Appeal from the District Court of Burleigh County, South Central Judicial District, the Honorable David E. Reich, Judge.
Charles (Casey) L. Chapman, Bismarck, N.D., for appellant.
Jeanne M. Steiner, Office of Attorney General, Bismarck, N.D., for appellee.
Gerald W. VandeWalle, C.J., Dale V. Sandstrom, Carol Ronning Kapsner, Lisa Fair McEvers. Opinion of the Court by VandeWalle, Chief Justice. Crothers, Justice, dissenting.
VandeWalle, Chief Justice.
[¶1] Shirley Bleick appealed from a district court order affirming a Department of Human Services' decision denying her application for Medicaid benefits. We affirm, concluding a preponderance of the evidence supports the Department's finding that the income stream from Shirley Bleick's life estate exceeds asset limits for Medicaid eligibility.
[¶2] In 1985, Shirley Bleick and her husband conveyed by warranty deed one quarter section of farmland to their son, Brian Bleick, and his wife. After Shirley Bleick's husband died in 1988, she conveyed the rest of the farmland, including a residence located on the land, to her son by warranty deed, but she reserved a life estate in that land. Shirley Bleick then left the farm and moved to Elgin.
[¶3] Brian Bleick lives in a house located on the land subject to a life estate. He farmed full-time until 1991, when he reduced his farming operation. He continues to farm a smaller portion of the property, including land that is part of Shirley Bleick's life estate.
[¶4] In 1992, Brian Bleick and his wife entered into a farm lease with Kerry Ulmer. Ulmer rents 410 acres of farmland from Brian Bleick, including some land subject to Shirley Bleick's life estate. The lease requires Ulmer pay Brian Bleick and his wife $8,200 in rent per crop year.
[¶5] In 1997, Shirley Bleick executed a durable power of attorney, naming Brian Bleick as her attorney-in-fact. Shirley Bleick suffers from dementia and Alzheimer's disease and Brian Bleick took over her finances in " the early 2000s."
[¶6] In February 2007, Brian Bleick, as attorney-in-fact, applied for Medicaid benefits for Shirley Bleick. The application was granted and she began receiving benefits. In June 2011, the Department sent Shirley Bleick and her son a letter advising them that her Medicaid benefits would be discontinued effective June 30, 2011, because she failed to provide information to the county social service office to determine continued eligibility. The Department also advised Shirley Bleick that she needed to provide a copy of the 1992 farm lease and a current or updated rental agreement including a description of the land rented, the dates the payments are due, and the amount of gross rent for each parcel.
[¶7] Shirley Bleick's Medicaid benefits were discontinued, and Brian Bleick filed a new application on her behalf in July 2011. On August 18, 2011, the Department sent Shirley Bleick and her son notice that it was denying her application for benefits because her countable assets exceed the maximum limit. The letter explained:
Shirley Bleick was entitled to annual income from her son/POA from the life estate property. Imputed rents of $1533 for the pasture rent, plus the $8200 annual lease for rented lands, total unreported and uncounted income of $9,733 per year. Because that income was not provided to her, it is still considered as available to her, and is a countable asset. For the five years before the application was submitted in 03/2007, and for the years 2007 (application month 03/2007), 2008, 2009, 2010 and 2011, the total available asset is $97,330 ($9,733 times 10 years). These assets will need to be paid back to Mrs. Bleick, and she will need to spend them down before any further Medicaid coverage can be considered for her.
[¶8] Shirley Bleick appealed the Department's decision denying her application. After a hearing, an administrative law judge (" ALJ" ) affirmed the denial of benefits. The Department issued an amended final order, rejecting some of the ALJ's findings and conclusions but affirming the denial of benefits. The Department found the farmland was rented starting in 1992, Brian Bleick kept the rental proceeds, Shirley Bleick was entitled to the rental income, and the transfer or assignment of the income to Brian Bleick is " best viewed as an annual gift." The Department concluded Shirley Bleick was entitled to the rental income for her portion of the rented land, the annual rent was either $6,013.20 or $5,332 and in either case the rental income exceeded the asset limitation of $3,000 for Medicaid eligibility. The Department also concluded Shirley Bleick was entitled to rent from her son and his wife for the two quarters that they live on that are subject to her life estate. The Department concluded the income stream from the life estate was an available asset, and Shirley Bleick presented no
evidence to establish a legal action against her son would be unsuccessful.
[¶9] Shirley Bleick appealed the Department's decision to the district court. The district court affirmed the Department's decision denying Shirley Bleick's application for benefits.
[¶10] When an administrative agency's decision is appealed from the district court, we review the agency's decision and the record before the agency in the same manner as the district court reviewed the decision. Makedonsky v. North Dakota Dep't of Human Servs.,2008 ND 49, ¶ 5, 746 N.W.2d 185; ...