Molloy v. Bane

After a cerebral hemorrhage left Barbara Molloy (plaintiff) wheelchair bound and unable to speak, Molloy was placed in a New York nursing home. She began receiving medical assistance under Medicaid, a joint federal and state program providing medical services for indigent persons. When Molloy’s 18-year-old daughter died without a will, Molloy and her former husband were the daughter’s only statutory heirs. The estate had no value other than a potential recovery in a wrongful-death action. The New York Department of Social Services (DSS) (defendant), which administered Medicaid benefits in the state, requested multiple times that Molloy assign her interest in the daughter’s estate to DSS. Molloy did not do so. Instead, she renounced her interest in the estate by filing a renunciation with the relevant court. DSS concluded that by failing to pursue a potential source of income or to assign her interest in that resource to DSS, Molloy rendered herself ineligible to continue receiving medical benefits. At a hearing contesting DSS’s decision to discontinue benefits, Molloy argued that she had an absolute right to renounce her interest in her daughter’s estate and that she was not healthy enough to bear the stress of litigating any wrongful-death claim. The DSS nevertheless maintained its original position, concluding that Molloy was ineligible to continue receiving benefits. Molloy petitioned for review of that decision in a New York supreme court, which then transferred the case to the appellate division.