Legal Question in Credit and Debt Law in New York
power of attorney liability
I was given POA for my mother after she went into a nursing home. She signed the paperwork before witnesses after I explained the request was for this if she were to become incapacitated and not able to make decisions. After making Medicaid arrangements I instructed her that all funds being deposited into her bank account were to be held there untouched until Medicaid made their final decision. When Medicaid was finally approved, I went to transfer the funds into the nursing home and found that it was approx. $6000 short of what the nursing home and Medicaid estimated. On investigation (and in constant contact with the nursing home), I found my mother had given my brother the difference stated before for HIS use(without my knowledge and using a check book I had no control over).
I have just received a letter from the collection General Counsel of the nursing home stating ''Because you Mr---, exercised possession and control of the income of Mrs. ---- , you may now also be responsible to pay some portion of the amount due. They also threaten to sue if some agreement to pay is not made.
Is this just an attempt to collect a debt or can I be held liable for the balance which was diverted without my knowledge(fraudulently).
1 Answer from Attorneys
Re: power of attorney liability
Good question.
Under NYJUR AGENCY � 318,
"There is no legal theory of vicarious liability for breach of contract by the contracting party if he or she was clearly acting only as an agent of a disclosed principal. A person making or purporting to make a contract with another as an agent for a disclosed principal does not become a party to the contract, absent an agreement or indication to that effect. Accordingly, an agent of a disclosed principal generally does not, absent express agreement, become liable individually on a contract relating to the agency,including debts incurred via contract. An agent assumes no personal liability in executing a contract for a disclosed principal unless it is clear that the agent intends to be bound personally.
However, an agent can by agreement substitute its liability for or superadd its liability to that of the principal. Further, custom and usage of a trade and the circumstances of the transaction can override the general principle that an agent is not liable."
Simply put, as an agent you may not be deemed liable for your mother's actions unless there is a separate agreement between you and the nursing home making you liable.
Mike.
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