Appeal from the Circuit Court of Du Page County. No. 94--P--973. Honorable John W. Darrah, Judge, Presiding.
Released for Publication August 8, 1997.
The Honorable Justice Thomas delivered the opinion of the court. Rathje and Hutchinson, JJ., concur.
The opinion of the court was delivered by: Thomas
The Honorable Justice THOMAS delivered the opinion of the court:
The petitioner, the Illinois Department of Public Aid (the Department), filed this claim against the estate of Lena Castro (the estate) to recover for medical benefits paid for by the Department while the decedent resided in a nursing home. The trial court denied the claim finding that settlement proceeds paid by the nursing home to the estate in connection with an injury sustained by the decedent in the nursing home were exempt under section 3-605 of the Nursing Home Care Act (Act) (210 ILCS 45/3--605 (West 1994)). The trial court further found that the Department's claim was barred because it had accepted full settlement of all claims. The Department appeals.
The record reveals that Lena Castro was born on November 17, 1909, and died on April 5, 1994, at the age of 84. During the six years prior to her death, the decedent was an inpatient in a nursing home. During that time, the Department made direct medical payments of $105,273 for her care. Following Lena's death, her estate received funds from the nursing home where Lena was a resident as settlement for an injury that she sustained in the nursing home.
On July 28, 1994, the Department wrote a letter to the attorney for the estate advising him that the Department had paid $208.68 of "medical and/or financial assistance" on the decedent's behalf "from August 10, 1993 through August 10, 1993." The letter further advised that because of payment delays with the State of Illinois, the amount listed might not be the total amount expended on behalf of the client and that the attorney should contact the Department at the time of settlement for an updated amount.
On October 21, 1994, the attorney for the estate sent the Department a letter with a check enclosed in the amount of $208.68. The check did not contain a restrictive endorsement, but the accompanying letter referenced the Department's case number and stated that the check was being tendered in "full and final payment of the lien from Medicaid in this matter."
On October 19, 1994, the estate was opened and Lena's son, David Castro, was named independent administrator. On December 16, 1994, the Department filed a claim against the estate for $105,273.02 for medical payments made for the benefit of Lena. By agreement of the parties, the claim of the Department was allowed as a sixth-class claim. Thereafter, the case was assigned to a different judge. The estate eventually moved to vacate the order allowing the claim, arguing that it had affirmative defenses to the claim and that it had mistakenly thought the previous order meant the claim could be filed not that it was allowed. The estate's motion to vacate was granted.
Following a hearing on the validity of the Department's claim, the trial court disallowed the claim. In so doing, the court found that (1) the "proceeds/damages received by the estate are exempt" under section 3--605 of the Nursing Home Care Act; and (2) the Department had accepted $208.68 in full settlement of all claims.
On appeal, the Department first argues that the exemption in section 3--605 of the Act does not apply.
Section 3--605 of the Act provides:
"The amount of damages recovered by a resident in an action brought under Sections 3--601 through 3--607 shall be exempt for purposes of determining initial or continuing eligibility for medical assistance *** and shall neither be taken into consideration nor required to be applied toward the payment or partial payment of the cost of medical care or services available under 'The Illinois Public Aid Code'." 210 ILCS 45/3--605 (West 1994).
The Department contends that the above-quoted exemption does not apply because (1) damages were not recovered by a "resident," in particular the decedent, but rather by her estate, since she was deceased at the time of settlement; and (2) ...