## Facts

- A nursing-home resident entered Dadeville Convalescent Home in 1994 and remained until his death after January 15, 1999.
- Prime Healthcare Corporation operated the facility.
- From 1994 through 1998, Medicaid paid part of the resident’s care costs; the remainder was paid from the resident’s Social Security retirement benefits.
- The resident’s stepson, William Slovik, served as the resident’s Social Security representative payee and handled financial matters.
- In 1998, Medicaid asserted it had overpaid benefits for 1997 and sought reimbursement, later disqualifying the resident from Medicaid benefits effective December 31, 1998, until repayment.
- Prime Healthcare claimed that, during the Medicaid dispute, the resident’s required share of cost increased and that payments were not made at the increased rate, creating an unpaid balance.
- Prime Healthcare alleged Slovik orally agreed to be responsible for paying the facility from the resident’s Social Security income for amounts not covered by Medicaid.
- Prime Healthcare introduced a document Slovik signed as “personal representative”; it was admitted only to show his signature, not to prove the document’s contents.
- Slovik denied ever agreeing to personal liability and maintained he acted only in a representative capacity.

## Issues

1. Whether substantial evidence supported a finding that Slovik entered an oral contract personally obligating him to pay the nursing-home charges.
2. Whether any alleged promise was unenforceable absent a writing under Alabama’s statute of frauds as a promise to answer for another’s debt.

## Decision

- The Alabama Court of Civil Appeals reversed the judgment for Prime Healthcare and remanded.
- The court held the evidence was insufficient, as a matter of law, to prove Slovik assumed a personal contractual obligation for the resident’s nursing-home debt.
- Because no personal promise was proven, the court did not decide whether the statute of frauds would bar enforcement of the alleged promise.

## Legal Principles

- The plaintiff bears the burden to present substantial evidence of contract formation and the defendant’s intent to be personally bound.
- A person acting and signing in a representative capacity is not personally liable absent clear evidence of an individual undertaking.
- Vague testimony about a “verbal agreement,” without a clear distinction between managing another’s funds and promising personal payment, is insufficient to impose personal liability.
- Where the record shows payments were made from the resident’s funds and documents identify the signer only as a representative, a court will not infer an individual assumption of the debt.

## Conclusion

The appellate court set aside the damages award against Slovik because Prime Healthcare failed to prove that he personally agreed to pay his stepfather’s nursing-home charges, as opposed to acting only as representative payee managing the stepfather’s Social Security benefits.


Slovik v. Prime Healthcare Corp., 838 So. 2d 1054 (Ala. Civ. App. 2002)