| Matter of County of Niagara v Daines |
| 2010 NY Slip Op 09692 [79 AD3d 1702] |
| December 30, 2010 |
| Appellate Division, Fourth Department |
| In the Matter of County of Niagara, Respondent, v Richard F.Daines, Commissioner, New York State Department of Health, et al.,Appellants. |
—[*1] Whiteman Osterman & Hanna LLP, Albany (Christopher E. Buckey of counsel), forpetitioner-respondent.
Appeal from a judgment (denominated order and judgment) of the Supreme Court, NiagaraCounty (Richard C. Kloch, Sr., A.J.), entered February 22, 2010 in a proceeding pursuant toCPLR article 78. The judgment, among other things, granted the amended petition and directedrespondents to pay petitioner $778,212.59.
It is hereby ordered that the judgment so appealed from is unanimously modified in theinterest of justice by vacating subparagraph (B) of the second decretal paragraph and as modifiedthe judgment is affirmed without costs.
Memorandum: Petitioner commenced this CPLR article 78 proceeding seeking, inter alia, tocompel respondents to reimburse it for certain Medicaid expenditures known as overburdenexpenses. According to petitioner, respondents incorrectly billed it for those expenses. Petitionerfurther alleged that, inasmuch as the expenditures were made prior to April 2005, respondentswere required to reimburse petitioner for them (see Social Services Law § 368-a[1] [h]; Matter of Spano v Novello,13 AD3d 1006, 1007-1008 [2004], lv denied 4 NY3d 819 [2005]). After theexpenditures were made but before petitioner submitted claims for reimbursement, theLegislature enacted a law capping the Medicaid expenditures for which counties could seekreimbursement ([Medicaid Cap Statute] L 2005, ch 58, part C, § 1, as amended by L 2006,ch 57, part A, § 60). In January and February 2009, petitioner submitted six claims for theexpenditures made prior to the enactment of the statute. Respondents denied those claims basedon the Medicaid Cap Statute.
In two appeals thereafter, this Court affirmed judgments compelling the same respondents toreimburse overburden expenditures to petitioner and another county, and we concluded thatrespondents improperly applied the Medicaid Cap Statute retroactively to the claims forreimbursement for services rendered prior to the effective date of the statute (see Matter of County of Herkimer vDaines, 60 AD3d 1456 [2009], lv denied 13 NY3d 707 [2009]; Matter ofCounty of Niagara v Daines, 60 AD3d [*2]1460 [2009],lv denied 13 NY3d 708 [2009]). Following our decisions in those cases, respondents"supplemented" their denial of the January and February 2009 claims by adding, as an additionalground for denying those claims, petitioner's failure to submit the claims within 12 months afterthe expenditures were made, pursuant to 18 NYCRR 601.3 (c). Petitioner thereafter submittedtwo additional claims in March and August 2009, which respondents denied on the grounds thatthe Medicaid Cap Statute prohibited payment of such claims and that the claims weretime-barred pursuant to 18 NYCRR 601.3 (c).
Respondents appeal from the judgment granting the amended petition and ordering them to"examine and determine all subsequent claims for [o]verburden reimbursement in accordancewith the procedures and time limits set forth in 18 NYCRR § 601.4 without asserting orotherwise relying on the Medicaid Cap [Statute] or 18 NYCRR § 601.3 as a basis todisallow any such subsequent claims." We agree with petitioner that respondents failed topreserve for our review their contention that they properly "supplemented" their denial of theJanuary and February 2009 claims by adding a different ground for the denial inasmuch as theyfailed to raise that ground in their answer. Respondents' contention may be raised for the firsttime on appeal, however, because petitioner "suggests no factual showing or legal counterstepthat might have been made if the [contention] had been tendered below" (People ex rel.Roides v Smith, 67 NY2d 899, 901 [1986]; see Matter of Persing v Coughlin, 214AD2d 145, 148-149 [1995]).
We conclude that respondents were prohibited from "supplementing" their finaldetermination denying the January and February 2009 claims. In order to determine whether anagency determination is final, a two-part test is applied. "First, the agency must have reached adefinitive position on the issue that inflicts actual, concrete injury and[,] second, the injuryinflicted may not be prevented or significantly ameliorated by further administrative action or bysteps available to the complaining party" (Matter of Best Payphones, Inc. v Department of Info. Tech. & Telecom. ofCity of N.Y., 5 NY3d 30, 34 [2005], rearg denied 5 NY3d 824 [2005]).Inasmuch as the denial of the claims inflicted actual harm on petitioner, and petitioner had nosteps available to ameliorate or prevent it, we conclude that respondents' determination was final.As respondents correctly concede, "[p]ublic officers or agents who exercise judgment anddiscretion in the performance of their duties may not revoke their determinations nor review theirown orders once properly and finally made, however much they may have erred in judgment onthe facts, even though injustice is the result. A mere change of mind is insufficient" (Peopleex rel. Finnegan v McBride, 226 NY 252, 259 [1919]). Thus, where, as here, no statutoryauthority exists to permit the respondents to "supplement" their denial of a claim (see 18NYCRR 601.4), their determination is final and not subject to amendment. Contrary to thecontention of respondents, barring them from revisiting their final determination "would [not]impermissibly estop [them] from enforcing [their] statutory mandate when [they have] erred inmaking an initial assessment" (Matter ofJason B. v Novello, 12 NY3d 107, 114 [2009]).
We reject respondents' further contention that all of the claims were time-barred pursuant to18 NYCRR 601.3 (c). It is well settled that "the interpretation given to a regulation by the agency[that] promulgated it and is responsible for its administration is entitled to deference if thatinterpretation is not irrational or unreasonable" (Matter of Gaines v New York State Div. ofHous. & Community Renewal, 90 NY2d 545, 548-549 [1997]). Where, however, theagency's "interpretation runs counter to the clear wording of the regulatory provisions, it shouldnot be given any weight" (Matter of Hickey v Sinnott, 277 AD2d 572, 575 [2000][internal quotation marks omitted]; see Matter of Air Cargo-Buffalo v Niagara FrontierTransp. Auth., 224 AD2d 1018 [1996]). The regulation upon which respondents rely governsrepayment of "expenditures made by a social services district" (18 NYCRR 601.3 [c]). Here, it isundisputed that the expenditures were not made by a social services district. Rather, they were[*3]made by respondents or by other agencies at the direction ofrespondents. Consequently, we conclude that the time limit set forth in that regulation does notapply. In light of that conclusion, respondents' remaining contentions concerning the applicabilityof the regulation are moot.
We agree with respondents, however, that Supreme Court erred in directing them to examineand determine all future claims for overburden reimbursement without relying upon 18 NYCRR601.3 (c) or the Medicaid Cap Statute as a basis for denying the claims. We therefore modify theorder accordingly. Although respondents failed to oppose petitioner's request for such an order,and thus they failed to preserve that contention for our review (see generally Frank Parlamis,Inc. v Piccola Pizza CafÉ-Times Sq., 259 AD2d 334 [1999]), we nevertheless exerciseour discretion to review respondents' contention in the interest of justice under the limitedcircumstances of this case (see generally White v Weiler, 255 AD2d 952 [1998]). Wenote in particular that our modification concerns only the decision of the court, which isindependent of the administrative determination that prompted this litigation.
We conclude that the court's determination with respect to future claims for overburdenreimbursement constituted an improper advisory opinion because it "will become effective onlyupon the occurrence of a future event that may or may not come to pass," i.e., respondents' denialof future claims for reimbursement of overburden expenses based on 18 NYCRR 601.3 (c) or theMedicaid Cap Statute (New York Pub. Interest Research Group v Carey, 42 NY2d 527,531 [1977]). Further, "[a]s a general rule, parties are allowed to take any position they like inlitigation, as long as they can make a good faith argument for it, and we see no reason to make anexception to that rule here. It may well be that our decision . . . willpreclude [respondents] from relitigating the issue we decide, in the sense that any attemptto relitigate it should be rejected; but [respondents] should not be enjoined from arguingotherwise" (American Std., Inc. vOakFabco, Inc., 14 NY3d 399, 404 [2010]).
We have considered respondents' remaining contention that is not moot and conclude that itis without merit. Present—Smith, J.P., Centra, Fahey, Peradotto and Pine, JJ.