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Nursing Home Not Permitted to Recover Attorney’s Fees

An Oregon appeals court rules that
foreclosing on a lien to recover the costs of a resident’s care does
not allow a nursing home to also recover attorney’s fees pursuant to a
contract with the resident’s agent. King City Rehab, LLC v. Clackamas County  (Or. Ct. App., No. CV05020792; A132436, Aug. 1, 2007).

Smirnes’ son, Richard, entered into a contract with King City Rehab for
her nursing home care. The contract provided that if King City was
required to hire an attorney to pursue collection efforts, Ms. Smirnes
would pay reasonable attorney’s fees and cost. Richard paid the monthly
bill until his death two years later, after which Ms. Smirnes’ bill
remained unpaid. Senior Guardianship Assistance Program (Senior Gap)
was appointed Ms. Smirnes’ guardian until her death shortly thereafter.

City sought foreclosure on a lien on real property owned by Ms.
Smirnes’ estate for the full cost of care. Senior Gap sent a check to
King City covering the cost of care plus interest. King City refused to
accept the check, demanding that Senior Gap also pay its attorney’s
fees. Senior Gap refused. The trial court ruled that Senior Gap had
tendered full payment of the lien, and King City appealed.

Oregon Court of Appeals affirms, finding that the statutory language
unambiguously provides for a lien for the “cost of care,” and that,
despite King City’s contention to the contrary, this does not include
attorney’s fees. The court notes that where it wished to do so, the
Oregon legislature expressly allowed attorney’s fees. “[F]or whatever
reason," the court writes, "King City did not bring an action to
enforce the terms of its contract…,” instead instituting a lien
foreclosure action.

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