In re Estate of Henkel, 2007 Tenn. App. LEXIS 704 (2007)

Mary Virginia Jones Henkel started receiving Medicaid benefits on July 1, 1991. She died on February 19, 2003. In March of 2003, her Conservator sent the Tennessee Bureau of TennCare a copy of the final accounting for Henkel’s conservatorship. TennCare responded by sending a printout of medical services paid by the State to the conservator, which forwarded it to Henkel’s children.

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.

Mary Henkel’s children never opened an estate for her. In September, 2005, TennCare sought to open an estate as a creditor. The petition was served on Mary’s children. Letters of Administration were issued to Jonathan Richardson on September 9, 2005. On November 4, 2005, Larry Henkel filed an answer and counter-petition and sought to have the matter transferred to Circuit Court. In December, 2006, the trial court declared the appointment of Mr. Richardson as administrator to be void ab initio. Following a hearing, on January 20, 2006, the trial court entered an Order appointing Mr. Richardson administrator pendente lite.

On January 30, 2006, TennCare filed its claim against the Estate for $287,646.30. 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.

A hearing was held on June 22, 2006. On October 30, 2006, the trial court entered its order barring the Bureau’s claim. Specifically, the trial court held that, “based upon In re Estate of Luck, 2005 Tenn. App. LEXIS 332, 2005 WL 1356448 (Tenn. Ct. App. June 7, 2005), read in conjunction with T.C.A. § 30-2-310(b), which makes the one year statute of limitation applicable to the State of Tennessee, the claim of TennCare against the Estate of Mary Henkel was untimely filed and is therefore barred.” The Bureau filed a timely notice of appeal. The sole issue before this Court is whether the trial court erred in barring the Bureau’s claim as untimely filed.

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. Under T.C.A. 30-2-310(b), the Legislature was more than generous with the State by allowing it a full year (as opposed to the usual four-months) in which to file any claims against an estate. The Court concluded that the Legislature did not intend the time for filing any claim or demand against an estate (other than for taxes) to extend beyond one year. The 2000 amendment adding T.C.A. 30-2-310(b) clearly evinced the Legislature’s intent to include claims by the state in this time limit.

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