Posts Tagged ‘Maryland’

Maryland Medicaid Agency Settles Multi-Million Dollar Lawsuit

MARCH 22, 2010  VOLUME 17, NUMBER 10

This week’s Elder Law Issues was written by our friend and Maryland colleague Ron M. Landsman. He describes the resolution of a class lawsuit he initiated in Maryland, challenging that state’s practice of setting Medicaid patients’ co-payment amount too high to allow them to pay nursing home bills incurred while they were waiting for Medicaid eligibility.

Preliminary approval of settlement of a class action suit in Maryland implements protection for nursing home residents who mess up their Medicaid eligibility and run out of money to pay for their care before they actually qualify for Medicaid benefits.

This is a common problem. The nursing home resident who is spending down misunderstands the rules or is careless, and finds himself with too much to qualify for Medicaid but not enough to pay the current nursing home bill.

The way Maryland was calculating residents’ co-payments, he would not have money to pay the old bill. Federal law requires – and the settlement implements – co-payment calculations that allow the resident to pay the old bill.

The resident is relieved of the risk of discharge for non-payment, and the nursing home gets paid for providing services. Legal Aid Bureau lawyers said they were using the new rules, which have been partly in effect while the suit was pending, to protect their clients from involuntary discharge because it gave them a way to pay the old bills once on Medicaid.

The Maryland class action, Eunice Smith, et al. v. John Colmers, et al., is believed to be the largest settlement ever paid by the Maryland Medicaid agency – up to $16 million in 2010-2012 to nursing homes that were underpaid because of the co-payment miscalculation. The nursing homes will then apply the previous resident co-payments to the old nursing home bills. If there is a shortfall and not enough to pay the old bills, the nursing homes receiving payment will have to forgive those old debts. That may amount to up to $64 million in claims against residents forgiven.

The settlement also requires the Maryland Medicaid agency to make comprehensive changes in the way it calculates co-payments so that it does it correctly in the future.

Cy Smith and Bill Meyer of Zuckerman Spaeder LLP in Baltimore, and Ron Landsman of Rockville, represented the plaintiff class. Landsman obtained the federal agency ruling that Maryland’s old rules for co-payments violated federal law, which then triggered the private lawsuit. Smith and Meyer led the negotiations resulting in a complicated 16-page “protocol” for making claims and payments to nursing homes.

The order signed on March 11 gives the settlement preliminary approval as “fair, reasonable, and adequate.” Notice will be sent to all class members, and they can “opt out” of the class action, if they want, to pursue their own claims for corrected co-payment calculations. But those doing so will be subject to a limit of three months for most old bills, which does not apply to the settlement, and they will not automatically have any unpaid portion of their old bills forgiven by the nursing home.

The settlement is scheduled for final approval on May 12, 2010.

Attorney Prepares Will Leaving Client’s Estate to His Daughter

APRIL 24, 2006  VOLUME 13, NUMBER 43

Sarah Ann Ester Straw went to her lawyer, N. Frank Lanocha, to have a will prepared. According to Mr. Lanocha, she wanted to leave the bulk of her estate to the lawyer’s daughter, Teresa Lanocha-Sisson. He prepared a will that did exactly that—in fact, it left $1,000 to Mr. Lanocha’s wife Teresa W. Lanocha, $2,000 to area charity Chimes, Inc., and the balance of the estate to Mr. Lanocha’s daughter.

There is a well-recognized ethical rule, however, that prohibits lawyers from writing themselves or family members into wills. There is an exception when the will is being prepared for a family member of the lawyer, but Ms. Straw had no familial relationship with Mr. Lanocha, his wife or daughter. There is a second exception for bequests that are not “substantial,” but the will Mr. Lanocha prepared clearly did not fit within that exception.

When Ms. Straw died and her will was submitted to probate, the judge assigned to the case was troubled by Mr. Lanocha’s conduct. A complaint to the Attorney Grievance Commission initiated a proceeding seeking to discipline Mr. Lanocha.

The Maryland Court of Appeals (the state’s highest court—equivalent to the Supreme Court of most other states) ultimately agreed that Mr. Lanocha had behaved improperly. The only sanction for his misbehavior, however, was a public reprimand—Mr. Lanocha’s ability to continue practicing law was not affected, and his daughter was not required to give up her claim to Ms. Straw’s estate.

Four of the seven judges agreed that Mr. Lanocha should be let off lightly. They believed his insistence that he had never heard of the rule prohibiting lawyers from writing themselves or family members into wills—though two other Maryland lawyers had been suspended from the practice of law indefinitely for naming themselves as beneficiaries as recently as 2003. Besides, reasoned the court majority, Mr. Lanocha had told Ms. Straw that she needed independent legal advice before leaving anything to his family, and she had insisted that he prepare the will anyway.

Judge Alan Wilner, one of the seven judges deciding Mr. Lanocha’s fate, would have gone further. He noted that no one had asked Ms. Lanocha-Sisson if she would be willing to disavow any inheritance; he suggested that without that sanction Mr. Lanocha should be indefinitely suspended. Judges Dale Cathell and Lynne Battaglia would have suspended Mr. Lanocha from the practice of law regardless of whether his daughter declined the inheritance.

Mr. Lanocha had a prior record of sorts, having been reprimanded for other violations in 2001. He had also been challenged by the Federal Trade Commission for violation of Fair Debt Collection Practices Act provisions in 1996, and ordered to pay $50,000 in penalties.

Two Lawyers Suspended For Including Themselves in Wills

APRIL 21, 2003 VOLUME 10, NUMBER 42

In recent weeks two Maryland lawyers have lost their licenses to practice law for the same offense. Both wrote themselves into wills they prepared for their clients. Even though each lawyer had a longstanding personal relationship with the client, and there was no evidence of coercion or influence, each violated a basic principle of legal ethics.

Charles F. Stein, III, had literally grown up with Xaver and Eleanor Lindinger. The Lindingers had been family friends of his parents, and his father (Charles F. Stein, Jr.) had been the Lindingers’ lawyer since at least the 1950s. After both Xaver Lindinger and Charles Stein, Jr., died it was only natural for Mrs. Lindinger to turn to Charles Stein, III, to represent her.

At her request, the younger Mr. Stein prepared two wills for Mrs. Lindinger over the years. Then in 1998 Mrs. Lindinger met with Mr. Stein to update her will, and the result was a document that left one-third of the residue of her estate to Mr. Stein.

Although Mr. Stein mentioned to her that she probably ought to discuss the matter with another lawyer in his office, he took no steps to make sure that she secured independent legal advice. Mrs. Lindinger died in 2001.

Mr. Stein apparently understood that there was something not quite right about including himself in the will, since he at least suggested that Mrs. Lindinger should seek separate legal counsel. In the disciplinary process, however, he claimed not to be aware of any prohibition against preparing a will naming himself as a beneficiary.

Like Mr. Stein, John A. Brooke had known his client for years. They had been friends for two decades, and Mr. Brooke had represented John C. Sherpinski on a number of occasions. When Mr. Sherpinski was about to be admitted to the hospital he asked lawyer Brooke for help with writing a will. Mr. Brooke explained that he could write the will out in his own handwriting, but Mr. Sherpinski expressed frustration with the process and asked if Mr. Brooke could have his secretary prepare the document.

Mr. Brooke gave Mr. Sherpinski’s handwritten notes to his secretary, along with instructions on how to complete the will. She prepared the document and Mr. Brooke then had it delivered to Mr. Sherpinski for signing. The will, as Mr. Sherpinski had instructed, left the bulk of his estate to Mr. Brooke.

In his defense, Mr. Brooke argued that he hadn’t “prepared” a will for Mr. Sherpinski–he had merely asked his secretary to type up the notes in will format. That argument did not impress the disciplinary commission, which recommended sanctions for Mr. Brooke’s conduct.

Each of these lawyers violated a clear prohibition in Maryland’s ethical rules governing lawyers. The real question faced by Maryland’s high court was to determine the proper sanction.

The court found that both lawyers were unaware of the prohibition against including themselves in wills they drafted. Neither lawyer was found to have influenced his client in any way. Still, both lawyers were indefinitely suspended from the practice of law. Either or both may apply for readmission, but not until they have formally waived any claim they might have to any share of the estates of their respective clients. Attorney Grievance Commission of Maryland v. Stein (March 18, 2003) and Attorney Grievance Commission of Maryland v. Brooke (April 11, 2003).

Arizona’s prohibition on a lawyer including himself or herself in a will is essentially identical to the Maryland provision. Both provide exceptions for wills prepared for the lawyer’s relatives. Both leave the question of sanctions up to the disciplinary process to determine the severity of the lawyer’s transgression in individual circumstances.

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