Nursing Home May Pursue Tortious Interference With Contractual Relationship Claim Against Discharged Resident's Son

A New Jersey appeals court allows a nursing home to pursue a tortious interference with contractual relationship claim against a discharged resident's son after the son refused to move his mother out of the nursing home or allow her to discuss her removal with nursing home staff. The Orchards at Bartley Assisted Living v. Schleck (N.J. Super. Ct., App. Div., No. A-3481-17T1, March 13, 2019).

Patricia Schleck's son, Patrick Schleck, was her agent under a power of attorney. Ms. Schleck entered a nursing home and signed a resident agreement that stated that if she did not have sufficient funds to pay the nursing home fees, the nursing home could discharge her. Ms. Schleck applied for Medicaid benefits. While the application was pending, the nursing home issued a discharge notice to Ms. Schleck for unpaid charges. Mr. Schleck refused to move his mother out of the facility and allegedly told her not to participate in discussions with the nursing home staff about her discharge. Ms. Schleck eventually qualified for Medicaid, but the nursing home did not accept Ms. Schleck as a Medicaid resident, and she left the facility.

The nursing home sued Mr. Schleck for breach of fiduciary duty and tortious interference with contractual relationship, seeking to recover fees that were not covered by Medicaid. Mr. Schleck filed a motion to dismiss, which the trial court granted. The trial court reasoned that even if Mr. Schleck engaged in the behavior alleged, it didn't satisfy the improper and unjustified elements of the breach of fiduciary duty or tortious interference claims. The nursing home appealed.

The New Jersey Superior Court, Appellate Division, affirms the dismissal of the breach of fiduciary duty claim, but allows the tortious interference with contractual relationship claim to continue. The court notes that there is a balancing test to determine whether someone "intentionally and improperly interferes with another's prospective contractual relationship." The court rules that Mr. Schleck's behavior in refusing to move his mother and discouraging her from discussing removal with the nursing home "may satisfy the unjustified element under this balancing test." According to the court, "Mr. Schleck's conduct may have been intended to benefit Mr. Schleck and to injure [the nursing home]."

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