Convalescent Center of Bloomfield, Inc. v. Department of Income Maintenance

Decision Date05 July 1988
Docket NumberNo. 13311,13311
Citation544 A.2d 604,208 Conn. 187
CourtConnecticut Supreme Court
Parties, 57 USLW 2065, 22 Soc.Sec.Rep.Ser. 854, Medicare & Medicaid Guide P 37,412 CONVALESCENT CENTER OF BLOOMFIELD, INC., et al. v. DEPARTMENT OF INCOME MAINTENANCE.

Kenneth A. Graham, Asst. Atty. Gen., with whom, on the brief, was Joseph I. Lieberman, Atty. Gen., for appellant (defendant).

Lewis K. Wise, with whom, on the brief, was Kenneth A. Zitter, for appellees (plaintiffs).

Before PETERS, C.J., and HEALEY, SHEA, CALLAHAN and SANTANIELLO, JJ.

PETERS, Chief Justice.

The central issue in this appeal is whether a litigant is collaterally estopped from rearguing an issue that was adversely decided in an administrative proceeding not subject to judicial review. The plaintiffs, Convalescent Center of Bloomfield, Inc., and Maple View Manor, Inc., brought an administrative action pursuant to General Statutes § 17-314 1 to contest the manner in which the defendant, the department of income maintenance, had calculated their entitlement to rental reimbursement for Medicaid patients. The defendant disallowed this action as an impermissible relitigation of similar claims that the plaintiffs had previously pursued with regard to their Medicare patients. An appeal from the defendant's decision was sustained by the trial court, which held that the Medicare ruling could not be given preclusive effect because that ruling, involving an amount less than $10,000, was afforded no judicial review under applicable federal law. The defendant appealed to the Appellate Court, and we transferred the case here. We find no error.

There is no dispute about the relevant facts. The plaintiffs operate nursing homes that are provider participants both in the Title XVIII Medicare program, administered by the United States department of health and human services, and the Title XIX Medicaid program, administered by the Connecticut department of income maintenance. The plaintiffs contend that, as a result of certain stock transfers in 1976, they became entitled to rental reimbursements for payments made to allegedly unrelated realty companies. Both the federal Medicare and the state Medicaid agencies have rejected this contention, and have limited the plaintiffs' reimbursements, in accordance with the related party principle, to the actual costs incurred by the related organization.

The plaintiffs elected to pursue this disagreement by first seeking relief with regard to their Medicare reimbursements. sDisallowance of their claims for reimbursement of rental expenses was upheld by a Medicare intermediary hearing panel and then by the Health Care Financing Administration (HCFA) of the United States department of health and human services. Because the amount in controversy was less than $10,000, 2 the plaintiffs had no opportunity to seek judicial review of the Medicare decision. See 42 U.S.C. § 1395oo (a)(1). 3

After they had exhausted their federal Medicare remedies, the plaintiffs requested a rehearing on their Medicaid reimbursements for their rental expenses. The defendant refused to consider the merits of the plaintiffs' claim, ruling instead that the plaintiffs were collaterally estopped from pursuing a Medicaid rate appeal because of the HCFA decision rendered against them in their Medicare rate appeal.

The trial court upheld the plaintiffs' appeal from the defendant's decision and remanded for an administrative hearing on the merits. The court concluded that collateral estoppel was inappropriate in light of the absence of an opportunity for judicial review of the HCFA decision. The validity of this conclusion is the only issue that the defendant has raised in its appeal.

I

Before we reach the collateral estoppel issue, we must decide whether this appeal is properly here. Because the trial court ordered a remand of this case for further administrative proceedings, we must inquire into the possibility that there has not as yet been a final judgment. "Under the Uniform Administrative Procedure Act, General Statutes § 4-166 et seq., further appellate review of superior court rulings on administrative appeals is limited to cases in which the Superior Court has rendered a final judgment. General Statutes § 4-184. That statutory provision accords with the general proposition that, except in special cases, such as appeals upon reservations; State v. Sanabria, 192 Conn. 671, 681-85, 474 A.2d 760 (1984); or upon certification pursuant to General Statutes § 52-265a; Laurel Park, Inc. v. Pac, 194 Conn. 677, 678-79 n. 1, 485 A.2d 1272 (1984); the jurisdiction of this court is restricted to appeals from judgments that are final. General Statutes § 52-263; Practice Book § 3000 (now § 4000); Melia v. Hartford Fire Ins. Co., 202 Conn. 252, 255, 520 A.2d 605 (1987); Doublewal Corporation v. Toffolon, 195 Conn. 384, 388-89, 488 A.2d 444 (1985)." Schieffelin & Co. v. Department of Liquor Control, 202 Conn. 405, 408-409, 521 A.2d 566 (1987).

In Schieffelin & Co., we held that administrative appeals are governed by the rule of State v. Curcio, 191 Conn. 27, 463 A.2d 566 (1983), which permits the immediate appeal of interlocutory orders only "(1) where the order or action terminates a separate and distinct proceeding, or (2) where the order or action so concludes the rights of the parties that further proceedings cannot affect them." Id., at 31, 463 A.2d 566. Because a trial court judgment that orders further administrative proceedings has not "terminate[d] a separate and distinct proceeding," the operative question is "whether the trial court's order 'so concludes the rights of the parties that further proceedings cannot affect them.' " Schieffelin & Co. v. Department of Liquor Control, supra, 202 Conn. at 409-10, 521 A.2d 566.

In resolving that question in Schieffelin & Co. v. Department of Liquor Control, supra, at 410, 521 A.2d 566, we found it helpful to inquire into whether the administrative ruling "is in some fashion incomplete and therefore not ripe for final adjudication." Schieffelin & Co. involved an attempt by the plaintiff to terminate liquor distributorships, in accordance with the requirements of General Statutes § 30-17(a)(2)(B), by sending written notices setting forth "just and sufficient cause." The administrative agency had denied the plaintiff relief on the ground that its notice was procedurally inadequate, without determining whether the plaintiff had sustained its burden of establishing good cause for the terminations. The trial court, sustaining the plaintiff's appeal with regard to the procedural adequacy of its notice, remanded for administrative adjudication of the issue of good cause. We held that, in the absence of a complete adjudication of the plaintiff's right to terminate the distributorships, the trial court's interlocutory ruling was not an immediately appealable final judgment. Id., at 411-12, 521 A.2d 566.

Schieffelin & Co. distinguished the administrative ruling that "is in some fashion incomplete"; id., at 410, 521 A.2d 566; from one involving a final resolution of an issue that is ripe for appellate judicial review. For the latter category, we relied on Watson v. Howard, 138 Conn. 464, 469, 86 A.2d 67 (1952), which concluded that the trial court had rendered a final judgment when it ordered a new administrative hearing because of illegal procedures in the prior administrative adjudication. We also cited Santos v. Publix Theatres Corporation, 108 Conn. 159, 161, 142 A. 745 (1928), which held that appeals could immediately be taken from trial court judgments concerning awards of compensation, whether or not such judgments involved remands for further action by the compensation commissioner.

In the circumstances of the present case, we view the issue of collateral estoppel as ripe for immediate appellate review. Further proceedings on the substantive merits of the plaintiffs' claim for rental reimbursement cannot affect the rights of the parties with respect to collateral estoppel. Indeed, to postpone appellate review and to require further exhaustion of administrative remedies would defeat the very purpose that collateral estoppel is intended to serve. "[T]he basic proposition ... has always been essentially the same: A party should not be allowed to relitigate a matter that it already had opportunity to litigate." F. James & G. Hazard, Civil Procedure (3d Ed. 1985) p. 589. If the defendant is correct that the plaintiffs are precluded from relitigating their entitlement to reimbursement, it would be unfair to require the defendant to expend its resources to defeat the plaintiffs' claims on the merits. We have held an interlocutory order to be final for purposes of appeal if it involves a claimed right " 'the legal and practical value of which would be destroyed if it were not vindicated before trial.' " State v. Powell, 186 Conn. 547, 553, 442 A.2d 939, cert. denied sub nom. Moeller v. Connecticut, 459 U.S. 838, 103 S.Ct. 85, 74 L.Ed.2d 80 (1982), quoting United States v. MacDonald, 435 U.S. 850, 860, 98 S.Ct. 1547, 1552, 56 L.Ed.2d 18 (1978); State v. Curcio, supra, 191 Conn. at 34, 463 A.2d 566. In this respect, the defense of collateral estoppel is a civil law analogue to the criminal law's defense of double jeopardy, because both invoke the right not to have to go to trial on the merits. Like the case of a denial of a criminal defendant's colorable double jeopardy claim, where immediate appealability is well established; State v. Curcio, supra; State v. Moeller, 178 Conn. 67, 72, 420 A.2d 1153, cert. denied, 444 U.S. 950, 100 S.Ct. 423, 62 L.Ed.2d 320 (1979); the present judgment denying the defendant's claim of collateral estoppel is a final judgment.

II

Whether access to judicial review is a necessary precondition to administrative collateral estoppel is a matter of first impression. As a general proposition, the governing principle is that administrative adjudications...

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