In this proceeding to judicially settle the Public Administrator's account process was served upon the respondent nursing home, directing it to show cause why interest of $33,091.17, which was paid by the Public Administrator on a claim filed by the respondent nursing home, should not be returned to the estate. The nursing home (objectant) filed objections to the relief requested.

The decedent died intestate on February 23, 2004. Her sole distributee is a son under a disability who is represented by a Mental Hygiene Law article 81 guardian of his person and property. The account reflects that the decedent's sole asset was real property and reports a gross estate of $352,470.07.

The objectant provided services to the decedent from April 4, 1997 through October 21, 1998, when she was discharged. During that time, the decedent was eligible for Medicaid benefits. However, the decedent was obligated to pay her net available Medicaid income (NAMI) to the objectant and Medicaid deducted the NAMI amounts from the payments it made to the objectant. The decedent failed to pay the required NAMI payments and there was an outstanding principal amount of $49,935.56 owed by the decedent which the nursing home could not recover from any governmental agency (see Florence Nightingale Nursing Home v Perales, 782 F2d 26 [1986], cert denied 479 US 815 [1986]). On December 10, 1998, almost two months after her discharge, the decedent was credited $800 toward that outstanding principal amount based on a payment she [*2]allegedly made. In October, 2004, the objectant filed a claim with the Public Administrator seeking $83,026.73, consisting of the outstanding principal amount of $49,935.56, plus interest of $33,091.17. Although the Public Administrator paid the claim in full, he now takes the position that the nursing home was not entitled to interest.

The parties agreed that the matter would be determined on papers and set a timetable for submission of the same. However, neither the Article 81 guardian for the distributee, who had indicated that she would file a memorandum of law, nor the Public Administrator filed a memorandum of law.

In its objections, the objectant alleges that: (1) although it is entitled to interest from the date of the decedent's discharge, it calculated interest only from December 10, 1998, the date of the single $800 payment, to October 11, 2004, the date it updated its claim filed with the Public Administrator; and, (2) it is entitled to statutory interest at the rate of 9% for this period, based upon the decedent's breach of contract to pay the NAMI, depriving it of the use of the principal for almost 6 years.

The uncontroverted proof demonstrates that the decedent was obligated to pay the NAMI, and a partial payment to the objectant was made by or on behalf of decedent on December 10, 1998. Based upon the facts presented, the objectant has demonstrated that the decedent breached the contract by her failure to timely pay the requisite NAMI (see Prospect Park Nursing Home, Inc. v Goutier, 12 Misc 3d 1192[A] [2006]). Conseuqently, the objectant is entitled to an award of interest for the breach of contract from the earliest ascertainable date the cause of action existed (CPLR 5001[a][b]). In addition, there is an implied contract to pay interest on an outstanding debt for services rendered (see Davison v Klaess, 280 NY 252, 258 [1939], citing Backwell v Finlay, 233 NY 367), and an estate is subject to paying the same interest on a claim as the decedent would have been obligated to pay during her lifetime (see Matter of Sheehan, 15 Misc 3d 1121[A] [2007], citing 6 Warren's Heaton, Surrogate's Court Practice, § 71.07[5], at 71-86 [7th ed rev]).

Accordingly, the objectant is entitled to retain the interest paid by the Public Administrator on the principal amount of its now-satisfied claim. Accordingly, the objections to the branch of the petition seeking a return of the interest paid are sustained and this decision constitutes the order of the court denying the petitioner's claim against the objectant.

The petitioner shall update his account and settle a decree.

SURROGATE