BARRY HOLLMAN and MICHAEL PULKRABEK, Plaintiffs and Appellants,
SOUTH DAKOTA DEPARTMENT OF SOCIAL SERVICES, Defendant and Appellee
Considered on Briefs February 17, 2015.
APPEAL FROM THE CIRCUIT COURT OF THE FIRST JUDICIAL CIRCUIT YANKTON COUNTY, SOUTH DAKOTA. HONORABLE CHERYLE W. GERING, Judge.
DAVID D. KNOFF of Kennedy Pier Knoff & Loftus, LLP, Yankton, South Dakota, Attorneys for plaintiffs and appellants.
MARTY J. JACKLEY, Attorney General, JOE THRONSON, Special Assistant Attorney General Department of Social Services, Pierre, South Dakota, Attorneys for defendant and appellee.
ZINTER, Justice. GILBERTSON, Chief Justice, and SEVERSON, WILBUR, and KERN, Justices, concur.
[¶1] The Department of Social Services (DSS) provided Medicaid benefits to Darlene Hollman while she was in a nursing home. At that time, Hollman had an interest in real estate. DSS did not record a lien on the property for the benefits it had provided until after Hollman died. Hollman's children contested the lien's validity. The circuit court granted summary judgment for DSS, ruling that the lien had attached to Hollman's interest in the property even though the lien was not recorded until after her death. The court concluded that the lien recording requirement related to the question of priority between claimants rather than lien attachment. Hollman's heirs appeal. We reverse.
Facts and Procedural History
[¶2] Thomas White owned real estate in Yankton County. Upon White's death in 2001, Hollman, White's stepdaughter, inherited a one-fifth interest in the property subject to a life estate in her mother Lydia White. In 2005, Hollman began receiving Medicaid benefits from DSS for nursing home care. Hollman died intestate in 2008, while her mother was still alive. At the time of Hollman's death, DSS had paid $101,850.09 for her care. Hollman's children and DSS were apparently unaware of Hollman's remainder interest. The interest had never been disclosed to DSS, and her estate was not initially probated.
[¶3] However, when Lydia died in 2012, Hollman's remainder interest became a present interest, and a probate was then opened to transfer Hollman's interest to her two children. DSS was given notice of the probate on February 12, 2013. On February 22, 2013, DSS filed a claim against the estate for the nursing home benefits it had provided. On March 11, 2013, the estate disallowed the claim because the three-year statute of limitations for creditor's claims had expired. That determination was not appealed by DSS. Instead, on March 21, 2013, DSS recorded a medical assistance lien on the property
for the Medicaid benefits it had provided. The personal representative later executed a deed conveying Hollman's interest to her children, and the probate was closed without payment of DSS's claim.
[¶4] Because Hollman's children wanted to sell their interest in the property, DSS released its lien in the amount of $101,850.09 and that sum was placed in escrow pending a judicial determination whether the lien was valid. A declaratory action was commenced, and both Hollman's children and DSS moved for summary judgment based on stipulated facts. The circuit court concluded that an enforceable medical assistance lien was created on the property at the time the nursing home assistance was provided. The court further concluded that Hollman's interest in the property transferred at death ...