September 6, 2017

By: Whitney Snyder

Pennsylvania appellate courts infrequently decide choice of law issues.  It appears that since 1889 the Pennsylvania Supreme Court has only issued 36 such opinions and the Superior Court only 142.  Choice of law issues are decided under the Griffith rule, which first requires the court to examine whether a conflict between two states’ laws truly exists, and if so, to apply the law of the state that has the greater interest in application of its law based on a multi-factor, policy-based test.  Budtel Associates, LP v. Continental Casualty Co., 915 A.2d 1353, 1355 (Pa. Super. 1983).

Melmark Inc. v. Schutt, 2017 PA Super 272 (Pa. Super. Aug. 21, 2017) exemplifies just how policy-based and subjective conflict of law decisions can be.

In Melmark, the Superior Court upheld a Court of Common Pleas of Delaware County ruling that New Jersey law applied to a dispute between Melmark, Inc., a non-profit Pennsylvania residential care facility that cared for Alex, the indigent and autistic son of elderly New Jersey residents Mr. and Mrs. Shutt, regarding payment for Melmark’s services.  Alex resided at Melmark from 2001 through 2013.  Up until 2012, New Jersey public funding paid Melmark for Alex’s care, at which time the New Jersey Department of Developmental Disability (NJDDD) refused to approve Melmark’s rates.  The Shutts did not remove Alex from Melmark’s care during either the pendency of their appeal of the NJDDD’s decision or later once they voluntarily dismissed that appeal.  Melmark sued the Shutts for payment for Alex’s care from 2012-2013.

Under both Pennsylvania and New Jersey law, parents of indigent adult children are liable for the financial assistance for their indigent child.  23 Pa. C.S. § 4603; N.J.S.A. § 44:1-140.  However, New Jersey law provides an exception for elderly parents of adult children.  N.J. Stat. Ann. § 44:1-140(c).

President Judge Emeritus Stevens, specially assigned to the Superior Court and writing for the three-judge panel, rejected Melmark’s argument that there was no conflict of laws because Melmark is a private entity, whereas the New Jersey statute’s elderly parent exception to liability pertained only to situations in which a New Jersey agency was seeking contribution from family members of an indigent person who is receiving public assistance funds.  Focusing instead on the New Jersey statute’s purpose and intent, which are to exempt elderly parents from filial support responsibility for adult indigent children eligible for public assistance, the Superior Court found that the New Jersey statute is applicable, conflicts with the Pennsylvania law, and that New Jersey law should control.

After establishing that a conflict between the two laws existed, the court went on to hold that New Jersey law should apply because New Jersey has the most significant interest.  This interest is protecting elderly New Jersey parents from the financial burden of caring for the adult child who was also a New Jersey resident, as opposed to Pennsylvania’s interest, which the court described as “one involving not the provision of care for the indigent but, instead, the collection of a private debt.” Thus, the court’s policy choice that protecting elderly parents from paying for care for their indigent adult son was more important than the collection of that private debt by the non-profit care provider decided the outcome of the case.

The court also quickly dismissed Melmark’s quantum meruit (unjust enrichment) claim against the Shutts.  The court found that since the Shutts had no legal duty to care for their adult son, Melmark’s services did not benefit the Shutts and therefore the Shutts were not unjustly enriched.

About the Author:  

Witney Cropped 1437Whitney Snyder, attorney at Hawke, McKeon & Sniscak, LLP, represents clients in wide-ranging appellate matters in state and federal court.  Her practice focuses primarily on administrative agency appeals and litigation.  Prior to joining the firm Whitney interned at the Pennsylvania Supreme Court and Pennsylvania Public Utility Commission.