Larisa's Home Care, LLC v. Nichols-Shields

Summary

The Oregon Supreme Court held that unjust enrichment is generally available when a party obtains discounted services through fraud, and that a defendant may be liable for the reasonable value of those services. The court concluded that the decedent’s estate was legally responsible for false Medicaid-eligibility representations made by the decedent’s agent and was unjustly enriched by the resulting lower rates. It reversed the Court of Appeals and remanded for consideration of whether Medicaid law nevertheless barred recovery.

Holdings

1. The Jaqua formula and its three factors are inadequate as an all-purpose statement of unjust-enrichment law. Oregon courts should examine established legal categories of unjust enrichment reflected in Oregon case law and other authorities rather than apply the Jaqua checklist categorically.
2. A person who obtains discounted services through fraud is generally unjustly enriched to the extent of the reasonable value of the services, and the person or the person's estate may be subject to restitution.
3. The undisclosed asset transfers would have disqualified Prichard from Medicaid when she applied, because the exception for a fraud victim whose assets had been recovered did not apply at that time. The false representations therefore enabled her to receive care at Medicaid rather than private-pay rates.
4. Prichard was legally responsible to third parties for Gardner's false representations because Gardner acted as her agent under a power of attorney that remained effective despite her later disability or incompetence.
5. ORS 410.070 does not bar an equitable action by a Medicaid service provider seeking recovery from a recipient or estate that obtained benefits through fraud.

Questions Presented

1. Whether an adult foster-care provider may recover the reasonable value of discounted services through unjust enrichment when the recipient obtained the discounted rate by fraud.
2. Whether the Court of Appeals' Jaqua formulation and three-factor test adequately state the elements of unjust enrichment.
3. Whether undisclosed asset transfers would have disqualified Prichard from Medicaid when she applied for benefits.
4. Whether Prichard was legally responsible to third parties for false representations made by Gardner under her power of attorney despite her incapacity.
5. Whether Medicaid statutes, administrative rules, or the provider's contract with the Department of Human Services barred the provider's restitution claim.

Disposition

reversed_and_remanded