While time may be critical in admitting an ailing relative into a healthcare facility, acting quickly is no substitute for acting prudently when claiming to have a power of attorney, as the Appellate Division of the Superior Court of New Jersey recently confirmed in Royal Suites Healthcare and Rehabilitation Center v. Palladino.

In Royal Suites, Theodore Fusco (“Fusco”) admitted his aunt, Dora Palladino (“Palladino”), who was suffering from dementia and medical problems, into the Royal Suites Healthcare and Rehabilitation Center (“Royal Suites”), a residential nursing home facility.  The admission agreement that Fusco signed included, among other things, the following provision:

If a Responsible Party and not the Resident signs this agreement, and the Responsible Party is the Resident’s Power of Attorney and/or Legal Guardian, legal proof of such should be furnished to the facility….

The admission agreement also stated that if the Responsible Party managed the Resident’s finances, he or she would be responsible for making payments owed to Royal Suites from the Resident’s funds.  Fusco signed the admission agreement on the line indicating “Signature of Responsible Party.”  Under his signature, Fusco wrote “P.O.A.,” signifying a purported power of attorney.  In reality, however, Fusco did not have a power of attorney for Palladino.

Although Medicare initially covered the cost of Palladino’s stay at Royal Suites, those benefits expired after two months, at which time Royal Suites offered Palladino the option of remaining at the facility as a “private pay” patient or leaving.  Palladino remained at Royal Suites for an additional month before being discharged but did not pay for the cost of her stay.  At the time of her discharge, Palladino owed Royal Suites the sum of $7,755. 

Following Palladino’s death two months later, Royal Suites sued Fusco for the balance owed.  The trial court found, among other things, that Fusco signed the admission agreement under a claimed power of attorney despite the fact that he failed to provide Royal Suites with an actual power of attorney or produce one at trial.  The trial court held Fusco liable for Palladino’s debt, and Fusco appealed.

The Appellate Division affirmed the lower court’s decision, specifically adopting the following reasoning of the trial court:

With a power of attorney you’re acting as the person’s agent.  Without that power of attorney you’re simply acting on your own.  You’re guaranteeing anything you sign.

The court in Royal Suites also cited to Fusco’s admission at trial that he handled Palladino’s finances at the time of her stay at Royal Suites.  Given that fact, and Palladino’s receipt of checks totaling more than $160,000, which were deposited into accounts to which the Fuscos had access in the months preceding her death, the Appellate Division held that Fusco was responsible for payment pursuant to the admission agreement.  Accordingly, the court affirmed the trial court’s judgment against Fusco.

The court’s decision in Royal Suites is instructive for anyone admitting a relative into a nursing home or other healthcare facility.  While claiming a power of attorney in a boilerplate admission agreement may help expedite the admission process, it can also lead to liability for the patient’s debt to the facility if an actual power of attorney does not exist.