COA finds ‘extraordinary circumstances’ in spousal support, Medicaid dispute between wife, FSSA

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The Indiana Family and Social Services Administration has prevailed before the Court of Appeals of Indiana in a dispute with a woman whose spousal support order increased the amount of Medicaid funding her incapacitated husband received.

After a trial court granted Mary Weber guardianship over her husband, Clarence Weber, Mary moved for and received an order for spousal support. The order was then used to increase Mary’s allowance and offset Clarence’s income when he applied for Medicaid, which boosted the Medicaid funding he received.

Almost a year after the spousal support order was issued, FSSA moved to intervene and for relief from judgment, arguing the Morgan Superior Court’s spousal support order was contrary to law.

The trial court granted FSSA’s request to intervene but found it was not entitled to equitable relief.

Without reaching the merits of the order, the court determined FSSA was not entitled to equitable relief because Indiana Code § 12-15-2-25(d) instructed FSSA to adopt rules “setting forth the manner in which the office will determine the existence of exceptional circumstances resulting in significant financial duress,” and FSSA had yet to do so.

Therefore, the court concluded an equitable remedy “should not be available to the FSSA due to their own failure to fully comply with their statutory obligation(s), such that this dispute might have been originally avoided by having their guidance.”

On appeal, FSSA argued that the spousal support order was erroneous and that it was entitled to relief from judgment. Cross-appealing, Mary argued the court erred in granting FSSA’s request to intervene.

At the Court of Appeals, judges concluded the trial court did not err in allowing FSSA to intervene given its significant interest in the proceedings, agreed with FSSA that Indiana’s spousal-support statute does not permit an award of support in Mary’s case, and concluded that extraordinary circumstances warrant equitable relief.

“… (W)e emphasize that while post-judgment intervention is generally disfavored, extraordinary and unusual circumstances are present,” Judge Nancy Vaidik wrote. “First, the judgment entered here did not go through any sort of adversarial proceeding. … Second … the plain language of the spousal-support statute does not provide for an award of support in the Webers’ situation.

“Finally, FSSA cannot challenge the order through its own internal process by adjusting the amount of the community spouse monthly income allowance since it is required to honor court-ordered spousal awards,” Vaidik continued. “… In this uncommon and extraordinary situation — where FSSA would otherwise be bound to honor a spousal-support order for which there was no basis in law — FSSA has the right to intervene, even post-judgment, in order to protect its interests in the only way it can.”

Thus, judges opined it was erroneous for the trial court to grant Mary spousal support and reversed and remanded, finding FSSA entitled to equitable relief.

“As noted above, these are unique circumstances,” Vaidik wrote. “FSSA had no opportunity to challenge this order before it was made final — nor did any party challenge it in any way before it was made final — and it does not appear FSSA has an alternative means of doing so now.

“And this order has significant impact on FSSA, as it compels them to pay for amounts of Clarence’s care that it would not otherwise be obligated to provide,” she continued. “We believe FSSA has shown extraordinary circumstances warrant relief here.”

Despite the outcome of the appeal, the COA noted Mary still has a remedy available to her.

“… (C)larence was found eligible for Medicaid in November 2019, at which time both federal and state Medicaid law permit either Clarence or Mary to seek a Medicaid determination that Clarence is entitled to retain for Mary a community spouse income allowance higher than the minimum monthly needs allowance due to exceptional circumstances resulting in significant financial duress,” Vaidik wrote. “… If they are dissatisfied with FSSA’s determination on that issue, they may appeal that determination through the administrative appeals process and/or the courts.”

The case is In re the Guardianship of Clarence E. Weber (an Incapacitated Adult) Indiana Family and Social Services Administration v. Clarence E. Weber, Mary M. Weber, 21A-GU-2680.

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