            If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                 revision until final publication in the Michigan Appeals Reports.




                          STATE OF MICHIGAN

                           COURT OF APPEALS



In re MICHAEL DECLERCK.


ROSEMARY DECLERCK,                                                 UNPUBLISHED
                                                                   June 18, 2019
               Petitioner-Appellee,

v                                                                  No. 343483
                                                                   Genesee Probate Court
DEPARTMENT OF HEALTH AND HUMAN                                     LC No. 18-209083-PO
SERVICES,

               Respondent-Appellant.


Before: METER, P.J., and JANSEN and M. J. KELLY, JJ.

PER CURIAM.

       Respondent, the Department of Health and Human Services (DHHS), appeals as of right
a protective order entered by the probate court requiring that all of Michael DeClerck’s income
be paid to his wife, Rosemary DeClerck, and terminating Michael’s rights to Rosemary’s estate.
Because the probate court abused its discretion by issuing the protective order, we vacate the
order and remand for further proceedings.

                                       I. BASIC FACTS

        Michael is an institutionalized individual who receives Medicaid benefits to cover part of
his healthcare costs. His spouse, Rosemary, sought a protective order under the Estates and
Protected Individuals Code (EPIC), MCL 700.1101 et seq., claiming that she lacked sufficient
income to meet her needs and asserting that she was entitled to support from Michael. The
DHHS opposed the petition, arguing that Rosemary did not exhaust available administrative
remedies regarding Medicaid determinations, that the proposed order would leave Michael
impoverished and unable to meet his own obligations, and that Rosemary did not need additional
income from Michael. Following two hearings on the matter, the probate court granted the
petition and entered a support order requiring Michael to pay Rosemary all of his Social Security
benefits and pension income, including cost of living increases.


                                               -1-
                     II. PROTECTIVE ORDER OF SPOUSAL SUPPORT

                                 A. STANDARD OF REVIEW

        The DHHS first argues that, under In re Estate of Vansach, 324 Mich App 371; 922
NW2d 136 (2018), probate courts may not issue protective orders of spousal support without
first considering the institutionalized spouse’s needs and patient-pay obligations under
Medicaid.1 We review probate court decisions on the record, not de novo. Id. at 385. The
court’s factual findings are reviewed for clear error, and its “dispositional rulings, including a
decision to enter a protective order, are reviewed for an abuse of discretion.” Id. A probate
court’s failure to operate within the correct legal framework constitutes an abuse of discretion.
Id. at 385, 402.

                                         B. ANALYSIS

        The outcome of this case is governed by this Court’s recent decision in Vansach. That
case clarified that although “a probate court has the authority to enter a protective order
providing support for a community spouse whose institutionalized spouse is receiving Medicaid
benefits,” that authority “does not include the power to enter an order preserving the community
spouse’s standard of living without consideration of the institutionalized spouse’s needs and his
or her patient-pay obligations under Medicaid.” Id. at 376-377. The Vansach Court explained
that in order to issue a protective order under MCL 700.5401(3)(b), “[t]he spouse requesting
support must make a showing of need—not merely a desire to maintain a current standard of
living without regard to the other spouse’s circumstances.” Vansach, 324 Mich App at 396. The
Court reasoned:

       Whether the community spouse is “entitled” to “support” will depend on all the
       facts and circumstances, including the incapacitated individual’s financial means
       and ability to provide assistance. For instance, when crafting a protective order,
       the probate court should consider the protected individual’s “foreseeable needs,”
       the interests of the protected individual’s creditors, and the interests of the
       protected individual’s dependents. See MCL 700.5408. A probate court
       considering a protective order should also bear in mind that the protected
       individual has the right to acquire, enjoy, and dispose of his or her own property.
       [In re Conservatorship of] Bittner, 312 Mich App [227,] 242[; 879 NW2d 227
       (2015)]. Weighing the various concerns will obviously depend on the facts of
       each case, but a protected individual’s rights and interests can never be totally
       disregarded in an effort to provide for his or her spouse. In other words, a
       community spouse cannot make a showing of “need” and is not “entitled to the
       [incapacitated] individual’s support” merely to maintain his or her current



1
  “In the Medicaid context, and as used in this opinion, the term ‘community spouse’ refers to a
spouse living at home, while the term ‘institutionalized spouse’ refers to a spouse who has been
institutionalized, usually in a nursing home.” Vansach, 324 Mich App at 376 n 2.


                                               -2-
      lifestyle when providing money to the spouse will leave the incapacitated
      individual entirely destitute and unable to meet his or her own needs.

               In cases in which an institutionalized spouse is receiving Medicaid
      benefits, weighing both spouses’ needs and circumstances requires consideration
      of those needs and circumstances as they actually exist under Medicaid. . . . .
      Consequently, along with any other relevant facts and circumstances, probate
      courts must consider the [community-spouse monthly income allowance]
      CSMIA[2] and any other resources available to the community spouse, the
      community spouse’s “need” for additional support beyond the CSMIA, and the
      institutionalized spouse’s need for income to meet the patient-pay amount related
      to his or her medical care under Medicaid. Importantly, a probate court’s
      consideration of the couple’s circumstances in light of Medicaid cannot involve a
      fallacious assumption that the institutionalized spouse should receive 100% free
      medical care under Medicaid or an assumption that a community spouse is
      entitled to maintain his or her standard of living. In actuality, Medicaid is a need-
      based program, and a Medicaid recipient is obligated to contribute to his or her
      care. See Mackey [v Dep’t of Human Srvs], 289 Mich App [688,] 693[; 808
      NW2d 484 (2010)]. The unfortunate reality is that medical costs and increased
      expenses related to illness may affect both spouses, see Mathews v De Castro,
      429 US 181, 188; 97 S Ct 431; 50 L Ed 2d 389 (1976), and even with the
      enactment of the spousal-impoverishment provisions, Medicaid provides no
      guarantee that a community spouse will enjoy “the same standard of living—even
      if reasonable rather than lavish by some lights—that he or she enjoyed before the
      institutionalized spouse entered a nursing home.” Balzarini v Suffolk Co Dep’t of
      Social Servs, 16 NY3d 135, 144; 944 NE2d 1113 (2011). “The trade-off for a
      married couple, of course, is that the institutionalized spouse’s costly nursing
      home care is heavily subsidized by the taxpayer. . . .” Id. Having made this
      trade-off, a community spouse is not entitled to have the probate court simply
      disregard Medicaid, ignore the institutionalized spouse’s patient-pay amount, and
      impoverish the institutionalized spouse in order that the community spouse may
      maintain his or her standard of living without regard for the institutionalized
      spouse’s needs and circumstances as they exist under Medicaid. Such a
      procedure is not contemplated by EPIC, and it is a gross misapplication of the
      probate court’s authority to enter an order when money is “needed” for “those
      entitled to the [incapacitated] individual’s support.” See MCL 700.5401(3)(b)
      (emphasis added). Instead, the actual Medicaid-related realities facing the
      couple—all of Medicaid’s pros and cons—become part of the facts and
      circumstances that the probate court must consider when deciding whether to
      enter a support order for a community spouse under MCL 700.5401(3)(b).


2
  Under Medicaid, the CSMIA is designed to ensure that a community spouse has sufficient
income to meet their minimum monthly maintenance needs allowance (MMMNA). See
Vansach, 324 Mich App at 381; 42 USC 1396r-5(d)(2).


                                              -3-
       Ultimately, when a community spouse’s institutionalized spouse receives
       Medicaid benefits and has a patient-pay amount, the community spouse seeking a
       support order under EPIC must show by clear and convincing evidence that he or
       she needs money and is entitled to the institutionalized spouse’s support despite
       the CSMIA provided under Medicaid and the institutionalized individual’s
       patient-pay amount under Medicaid. [Vansach, 324 Mich App at 397-399.]

        Here, the probate court entered an order awarding Rosemary 100% of Michael’s monthly
income, thereby leaving Michael without sufficient income to support himself. In doing so, the
court reasoned:

       It is clear from the record that without the protective order, the joint assets of
       Rosemary and Michael DeClerck will be depleted to the point that Rosemary will
       not be capable of supporting herself as she has supported Michael.

Absent from the court’s findings is any indication that it considered (1) whether Rosemary
needed—as opposed to simply wanted—money and (2) whether Rosemary was entitled to
Michael’s support despite the CSMIA provided under Medicaid and Michael’s patient-pay
amount under Medicaid. Because those findings are necessary before a probate court may enter
a protective support order under MCL 700.5401(3)(b), we conclude that the probate court abused
its discretion by entering the order awarding Rosemary 100% of Michael’s monthly income.
Accordingly, we vacate the court’s order and remand for further proceedings consistent with the
legal framework set forth in Vansach. See Vansach, 324 Mich App at 391-399.3

       III. JURISDICTION AND EXHAUSTION OF ADMINISTRATIVE REMEDIES

                                 A. STANDARD OF REVIEW

       The DHHS also argues that Rosemary was required to exhaust administrative remedies
available before seeking a protective order from the probate court, and that the probate court
should have declined to exercise jurisdiction until all administrative remedies were exhausted.
Whether a court has jurisdiction is a matter of law that this Court reviews de novo. Vansach, 324
Mich App at 384.




3
  In its brief on appeal, the DHHS also suggests that no evidence was presented related to
Michael’s mental state or mental abilities so as to satisfy the requirement in MCL
700.5401(3)(a). However, at the hearing, the DHHS conceded that Michael was a vulnerable
adult and would meet the criteria for a conservator under MCL 700.7501(4). Generally, a party
may not intentionally relinquish an argument at the trial court level and then argue on appeal that
the resultant action was error. See People v Kowalski, 489 Mich 488, 503; 803 NW2d 200
(2011). Accordingly, we decline to consider this unraised, unpreserved argument further.


                                                -4-
                                         B. ANALYSIS

        In Vansach, the DHHS argued that the courts lacked jurisdiction to enter orders affecting
Medicaid decisions. Id. at 385-386. The Vansach Court, however, concluded that “the statutory
language governing Medicaid does not create an exclusive administrative remedy; rather, it
acknowledges the possibility of judicial spousal-support orders . . . .” Id. at 388. Further, after
reviewing the court’s authority to enter support orders under Michigan law, the Vansach Court
concluded that the probate courts had subject-matter jurisdiction to enter a protective order
allowing the distribution of income to a protected individual’s dependents and that Medicaid did
not preempt the courts’ ability to do so. Id. at 389-390. Finally, the court expressly stated that,
“Medicaid did not establish administrative remedies as the sole means of relief or abolish any
court’s jurisdiction to enter a support order.” Id. at 388. Applying Vansach to this case, we
conclude that the DHHS’s arguments as they pertain to the exhaustion of administrative
remedies and the court’s jurisdiction lack merit.

        The DHHS contends that the Vansach Court did not address whether the exhaustion of
administrative remedies under the relevant Medicaid provisions was a prerequisite to seeking a
protective order under MCL 700.5401(3). However, although the Vansach Court recognized the
general obligation to exhaust available administrative remedies before a court may exercise
jurisdiction over a matter, Vansach, 324 Mich App at 386, the court also held that the relevant
“Medicaid provisions providing for administrative proceedings do not confer exclusive
jurisdiction on the DHHS with regard to the income allocation between spouses,” id. at 386-387.
In other words, although a challenge to the Medicaid decision would require an exhaustion of
administrative remedies, the decision at issue before this Court is not a Medicaid decision. It
instead involves the issuance of a protective order under MCL 700.3401(3), and, although the
issuance of such an order can affect aspects of the Medicaid determination, it is nevertheless a
separate proceeding under which the probate court has jurisdiction. Again, “Medicaid provisions
providing for administrative proceedings do not confer exclusive jurisdiction on the DHHS with
regard to income allocation between spouses.” Id. In sum, different methods for obtaining
support from an institutionalized spouse are permitted; in this case, Rosemary sought to avail
herself of a protective order under EPIC as opposed to administratively appealing the CSMIA.
The court had jurisdiction to enter the order notwithstanding Rosemary's failure to exhaust her
administrative remedies.

        Protective order vacated and case remanded for further proceedings. The probate court
shall consider both spouses’ needs in accordance with the legal framework set forth Vansach,
324 Mich App at 384-385. We do not retain jurisdiction.

                                                            /s/ Patrick M. Meter
                                                            /s/ Kathleen Jansen
                                                            /s/ Michael J. Kelly




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