Alfred M. DeOca [hereafter, DeOca] died intestate on March 2, 2020, a registered member of the Seneca Nation of Indians. A small estate affidavit was filed by the decedent’s sister Maria D. Corwin [hereafter, Corwin], and thereafter on May 14, 2020, certificates of Voluntary Administration were issued authorizing Corwin to collect two M & T checking accounts: (1) account ending -2160 in the amount of $47,769.001 ; and (2) account ending -0601 in the amount of $1,126.00. On March 15, 2021, a verified claim was filed by the Commissioner of the Erie County Department of Social Services [hereafter, Erie County] through HMS, Inc. [hereafter, HMS] for claimant New York State Department of Health [hereafter, NYS, DOH], as supervising governmental entity of Medicaid administered by Erie County. NYS DOH, as a preferred creditor, asserted an unsecured claim against the estate in the sum of $347,327.16 for services and care provided by NYS DOH to or on behalf of DeOca. A later-dated verified claim was filed on April 12, 2021, by Erie County through HMS as NYS DOH’s claim in the same sum as the initial claim. Corwin filed a petition on August 19, 2021, requesting that this Court determine the validity of NYS DOH’s claim as supervising governmental entity of Medicaid administered by Erie County. Corwin argued that the verified claim against account ending -2160 should be rejected because the assets deposited into this account by the Seneca Nation came from a Seneca Nation fund account which qualifies as a Medicaid applicant’s exempt resource under Erie County’s Regulations. A citation was issued to NYS DOH, HMS, and to decedent’s distributees, returnable December 9, 2021, to show cause pursuant to SCPA 1809 why this Court should not approve the estate’s rejection of NYS DOH’s claim against account ending -2160. Affidavits of service were filed with the Court establishing that all cited parties were duly served with the citation. No parties appeared on December 9, 2021, nor were any answering papers filed in opposition to the relief sought by petitioner. (I) In SCPA 1809 proceedings, this Court has a broad mandate in determining the validity of a claim: ” the court is to take into consideration all of the facts and surrounding circumstances, such as relationship of the parties and the nature of the claim presented” (Matter of Truitt, 2005 NY Misc LEXIS 4818). Among other requirements, a fiduciary’s petition must show a basis to question the validity of a claim and it must request that the claimant show cause why the claim should not be disallowed. It is well-established that, after the payment of administration and funeral expenses, priority is given to debts entitled to preference under the laws of the United States and the State of New York (SCPA 1811[2][a]). Moreover, a claimant has the burden of proving his/her/their claim by clear and convincing evidence (see, e.g., Matter of McCormack, 43 AD2d 794 [1973], aff’d 35 NY2d 888 [1974]). (II) Petitioner contends that, upon receipt of HMS’ Notice of Intent to File a Claim Against the Estate advising of NYS DOH’s intent to file a claim to recover costs of certain Medicaid benefits that had been paid to or on behalf of DeOca prior to his death, a “New York Estate Recovery Questionnaire” had to be completed and submitted for review by HMS. Petitioner’s attorney completed the Questionnaire and, in response to Question 5, attached a schedule which listed DeOca’s two M & T checking accounts: (1) account ending -2160 in the amount of $47,769.00 which was identified as exempt, and (2) account ending -0601 in the amount of $1,126.00 which was not identified as exempt. Petitioner’s attorney also included the following explanation under Question 8 of the Questionnaire: “Decedent was an American Indian. As indicated on the attached schedule of assets, the majority of assets consists of annuity funds deposited into the decedent’s account by the Seneca Nation from a Seneca funds account and therefore, these funds are exempt.” Upon submission of this Questionnaire, petitioner’s counsel received NYS DOH’s first claim from HMS in the amount of $347,327.16, and NYS DOH’s second claim from HMS in the same amount followed thereafter. Petitioner argues that the claim cannot be asserted against DeOca’s account ending -2160 because that account was funded solely from payments made by the Seneca Nation. Such funds are not recoverable by Medicaid as they were paid to the Seneca Nation as part of the Seneca Nation Settlement Act of 1990 (PL 101-503, November 3, 1990, 104 Stat 1292), which, under section 8(b), entitled Eligibility for Government Programs, provides as follows: “None of the payments, funds or distributions authorized, established, or directed by the Act, and none of the income derived therefrom, shall affect the eligibility of the Seneca Nation or its members for, or be used as a basis for denying or reducing funds under, any Federal program.” While petitioner acknowledges that Social Services Law §369(2)(B) provides Erie County the right to reimbursement in some instances, she contends that Erie County has failed to acknowledge the exception thereunder raised by DeOca. When eligibility for long-term care Medicaid applicants is determined, the county within which the New York State applicant is domiciled reviews the applicant’s available resources and income (NY Social Services Law §366), and there are exceptions or limitations on certain resources and income. Under the Regulations of the Department of Social Services, “[A]ny payments made pursuant to Public Law 101-503 (the Seneca Nation Settlement Act) are exempt and disregarded as income and resources in determining eligibility or standard of need for public assistance” (18 NYCRR 352.22(n)). Furthermore, Administrative Directive 02 OMM/ADM-3, §IV(B)(2)(e), page 9, provides that recovery for Medicaid which was properly paid may not come from estate income or resources belonging to an American Indian which was derived from tribal land. (III) Accordingly, I find and conclude that NYS DOH’s claim cannot be asserted against decedent’s account ending -2160 as petitioner has presented controlling authority demonstrating that those funds originated from the Seneca Nation and are, therefore, exempt from Medicaid estate recovery. By contrast, NYS DOH’s claim against decedent’s account ending -0601 is allowable because there is no proof or allegation that this account’s funds originated from the Seneca Nation. The petition is hereby granted with respect to the non-availability of decedent’s funds in his account ending -2160. This decision shall constitute the Order of this Court and no other or further Order shall be required. Dated: March 28, 2022
