Court Opinion

ID: 4028859
Source: CourtListenerOpinion
Date Created: 2016-08-26 20:05:11.093813+00
Date Added: 2024-06-11T14:50:19.091239
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

MARY J. MILLER (deceased)
and DEBORAH MILLER,

Defendant-BeloW/Appellant
and Cross-Appellee,

v. C.A. N15A-03-009 AML

ONIX SILVERSIDE, LLC,
t/a CADIA REHABILITATION
SILVERSIDE,

Plaintiff-BeloW/Appellee
and Cross-Appellant.

Subrnitted: May 10, 2016
Decided: August 26, 2016

ORDER

On appeal from a decision of the
Court of Common Pleas: AFFIRMED, in part, and REVERSED, in part.

This is an appeal from a post-trial decision of the Court of Common Pleas in
a breach of contract case involving an agreement between a nursing home facility,
a resident, and the resident’s daughter. The facility filed a claim against the
resident and her daughter, both of Whom signed a residency agreement, for failure
to make payments for nursing care and residence services. vOn February 27, 2015,
the Court of Common Pleas entered judgment against the resident’s daughter for
$13,920 plus attorneys’ fees and post-judgment interest. The resident’s daughter

has appealed the trial court’s decision. The facility cross-appealed In this

decision, I deny the appeal because the claims of error raised by the daughter lack
merit. I similarly deny the facility’s cross~appeal, except as to the trial court’s

interest award, Which I reverse.

MT_S
A. The Resident Admission Agreement

On December 26, 2013, Mary Miller (“Mary”)l Was admitted to Onix
Silverside, LLC, t/a Cadia Rehabilitation Silverside (“Cadia”).2 On December 28,
2013,3 Mary, her daughter, Deborah Miller (“Deborah”), and Cadia signed a
contract: the “Resident Admission Agreement” (the “Agreement”).4 Under the
terms of this Agreement, Deborah Was designated Mary’s “Responsible Party.” As

such, the Agreement required, and Deborah agreed, to:

exercise the Resident’s rights and fulfill the Resident’s
obligations under this Agreement as authorized in the
document(s) appointing him/her Responsible Party.

The Resident/Responsible Party Will pay promptly from
the Resident’s income or resources all fees and charges
for Which the Resident is liable under this Agreement.
The undersigned agrees therefore, that she/he Will take all
actions necessary to insure that such funds of the

l l use l\/Is. Miller’s first name to distinguish her from her daughter and not as a sign of

disrespect.
2 Om'x Silverside v. Miller, C.A. No. CPU4-l4-000859, at 57 (Del. Com. Pl. Jan. 28, 2015)

(TRANSCRIPT) (hereinafter cited as “Tr.”).
3 Tr. 57 (l\/loreci). The Agreement Was not signed until two days after l\/Iary’s arrival at Cadia.

Generally, upon arrival at the facility, residents are given seven to ten days to sign the resident

admission agreement Ia'. at 47.
4 Ia'. at 21. The Agreement is attached to Appellant’s App. 12-20 (hereinafter cited as

“Agreement”).

Resident (less $44.00 per month) Will be paid to the
Facility, and that the undersigned is personally and
financially liable to the Facility, for all such funds
under his/her control, that s/he does not pay to the
Facility pursuant to this Agreement . . .5

B. Mary’s Medicare coverage terminates.

When Mary arrived at Cadia in Decernber, Medicare skilled care benefits
covered a portion of her expenses6 On February 12, 2014, Cadia determined
Mary’s progress had plateaued, she no longer needed skilled care, and, therefore,
as of February 15, 2014, she no longer Was eligible to receive Medicare benefits7
Under the Agreement, because Medicare no longer covered Mary’s expenses,
l\/Iary, or her Responsible Party, remained “responsible for charges for the entire
duration of [l\/lary’s] stay at the Facility.”8 As of February l6, 2014, Cadia began
billing Mary as a “private pay” resident The parties dispute What daily rate Mary
should have been charged as a private pay resident The Agreement states the
daily rate Was $270,9 but Cadia contends the rate increased to $300 a day as of

February 2014. l\/Iary left Cadia on April 7, 2014 and did not return.lo

5 Agreement III. (A.)-(B.) (emphasis added).
6 Tr. 128-29 (l\/Iiller). Medicare skilled care benefits covered 100% of Mary’s first 20 days at
Cadia and 80% Of the next 31 days at Cadia, and l\/Iary’s medi-gap insurance contributed $IOO a

day to the latter. Id.
7 Tr. 40-41, 62 (l\/Ioreci). The Notice of Medicare Non-Coverage is dated February 12, 2014

With a last coverage date of February 15, 2014. Appellant’s App. 27.

8 Agreement II. (B.) (3).

9 Id. 11. (A.) (i).

10 Tr. 22 (Moreci). A resident is not charged for the day he or she leaves the facility. Id.

3

On or about April 7, 2014, almost two months later, the Millers appealed the
decision that disqualified Mary from receiving Medicare benefitsll On April 9,
2014, Medicare denied the appeal and issued a W.V.M.I. Quality Insight Report
(the “WVMI Report”). The WVMI Report stated Medicare Was “upholding

”12 The l\/Iillers did not appeal Medicare’s decision.13

Cadia’s recommendation
According to the WVMI Report, Mary’s Medicare coverage ended on
“12/15/2014,” Which is inconsistent With the February 15, 2014 date previously
referenced A Cadia employee testified that the WVMI Report Was generated by
Medicare, not Cadia. The Cadia employee suggested that the date in the WVMI
Report Was a typo and that the date should have read “2/15/2014.”'4
C. Deborah engages in Medicaid planning for Mary.

Before she moved to Cadia, Mary lived in her horne in Claymont, Delavvare,
while Deborah lived in Park Plaza Condorniniums in Wilmington in an apartment
leased under Mary’s name.15 From January to April 2014, Mary paid Deborah’s
living expenses, including her rent, utilities, credit card bills, car insurance, and

home insurance16 On March 4, 2014,17 Mary executed a Durable General Power

of Attorney, giving Deborah authority over Mary’s funds and assets.

" ld. at 64-65, 72.

‘2 ld. at 64.

‘3 ld. at 72-73.

‘4 Id. at 58-59.

‘5 Id. at 86 (Miuer).

'6 ld.at99-105,109-11,120.

On February 12, 2014, when Deborah learned Mary’s l\/Iedicare benefits
were going to stop, Deborah retained Karla Levinson to assist in obtaining
Medicaid for Mary.18 Deborah testified that she did not consult with anyone at
Cadia about Medicaid and that the extent of any conversation with Cadia on the
topic was that the Millers would need to seek l\/ledicaid.19 Deborah testified that
she chose to use outside assistance ~ the Levinson Firm ~ “to make sure that
everything was done and handled properly.”20 Ms. Levinson did not testify at trial,
but various email exchanges between Ms. Levinson and Cadia’s counsel were
referred to during witness testimony, and the emails subsequently were introduced
into evidence over Deborah’s counsel’s objection.21

Deborah paid Ms. Levinson a total of $4,750 in February and March.
Deborah personally paid for Ms. Levinson’s services, but later partially reimbursed
herself from her mother’s funds,22 Deborah testified that Ms. Levinson’s retention
was for a dual purpose: (1) obtaining Medicaid coverage for Mary’s stay at a

nursing home and (2) protecting Mary’s Claymont house and transferring it to

'7 Id. 150-51 (Miller). According to Deborah’s testimony, the power of attorney Was signed on
two different dates: March 4, 2014 and March 18, 2014. Id. at 74, 151.

‘8 ld. ar 81, 119, 129-30.

’° 1d.at82,128.

20 Id. ar 128.

21 Ia’. at 181-84 (Moreci). A Cadia employee Was carbon copied on these emails. Ia'. at 181.
22 ld. at 107, 119, 131 (Miller). Deborah only partially was reimbursed because Mary “didn’t

have enough to reimburse [her] fully.” Id. at 131.
5

Deborah’s name.23 To accomplish this, Ms. Levinson helped Deborah submit an
application for Medicaid benefits on Mary’s behalf.24 Deborah testified that their
goal was to file the Medicaid application so its effective date would be March l,
2014.25 Mary’s Medicaid application ultimately was submitted at the end of June
2014 and approved with an effective date of June l, 2014.26

To qualify for Medicaid, an applicant must meet certain income
requirements27 Subject to Medicaid’s eligibility criteria, Medicaid may
retroactively pay an applicant’s expenses incurred up to three months before the
application date.28 As part of the Medicaid-planning process that Ms. Levinson
recommended, Deborah had to “spend down” Mary’s assets and resources to
below 52,000.29

In March 2014, Ms. Levinson set up a Miller Trust for l\/Iary.30 Deborah
testified that the purpose of a Miller Trust was to allow an applicant to exceed the
Medicaid income limits and still be eligible for Medicaid31 She testified that, to

her understanding, Mary’s income was deposited to this trust and only could be

22 ld. at 82-83.

”mmm.

251d.at138.

26 1d.ar84,138.

27 Id. at 84; ld. ar 174 (Moreci).

28 Id. at 174-75 (l\/Ioreci).

29 Id. ar 83-84 (Miller); 1d. at 174 (Moreci),

30 Id. at 152 (l\/Iiller). The Defendants’ last name and the name of this type of trust is a

coincidence
31 Id. 3190.

used for Medicaid copays and related expenses32 On June 26, 2014, also for
Medicaid qualification purposes, Mary conveyed her Claymont house to
Deborah.33 Ms. Levinson prepared the deed.34 Deborah essentially testified the
house was a gift, since she did not pay her mother any money for it.35 The house
had no mortgage on it, was free and clear of all liens, and Deborah estimated its
value at $160,000.36 Until the home was transferred, Mary was not eligible to
receive Medicaid coverage37
PROCEDURAL HISTORY

On April 9, 2014, Cadia filed an action against Mary38 and Deborah to
collect $15,247 in damages for breach of contract and fraudulent conveyance39
The damages were the result of the l\/Iillers’ failure to pay for Mary’s stay at Cadia,
as required under the Agreement signed by both Mary and Deborah.

On January 28, 2015, the Court of Common Pleas held a one-day trial,

during which the judge agreed to the parties’ joint request that any application for

33 1a at 151.

33 1a ar 74, 83.

34 1a at 143.

33 Id. ar 77-78.

36 1a ar 79. The house gold en May 24,2016.D.1. 19.

37 Tr. 155-56 (Miller). Although the home was not transferred until the end of the month,
Medicaid will cover the entire month of care, provided an applicant is qualified by month’s end.
38 Mary passed away months after the complaint was filed.

39 This amount is less than the $22,605.19 Cadia originally sought in the complaint Cadia
reduced the bill after the complaint was flled to adjust for Mary’s leaving the facility on April 6,
2014.

interest and attorneys’ fees be handled “post-trial method rather than here.”40 On
February 3, 2015, Cadia filed its application and affidavit for attorneys’ fees and
costs, seeking 3§15,389.86.41 No opposition was filed.

On February 27, 2015, the Court of Common Pleas entered judgment in
favor of Cadia, awarding damages in the amount of 313,920 for breach of contract
plus $10,296.40 in attorneys’ fees and post-judgment interest at the legal rate of
5.75%. On March 26, 2015, Deborah appealed the trial court’s decision. Cadia

filed a cross-appeal on April 2, 2015.

THE PARTIES’ CONTENTIONS
A. Deborah’s Appeal

Deborah argues the trial court made three erroneous evidentiary rulings.42
First, Deborah contends the trial court “erred in considering Kara [sic] Levinson’s
email since she did not appear or testify and [Deborah] objected as hearsay but the
Court allowed it into evidence and her email became a central part of the case.”43
During oral argument on the appeal, Deborah’s counsel acknowledged that he
withdrew his objection to this evidence during trial, but argued that this Court is

allowed to reverse the ruling for plain error. Second, Deborah argues the trial

court erred by allowing into evidence the WVl\/II Report along with the testimony

40 rr.116.

41 Appellee’s Answering Br. l.
42 Although Deborah does not explicitly say so, I assume she contends that, had the trial court
not admitted the disputed evidence, it would have reached a different conclusion as to liability.

43 Appellant’s Opening Br. 13.

that the 12/15/2014 date therein Was a typo.44 She argues: “The letter is the best
evidence and the best evidence is that Mary Miller Was no longer eligible for
Medicare service, as of 1216/2014 [sic].”45 Confusingly, after arguing the Report
is the “best evidence,” Deborah then argues in reply that the WVMI Report should
have been excluded in its entirety,46 Third, Deborah contends the trial court erred
by allowing certain evidence that Deborah paid her bills using Mary’s funds.47
Deborah argues that bills she paid before February 2014 Were irrelevant and
submitted by Cadia “solely [] to present [her] in a bad light.”48

In addition to those evidentiary issues, Deborah argues the Court of
Common Pleas incorrectly found that she breached the Agreement. Essentially,
Deborah argues everyone involved in her mother’s care understood Mary Was
“Medicaid pending” during March and April and she therefore improperly Was
billed as a “private pay” patient. This argument takes two forms. First, Deborah
argues that Mary should have been classified as “Medicaid pending” and charged
only the monthly Medicaid patient pay rate, Which, according to Deborah, Was

Mary’s monthly income of $l,800 less $44.49 Alternatively, Deborah argues:

“Since Mary Miller Was accepted for Medicaid [in June 2014] and Medicaid goes

44 Tr. 58-59 (Moreci).

45 Appellant’s Opening Br. 14.
46 Appellant’s Reply Br. & Answering Br. Cross Appeal 1-2. During trial, Deborah’s counsel
objected to the Report on the basis of hearsay. His objection was overruled. Tr. 38-39.
4a , -
Appellant s Opening Br. 14.
43
!d,
49 Id. at 6.

back for three months from the application, [Cadia] should be forced to submit a
bill to Medicaid, which was never considered by the Lower Court, even though it
was addressed at trial.”50

Lastly, Deborah appeals the trial court’s award of $10,296.40 in attorneys’
fees and costs. Deborah argues the trial court neither sufficiently stated its reasons
justifying the award nor considered Deborah’s ability to pay.

Cadia responds that after “considerable legal argument over the admissibility
of these e-rnails,” Deborah’s counsel withdrew his objection to the Levinson
email.51 ln response to Deborah’s argument regarding the WVMI Report, Cadia
contends that the 12/16/ 14 date is “clearly a typo . . . known to everyone under the
circumstances,” including Deborah.52 Cadia argues the WVMI Report, dated April
9, 2014, affirmed Cadia’s February 12, 2014 “cut letter,” which further supports
the testimony that the 12/16/14 date was a typographical error.53

Cadia also contends the trial court correctly held that the Millers breached
the Agreement. Despite the fact that Mary applied, and was approved, for
Medicaid in June 2014, she was “private pay” status until then, not “Medicaid
pending” and therefore was obligated to pay the private pay daily rate.54 The

Millers provided no financial information to Cadia, and, while acknowledging that

50 ld. ar 12.

5' Appellee’s Answering Br. 8.
52 Id. at 4.

55 ld.

54 Tr. 169 (Moreci).

10

Cadia can provide assistance in applying for Medicaid, Cadia argues it is not
contractually bound to apply for Medicaid on residents’ behalf.55 Cadia
acknowledges that “Medicaid can go back in time up to three months, if during that
three-month period, the person is otherwise qualified for Medicaid.”56 Cadia
points out, however, that up until June 26, 2014, Mary was not qualified for
Medicaid because her ownership of her home left her “over resourced.”57

Cadia also argues that Deborah waived her objection to the award of
attorneys’ fees and costs by failing to file a timely response to Cadia’s fee affidavit
and that the trial court properly exercised its discretion in granting such fees and
costs.58

B. Cadia’s Cross-Appeal

Cadia has cross-appealed the trial court’s decision, arguing the court erred
by: (l) calculating damages based on the daily rate of $27_0, (2) failing to award
pre-judgment interest, and (3) awarding post-judgment interest at the legal rate
rather than the contractual rate. Cadia contends Deborah’s contractual obligation

is 51;15,24759 (50 days60 x $300 = $15,000 plus $247 sf insidemsls), based ss a

55 Appellee’s Answering Br. 7.

56 1d.st6.

57 ld. srs-1

58 Ia'. at l7. Appellee originally asserted that all $15,389.86 in attorneys’ fees should have been
awarded. Id. This argument was abandoned at oral argument

59 Appellee’s Answering Br. 16 states Cadia is seeking the “full requested amount of
315,389.86.” This figure is a typo. Cadia confused the originally requested attorneys’ fees
amount ($15,389.86) and the balance due (315,247).

ll

daily rate of $30(). According to Cadia, the daily rate increased from $270 to $300
in March 2014, effective February 2014, and neither Deborah nor Mary, nor any
other representative of Mary, objected to this increase.6' Cadia contends it also is
entitled to pre-judgment interest as a matter of right under Delaware law and that it
is entitled to post-judgment interest at the contractual rate, not the legal rate. Cadia
argues that, because the Agreement specified a rate of 1.5% per month, the
applicable interest rate is 18% per year (12 X 1.5%).

Deborah responds that the trial court properly awarded damages using the
daily rate of $270 because Cadia failed to submit evidence that Mary or Deborah
received notice of the rate increase.62 As to interest, Deborah argues that because
“the legislature intended for Section 2301 (A) to cap post-judgment interest rates
on personal loans to the lesser of the legal rate under Section 2301 (A) or the
contractual rate” and “this case is more akin to a personal loan rather than a
business matter,” the trial court correctly applied the legal rate.63 Deborah does not

dispute Cadia’s right to pre-judgment interest.

 

60 Mary was a private pay resident for 50 days: 13 days in February, 31 days in March, and six
days in April. Tr. 21 (Moreci).
6‘ 1d.at66.
:: Appellant’s Reply Br. & Answering Br. Cross Appeal 5-6.
Id. at 5.

12

STANDARD OF REVIEW
When considering an appeal from the Court of Common Pleas, this Court
sits as an intermediate appellate court.64 As such, the Court's function is similar to

65

that of the Delaware Supreme Court. As to factual findings, this Court’s role is

to review the challenged factual findings of the lower court to determine if they
sufficiently are supported by the record and are the product of an orderly and
logical deductive process.66 If substantial evidence supporting the factual findings
exists, this Court must accept the lower court’s ruling and may not make its own
factual findings, weigh evidence, or make credibility determinations67 As to
questions of law, this Court reviews such rulings de nova68 Finally, this Court
reviews the trial court’s evidentiary rulings under an abuse of discretion standard.69
“An abuse of discretion occurs when ‘a court has . . . exceeded the bounds of
reason in view of the circumstances,’ [or] . . . so ignored recognized rules of law or
practice . . . to produce injustice.”70 On all such questions, this Court reviews the

appeal on the record and does not conduct a new trial.71

66 Sm¢e v. Richards, 1998 wL 732960, at *1 (Del. super. May 28, 1998).
663¢1/¢€1» v. Connell, 488 A.2d 1303, 1308 (Del. 1985).

66 Levm v. Bouvzer, 287 A.zd 671, 673 (Del. 1972).

67 Johnson v. Chrysler Corp., 213 A.zd 64, 66 (Del. 1965).

66 Downs v. sra¢e, 570 A.2d 1142, 1144 (Del. 1990).

69 szy of Wzlm. v. Flamer, 2013 WL 4829585, at *4 (Del. super May 22, 2013).
76 Culp v. s¢aze, 766 A.zd 489, 489 (Del. 2001).

7' 10 Del. C. § 1326; super. Ct. Civ. R. 72(g).

13

ANALYSIS

A. Evidentiary Rulings

I find no abuse of discretion or plain error in the trial court’s evidentiary
rulings. “[T]o find reversible error in an evidentiary ruling, [the Court] must find
not only error in the ruling, but that a “substantial right of the party is af`fected.”72
If the reviewing court determines that the lower court abused its discretion, the

reviewing court then must consider whether the decision resulted in significant

3

prejudice.7 The Court only should reverse a lower court's evidentiary decision

where there was a clear abuse of` discretion.74 Here, Deborah’s counsel eventually
withdrew his objection to the Levinson email’s admission. Af`ter Deborah’s
counsel cross-examined a witness about several Levinson emails, the trial court
specifically asked him whether he was objecting to their admission, and he said
“No.”75 Without an objection, the issue is not preserved for appellate review.76

The Court “will not retroactively cure any perceived mistake created by trial

72 Mercedes-Benz of N. Am. Inc. v. Norman Gershman's Things to Wear, lnc., 596 A.2d 1358,
1365 (Del. 1991).

73 Harper v. Sm¢e, 970 A.zd 199, 201 (Del. 2009).

74 Culp v. Sm¢e, 766 A.2d 489, 489(De1. 2001).

75 Tr. 184-85. Deborah’s counsel’s earlier objection was sustained ld. at 37. He then elicited
questions concerning the Levinson emails, after which Cadia’s counsel moved to have the emails
admitted into evidence. Ia’. at 170-72. Additionally, Deborah’s counsel later made no objection
to another Levinson email being admitted into evidence. Ia'. at 189.

76 Weber v. State, 457 A.2d 674, 684 (Del. 1983) (“[I]t is well settled that the failure to object to
the admission of evidence or to timely move to suppress evidence constitutes waiver of the issue
for purposes of appellate review.”).

14

counsel’s failure to object at trial.”77 Furthermore, the trial court did not rely on
the Levinson email in its decision, much less make it a “central part” of the case.
There is no mention of a Levinson email in the entire, l4-page decision.
Therefore, the Court of Common Pleas did not commit legal error or abuse its
discretion With respect to the Levinson email, and no prejudice resulted from the
ruling.

Deborah argues, only in her opening brief, that the trial court erred by
allowing testimony regarding possible typos in the WVMI Report. Deborah
asserts that the WVMI Report is the best evidence that Mary Was eligible to
receive Medicare until December 2014, and the trial court therefore should have
barred the Cadia employee’s testimony in response to opposing counsel’s
questions. Deborah ignores the fact that her counsel elicited the same responses
from the Witness, and the trial court only allowed Cadia’s counsel to “clarify it on
redirect,” over Deborah’s objection, because Deborah “raised it on cross.”78

Deborah’s argument then shifts in reply and she confusineg argues that the
Report she previously argued Was the “best evidence” of Mary’s Medicare cut date

should have been ruled inadmissible because of the testimony regarding typos in

the Report, that is, the testimony Deborah previously argued should not have been

77 Cohen_rhomas v. Lewullzs, 2016 WL 721009, at *4 (Del. super. Jan. 29, 2016) (ciring
Haml`lton v. Wrcmg, 221 A.Zd 605, 606 (Del. 1966) (Counsel is required to “state his objection to
anything taking place during the trial, and his failure to do so prevents him from urging the point

on appeal.”)).
78 Tr. 59, 62 (Moreci).

15

admitted.79 The only one of these arguments arguably preserved on appeal is the
admission of testimony elicited by Cadia’s counsel about the typo in the letter.80
To the extent Deborah argues that the admission of this testimony violated the best
evidence rule, she misunderstands that rule, Which provides that “in proving the
terms of a Writing, Where such terms are material, the original document must be
produced.”g‘ The dispute Deborah raises is not as to the “terms of the Writing,” but
rather the date Mary’s Medicare skilled care coverage ended, Which all parties
agree, including Deborah, Was February 15, 2014. Nothing about the best
evidence rule precludes admission of testimony that a Writing may contain
typographical errors. Similarly, the testimony elicited by Cadia’s counsel properly
Was admitted because it Was the same testimony elicited by Deborah’s counsel on
cross-examination
B. Admission of Deborah’s bills paid by Mary

Finally, Deborah contends the trial court erred by allowing the admission of
Deborah’s bills dated before February 2014 that Were paid using Mary’s funds.82
Upon Deborah’s objection, the court admitted the bills for a limited purpose, ruling

they Were “relevant for the period for Which the bill Was incurred or any ancillary

79 Appellant’s Reply Br. & Answering Br. Cross Appeal 2.

80 Tr. 61-62 (Moreci). Deborah did not argue in her opening brief that the WVl\/[I Report should
be inadmissible and therefore that argument is Waived.

81 Day v. Stale, 297 A.Zd 50, 51 (Del. 1972) (citing McCo/'m/'Ck 01/1 Evidence, § 196; 4 Wigmore
on Evidence, § 1174 (3d ed.)).

82 Tr. 95-98, 101-03 (Miller).

16

83 Pursuant to the Agreement, Deborah agreed to “take all actions

time thereto.”
necessary to insure that such funds of the Resident (less $44.00 per month) Will be
paid to [Cadia] and that [Deborah] is personally and financially liable to [Cadia],
for all such funds under []her control[] that she does not pay to [Cadia] pursuant to
this Agreement.”84 Accordingly, l find the trial court Was Within its discretion in
admitting into evidence such bills paid using Mary’s funds pursuant to the stated
limitations. Even if the bills improperly Were admitted, that error Was harmless
under Superior Court Civil Rule 6l.85 The Court finds that Deborah suffered no
prejudice because the bills supported the fraudulent conveyance claim and, as

discussed beloW, Deborah independently Was liable for breach of the Agreement.

C. The trial court correctly concluded Mary and Deborah breached the
Agreement.

The trial court’s decision that Mary and Deborah breached the
Agreement With Cadia sufficiently is Supported by the record and is the product of
an orderly and logical deductive process. The trial court determined that l\/lary
contractually Was obligated to pay the private pay rate from February 15, 2014

until April 6, 2014 and that Deborah Was liable for l\/Iary’s financial obligations to

83 Tr. lOl, 103 (“Well, l agree With you, you cannot deplete the funds, incur a bill and deplete the
funds. I think you’re right. But it has to bear some relationship to the time and the bill Which
was incurred and it’s admitted for that limited purpose subject to further review.”).

84 Agreement III. (B.).
85 Super. Ct. Civ. R. 611 “The Court at every stage of the proceeding must disregard any error or
defect in the proceeding Which does not affect the substantial rights of the parties.”

17

the extent of Mary’s funds under Deborah’s control.86 The trial court rejected
Deborah’s argument that Cadia’s failure to provide adequate care excused payment
because Deborah did not “provide any evidence establishing the standard of care
required.”87 Deborah’s adequate care argument is not raised on appeal. Instead,
Deborah argues that Cadia should have classified Mary as “Medicaid pending,”
and (l) Mary only should have been billed her monthly income less $44, or (2)
because Medicaid covers the three months before that in Which coverage Was
granted, Medicaid should cover the balance incurred in March and April, and
Cadia should be required to submit its bills to Medicaid.

Deborah concedes that Mary Was private pay for the month of February.88
She contends, however, that Medicaid Was going to cover her mother’s stay at
Cadia as of March l, 2014.89 Even if Mary Was classified as “Medicaid pending”
as of March lst - the evidence says otherwise90 - While a resident is “Medicaid
pending,” the resident is responsible to pay the private pay rate.91 Deborah

incorrectly maintains that “Medicaid for Mary l\/Iiller Was approved in June 20l4

88 Om'x Silverside v. leler, C.A. NO. CPU4-14-000859, at 9 (Del. Com. Pl. Feb. 27, 2015)
(hereinafter cited as “CCP Decision”) (citing Agreement II. (B.) (3), III. (B.)).

87 CCP Decision ar 10.

88 Tr. 192 (Miner).

88 Id.

90 Based on the record, Cadia’s understanding Was that once Mary Was cut from Medicare, she
Was going to be private pay “With the family’s intentions of eventually filing for Medicaid.” Id.
at 53 (Moreci).

91 Agreement II. (C.) (3): “The Resident understands that until the application for Medicaid is
approved, the Resident Will receive a bill for the total amount, and it is the Resident’s
responsibility to pay the billed amount until approved. If approval is not granted, the Resident is
responsible for payment of the entire bill.”

18

and [therefore] Medicaid would go back for three months and cover those
expenses, includ[ing] March, April and May.”92 Depending on when and how the
resident is determined Medicaid eligible, Medicaid may cover up to three months
of private pay retroactively, but not in all cases. Medicaid eligibility is based on a
number of criteria, namely whether the applicant’s income or resources exceed the
eligibility threshold. According to the record, Mary’s financial position,
particularly her ownership of a house, made her ineligible for Medicaid coverage
before June l, 2014.93 Accordingly, Mary properly was billed as a private pay
resident between February 16, 2014 and April 6, 2014, and Deborah is responsible
for the resulting balance.

Cadia brought a separate claim against Deborah for fraudulent conveyance
I need not reach the merits of that claim because I have determined that judgment
for the balance of 313,747 properly was entered against Deborah for breach of the
Agreement.

D. Attorneys’ Fees

Deborah also disputes the trial court’s award of attorneys’ fees and costs. ln

my view, the trial court’s award was not an abuse of its discretion. Generally,

Delaware courts follow the American Rule, whereby each party bears its own costs

92 Appellant’s Opening Br. 12.

93 Tr. 155 (Miller). Mary transferred the house to Deborah June 26, 2014. Ia'. at 76. “lf
Medicaid deems [Mary] was only eligible in June, [l\/[edicaid] cannot go back and pay for
January, February, March, April, May.” ld. at 174 (Moreci).

19

4

and attorneys’ fees.9 There are, however, long recognized exceptions, one of

which is a fee-shifting clause in a contract.95 Here, the parties entered into an

Agreement whereby “the Resident agrees to pay reasonable collection costs and

3396

attorney’s fees. Finding a contractual basis for shifting attorneys’ fees, the

Court of Common Pleas acted within its discretion in awarding a portion of the

fees sought by Cadia.

The court has discretion to determine what amount of fees is reasonable.97
In this case, the trial court properly explained the standard under Rule 1.5 of the
Delaware Lawyers’ Rules of Professional Conduct and its reasons for awarding
attorneys’ fees and costs, including that the parties engaged in an unsuccessful
mediation, Cadia was required to engage in motion practice, and there was a one-
day trial.98 The trial court need not address each Rule 1.5 factor individually99

Deborah argues that one factor the court failed to consider in assessing

reasonableness was her ability to pay. Deborah’s ownership of l\/Iary’s house is a

94 Dover Hiszorical soc ’y, lnc. v. Czry ofi)over Plannmg Comm 'n, 902 A.2d 1084, 1089 (Del_
2006).

95 ATP Tour, Inc. v. Deutscher Tennis Bund, 91 A.3d 554, 558 (Del. 2014); Bergin v. McCloskey,
2008 WL 4662378, at *l (Del. Com. Pl. Oct. 22, 2008).

96 Agreemem 11. (G.) (2).

97 nixon v. Counczl Of Chyy House Condo., 2009 WL 5455537, at *5 (Del. Com. P1. Dec. 8,
2009).

98 CCP Decision at 13-14.

99 Saunders-Gomez v. Rurledge Mam¢. Corp., 2016 WL 764123, at *1 (Del. Com. Pl. Feb. 25,
2016) (“These [Rule 1.5] factors are not exclusive, nor will each factor be relevant in assessing
the reasonableness of attorney's fees.”) (citing Del. Lawyers’ R. Profl Conduct 1.5, comment

lll)_

20

substantial asset from which the attorneys’ fees can be paid.100 Deborah has
argued neither below nor here that the rate charged or amount billed was
unreasonable.]O' Additionally, Deborah has failed to raise any substantive
objection to the bills’ amount or content. Accordingly, the Court of Common
Pleas did not abuse its discretion in awarding attomeys’ fees and costs in the
amount of $lO,296.40.
E. Amount of Damages

This Court must determine whether the trial court abused its discretion in
awarding damages at the $270 daily rate rather than the increased daily rate of
$300. I cannot say that the Court of Common Plcas exceeded the bounds of reason
in view of the circumstances or so ignored recognized rules of law or practice to
produce injustice when it awarded damages at the $270 rate. lt was Cadia’s burden
to demonstrate that Deborah was notified of the rate change pursuant to the
Agreement, which required Cadia to provide 30 days’ written notice and identify

an effective date for the rate change.102 While Cadia offered testimony that

'00 I assume for purposes of this argument that the trial court should have considered Deborah’s
ability to pay. Although I recognize courts have considered this factor in some situations, Dixon,
2009 WL 5455537, at *6, I am highly skeptical that this is an appropriate consideration in a
breach of contract case.

101 Even if Deborah did not have a sufficient opportunity below to respond to Cadia’s fee
affidavit, Deborah had a full opportunity to address the issue on appeal and failed to raise any

substantive objection to the amount or content of the bills.
‘°2 Agreemem n. (A.) (3).

21

. - - - 103
“there’s a rate increase every year, a letter goes out with the mvoice,” and “the

”104

letters usually go out at the end of February, there was no evidence that

Deborah, specifically, was sent a letter or otherwise notified of the rate change

105

within the terms of the Agreement. Cadia maintains on appeal that because

Deborah did not object to the rate change, Cadia is not required to prove notice.
This reasoning, however, contradicts the plain reading of the Agreement, which
states: “Resident understands that s/he will receive a thirty (30) day written notice
about any increases in daily rate changes in billing procedures.”m6 Accordingly,
the trial court was within its discretion in awarding damages based on the daily rate
of $270. The amount of damages, however, is revised, upon stipulation by the
parties from $13,920 to $13,747 based on the daily rate of $270 ($270 x 50 =

$13,500 + $247 in incidentals).

F. Cadia is entitled to pre-judgment and post-judgment interest at the
contractual rate.

“In Delaware, prejudgment interest is awarded as a matter of right.”107

Generally, interest begins to accrue from the day payment is due.108 Therefore, the

'03 Tr. 51-52 (Moreci).

104 Id. at 66 (emphasis added).

105 See id. at 131 (Miller) (Deborah testifying she never was notified that the rate changed from
$270 to $300).

'06 Agreemem II. (A.) (3).

‘07 Cimdel Hldg. Corp. v. Roven, 603 A.2d 818, 826 (Del. 1992) (citing Moskowzrz v. Mayor &
Councl'l of Wilm., 391 A.2d 209 (Del. 1978)).

108 Metro. Mut. Fire Ins. Co. v. Carmen Hldg. Co., 220 A.2d 778, 782 (Del. 1966); see also
Watkins v. Beatrice Cos., lnc., 560 A.2d 1016, 1020 (Del. 1989).

22

trial court erred as a matter of law by failing to award pre-judgment interest.
Similarly, the Court of Common Pleas incorrectly awarded post-judgment interest
at the legal rate. Where (i) a personal loan is involved or (ii) the parties fail to
provide a specific interest rate or computation method, then Delaware law provides
that the legal rate of interest is applied.109 Here, there was no personal loan
involved, and the Agreement specified a “Corporate late fee policy” of 1.5% of the
unpaid balance per month.HO Accordingly, Cadia is entitled to pre-judgment and
post-judgment interest at the contractual rate.

Based on the foregoing, the Court of Common Pleas' decision is
AFFIRMED as to the damages award and REVERSED as to the award of

interest.

IT IS SO ORDERED.

 

Original to Prothonotary
cc: Leo John Ramunno, Esquire
Robert K. Beste, Jr., Esquire

109 See 6 Del. C. § 2301(a) (“Where there is no expressed contract rate, the legal rate of interest
shall be 5% over the Federal Reserve discount rate including any surcharge as of the time from
which interest is due; provided, that where the time from which interest is due predates April 18,
1980, the legal rate shall remain as it was at such time.”); see also Del. Tech. & ley. Coll. v.
Emory Hl'll Co., ll6 A.3d 1243 at *2 (Del. 2015) (TABLE) (“[T]he Legislature intended for §
2301(a) to cap post-judgment interest only in cases of personal loans to the lesser of the legal
rate under § 230l(a) or the contractual rate.”); CRELK Emers. v. Meris Props., 2016 WL
2620533 (Del, Super. Apr. 21, 2016).

“0 Agreement II. G. (1).

23