Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

National Foundation for Special Needs Integrity, Inc. v. Reese

United States District Court, S.D. Indiana, Indianapolis Division

March 21, 2017

NATIONAL FOUNDATION FOR SPECIAL NEEDS INTEGRITY, INC., Plaintiff,
v.
DEVON C. REESE, as Personal Representative for THE ESTATE OF THERESA A. GIVENS, deceased, Defendant. DEVON C. REESE, as Personal Representative for THE ESTATE OF THERESA A. GIVENS, deceased, Counter Claimant,
v.
NATIONAL FOUNDATION FOR SPECIAL NEEDS INTEGRITY, INC., Counter Defendant.

          FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER FOLLOWING BENCH TRIAL

          TANYA WALTON PRATT, JUDGE

         A bench trial was held in this action on January 9, 2017 and January 13, 2017. The Counter Claimant, Devon C. Reese as Personal Representative of the Estate of Theresa A. Givens (“the Estate”), appeared in person and by counsel James A. Beckemeir and Wanda E. Jones. Counter Defendant National Foundation for Special Needs Integrity, Inc. (“National Foundation”) appeared by counsel David W. Gray, Matthew S. Tarkington and Suzanne R. Gaidoo. The issues before the Court at trial are the Estate's counterclaim for reformation and National Foundation's defense of laches as to the counterclaim. Upon consideration of the evidence presented during the bench trial[1], the Court now issues its Findings of Fact and Conclusions of Law pursuant to Federal Rule of Civil Procedure 52(a)(1). Any finding of fact that is more properly considered a conclusion of law is adopted as such. Similarly, any conclusion of law that is more properly considered a finding of fact is adopted as such.

         I. FINDINGS OF FACT

         National Foundation is a not-for-profit corporation whose purpose is to act as trustee to pooled special needs trusts. A special needs trust is a trust created for the benefit of a beneficiary with a disability who is receiving means-tested governmental benefits, such as Supplemental Security Income or Medicaid. A special needs trust protects a disabled person's eligibility for current or future public benefits while simultaneously allowing the person with disabilities access to additional funds to pay for expenses not covered by public benefits. The trust property of numerous trust beneficiaries (called “members”) is “pooled” for the purpose of custody, management, and investment in accordance with 42 U.S.C. §1396(d)(4)(C). A separate “sub-account” is established and administered for the sole benefit of each specific trust member. At the time of a pooled trust member's death, the funds remaining in the deceased member's sub-account must be used to pay back Medicaid, and if funds still remain after repayment, the funds either: (a) remain in the pooled trust for the benefit of the other pooled trust members, or (b) can be distributed to others pursuant to the beneficiary's wishes that are clearly stated in the trust documents.

         Theresa Givens (“Givens”) was a forty-nine year old, unmarried mother of three adult children, who was severely injured in 2009 by the medical use of Gladolium dye. Givens was a member of a products liability class action lawsuit and was represented by Brown & Crouppen, P.C. (“Brown & Crouppen”) law firm. In July 2011, Givens agreed to a $500, 000.00 settlement of which Brown & Crouppen received 40% as its fee, plus reimbursement of its costs. Givens received $254, 847.76 in net settlement proceeds. Prior to receiving the settlement proceeds, Seth Webb (“Webb”), Givens' attorney at Brown & Crouppen, advised her to place all of her net settlement funds into a pooled special needs trust. Brown & Crouppen gave her the name of both National Foundation and Midwest Special Needs Trust to discuss distribution of her settlement benefit.

         On or about June 1, 2011, Givens contacted K. Shane Service (“Service”), National Foundation's then-general counsel, to discuss placing her settlement funds into a pooled special needs trust. At their meeting, Givens told Service that she had six goals for her settlement funds. She wished to use her settlement funds to purchase: 1) a primary residence; 2) a home for her son; 3) an income-producing storefront property; 4) two cars; 5) a vacation; and 6) saving bonds of an undisclosed amount for her three children and all of her grandchildren. Givens also informed Service that she wanted to purchase an annuity with the left over proceeds and to live off the interest. Service talked to Givens about Medicaid payback, and explained the pros and cons of a pooled trust. Givens was concerned about her children and she told Service that ultimately, after Medicaid payback and any liens, she wanted the proceeds to go to her children. Service explained that in the majority of these cases, when a beneficiary passes away, the pooled trust that administers the trust has the legal right to retain the money. The conversation ended with Givens stating that she needed to “chew on this.” Given her stated goals, Service expected never to hear from Givens again.

         After speaking with Givens, Service emailed Webb and Andee McGaughey (“McGaughey”), the paralegal at Brown & Crouppen who was assigned to Givens' case. (Tr. Exhibit 105.) In the email, Service reminded McGaughey that a special needs trust is subject to the sole benefit rule and cannot be used for the primary benefit of anyone other than the beneficiary. Service noted that he had informed Givens that, given her stated goals, a special needs trust might not be the proper vehicle for her because it would not allow Givens to purchase housing for her family members, give gifts to her children and grandchildren, and would only allow her to purchase one vehicle.

         On July 11, 2011, Givens met with her personal injury attorneys at Brown & Crouppen who again advised that the settlement funds needed to be placed in the trust so that Givens would not lose her public health benefits. On July 20, 2011, despite the advice of counsel regarding the risk of losing her needs based government benefits, Givens instructed Brown & Crouppen to place only $184, 000.00 in a special needs trust and distribute the remaining portion by check made payable to her. Givens informed her attorneys at Brown & Crouppen that she intended to use the funds that were not placed in the trust to pay off her debts, open a bank account, buy a car for her daughter, and give $50, 000.00 to her son.

         Eight days later, on July 28, 2011, Givens contacted her attorneys at Brown & Crouppen and instructed them to place her entire settlement into a special needs trust. On that same day, Givens informed McGaughey that she was frustrated with her children because she felt that she was being pressured by them to give them her settlement funds. Givens also told McGaughey that she was afraid her children would take the money, she would be left without anything, and that she could have everything taken away from her.

         On August 9, 2011, Givens executed a Joinder Agreement, thereby joining the pooled trust operated by National Foundation. (Tr. Exhibit 102.) McGaughey went to Givens' home to pick up the agreement and signed the document as a witness, indicating that she was present when Givens signed the agreement. McGaughey, however, did not assist Givens in filling out the agreement. McGaughey then delivered the executed agreement to Brown & Crouppen. Although Brown & Crouppen was Givens' legal counsel, at the time she completed the Joinder Agreement an attorney was not present and no Brown & Crouppen attorney reviewed the Joinder Agreement before sending it to National Foundation. Givens listed herself as the only “contingent/ remainder/residual” beneficiary. The pertinent provisions in the Joinder Agreement state as follow:

IV. DISTRIBUTIONS UPON THE DEATH OF THE BENEFICIARY:

         Amounts remaining in the trust upon the death of the Beneficiary shall be distributed in accordance with §13611(b) of the Omnibus Budget Reconciliation Act of 1993 (OBRA), Public Law 103-66, codified at 42 U.S.C. §1396p(d)(4)(C). Accordingly, to the extent that amounts remaining in the beneficiary's account upon the death of the Beneficiary are not retained by the trust, the trust shall pay to the state of Missouri such remaining amounts in the account an amount equal to the total amount of medical assistance paid on behalf of the Beneficiary under the State of Missouri's Medicaid plan.

Except in the event that this Article Fourteen may be in the future amended to effectuate the letter, spirit and purpose of 42 U.S.C. §1396p(d)(4)(C)(iv), the National Foundation for Special Needs Integrity, Inc. shall not retain any portion of the Beneficiary's trust Sub-Account upon his or her death. Rather, all such amounts shall be reimbursed to the state of Missouri, by and through the Missouri Department of Health and Family Services, up to the full amount that it has expended on the Beneficiary, both before and after the creation of this trust.
If any money remains after the state of Missouri has been reimbursed in full, said money shall be distributed in accordance with Section V, below.
If no secondary Contingent/Residual/Remainder Beneficiaries survive or if none are named in Section V below, then and only then shall said money remain with the trust.
….
If any amounts remain after the state of Missouri (and any other state that may receive proportionate reimbursement pursuant to Section 14.2 of the accompanying Declaration of Trust) has been reimbursed in full, as described above, the remaining amounts shall be distributed in accordance with the Joinder Agreement under which the Beneficiary has enrolled in the pooled trust.

(Tr. Exhibit 102 p.13).

V. CONTINGENT/REMAINDER/RESIDUAL BENEFICIARIES: ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.