Caldwell v. Basler, Inc.

BROWN (Gerald), J.

Janet Caldwell, as executrix of the Estate of Editha P. Pierce, deceased, brought suit against Basler, Inc., doing business as Basler Home, for the sum of $11,672.55. Judgment favored the plaintiff and defendant has appealed.

The facts are not in controversy. Mrs. Pierce entered Basler Home November 12, 1958, as a month-to-month resident. Beginning in January 1959, and assisted by her financial advisor, Mrs. Pierce negotiated with Basler Home for a life care contract. On April 4, 1959, a life care contract was executed by the parties. At that time Mrs. Pierce was 85 years of age, had a life expectancy of 7.11 years, was in fair health, ambulatory, and neither deranged in mind nor afflicted

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with disease. The contract provided that she pay $15,525 for life care, $12,000 cash and the remaining $3,525 to be payable from her estate on her death.

Basler Home was licensed by the Department of Social Welfare of the State of California to enter into life care contracts, the form of its basic life care contract had been approved by the department, and in particular, the contract with Mrs. Pierce had been approved. It provided in substance for life care of Mrs. Pierce; ordinary nursing without extra cost; from the sum paid by Mrs. Pierce, the home was required to maintain a reserve fund in an amount required by law and the department for the protection of Mrs. Pierce; should any reserve funds remain on her death they must be retained by the home in the general life care contract fund for the use of other life members; the home could dismiss Mrs. Pierce for cause, upon 30 days ’ notice; and either party could terminate the agreement within 90 days of admission, in which case Mrs. Pierce would be refunded the amount she paid less the cost of her care to that time.

Mrs. Pierce died May 19, 1959. At that time neither party had terminated the agreement. The home thereupon transferred the unused funds in Mrs. Pierce’s account to the general life care fund for the care of the other life care residents. No claim was made by the home against the estate for the balance due under the contract. On June 20, 1959, the home received a notice from plaintiff, in her capacity as special administratrix of Mrs. Pierce’s estate, purporting to terminate the contract and demanding a refund of the amount paid less charges for care to the time of death. The sum of $11,672.55 was stipulated as the amount due in the event plaintiff prevailed.