DocketNumber: No. C-080241.
Citation Numbers: 903 N.E.2d 379, 179 Ohio App. 3d 685, 2008 Ohio 6507
Judges: MARK P. PAINTER, Judge.
Filed Date: 12/12/2008
Status: Precedential
Modified Date: 1/13/2023
{¶ 1} Defendant-appellant Jack Sahnd appeals the entry of summary judgment for plaintiff-appellee, Lifesphere, on its claim that Jack's mother, Kathleen, had fraudulently transferred her home to Jack under R.C.
{¶ 2} Kathleen was 80 plus when, in January 2005, she gave her house to her son Jack Sahnd. About seven months later, Kathleen moved to Maple Knoll, a geriatric-care nursing home operated by Lifesphere, and she lived there until she died in January 2006. *Page 687
{¶ 3} Under Ohio Adm. Code
{¶ 4} While she was ineligible to receive Medicaid benefits, Kathleen became increasingly indebted to Maple Knoll; after she died, her estate could not pay her nursing-home bills. Lifesphere sued under Ohio's fraudulent-conveyance statute3 and then moved for summary judgment. The trial court granted the motion, concluding that the transfer of realty had been committed fraudulently under R.C.
{¶ 5} In his appeal, Sahnd argues that Lifesphere was not entitled to summary judgment because the trial court did not construe the evidence in his favor, and because it considered issues not supported by evidence in the record.
{¶ 8} The time limit for filing an action under the actual-intent section7 is within four years after the transfer was made or the obligation was incurred or, under certain circumstances, within one year after the transfer or obligation was or reasonably could have been discovered by the claimant8; and if the action is brought under a constructive-fraud theory, 9 the action must commence within four years after the transfer was made or the obligation was incurred.10 Life-sphere's suit was filed well within time.
{¶ 9} The trial court, citing Colonial GuildLtd. v. Pruitt, 11 ruled that the transfer was fraudulent as a matter of law because it rendered Kathleen insolvent and because it was made without fair consideration. The trial court's pronouncement *Page 689
of the black-letter law follows: "If a creditor proves that a transfer made the debtor insolvent and the transfer was made without fair consideration, a transfer is fraudulent as a matter of law." This language likely was based on R.C.
{¶ 10} Proving that a transfer is fraudulent under R.C.
{¶ 11} We must be careful when interpreting words (and statutes). The trial court's statement of law would have been correct if Kathleen's debt had already been incurred when she transferred her property. But when Kathleen transferred the property, Maple Knoll and Lifesphere were not creditors — she owed them nothing. Her debt to Maple Knoll arose months after the transfer. R.C.
{¶ 12} But the trial court in the alternative also determined that, under R.C.
{¶ 14} At this juncture, we feel compelled to address a misconception about Ohio's statutes governing Medicaid eligibility and those prohibiting fraudulent transfers. The separate statutory schemes are not synonymous — the provisions of the Ohio Administrative Code governing Medicaid eligibility13 and Ohio's statute against fraudulent transfers14 (and the defenses to each) cannot be used interchangeably. As the court noted in Romaniw-Dubasv. Polowyk, merely because a transfer is improper as to a Medicaid application does not necessarily mean the transfer is also improper as a fraudulent conveyance.15 While the facts present in Romaniw-Dubas are not the same as those in this case, we are convinced that its underlying rationale — that an improper transfer for purposes of Medicaid is not dispositive of whether the transfer is improper under Ohio's statute against fraudulent transfers — applies here. Thus an administrative hearing before JFS cannot under a theory of res judicata bar later proceedings in the common pleas courts under R.C.
{¶ 16} The trial court did not fail to construe the evidence in Sahnd's favor: as we have mentioned, even if the transfer had been improper under Ohio Adm. Code
{¶ 17} Kathleen gave her home to her son, leaving her with monthly social-security and pension checks as sources of income. Otherwise she had little or no assets. We are convinced, for purposes of Lifesphere's claim, that the transfer from Kathleen to Jack violated Ohio's statute against fraudulent conveyances because after the transfer of the bulk of her assets, Kathleen should have reasonably believed that she would incur debts beyond her ability to pay as they became due.
{¶ 18} We hold that anyone, of any age, who transfers their major asset without consideration, leaving little or no assets, is liable to creditors who shortly thereafter extend credit without knowledge of the transfer. Of course, an action seeking to set aside a property transfer under the fraudulent-conveyance statutes is subject to the one and four-year time limitations found in R.C.
{¶ 19} We reject Sahnd's second assignment of error that the trial court considered issues that were not supported by the evidence. The evidence used by the court in entering summary judgment, as well as the evidence considered in this opinion, was properly before the court and supported a judgment favoring Lifesphere on its claim under R.C.
{¶ 20} The trial court did not err in entering summary judgment for Life-sphere, and we affirm its judgment.
Judgment affirmed.
SUNDERMANN, P.J., and HENDON, J., concur.