Fritz, Crahay and Ard. The opinion of the court was delivered by Crahay, J.A.D.
This case presents the question of whether a home for the aged may retain a resident's payment under a life-care contract, when the resident died during a probationary period and the contract was silent as to that eventuality.
On August 8, 1974 Emma L. Zimmerman (Zimmerman), then 77 years old, completed and signed an "Application" for admission as a resident to the Fritz Reuter Altenheim, a nonprofit corporation operating a home for the aged. The form which was prepared by defendant constituted a written agreement between the parties. It generally provided that for a "donation" of $32,000 and an agreement that Zimmerman give her pension and Social Security payments to the home, less $45 a month, defendant would provide complete life care and burial. The contract contained the following provision agreed by the parties to be a probationary period:
I understand that if I desire to withdraw, or am expelled from the Home at any time during the first year of my stay, that I will have returned to me my entire donation, less however, the sum of $20.00 for each day I lived at the Home, or the sum of $1,000.00, whatever sum is greater * * *.
The contract made no provisions for the disposition of the entrance fee if a resident died.
Two members of appellant's investigating committee testified that on November 21, 1974 a meeting was held with Zimmerman at which time she was told that her application would be accepted for a fee of $42,000. On the agreement $32,000 was crossed out and $42,000 inserted by a representative of the home. This increase was the result of a medical report of the applicant's health prepared after August 1974. At the November meeting Zimmerman objected to the increased payment because she wanted to leave money to certain relatives. She was told that her application could be withdrawn and she could live with relatives. Zimmerman allegedly then orally agreed to pay the additional amount. She did not initial the change or again sign the agreement. Testimony was presented that at the time Zimmerman inquired as to what would become of her money if she died. A member of the committee told her that if she died the day after she entered the home, the money would go to the home.
On December 3, 1974 Zimmerman executed a document entitled "Bill of Sale of Personal Property," transferring to defendant certain assets totaling $43,000 plus her monthly Social Security payments less $50. Zimmerman was not represented by legal counsel or others during these negotiations.
On January 11, 1975 Zimmerman entered the home and on January 27, 1975 she signed an "Addition to Application" wherein she designated that her funeral expenses would be paid by the home. Her cemetery deed was given to the home "if admitted as a resident." She died on January 30, 1975. During the three weeks in which she resided at the home she did not express any dissatisfaction with it or indicate any desire to withdraw. Likewise, at no time prior to her death did defendant consider expelling Zimmerman from the home.
This action was brought by Zimmerman's estate to recover from defendant the entrance fee paid less expenses. The trial judge found, after taking testimony and considering the applicable cases in the area, that plaintiff was entitled
to a return of the money paid over to the home, less certain deductions.
The principal question to be resolved is what was the intention of the parties as to this contingency in the ...