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Royal Suites Healthcare and Rehabilitation Center v. Estate of Dora Palladino


April 20, 2012


On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Atlantic County, Docket No. DC-12057-08.

Per curiam.


Submitted February 16, 2012 -

Before Judges Fuentes, Graves and Koblitz.

Defendants Theodore and Rita Fusco*fn1 appeal the November 12, 2009 judgment against them in the amount of $10,782.90, including $1746.75 in attorney fees, representing an unpaid nursing home bill of their deceased aunt, Dora Palladino, in favor of plaintiff Royal Suites Healthcare & Rehabilitation (Royal Suites). Although appellants did not include point headings as required by Rule 2:6-2(a)(5), we glean from their brief that they contest both the accuracy of the bill and the finding that they are responsible for its payment. After reviewing the record in light of the contentions advanced on appeal, we affirm.

On March 10, 2008, Mr. Fusco signed an agreement to admit Palladino to Royal Suites, a residential nursing home facility. At the time of admission, Palladino was suffering from dementia and medical problems. Mr. Fusco signed the admission agreement on the line indicating "Signature of Responsible Party." After his signature, he wrote "P.O.A.," meaning "Power of Attorney."

The admission agreement set forth the terms of Palladino's stay at Royal Suites and the obligations of the parties involved. Under the section entitled "Authority of the Responsible Party," the agreement, states in part:

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. Residents may appoint a person other than a Power of Attorney or Legal Guardian to act as their Responsible Party.

Under the section entitled "Primary Obligation of the Responsible Party," the agreement reads:

The obligation of the Responsible Party is a primary obligation and not one of guaranty of payment or other performance. However, if the Responsible Party manages the Resident's finances, he/she is responsible for making payments owed to the facility out of the Resident's funds on time . . . . If this provision or any other provision of this agreement is breached by the responsible party, the obligation becomes one of guarantee of payment.

Under the section entitled "Facility Services," the agreement stated: "The Facility agrees to render care to the Resident, which includes food, shelter and general nursing care, so long as the Resident and/or Responsible Party fulfills their obligations under this agreement."

The agreement also contained a section entitled "Additional Conditions for Private Pay Residents." The agreement set forth a "Per Diem Rate Charge" of $250.

Under the section entitled, "Interest on Overdue Charges," the agreement states:

Bills for the Per Diem rate shall be rendered monthly and shall be paid within ten (10) days of receipt. All bills for any account overdue more than thirty (30) days will bear interest at the rate of one percent (1%) per month, (i.e.) twelve percent (12%) per annum, compounded monthly. Should this matter be referred to an attorney for collection, the Resident/Responsible Party are liable to the facility for all attorney fees and costs incurred.

Although Medicare initially covered her expenses, Palladino became ineligible for Medicare benefits on May 14, 2008. At that point, Palladino had the option of either staying at Royal Suites as a "private pay" resident or leaving the facility. Palladino stayed at Royal Suites.

On June 3, 2008, Royal Suites sent Mr. Fusco a "thirty-day discharge notice." The notice stated that he had not "come up with any payment arrangements," and that he must contact Royal Suites to do so or Royal Suites would no longer provide services to Palladino.

Palladino was discharged home on June 13, 2008. At the time of her discharge, Palladino owed a balance of $7,755 to Royal Suites. This amount represented the accumulated per diem charges for the period of May 15, 2008, through June 12, 2008, excluding a day she spent in the hospital, plus interest at twelve percent per annum. As of the date of the trial, the amount owed was $6,987 because of a $768 payment made by Palladino's insurance company.

From January 2008 until Palladino's death in August 2008, she received four checks totaling $160,418.52. The checks were deposited into accounts held either jointly by Palladino and the Fuscos or solely by the Fuscos.

Following a bench trial, the judge rendered his oral opinion. The trial judge began by identifying the "primary issue" as who was liable for payment of the outstanding bill. The judge observed that Mr. Fusco signed the admission agreement as Palladino's power of attorney. He further found, however, that "no power of attorney was produced to the facility" and no power of attorney was produced at trial. The judge also noted that defendants admitted that Palladino had a will, but her will was "never admitted into probate" and a copy of the will was not produced at trial.

The judge went on to state the following:

There's significance to a power of attorney and there's significance to admission of a will into probate, and it's this. 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. When there is a will there is a requirement that the will is probated even if there's nothing in the estate. There [are] various forms of probate and various degrees of probate, but the will must be admitted. Without that will being admitted you essentially act on your own, and in this case I find Mr. Fusco was acting on his own.

Thus, the judge found that "the Fuscos are liable for the debt that's owed."

Turning to the amount owed, the judge found that Palladino received a letter "indicating that Medicare was no longer responsible, that essentially the funds were being eliminated as [of] May 15, [2008,] and she continued to stay" as a private-pay resident. Ultimately, the judge concluded that the debt was "due and owing in the amount of $6,987, plus interest calculated at one percent or twelve percent per annum, plus reasonable attorneys' fees."

Plaintiff's counsel provided the judge with a certification indicating that the total amount of attorneys' fees and costs was $17,851.36. After reviewing the certification, the judge found that plaintiff's counsel was entitled to only twenty-five percent of the judgment amount, an amount he characterized as what he "normally award[s], when attorneys' fees are specified" in Special Civil Part collection cases where no statutory fee is appropriate.*fn2

When error is alleged in a judge's fact finding following a bench trial, the scope of appellate review is limited. See, e.g., Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974); Fagliarone v. Twp. of N. Bergen, 78 N.J. Super. 154, 155 (App. Div.), certif. denied, 40 N.J. 221 (1963). We will not disturb the factual findings of the trial court "unless we are convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice." Fagliarone, supra, 78 N.J. Super. at 155. "Findings by the trial judge are considered binding on appeal when supported by adequate, substantial and credible evidence." Rova Farms, supra, 65 N.J. at 484.

A trial court's legal interpretation of a contract's meaning is subject to de novo appellate review. Fastenberg v. Prudential Ins. Co. of Am., 309 N.J. Super. 415, 420 (App. Div. 1998). Generally, the interpretation of contract terms "are decided by the court as a matter of law unless the meaning is both unclear and dependent on conflicting testimony." Bosshard v. Hackensack Univ. Med. Ctr., 345 N.J. Super. 78, 92 (App. Div. 2001).

Mr. Fusco conceded at trial that he was disputing the amount of the bill, not that money was owed. He admitted to answering an interrogatory by stating that $6725 was owed to Royal Suites. At trial, the Fuscos sought to introduce prior billing mistakes by Royal Suites through various unauthenticated documents. They also sought additional time to produce other documents. The judge properly denied these requests. N.J.R.E. 901; See In re Estate of Schifftner, 385 N.J. Super. 37, 44 (App. Div. 2006) (citing Venner v. Allstate, 306 N.J. Super. 106, 110 (App. Div. 1997)) (indicating that self-represented litigants must abide by the court rules).

Mr. Fusco admitted to handling Palladino's finances and acknowledged that more than $160,000 in her funds were deposited into accounts accessible to both him and Rita Fusco over an eight-month period prior to Palladino's death. Rita Fusco stated*fn3 that Palladino decided to cash in her stocks because they were losing money. Mr. Fusco admitted that a check to Palladino for over $43,000 was placed into the Fusco's personal account. A check for over $17,000 was used to pay off a loan from Fusco's life insurance, "with Palladino's permission." The Fuscos claim that if Royal Suites had presented Palladino with a correct bill when she was alive, she would have paid it. Now that Palladino's money has been dispersed and Palladino has passed away, the Fuscos believe they are not obligated to pay her debt to Royal Suites.

Additionally, Mr. Fusco now claims to have been suffering from both memory and cognitive issues when he executed the contract with Royal Suites. He does not assert, however, that he informed Royal Suites of these problems at the time he signed the contract. Thus, he cannot now raise the defense that he was unaware of the contract's contents. See Fortunel v. Martin, 114 N.J. Eq. 235, 241 (E. & A. 1933) (presumption that, absent fraud, misconduct, or overreaching, a party to a written contract "read, understood, and assented to its terms"); see also Rudbart v. N. Jersey Dist. Water Supply Comm'n, 127 N.J. 344, 353, cert. denied sub nom., First Fidelity Bank v. Rudbart, 506 U.S. 871, 113 S. Ct. 203, 121 L. Ed. 2d 145 (1992) (basic principle of contract law that a party's signature indicates agreement to the written terms of the document); Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 386 (1960) (same).

In light of the contract signed by Mr. Fusco through which he agreed to pay Palladino's Royal Suites expenses, and given the significant amount of Palladino's money accessible to both defendants, the judgment against the Fuscos is affirmed.


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