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LLC v. Nichols-Shields

Court of Appeals of Oregon

April 24, 2019

LARISA'S HOME CARE, LLC, an Oregon limited liability company, Plaintiff-Respondent,
v.
Karen NICHOLS-SHIELDS, the duly appointed Personal Representative of the Estate of Isabell Prichard, Deceased, Defendant-Appellant.

          Submitted on remand December 11, 2017.

         On remand from the Oregon Supreme Court, Larisa's Home Care, LLC v. Nichols-Shields, 362 Or. 115, 404 P.3d 912 (2 017) .

          Washington County Circuit Court C124865CV; Janelle F. Wipper, Judge.

          Hafez Daraee fled the briefs for appellant. Ross A. Day, Matthew Swihart, and Day Law Group, PC, fled the briefs for respondent.

          Ellen F. Rosenblum, Attorney General, Benjamin Gutman, Solicitor General, and Jordan R. Silk, Assistant Attorney General, fled the brief amicus curiae for Oregon Department of Justice.

          Before Hadlock, Presiding Judge, and DeHoog, Judge, and Aoyagi, Judge.

         Case Summary: This case is on remand from the Oregon Supreme Court. Larisa's Home Care, LLC v. Nichols-Shields, 362 Or. 115, 404 P.3d 912 (2017) (Larisa's II). In Larisa's Home Care, LLC v. Nichols-Shields, 277 Or.App. 811, 372 P.3d 595 (2016), the Court of Appeals held that the trial court had erred in concluding that plaintiff had been unjustly enriched. The Supreme Court reversed and remanded for the Court of Appeals to consider an additional defense argument that it had not reached in its original decision, which is whether certain [297 Or.App. 220] provisions of Medicaid law nevertheless prohibit plaintiff's recovery. Held: In light of the Supreme Court's holdings in Larisa's II, the arguments that defendant made to the Court of Appeals do not establish that either former OAR 411-050-0435(1)(d) (Jan 1, 2007) or any other law precluded plaintiff from pursuing or prevailing in this unjust enrichment action.

         Affirmed.

         [297 Or.App. 221] HADLOCK, P. J.

         This case comes to us on remand from the Supreme Court. Larisa's Home Care, LLC v. Nichols-Shields, 362 Or. 115, 404 P.3d 912 (2017) (Larisa's II). Plaintiff is a residential adult foster care provider that brought an unjust enrichment claim to recover the reasonable value of its services from defendant, the personal representative of the estate of a former resident, Prichard, who fraudulently obtained services from plaintiff at a lower Medicaid-based rate. In response, defendant contended, among other things, that Prichard's estate had not been unjustly enriched; she moved to dismiss on that basis. The trial court implicitly denied that motion and, following a bench trial, "ruled in favor of plaintiff, concluding that there was unjust enrichment." Id. at 120. Defendant appealed. In our initial decision, we held that the trial court had erred by concluding that defendant had been unjustly enriched. We therefore reversed without reaching additional arguments that defendant had made on appeal. Larisa's Home Care, LLC v. Nichols-Shields, 277 Or.App. 811, 812, 820, 372 P.3d 595 (2016) (Larisa's I). On review, the Supreme Court concluded that plaintiff had established that the estate had been unjustly enriched. Larisa's II, 362 Or at 123. It reversed our decision on that basis and remanded the case to us to consider an additional defense argument that we had not reached-whether certain provisions of Medicaid law nevertheless prohibit plaintiff's recovery. Id. at 123, 142. For the reasons set out below, we affirm.

         We provide background facts as articulated in Larisa's II. Plaintiff contracted with the Department of Human Services (DHS) to provide adult foster home services to patients who qualified for Medicaid. Larisa's II, 362 Or at 118. For Medicaid-qualified patients, the rates charged by plaintiff were set by DHS. Id. The Medicaid rates were substantially lower than the rates that plaintiff charged to non-Medicaid patients-the "private pay" patients. Id. at 119. Prichard, who had been approved to receive Medicaid benefits, resided and received care in one of plaintiffs facilities and was charged the Medicaid rate for services, rather than the higher, private-pay rate. Id. at 118-19.

          [297 Or.App. 222] After Prichard's death, her family (and others) learned that Prichard's son, Gardner, who had had power of attorney for Prichard, had made a false representation on Prichard's Medicaid application. Id. at 119. Another of Prichard's children-defendant, who was appointed as the personal representative for the estate-discovered that for years, Gardner had been transferring Prichard's assets to himself or using her funds for his own benefit.[1] Id. at 119-20. Gardner had represented on his mother's Medicaid application, however, that Prichard had not transferred or given away any cash or other property to anyone in the preceding 60 months. Id. at 119. "As a result, [DHS] approved Pritchard for Medicaid benefits." Id.

         Plaintiff made a claim against Prichard's estate, which defendant denied. Id. at 120. Plaintiff then filed this lawsuit for equitable relief in which it sought payment from the estate of the difference between a higher private-pay rate and the lower Medicaid rate that it had charged Prichard. Id. at 120. The trial court ruled in plaintiff's favor after concluding that defendant was unjustly enriched and that Medicaid law did not prevent plaintiff's recovery. Id. at 120-21. It entered a judgment in plaintiff's favor in the amount of $48, 477. Id. at 121.

         Defendant appealed and presented two arguments, which the Supreme Court characterized broadly as follows: "(1) there was no unjust enrichment; and (2) regardless, Medicaid-related law (statutes, rules, and the terms of plaintiffs contract with the department) prohibited plaintiff from recovering from defendant." Id. at 121. We held that the record did not support the unjust enrichment claim and that the trial court erred in denying defendant's motion to dismiss. Larisa's I, 277 Or.App. at 820. As stated above, the Supreme Court reversed our decision regarding the unjust enrichment ...


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