Suit was instituted by plaintiff seeking return of a community entry fee of $16,750 paid by decedent to defendant nursing home under the terms of a life-care agreement. Defendant's answer denied plaintiff's claims of illegality and asserted its right to retain the monies pursuant to the terms of the contract.
Subsequently motions for summary judgment were filed by both parties and, after argument, judgment was granted on behalf of defendant. Plaintiff appeals.
The allegations of error as asserted by plaintiff are as follows: (1) the defendant retirement community will be unjustly enriched if allowed to keep the $16,750 entry fee paid by resident who subsequently died after only one month of residency; (2) the defendant retirement community is not entitled to retain the entry fee when the resident dies during the probationary period of the contract; (3) the forfeiture of the entry fee to the defendant retirement community upon the death of the resident constitutes a testamentary disposition of assets and must be in compliance with the statute of wills, and (4) the life-care contract which is the subject of this controversy is void as against public policy.
The Estaugh is a nonprofit corporation operating a resident and care facility for the elderly. On September 23, 1974 Jean K. Pedlow, the deceased, entered into a contract with defendant whereby, for an entrance fee of $16,750 and a monthly fee of $360, defendant was to provide living accommodations, housekeeping, laundry services, three meals a day and medical services for the rest of decedent's life or until earlier termination of the agreement, within the terms of the contract, by either party. Decedent took up residence at the home on November 1, 1974, and died there on December 4, 1974.
The agreement entered into by the parties contained the following language:
A. Adjustment Period. There shall be a probationary period of three months of residence commencing immediately after Resident enters Medford Leas which shall be considered a period of adjustment. During this period, either the Community or Resident may terminate this agreement by giving written notice to the other of intent so to do. Upon any such termination, Resident shall be entitled to a refund as provided in paragraph 5E(1) below. If Resident should die during this period of adjustment, the right of termination contained in this paragraph shall immediately expire and shall not pass to Resident's estate or legal representative, and the interests of Resident and the Community shall then be governed by the provisions of paragraph 5C below.
C. Termination by Death. Unless sooner terminated by its own provisions, this agreement shall terminate at the death of Resident, whereupon all obligations of the Community under this agreement, other than those relating to burial and to removal of personal property, shall cease. Any personal effects of Resident in the accommodation theretofore occupied or held in storage shall thereupon be delivered to Resident's executor, administrator, or personal representative, or if none qualifies within 30 days after Resident's death, to any of Resident's next of kin. The Community will hold such personal effects for a period of not to exceed thirty (30) days at the risk of Resident's estate or persons entitled thereto, subject to ordinary care of the Community in safeguarding the same until delivery can be had. At the death of Resident, all Entry Fees, Monthly Rates, and any other funds deposited with the Community under this agreement shall thereupon and forthwith become the permanent property of the Community without any right of refund.*fn*
The affidavit of William Martin, executive director of the facility, indicates that decedent was advised by legal counsel at the time she signed the agreement with defendant. Plaintiff does not dispute this fact. Moreover, there is no evidence or allegation of fraud or overreaching on the part of defendant. Plaintiff's contentions are purely legal in nature and do not suggest questions of fact. Summary judgment was the most appropriate method of disposing of this case. R. 4:46-2 et seq.
Plaintiff's first contention that the retirement community will be unjustly enriched if allowed to keep the $16,750 entry fee paid by the resident, who died after only one month of residency is without merit. Defendant, a nonprofit organization, is run in part by charitable contributions. If the deceased in time became unable to afford the monthly payments, defendant would have subsidized the cost of her care from a reserve fund. In such circumstances, we have difficulty in assessing as unjust enrichment incidental benefits express in the contract, to inure for the good of others than defendant, like benefits which might have benefited decedent had she lived.
The fact of Mrs. Pedlow's early demise is of no legal moment. The vast majority of cases uphold life-care contracts entered into between nursing homes and aged persons as not unfair, unconscionable or unjust, even if the resident dies a relatively short time after entering the home and before receiving benefits roughly commensurate with the value of the property received by the home. Fidelity Union Trust Co. v. Reeves , 96 N.J. Eq. 490, 494-495 (Ch. 1924), aff'd o.b. 98 N.J. Eq. 412 (E. & A. 1925); Wilson v. Dexter , 135 Ind. App. 247, 192 N.E. 2d 469 (App. Div. 1963); Dodge v. New Hampshire Centennial Home For Aged , 95 N.H. 472, 67 A.2d 10 (Sup. Ct. 1949); Stiegelmeier v. West Side Deutscher Frauen Verein , 88 Ohio L. Abs. 97, 20 Ohio O. 2d 368, 178 N.E. 2d 516 (Ct. App. 1961); Henry Keep Home v. Moore , 198 Okl. 198, 176 P. 2d 1016 (Sup. Ct. 1947). It is reasonably foreseeable that death may occur at any time, ...