In re Estate of Anderson, 2007 Tenn. App. LEXIS 705 (2007)

Margie Mary Anderson started receiving Medicaid benefits on January 1, 1994. She died on February 21, 2004. Prior to Ms. Anderson’s death, benefits in the amount of $99,345.81 were paid to her medical providers on her behalf by the Tennessee Bureau of TennCare.

In June, October and November of 2003, TennCare sent letters to Henkel’s children notifying them that TennCare might have an interest in Henkel’s estate, although TennCare did not expressly demand reimbursement. In January of 2004, Larry Henkel, one of Mary’s children, requested a release of any claim TennCare might have. In response, TennCare sent him a letter indicating it might have an interest in Mary Henkel’s estate.

On June 3, 2005, in accordance with T.C.A. § 30-1-301 et seq., the Bureau filed a complaint to appoint an administrator for Ms. Anderson’s estate. As provided for in T.C.A. § 30-1-303, the complaint named Opal D. Pedder, William Roy Anderson, and Wanda Kay Smith as defendants. Letters of Administration were issued to James Balthrop on July 15, 2005. There was no publication or other notice to creditors.

On November 14, 2005, TennCare filed its claim against the Estate for $99,345.81. Its claim was based on T.C.A. § 71-5-116(c) which reads as follows:

(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 [*4] a recipient who was fifty-five (55) years of age or older at the time the recipient received medical assistance or 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, if any, and only at a time when the individual has no surviving child who is under eighteen (18) years of age or no surviving child, as defined in § 1614 of the Social Security Act, who is blind or permanently and totally disabled, or a child who became blind or permanently and totally disabled after reaching majority, if the TennCare bureau and the personal representative agree, or, in the event of a disagreement, the court, after de novo review, finds that repayment would constitute an undue hardship to the blind or disabled child.

On November 18, 2005, the Administrator of the Estate filed an exception to the Bureau’s claim, alleging that such claim “was not filed within twelve (12) months of the date of death of the deceased and is therefore time barred, pursuant to Tennessee Code Annotated § 30-2-310.” The Administrator of the Estate did not otherwise dispute the validity of the Bureau’s claim.

On appeal, the Court found that TennCare’s claim was barred by the limitations period. In the case of TennCare services, the State is on notice when a recipient dies because TennCare stops paying benefits at that point. TennCare argued that T.C.A. § 30-2-501(a) extends the twelve month statute of limitations in this case. T.C.A. § 30-2-501(a) reads:

Other than by filing of claims or the revivor of actions pending against the decedent at the time of the decedent’s death, no suits shall be brought or other action taken by any creditor against the estate until the expiration of three (3) months from the issuance of letters, and nothing herein shall be so construed as to permit the filing of claims of revivor of pending actions, or institution of suits against the personal representative after twelve (12) months from the date of death of the decedent, except, however, for insolvency proceedings or claims filed by creditors within the period prescribed in the notice published or posted in accordance with § 30-2-306(c).

Although the Court agreed with TennCare that T.C.A. § 30-2-501(a) would extend the limitations period for an insolvent estate, there was nothing in the record indicating this estate was insolvent. Further, because there was no notice to creditors, T.C.A. § 30-2-321 was not triggered. The Court also disagreed with TennCare’s argument that T.C.A. § 30-2-310(b) to apply only “to the time for filing suit, rather than to the filing of claims” against an estate. Here, Ms. Anderson died on February 21, 2004. The Bureau filed its claim against the Estate on November 14, 2005. There was no proof of insolvency or tax debt, which would trigger exceptions to the twelve-month time limit. From the plain language of T.C.A. § 30-2-310(b), and in light of the facts of this case, the Court concluded that the trial court correctly barred the Bureau’s claim as untimely under T.C.A. § 30-2-310(b).

Decided: November 16, 2007. Opinion at: http://www.tsc.state.tn.us/OPINIONS/Tca/PDF/074/EstateofAndersonMOPN.pdf
Same issue resolved against the State in In Re: Estate of Henkel