Cona Elder Law Achieves Successful Settlement for HCF in Complicated Collections Case

Cona Elder Law represented a health care facility in a complicated collections action with a significant six-figure outstanding balance, which was growing by several thousands of dollars each month. In early 2019, a terminally ill resident was placed at the facility with the assistance of his wife, who executed the facility’s Admission Agreement promising to utilize her access to her husband’s assets, and her authority pursuant to a previously executed Power of Attorney, to assist the resident in remitting payment to the facility for the ongoing cost of his care. 

The resident was relatively young, but profoundly disabled, and completely reliant on the round-the-clock care provided by the facility for all of his activities of daily living. However, the resident was receiving substantial income each month through private disability payments which were more than sufficient to meet his ongoing health care needs. Unbeknownst to the facility, mere days before the resident’s admission to the facility, the resident’s wife had facilitated a spousal support and separation agreement whereby nearly all of the resident’s monthly disability income was diverted to his spouse (including thousands of dollars each month in spousal and child support and payments for premiums of life insurance policies to benefit the resident’s wife upon his death), leaving only the resident’s meager Social Security income each month available toward the cost of the his care.  The resident’s wife then divorced the resident, sold the family home and relocated out of state, leaving the resident without any source of payment for the cost of his room, board, and life-sustaining medical care.

When Cona Elder Law became involved, the firm immediately served demands on the resident’s ex-wife, and the family law firm that had facilitated the divorce and settlement agreement, demanding a more equitable distribution of the resident’s monthly income and payment of the past-due balance. After the resident’s ex-wife and her attorney failed to respond, Cona Elder Law commenced legal proceedings against the resident’s ex-wife for breach of contract, and after securing a favorable ruling early in the case on a crucial issue, secured a global settlement with opposing counsel and the resident’s attorney-in-fact. Pursuant to the terms of the settlement agreement, the resident’s ex-wife agreed to assign the facility a secured interest as a beneficiary on a life insurance policy she had for the resident, for the full amount of the outstanding balance due on the resident’s account, and further agreed to a reduction of her support payments each month to ensure that the resident would have sufficient income available to remit payment to the facility each month going forward. The settlement agreement also directed that the resident’s ex-wife would accept further reductions in support payments where the resident’s extraneous medical expenses exceeded this amount, further insuring the facility’s ability to receive ongoing payments for room, board and services provided to the resident each month. 

This case was handled by Dana Walsh Sivak, Esq., Senior Associate at Cona Elder Law. 

For more information on how our experienced attorneys can improve your facility’s bottom line, call us at 631.390.5000 or click here.