                    IN THE COURT OF APPEALS OF TENNESSEE
                                AT NASHVILLE
                                           July 8, 2002 Session

            IN RE: THE ESTATE OF MARTHA G. SPENCER, Deceased

                       Appeal from the Chancery Court for Marshall County
                                No. 11410  J. B. Cox, Chancellor



                     No. M2001-02187-COA-R3-CV - Filed November 26, 2002


The origin of this appeal was a claim made against the Estate of Martha G. Spencer, by NHC Health
Care of Lewisburg, a skilled nursing home, for services rendered her in the amount of $25,934.54.1
After a plenary trial the Chancellor dismissed the claim upon finding that NHC was estopped from
pursuing its claim because of representations made that Ms. Spencer’s expenses were covered by
Medicare. NHC appeals. We affirm.



      Tenn.R.App.P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed;
                                    Cause Remanded

HOUSTON M. GODDARD , P.J., delivered the opinion of the court, in which HERSCHEL P. FRANKS and
D. MICHAEL SWINEY, JJ., joined.

Robert O. Binkley, Sr., Lewisburg, Tennessee, for the Appellant, NHC Health Care

Barbara G. Medley, Lewisburg, Tennessee, for the Appellee, The Estate of Martha G. Spencer

                                                   OPINION


       Although NHC raises several issues, we deem the critical issue raised is whether NHC can
be estopped when its representations to Ms. Spencer’s kin were not known by NHC to be false.




        1
                    $11,317.67 of this claim represented payments made by Ms. Spencer's supplemental carrier, which
is only owed if Ms. Spencer was Medicare eligible. NHC refunded this amount to her supplemental carrier the day
before trial but, of course, subsequent to its filing a claim including it.
      As this is a non-jury case, our review is de novo upon the record of the proceedings below;
however, that record comes to us with a presumption that the trial court's factual findings are correct.
Tenn.R.App.P. 13(d). We must honor that presumption unless we find that the evidence
preponderates against the trial court's factual findings. Union Carbide Corp. v. Huddleston, 854
S.W.2d 87, 91 (Tenn. 1993). The trial court's conclusions of law, however, are not accorded the
same deference. Campbell v. Florida Steel Corp., 919 S.W.2d 26, 35 (Tenn. 1996).

       The facts pertinent to disposition of this appeal, which were presented to the Trial Court by
way of stipulation and testimony, are relatively undisputed.

       On October 19, 1999, Ms. Spencer was admitted to NHC pursuant to a contract signed by
her niece, Emma Crutcher, who, along with her husband, Donald Crutcher, was personal
representative named in Mrs. Spencer’s will.

        Ms. Spencer died testate on February 23, 2000. During her stay at the nursing home all her
bills were paid by Medicare. Subsequently, it developed that her eligibility to receive Medicare
payments ceased because of previous payments made by Medicare for her confinement in another
nursing facility. Whereupon, Medicare withheld from NHC payments otherwise due to recoup the
payments improperly made on behalf of Ms. Spencer.

        At the time of Ms. Spencer admission, employees of NHC represented that she had coverage
for her confinement and continued to do so on numerous occasions up to and including the date of
her death. Ms. Crutcher’s testimony in this regard is as follows:

                 Q. And when you initially talked to Ms. Hudson,2 did you tell her about Ms.
           Spencer’s prior hospitalizations?3

                    A. Yes, ma’am. Me and my daughter told her about all of the stuff she had been
           in that year. We told her to check, to be sure with Medicare, to make sure how many days
           because my daughter’s a CNA. And we were going to take her home if she didn’t have
           enough days.


       2
                  Janet Hudson was Social Director for NHC.

       3
                  The brief of NH C explains those eligible for M edicare p ayments as follows:

                     Med icare pays for a person to stay 100 non-consecutive d ays in a skilled nursing facility.
           If a person is out of skilled nursing facility for more than 60 c onsecutive days, the 10 0-day bene fit
           begins anew. If a person uses a portion of the 100 non-consecutive days and returns to a skilled
           nursing facility before a break of 60 co nsecutive days, the first return day is counted as the next
           day in the 10 0 non-consecutive days. E xample: A patient is in a skilled nursing fac ility for 30
           days, discharged and not admitted to a skilled nursing facility for 70 days; the patient is entitled
           to a new 100 days; ho wever, if the patient returns to the skilled nursing facility after 45 days, the
           first day of the second admission is the 31 st day of the original 10 0 days.



                                                                   -2-
               And Ms. Hudson promised us she had enough days.

       Q.      So your daughter is a certified nursing assistant?

       A.      Yes, ma’am.

       Q.      She’s worked in a nursing home before?

       A.      Yes, ma’am.

       Q.      And you all would have taken care of her if you had known that Medicare
wasn’t going to cover it?

       A.      Yes, ma’am.

       ....

       Q.      Did she have a 60-day break in her stay?

        A.     I ain’t real sure because she had – she had a time where her TennCare was
taking her. And she – she – the lady left her in the van. And my aunt had kidney failure.
She was on a dialysis machine, and she didn’t know that she was getting too hot, and the
woman thought she was cold because she had a coat on. And she overheated and liked to
die then. So she was probably in there two days.

       Q.      In the hospital for two days?

       A.      Uh-huh.

       Q.      And would that have been in between July and September, or do you know?

       A.      I don’t really recall.

       Q.      Okay.

       A.      But it could have been. I don’t think so, but it could have been.

       ....

       Q.    Based upon your knowledge of Ms. Spencer’s prior hospitalizations, did you
tell NHC where she had been and the number of days she had been there?




                                           -3-
               A.      Well, I didn’t tell them the number of days. But I told them that they needed
        to check with Medicare. And Janet Hudson told me she had checked with Medicare, and
        she did have days.

                Q.      Now, while she was there from October until February, did you ever inquire
         again as to whether she had days left or eligible days?

                A.      Yes, ma’am. My daughter and me and my husband went up there every
         week, sometimes two or three times a week. And we asked Ms. Hudson, “Are you sure
         she’s got days?”

                         And she’d say, “I promise you, she’s got days.”

                 Q.      And the day that she died, you went up there?

                A.      Yes, ma’am. And she came running back there to console us over our loss.
         And she said, “You just made it. I called Medicare. She was two days from being out of
         here.”

                 Q.      And you were back out there several days after her death?

                A.     Yes, ma’am. We went back out there to make sure we didn’t owe them
         nothing, me and my husband and my daughter.

                 Q.      And what were you told then?

                 A.      That we didn’t owe anything.

       Notwithstanding the foregoing representations to the Crutchers, NHC did not know at that
time that Ms. Spencer had used all but three days of her entitlement to Medicare benefits.

        Tennessee Jurisprudence, Volume 11, Estoppel § 25, with appropriate case citations, states
the following:

                 § 25. Basis and Object of Doctrine. – Generally, an equitable estoppel
         arises, when one by his acts, representations or admissions, or by his silence when
         he ought to speak out, intentionally or through culpable negligence induces
         another to believe certain facts to exist and such other rightfully relies and acts on
         such belief, so that he will be prejudiced if the former is permitted to deny the
         existence of such facts.




                                                  -4-
       It is true that the cases decided by Tennessee appellate courts do not use the language
“culpable negligence.” However, it is found in a Federal District Court opinion authored by Judge
Robert L. Taylor, Sigmon Fuel Co. v. Tennessee Valley Authority, 531 F.Supp. 80 (1982).

       We believe under the particular circumstances of this case, the fact that our Supreme Court
has held "the doctrine of equitable estoppel is constantly growing,"4 and the repeated assurance that
Ms. Spencer's expenses were covered by Medicare, NHC was egregiously negligent and it was
appropriate to apply the doctrine of estoppel.

       We say this because NHC dealt with Medicare on practically a daily basis and would be
expected to have much more knowledge of the rules and regulations promulgated by Medicare than
Ms. Spencer or the Crutchers.

        We accordingly concur in the findings of fact and conclusions of law of the Chancellor and
affirm the judgment entered below.

        For the foregoing reasons the judgment of the Trial Court is affirmed and the cause remanded
for collection of costs below. Costs of appeal are adjudged against NHC Health Care, Lewisburg.



                                                    _________________________________________
                                                    HOUSTON M. GODDARD, PRESIDING JUDGE




        4
                  Giles Cou nty Bo ard of Education v. Hickman, 547 S.W.2d 944 (Tenn. 1977), quoting with approval
from Saylor v. Trotter, 255 S.W . 590 (Tenn. 192 3).

                                                       -5-
