Claims Against an Estate for Care Rendered to a Decedent
Claims Against an Estate for Care Rendered to a Decedent
by Lindsey K. Warren, David W. Kirch, David S. Anderson
Reproduced by permission. ©2004 Colorado Bar Association,
33 The Colorado Lawyer 93 (November 2004). All rights reserved.
During a decedent’s last illness, in-home care often is provided by a family member or friend. This article focuses on various legal arguments and issues that arise when the caregiver attempts to recover the value of his or her services from the decedent’s estate.
It happens all the time. A senior family member becomes ill and insists on staying in the home. Funds are not available or liquid enough to pay for in-home care, which averages between $4,300 and $7,300 per month.1 Often, a child, other relative, or friend becomes the senior family member’s primary caregiver, homemaker, nurse, and companion. Other relatives may not participate because they live far away, cannot afford to help, are too busy to assist, or simply choose not to be involved.
The time required and care the senior family member needs may be so significant that the person providing the care and services must take considerable time off work or quit a job altogether. The time frame for such extensive care may last from a few weeks to several years.
After the senior family member’s death, it is common for such a care provider to face obstacles when attempting to recover from the estate. Other relatives may refuse to allow compensation, and the care provider may be forced to litigate his or her claim against the estate.
This article addresses the most common legal theories for recovery as a claim against an estate for the value of caregiving services rendered prior to a decedent’s death. The article also addresses an unsettled legal issue regarding whether Colorado has an evidentiary presumption that services rendered by a family member are gratuitous. In addition, the article highlights evidence that courts have found persuasive when awarding compensation to a caregiver.
Finally, although this article does not address the issue, practitioners in this area should be sensitive to the possibility that the caregiver could have taken advantage of a confidential relationship with the decedent. In such a capacity, a caregiver has potential to unduly influence the decedent to make inter vivos or testamentary gifts.2
Overview of Terms and Causes of Action
Courts and commentators have notoriously blurred some of the key terms in this area of the law. For example, different terms may be used interchangeably; a term may not accurately describe the nature of the cause of action; and, in certain instances, the courts may look for similar facts to determine if the elements of the cause of action have been met.
Thus, as a starting point, but not to set forth the prima facie elements of a particular cause of action, this section of the article defines key terms used throughout. Each term or cause of action is more fully developed later in the article.
Express Contract: This is a traditional contract, with an offer, consideration, and acceptance. An express contract may be written or oral.
Contract Implied in Fact: A contract implied in fact is sometimes stated in the reverse, as an “implied in fact contract.” Regardless of the phraseology, a contract implied in fact also is a contract—with an offer, consideration, and acceptance—but this contract is implied by the conduct of the parties, instead of their written or oral words.
Contract Implied in Law and Quantum Meruit: By contrast, a contract implied in law is not a contract. A contract implied in law is loosely interchanged with terms such as “quasi-contract,” “quantum meruit,” and “unjust enrichment,” although it appears there may be slight variations on the actual definitions of these terms (the prima facie elements). Regardless of the exact term used, the idea is that where services are provided by one person and accepted by another, the law will imply a promise to pay to avoid unjust enrichment to the recipient. The Restatement (Second) of the Law on Contracts explains clearly:
Quasi-contracts have often been called implied contracts or contracts implied in law; but, unlike true contracts, quasi-contracts are not based on the apparent intention of the parties to undertake the performances in question, nor are they promises. They are obligations created by law for reasons of justice.3
The interchangeability between the terms “quantum meruit” and “contract implied in law” is part of the reason for the confusion because quantum meruit often is used to describe more than just the equitable cause of action defined in the paragraph above. The term quantum meruit is Latin for “as much as he/she deserved.” Quantum meruit is used to describe any of the following: (1) a measure of damages—namely, the reasonable value of the services rendered; (2) a claim or cause of action for the reasonable value of services rendered; and (3) a categorical title for equitable remedies, such as unjust enrichment and contract implied in law.
Further confusion is due to the fact that these causes of action, “contracts implied in law,” ordinarily were enforced at common law. The same form of action is used that is appropriate for true contracts (assumpsit). In addition, the word “contract” is used in the name “contract implied in law,” even though it is not a true contract. This article consistently uses the term “contract implied in law,” unless the context otherwise requires one of the other interchangeable terms discussed above.
Without rehashing the first year of law school, an express contract is just that: it is “expressed” either in written or oral words between the parties. The usual requirements of offer, consideration, and acceptance are required to show there is a contract.
To demonstrate a breach of an express contract, it is useful to go to the Colorado Civil Jury Instruction (“CJI-Civ”) 30:1 for the elements of liability. Of note to the practitioner is that the jury instruction requires that the elements of liability for breach of express contract be proved by a preponderance of the evidence.4 However, at least one Colorado Supreme Court case states that “where claimant seeks to recover from the estate of a decedent under an express contract[,] clear and convincing proof is required.”5
Under the theory of express contracts, caregivers will be able to recover for the cost of their services. In the case of Tucker v. Tucker,6 a nephew provided nursing care for his ailing uncle. After the uncle died, the nephew sought the value of his services from the estate. The claim against the estate filed by the nephew was objected to by the executor and subsequently disallowed by the trial court. The Colorado Court of Appeals recognized the entitlement to recover on an implied promise, but also approved the instruction that when both parties understand that compensation should be made, an implied promise is not needed.7 Likewise, in Estate of Bennett,8 the Court of Appeals held that when a plaintiff seeks recovery for the value of services that were rendered to a decedent, alternative grounds of recovery like quantum meruit need be resorted to only in the “absence of proof of an express contract.”9
Express Contracts and
Powers of Attorney
Many persons requiring in-home care may be incapacitated. Similarly, someone else may be making decisions under a power of attorney regarding financial matters, medical care, or both. Thus, express contracts entered into by someone holding a power of attorney are worthy of discussion.
Many powers of attorney for both financial and medical matters include the right to pay persons and organizations for goods and services provided. Such documents also may grant the power to make and direct any health care and medical care decisions. In such cases, the agent can make a contract with a care provider or the agent may choose to become the care provider and pay himself or herself for those services.
Some basic guidelines imply this power even in the absence of language specifying power to compensate individuals for services provided, or when the power to make medical and health care decisions in a power of attorney document is absent. First, under a power of attorney, the agent’s main duty is to act for the benefit of the principal.10
Additionally, statutory authority may be relied on to give an agent power to enter into an express contract. CRS § 15-14-506, which governs durable medical powers of attorney, gives the agent direction to act “in conformance with the principal’s wishes that are known to the agent.” For instance, if the agent knows that the principal wishes never to be placed in a nursing home, contracting with a family member or close friend for in-home care services would seem to conform to the wishes of the principal as directed by the statute.
A more complicated issue arises when the agent is the caregiver. Effectively, the agent contracts with himself or herself to provide in-home care to the decedent. The law is not clear on whether the agent has the authority to pay himself or herself compensation for the in-home care being provided. However, these authors would argue that in Colorado, agents are entitled to “reasonable compensation” for the services they provide the principal.
Although there is no case law regarding this issue, CRS § 15-1-1302 sets forth a standard statutory form for creating a power of attorney for property and financial matters. Paragraph 5 of that form states, “My agent is entitled to reasonable compensation for services rendered as agent under this power of attorney.”11 The instructions above this statement specify that the person signing the power of attorney must strike through this sentence and initial it “if you do not want your agent to . . . be entitled to reasonable compensation for services as agent.”12
Thus, the principal must perform an affirmative act for the agent not to be entitled to reasonable compensation. This seems to imply Colorado’s default rule is that if compensation is not referred to in the power of attorney, the agent is entitled to reasonable compensation. If in-home care services are provided by the agent, it would be logical that the value of that service, perhaps based on comparisons of fees charged by local commercial providers, would be reasonable compensation. This reasoning also is supported by those few states that have addressed the issue statutorily. For example, both California and Missouri statutes specifically state that an attorney-in-fact is entitled to reasonable compensation for services rendered.13
Express Contracts and the Dead Man’s Statute
An interesting issue arises regarding how a claimant would prove an oral express contract. CRS § 13-90-102, which is commonly referred to as the “Dead Man’s Statute,”14 states, in relevant part:
(1) Subject to the law of evidence, in any civil action by or against a person incapable of testifying, each party and person in interest with a party shall be allowed to testify regarding an oral statement made by the person incapable of testifying if:
(a) The statement was made under oath at a time when such person was competent to testify;
(b) The statement is corroborated by material evidence of an independent and trustworthy nature; or
(c) The opposing party introduces evidence of related communications. . . .
As revised effective July 1, 2002, the Dead Man’s Statute now applies only to the oral statements of the decedent.15 Thus, the claimant trying to prove an oral express contract is only allowed to testify as to those oral statements by the decedent evidencing the express contract if one of the narrow exceptions set forth in (1)(a) through (c), above, applies. Written communications of the decedent are admissible under the new statute.16
If the conundrum is not obvious, a claimant who had an oral express contract with the decedent can only prove his case by two methods. The first is evidence of a writing, which would make it a written express contract. The second is by the parties’ actions, which would make it a contract implied in fact. Thus, these authors do not believe it is possible for a claimant to prove an oral express contract unless: (1) one of the three exceptions provided in the Dead Man’s Statute applies; or (2) the opposing party waives the applicability of the statute. Such analysis would apply to the enforcement of any oral contract of a decedent, not just a claimant for in-home care services provided.
Oral Contracts to Wills
A related issue to this discussion is whether the decedent orally promised to benefit, or pay back, the caregiver by including the caregiver in his or her will. Although the authors are aware of at least one state that does validate an oral contract to will, Colorado does not.17
CRS § 15-11-514 specifies the three ways a contract to will may be established. All three require a writing; therefore, oral contracts to wills are not recognized in Colorado.
Contract Implied in Fact
A 1996 Colorado Court of Appeals case addressed the differences between an express contract and a contract implied in fact. The court stated:
There is little fundamental difference between an express contract and a contract implied in fact. An express contract is one evidenced by the parties’ words, while a contract implied in fact arises from the parties’ conduct. In either case, however, the words or conduct must evidence a mutual intention by the parties to contract with each other.18
According to In re Estate of Murphy, “there can be no implied contract where there is an express contract between the parties in reference to the same subject matter.”19 Therefore, a party seeking recovery for the value of his or her services needs to rely on an implied contract (contract implied in fact) only if there was no express contract or an express contract is held invalid.
CJI-Civ 30:14 addresses the means to find a contract implied in fact for services rendered. According to CJI-Civ 30:14, all of the following must be proved by a preponderance of the evidence:
1. The plaintiff rendered services to the “defendant.” In the context of an estate, the defendant would be the decedent.
2. The plaintiff did so without a specific agreement as to payment, but with the reasonable expectation that he or she would be paid the reasonable value of the services by the defendant.
3. The defendant requested or accepted the services, expecting to pay for them or under such circumstances that he or she knew, or reasonably should have known, that the plaintiff expected to be paid.
4. The plaintiff can show the reasonable market value of the services rendered.20
When examining the conduct of the parties to find a contract implied in fact, courts seem to focus on the reasonable expectations of the parties.21 Courts look for “extraordinary services, care or commitment such that a reasonable person would expect to pay for those services” to determine the reasonable expectations of the parties.22 For instance, in a Denver Probate Court case, extraordinary care or commitment were not found in Estate of Johnson,23 where a niece spent only three hours a day with her aunt, never spent nights with her aunt, and only prepared meals and administered eye drops.24
The more extraordinary the care provided by the caregiver, the greater the significance. It puts the person receiving the care on notice that the services being received are not free. It also gives the caregiver the reasonable belief that he or she will be compensated for such extraordinary service. These two points together—notice to the recipient that the services are not free and the reasonable belief of the caregiver of compensation—form the mutual intention to contract needed for a contract implied in fact.
Aside from the extraordinary nature of the service, other conduct may show the mutual intent required for a contract implied in fact. For example, if there is evidence to show the in-home care provided was requested by the decedent, such request may be sufficient to raise an implied promise to pay.25
In addition, conduct between the two parties during the time that care is provided may be vastly different from the relationship and interactions prior to the care arrangement. Essential services provided by the caregiver, such as feeding, bathing, changing diapers, and administering medication often are provided by professional in-home care services. These various examples of conduct between the caregiver and recipient can demonstrate a mutual intent to contract and, therefore, a reasonable expectation of payment such that a contract implied in fact will be found.
Contract Implied in Law
For purposes of this section, the terms “contract implied in law” and “quantum meruit” are interchangeable. Whether the doctrine of contract implied in law will be applied does not depend on the existence of a contract, either express or implied in fact. Instead, it is used to avoid the unjust enrichment of the decedent, even though there was no actual agreement to pay for the benefit conferred.26 To recover under a theory of contract implied in law (unjust enrichment, quasi-contract), the plaintiff must prove that
(1) at plaintiff’s expense (2) defendant received a benefit (3) under circumstances that would make it unjust for defendant to retain the benefit without paying.27
The scope of this remedy is quite broad in part because of the broad definition of “benefit.” A benefit may be conferred upon another “not only where he [or she] adds to the property of another, but also where he [or she] saves the other from expense or loss. The word ‘benefit,’ therefore, denotes any form of advantage.”28
In the situation of a family member or friend performing in-home care services, large amounts of money may be saved for the decedent, because it obviates the need for placement in a nursing home or the provision of professional in-home care. As previously noted, the average cost of twenty-four-hour in-home care ranges from $4,300 to $7,300 per month, depending on the services required. Obviously, that can add up quickly.
In a Colorado case on point, In re Estate of Roddy,29 the Court of Appeals allowed a niece to recover the value of in-home care services performed for her aunt under a contract implied in law.30 The court upheld the trial court’s finding that if the niece “[had] not rendered those services, the decedent would have had to have someone render those services” and, thus, the estate was saved a minimum of $2,000 per month during the aunt’s illness.31 This demonstrated the “benefit” conferred upon the decedent. The Roddy court found that it would be inequitable for the decedent to retain the services without payment to the niece and allowed recovery, although the services were rendered for only five months.32
However, according to the Colorado Court of Appeals, “the mere fact that a benefit has been bestowed and is appreciated is not sufficient to give rise to a claim for unjust enrichment.”33 Instead, it also must be unjust for the recipient to retain the benefit without payment.34 When determining whether it is inequitable for the decedent to retain the benefit conferred, courts will look at many of the same things previously discussed, such as the extraordinary nature of the services rendered and the length of time care was provided.
This appears to be an area where contracts implied in law blend with contracts implied in fact. At a point, the court will say that the conduct of the parties rises to the level of finding a contract implied in fact. This is because the facts of the case demonstrate such extraordinary care that the recipient should have known that the services rendered were not free, and the reasonable expectations of the parties was that payment for the services would occur.
Presumption of Gratuity
Many states have an evidentiary rebuttable presumption that services rendered to a family member are gratuitous in nature, so the care-provider cannot recover.35 However, in states with such a presumption, these are not always hard and fast rules. In West Virginia, for example, the mere fact that persons are related by “blood”36 is not itself enough to trigger the presumption.37 The presumption in that state does not apply where parties, even though related by blood, are not living together as members of the same family.38 However, in West Virginia, the presumption can be applied to persons who, even though not related by blood, live together in a family relationship at the time the services were rendered.39 Likewise, Minnesota will apply the presumption, regardless of whether the persons are related, if they live together in a family relationship.40
It should be noted that this presumption of gratuity is applied only in the absence of a contract between the parties. Further, the contract can be either an express contract or a contract implied in fact.41
It is not entirely clear from case law whether Colorado has such a presumption. No Colorado case appears to expressly reject or accept a presumption of gratuity. Nevertheless, the language in some Colorado cases is not entirely clear on this issue. For example, in Tucker,42 the Colorado Court of Appeals found that the caregiver, who had cared for his uncle, was entitled to be paid for services rendered. The court stated that
there was nothing in the relation existing between claimant and his uncle, the deceased, from which the law presumes the services of the nephew to have been gratuitous.43
The claimant in the Tucker case resided in Missouri and the uncle lived in Colorado prior to services being rendered, and as stated above, living together in one household as a family is one of the requirements other states use to apply a presumption of gratuity.
In Mitchell v. Sheets,44 an express contract existed between the decedent and the claimant’s father that the claimant would care for the decedent and he would “pay her well.”45 The Colorado Supreme Court held that there was enough evidence to overcome the defendant’s assertions that a presumption of gratuity existed due to the family relationship.46
Two other Colorado cases, neither of which involves a blood relative providing services to the decedent, seem to indicate that a reason for not imposing a presumption of gratuity, as asserted by the defense, was because the caregiver and decedent were not relatives.47 In one of those cases, In re Estate of Murphy,48 the Colorado Supreme Court stated, “the asserted defense that the services of claimant were rendered gratuitously might have more force had claimant been a close relative of decedent.”49
The only cases that the authors could find in Colorado directly on point are two Denver Probate Court cases (obviously, without precedential value) that address whether Colorado has the presumption of gratuity.50 In the earlier of the two cases, the court specifically declined to adopt the presumption, but added that the
strength or weakness of the relationship between a plaintiff and a defendant bears upon the reasonableness of any belief a defendant may have had regarding the cost, if any, of the services.51
The later case involved a claim against the estate for services rendered by a claimant who arguably was the common law spouse of the decedent. The probate court seemed to accept the presumption of gratuity and cited various cases from other jurisdictions that dealt with the applicability of the presumption in marital or quasi-marital relationships.52 The probate court, however, pointed out again that it was unaware of any Colorado case that expressly adopts the presumption.53
Although it is not entirely clear whether Colorado has adopted the presumption of gratuity, the Colorado courts have and will examine the closeness of the relationship between the parties. Such an examination is helpful in determining whether: (1) there are reasonable expectations to be paid or to pay, as in the case of a contract implied in fact; or (2) it would be unjust not to pay for the benefit rendered, as in the case of a contract implied in law. However, like states that apply a presumption of gratuity, an express contract removes any reasonable expectation not to pay or receive payment for services.54
The closeness of the blood relationship bears only on the reasonableness of the plaintiff’s and defendant’s expectations of payment. As previously discussed, other factors, such as the nature of the service, also should be considered in determining reasonableness. Extraordinary service and commitment that does not normally exist among family members may be sufficient to dismiss the notion that a family relationship would cause the parties to reasonably believe the services were performed without the expectation of receiving payment.
Evidence in Support of Caregiver
Answering “yes” to the questions below will strengthen a case based either on: (1) a contract implied in fact, to show the expectation of payment was reasonable; or (2) a contract implied in law, to show that it would be unjust not to compensate for the benefit received.
1. Were the services provided by the claimant a type for which one customarily pays?55
2. Would a stranger have had to render those services if the family member had not?56
3. Specifically, how much would it have cost to have a non-family member provide the same services?57
4. Was there a sense of contractual obligation to the claimant by the decedent?58
5. Is there any evidence that the claimant intended to charge the decedent?59
The evidence should demonstrate that the expectation of payment was reasonable, given the extraordinary nature of the services provided and nature of the relationship of the parties.
The case law in Colorado gives claimants several causes of action to recover for the services they rendered a decedent during his or her final illness. Whether the claimant can show an express contract, a contract implied in fact, or a contract implied in law, personal representatives should be sensitive to the issue and not summarily dismiss the claim, thinking there is a clear presumption of gratuity when the claimant is a family member. An awareness of these types of claims, as well as open dialogue about the circumstances surrounding and the nature of the care rendered may avoid costly litigation, which can only further decrease the value of the decedent’s estate.
1. These amounts are based on 2004 figures for Medicaid and the authors’ survey of a number of companies that provided varying degrees of in-home care.
2. See CJI-Civ-4th 34:14 through 34:18.
3. Restatement (Second) of the Law on Contracts (Philadelphia, PA: Am. Law Inst., 2002) at Comment b.
4. CJI-Civ-4th 30:1.
5. In re Murphy’s Estate, 134 P.2d 199, 200 (Colo. 1943).
6. Tucker v. Tucker, 21 Colo.App. 94, 121 P. 125 (Colo.App. 1912).
7. Id. at 21 Colo.App. 101, 121 P. 127.
8. Estate of Bennett, 529 P.2d 338 (Colo.App. 1974).
9. Id. at 339.
10. King v. Bankerd, 492 A.2d 608, 613 (Md. 1985).
11. CRS § 15-1-1302.
13. Cal. Prob. Code 4204; Mo. Rev. Stat. 404.725.
14. For a discussion of this statute, see Tucker, Darling, and Hill, “The New Colorado Dead Man’s Statute,” 31 The Colorado Lawyer 119 (July 2002).
15. The prior statute excluded both written and oral testimony. Id. at 120.
16. CRS § 13-90-102.
17. CRS § 15-11-514. West Virginia recognizes an oral contract to will. Gibson v. McCraw, 332 S.E.2d 269, 273, 274 (W.Va. 1985), citing Lantz v. Reed, 89 S.E.2d 612 (1955).
18. DCB Constr. Co., Inc. v. Cent. City Dev. Co., 940 P.2d 958, 961 (Colo.App. 1996), aff’d,
DCB Constr. Co. v. Cent. City Dev. Co., 965 P.2d 115, 119-20 (Colo. 1998).
19. Murphy, supra, note 5 at 201.
20. CJI-Civ-4th 30:14.
21. Estate of Johnson, Denver Probate Ct. No. 94 PR 1678 (1995). Although this case does not have precedential value, it provides some guidance as to the issues considered by Colorado courts.
25. McDonald v. Thibault, 84 Colo. 470, 471, 271 P. 183 (Colo. 1928).
26. Cablevision of Breckenridge, Inc. v. Tannhauser Condo. Ass’n, 649 P.2d 1093, 1097 (Colo. 1982).
27. Salzman v. Bachrach, 996 P.2d 1263, 1265-66 (Colo. 2000) (old elements of unjust enrichment reformulated to remove test language that defendant must also appreciate and accept benefit conferred in DCB Constr. Co., supra, note 18, 965 P.2d at 119-20.
28. Cablevision of Breckenridge, Inc., supra, note 26 at 1097 (quoting from Restatement of Restitution (Philadelphia, PA: Am. Law Inst., 1937)) at § 1, Comment b.
29. In re Estate of Roddy, 784 P.2d 841 (Colo. App. 1989).
31. Id. at 845.
33. DCB Constr. Co., supra, note 18, 940 P.2d at 962.
34. Id.; but see
DCB Constr. Co., supra, note 18, 965 P.2d at 119-20 and 122 (Colorado Supreme Court removed requirement of appreciation and acceptance from test for unjust enrichment, added requirement in landlord/tenant context, that to be “unjust,” some type of improper, deceitful, or misleading conduct was undertaken by the landlord).
35. Some of these states include: California (e.g., Hill v. Estate of Westbrook, 247 P.2d 19 (Cal. 1952)); Minnesota (e.g., In re Estate of Beecham, 378 N.W.2d 800 (Minn. 1985); In re Estate of Anderson, 97 N.W. 671 (Minn. 1923)); Missouri (e.g., Martin v. Dodson, 878 S.W.2d 513 (Mo.App. 1994)); West Virginia (e.g., In re Estate of Fox, 48 S.E.2d 1 (W.Va. 1948); Furman v. Hunt, 65 S.E.2d 1 (W.Va. 1951); Ireland v. Hibbs, 22 S.E.2d 706 (W.Va. 1942)). See also 66 Am.Jur.2d Restitution & Implied Contracts § 54 (2004).
36. The authors generally intend to differentiate “blood” relatives from relatives by marriage or non-relatives. “Blood” relatives would include the legal heirs of a decedent, including an adopted child.
37. Gibson, supra, note 17 at 275.
40. In re Estate of Beecham, 378 N.W.2d 800, 802 (Minn. 1985).
41. Gibson, supra, note 17 at 276; Beecham, supra, note 40 at 803.
42. Tucker, supra, note 6.
43. Id. at 21 Colo.App. 99, 121 P. 127.
44. Mitchell, 21 P.2d 714 (Colo. 1933).
45. Id. at 714.
47. Bennett, supra, note 8 at 339; Murphy, supra, note 5 at 201.
48. Murphy, supra, note 5.
49. Id. at 201.
50. Johnson, supra, note 21; In re Estate of MacDonald, Denver Probate Ct. No. 97 PR 761 (1998).
51. Johnson, supra, note 21.
52. MacDonald, supra, note 50.
55. Cablevision of Breckenridge, Inc., supra, note 26 at 1098.
56. Roddy, supra, note 29 at 845.
58. Gibson, supra, note 17 at 276.