R3-CV, 2012 WL 3612386
(Tenn. Ct. App. Aug. 23, 2012), perm. app. filed (Oct. 18, 2012). These cases highlighted
the applicability of the Court’s decision in Tanner in light of the amendments to section 71-5-
116.

       In Gregory, the executor of decedent’s estate waited approximately 14 months to open
decedent’s estate and provide notice to the Bureau. When the Bureau filed its claim, the
executor asserted that the Bureau’s claim was untimely because it had not been filed within
the applicable one-year statute of limitations. Relative to the notice provisions in section 71-
5-116, this court stated,

       The effect of giving the statute of limitations effect without notice from the
       personal representative within one year of the death would be to reward the
       estate for failing to give the intended notice in a manner that would facilitate
       the filing of a claim, while penalizing the Bureau for failing to act despite the
       lack of notice. We understand that the Bureau is supposed to receive notice
       of the death from the department of health pursuant to [Tennessee Code
       Annotated section 71-5-116(d)(1)(A)], but that was also true in Tanner. (See
       Tanner, 295 S.W.3d at 615 (quoting same requirement in version of statute in
       effect before January 1, 2007).

Gregory, 2012 WL 2499502 at *3. In holding that the Bureau’s claim was not barred, this
court stated,

                                                -7-
       [W]e hold that, under the undisputed facts of this case, the January 2007
       amendment to [Tennessee Code Annotated section 71-5-116] does not change
       the applicability of Tanner. The executor, having waited more than one year
       from the death of Ms. Gregory to open the estate and give notice of the death,
       cannot now invoke the notice and claim requirements of section 71-5-
       116(d)(1)(D) as a reason for strictly holding the Bureau to the statute of
       limitations. The executor’s failure to obtain a waiver or release from the
       Bureau prevented the statute of limitations found in Tennessee Code Annotated
       section 30-2-310 from running. We state no opinion as to the result had the
       executor filed the estate shortly after the death and given notice to the Bureau
       in time to facilitate it filing a claim within a year of the death.

Id. at *4 (emphasis added).

        In Stidham, the Bureau filed a petition to open the estate a few days after the one-year
anniversary of the decedent’s death. The Bureau filed its claim after the court appointed an
administrator. Decedent’s heirs objected to the claim and raised several issues relating to the
Bureau’s ability to recover the claimed amount. As relevant to this case, they argued that the
claim itself was barred because it was untimely. The Bureau responded that the claim was
not barred because it never received notice of death as required by section 71-5-116. The
trial court agreed with the Bureau, and the heirs appealed. On appeal, this court discussed
the Tennessee Supreme Court’s decision in Tanner and this court’s decision in Gregory
before ultimately agreeing with the trial court that the statute of limitations did not bar the
Bureau’s claim. In so holding, this court stated, in pertinent part,

       In this case, the decedent’s heirs never sought to open the estate. Instead, the
       Bureau initiated a probate proceeding, like the proceeding that was instituted
       in Tanner, pursuant to section 30-1-106. Once that proceeding was instituted,
       the estate could not be closed until the personal representative of the estate
       filed a release pursuant to section 71-5-116(c)(2). The failure of the personal
       representative of the estate to obtain a release prevented the statute of
       limitations from running. Gregory, 2012 WL 2499502 at *4. Additionally, the
       heirs neglected to give any notice to the Bureau of Decedent’s death and his
       status as a TennCare recipient. As stated in Gregory, those who fail to give
       notice should not be able to assert the notice and claim requirements contained
       in section 71-5-116. Id. Accordingly, the statute of limitations did not prevent
       the Bureau from filing its claim.

Stidham, 2012 WL 3612386, at *5.

                                              -8-
       While Gregory presented a slightly different scenario, the factual scenario presented
in Stidham is nearly identical to the facts in this case. Like the heirs in Stidham, the heir in
this case never opened the estate, thereby forcing the Bureau to file a petition to open the
estate pursuant to section 30-1-106 once it discovered that Decedent was a TennCare
recipient. Administrator argues that Stidham is distinguishable from this case because the
clerk and master waived Administrator’s duty to file an affidavit of notice with the Bureau.
We do not believe that distinction affects the applicability of Stidham. The Bureau knew of
Decedent’s death when it opened the estate. Thus, the filing of an affidavit of notice was no
longer needed and was rightly waived as superfluous. While not explicitly stated as such,
the analysis in Gregory and Stidham demonstrates that the notice provision contained in
section 71-5-116(d)(1)(D) is simply inoperative if the Bureau did not receive a notice to
creditors of a decedent’s death within the one year statute of limitations. Indeed, the statute
provides,

       If a notice to creditors is provided to the [B]ureau, the [B]ureau shall file a
       claim for recovery in accordance with the requirements of title 30, chapter 2,
       part 3.

Tenn. Code Ann. § 71-5-116(d)(1)(D) (emphasis added). Neither Gregory nor Stidham
provided any “opinion as to the result had the executor filed the estate shortly after the death
and given notice to the Bureau in time to facilitate it filing a claim within a year of the
death.” Stidham, 2012 WL 3612386, at *5 (quoting Gregory, 2012 WL 2499502, at *4). We
also refuse to provide such an opinion as to the result had Administrator provided notice to
the Bureau in time for the Bureau to file the claim within a year of the death. Accordingly,
we adhere to this court’s analysis in Stidham and conclude that the statute of limitations did
not prevent the Bureau from opening the estate and filing the claim.

                                              B.

        The legislatively imposed notice requirements placed upon the personal
representatives of a decedent’s estate were intended to enhance the Bureau’s ability to “strive
vigorously to recoup any TennCare funds expended for decedent during decedent’s lifetime.”
Tenn. Code Ann. § 71-5-116(d)(2). The Bureau argues that the trial court erred in holding
that it failed to vigorously pursue recovery efforts. The Bureau contends that the court’s
decision was based upon the erroneous assumption that it waited approximately 11 months
to comply with the court’s order to file the claim. The Bureau notes that it submitted the
claim within weeks of the court’s order but that the clerk and master did not file the claim
in a timely manner. Administrator responds that despite the filing error, the trial court
properly barred the Bureau’s claim because the Bureau failed to vigorously pursue recovery
efforts. He notes that while the filing error caused additional delays, the court’s decision was

                                              -9-
based upon the Bureau’s initial delay in opening the estate and the subsequent eight-month
delay in submitting the claim for filing.

        This case was unnecessarily prolonged by delays caused by notice and filing errors.
The Bureau sought to file its claim after the initial opening of the estate, while Administrator
strongly opposed the Bureau’s standing to even open the estate as a creditor. We cannot fault
the Bureau for seeking the court’s permission to file a claim when the Bureau was faced with
Administrator’s constant opposition. Given the prolonged delays and the Bureau’s repeated
motions to set aside court orders, we are not surprised that the transcript of the final hearing
reflects that the court was deeply troubled by the Bureau’s additional 11-month delay in
filing the claim. Both parties now agree that the additional 11-month delay was a filing error
not caused by the Bureau. The record reflects that the Bureau opened the estate within 13
months of Decedent’s death and that since that time, the Bureau sought to recoup the
TennCare funds from the estate. In light of the facts of this case, we must conclude that the
trial court erred in holding that the Bureau failed to “strive vigorously” in its effort to recoup
TennCare funds from Decedent’s estate.

                                     V. CONCLUSION

      The judgment of the trial court is reversed, and the case is remanded for such further
proceedings as may be necessary. Costs of the appeal are taxed to the Estate of Fred F.
Crumley, Sr.

                                             ______________________________________
                                             JOHN W. McCLARTY, JUDGE

                                               -10-