Mass. Appellate Court Reinstates Legal Malpractice Verdict Following Flawed Medicaid-Planning Advice

In October 2015, the Massachusetts Court of Appeals addressed the question of whether there were damages flowing from a lawyer’s Medicaid advice to an older couple. The lawyer had counseled that, for Medicaid planning reasons, the couple should not retain a life estate in a house purchased with their money but held in the name of their adult children. The court found the surviving mother suffered real damages, even if eviction from the house by her children was unlikely.  Key allegations included:

Thirteen years later, in July of 2007, the Brissettes [the parents] and two of their four children, Paul Brissette and Cynthia Parenteau, met at [Attorney] Ryan’s office to discuss the Brissettes’ desires to sell the South Hadley home and to buy property located in Springfield. They discussed the prospect of putting the Springfield property in the names of Paul and Cynthia. Ryan told the Brissettes that if they reserved life estates in the Springfield property, they could be ineligible for Medicaid if they applied any time within five years of getting the life estates. He also told them that if they took life estates in the Springfield property, there could be a Medicaid lien against that property when they died. There was evidence that the Brissettes asked about “protection,” but Ryan told them that he did not feel that the Brissettes needed protection because they could trust their children to do what they wanted them to do. In reliance on Ryan’s advice, the Brissettes decided that the Springfield property would be bought with their money  but put in Paul’s and Cynthia’s names, and that the Brissettes would not have life estates in the Springfield house.

After her husband’s death. Mrs. Brissette concluded she wished to own “her” home in her own name, but the children declined to re-convey the property to her. 

During the malpractice trial, Lawyer Ryan conceded his advice about the effect of a life estate on Medicaid and/or a Medicaid lien was wrong, and expert witnesses also testified that the incorrect Medicaid advice was “below the standard of care applicable to the average qualified attorney advising clients for Medicaid planning.”

Expert testimony established that it “would have been possible to structure the transaction using a testamentary power of appointment which would have given the [parents] the right to change the remaindermen and which would have provided the [parents] with leverage over [their children].”   

At trial, the jury found the attorney liable for negligence and set damages at $100k.  However, the trial judge granted judgment notwithstanding the verdict, in favor of the attorney, on the ground that because the children testified they would never “evict” their mother, there was no proof of actual damages to their mother.

The appellate court disagreed, noting that through the series of transactions, the mother lost her right to lease, mortgage or sell the house herself, meaning “that she did not obtain something of value that she otherwise would have.”  The appellate court reinstated the jury’s verdict.

In a final footnote in the case, the appellate court observe that it might be possible to argue that the “amount” of damages was speculative.  However, the court found that issue was not before them on appeal. 

For the full ruling, see Brissette v. Ryan, 2014 WL 10575440, __ N.E.3d ___ (Ct. App. Mass., October 29, 2015).