County of Essex v. Commissioner, New Jersey Dept. of Human Services

• Decision Date: 14 June 1991
• Citation: 252 N.J.Super. 1,599 A.2d 167
• Parties: COUNTY OF ESSEX, a body politic and corporate of New Jersey, Plaintiff-Respondent, v. COMMISSIONER, NEW JERSEY DEPARTMENT OF HUMAN SERVICES, and Harriet Canik, Chief, Bureau of Financial Standards and Procedures, Defendants-Appellants.
• Court: New Jersey Superior Court — Appellate Division

Page 1

252 N.J.Super. 1

599 A.2d 167

COUNTY OF ESSEX, a body politic and corporate of New Jersey Plaintiff-Respondent, v. COMMISSIONER, NEW JERSEY DEPARTMENT OF HUMAN SERVICES, and Harriet Canik, Chief, Bureau of Financial Standards and Procedures, Defendants-Appellants.

Superior Court of New Jersey Appellate Division.

Argued Jan. 9, 1991.

Final Briefs Submitted May 10, 1991.

Decided June 14, 1991.

Sharon M. Hallanan, Deputy Atty. Gen., for defendants-appellants (Robert J. Del Tufo, Atty. Gen., attorney; Michael R. Clancy, Asst. Atty. Gen., of counsel).

H. Curtis Meanor, Essex Sp. Counsel, for plaintiff-respondent (Harry J. Del Plato, Asst. County Counsel, of counsel; Thomas M. Bachman, Asst. County Counsel, on the brief).

Before Judges KING, LONG and R.S. COHEN.

The opinion of the court was delivered by

KING, P.J.A.D.

This is an appeal and cross-appeal from a decision by Judge Villanueva on cross-motions for summary judgment in the Law Division. We conclude that the judgment in the Law Division must be affirmed for the reasons given by Judge Villanueva in his 94-page oral opinions of September 25, 1989 and October 19, 1989.

These are the contentions as framed by the State on its appeal and in response to the cross-appeal:

POINT I--THE TRIAL COURT ERRED IN ORDERING INJUNCTIVE RELIEF AND CREDIT TO ESSEX COUNTY BECAUSE N.J.S.A. 30:4-68.1 APPLIES ONLY TO STATE HOSPITALS FOR THE MENTALLY ILL AND NOT TO FACILITIES FOR THE DEVELOPMENTALLY DISABLED.

A. The Legislative History of N.J.S.A. 30:4-68.1, Which Was Given Short Shrift and Misconstrued By The Trial Court, Shows That The Statute Was Only Intended To Apply To The State Hospitals for the Mentally Ill.

B. The Internal Context of N.J.S.A. 30:4-68.1 And Comparison To Related Statutes In Title 30 Support The Conclusion That Counties Are Only Relieved From Maintenance Payments For Psychiatric Hospital Residents and Not For DDD Facilities Residents.

C. Caselaw Construing Title 30 Maintenance Responsibilities Supports The Conclusion That N.J.S.A. 30:4-68.1 Does Not Relieve Essex County From Maintenance Payments For Residents of DDD Facilities.

D. The Longstanding Administrative Interpretation of N.J.S.A. 30:4-68.1 Without Legislative Intervention Further Supports The Conclusion That the Statute Only Applies To State Hospitals For The Mentally Ill.

POINT II--IF THE TRIAL COURT'S ORDER APPLYING N.J.S.A. 30:4-68.1 TO THE DDD FACILITIES IS NOT REVERSED, THEN THE TRIAL COURT'S RULING DENYING RELIEF RETROACTIVE TO JANUARY 1, 1980 MUST ALSO BE AFFIRMED AS AN APPROPRIATE EXERCISE OF JUDICIAL DISCRETION TO AVOID DISASTROUS FISCAL CONSEQUENCES TO THE STATE UPON ANNOUNCEMENT OF A NEW PRINCIPLE OF LAW.

These are the counter-contentions of the County of Essex in response to the State's appeal and on its own cross-appeal:

POINT I--THE TRIAL COURT APPROPRIATELY ORDERED INJUNCTIVE RELIEF AND CREDIT TO ESSEX COUNTY SINCE N.J.S.A. 30:4-68.1 APPLIES TO STATE INSTITUTIONS AND FACILITIES FOR THE DEVELOPMENTALLY DISABLED AS WELL AS THE MENTALLY ILL.

POINT II--THE TRIAL COURT ERRED IN AWARDING PLAINTIFF ONLY PARTIAL RELIEF PROSPECTIVELY FROM MARCH 30, 1989. THE

PLAINTIFF IS LEGALLY ENTITLED TO FULL RETROACTIVE RELIEF FROM JANUARY 1, 1980, THE EFFECTIVE DATE OF N.J.S.A. 30:4-68.1.

A. THE COURT'S DENIAL OF RETROACTIVE RELIEF BASED ON THE APPLICATION OF THE VOLUNTEER RULE IS ERRONEOUS.

B. RETROACTIVE RELIEF IS THE APPROPRIATE REMEDY TO WHICH PLAINTIFF IS LEGALLY ENTITLED.

The plaintiff County of Essex filed this complaint in lieu of prerogative writ in April 1989. The County alleged that the Commissioner of the Department of Human Services and the Chief of Bureau of Financial Standards and Procedures had wrongfully charged the County for maintenance costs of persons residing in State institutions and facilities for the developmentally disabled in those cases where the State had received Federal Medicare and Medicaid benefits for those persons. The County sought prospective injunctive relief and repayment of these sums retroactive to June 1, 1980.

The State responded by moving to dismiss, contending that N.J.S.A. 30:4-68.1 ¹ (and N.J.S.A. 30:4-23 ²) applied only to State hospitals for the mentally ill and not to State institutions and facilities for the developmentally disabled (DD). The County cross-moved for summary judgment.

As noted, Judge Villanueva denied the State's motion to dismiss and granted the County's motion for summary judgment, adopting the County's interpretation of N.J.S.A. 30:4-68.1. He held that the County was relieved from making institutional maintenance payments for developmentally disabled Medicaid and Medicare recipients but refused to make the ruling retroactive to January 1, 1980. He made the ruling retroactive to March 30, 1989. ³ A motion for reconsideration was denied. As a result of the ruling, a credit to the County of $4 million was allowed. We understand that some additional credits may be in order on reexamination of the statistics.

Judge Villanueva treated the State's motion to dismiss the complaint as a motion for summary judgment under R. 4:46-2 since matters outside the pleadings were considered by the court. He said the issue was whether the State had violated N.J.S.A. 30:4-68.1 by billing the County since January 1, 1980, the effective date of the statute, for the maintenance costs of mentally retarded patients for whom the State received Federal Medicaid and Medicare. The judge said that the State's argument that the statute applied only to psychiatric hospitals for the mentally ill and not to facilities for the developmentally disabled was based on ignoring the statutory definition of the word "patients" which controlled the meaning of the word in the first sentence of N.J.S.A. 30:4-68.1. He referred to N.J.S.A. 30:4-23, the definition statute which was in existence at the time N.J.S.A. 30:4-68.1 was enacted, which he said defined the terms in Chapter 4 of Title 30. As a result that definition controlled N.J.S.A. 30:4-68.1. Under N.J.S.A. 30:4-23 "patients" included "any person or persons alleged to be mentally ill, tuberculous or mentally retarded or whose admission to any institution for the care and treatment of such class of persons in this state has been applied for." The judge recognized that the definition statute had been repealed recently but found it was applicable at the time the statute in issue was enacted. He said he did not think that the repeal of N.J.S.A. 30:4-23, effective in 1989, had any bearing on the analysis of N.J.S.A. 30:4-68.1. See L. 1987, c. 116, § 30, eff. June 7, 1989. ⁴

The judge then set out the statutory scheme as referred to above under N.J.S.A. 30:4-66, 4-68, 4-78, and 4-165.3. He pointed out that the primary responsibility for the maintenance of a person in a state institution or facility rests upon that person or that person's legally responsible family members. N.J.S.A. 30:4-66. The rate of payment for such a person is fixed by the State House Commission. N.J.S.A. 30:4-78. If the patient or the responsible family members cannot pay the maintenance costs, N.J.S.A. 30:4-60 provides for payment to be made by the county of settlement and the State. Another source of financial support for indigent or elderly people is Federal Medicare and Medicaid under 42 U.S.C. § 1395 and § 1396 as well as N.J.S.A. 30:4D-7 to -17.14. The judge observed that N.J.S.A. 30:4-68.1 is the only state statute which makes reference to the relationship between Federal Medicare and Medicaid statutes and Title 30 maintenance costs. He said that "in making the contention that N.J.S.A. 30:4-68.1 applies only to the mentally ill as opposed to the mentally retarded, the defendants have ignored the clear and unambiguous legislative scheme set forth in Title 30, as well as the case law which has evolved thereon which clearly holds that N.J.S.A. 30:4-68.1 does then apply to the mentally retarded as well as the mentally ill." He also said the State "had attempted to apply rules of construction which are inapplicable to the current case in order to create a distorted impression of N.J.S.A. 30:4-68.1."

The judge said that reliance by the County on a 50/50 scheme for equalization of the financial responsibility of the state and the county for indigent developmentally disabled people can be inferred from N.J.S.A. 30:4-78 and the scheme "is consistent with well-established New Jersey statutory law and case law mandating equal treatment of the mentally ill and retarded. Clark v. Degnan, 83 N.J. 393, 397 (1980); Guempel v. State, 159 N.J.Super. 166, 183 (Law Div.1978), modified [in] Levine v. Institutions and Agencies, Department of New Jersey, 84 N.J. 234 (1980)." He said that although N.J.S.A. 30:4-78 "does not specifically provide for a 50/50 sharing for mentally retarded patients between the State and the county [it is] significant that our courts have nevertheless held that the payment scheme provided in N.J.S.A. 30:4-78 ... also applies to the mentally retarded." He also noted that the cost of treatment for the mentally ill and mentally retarded who have no county settlement is borne in full by the State under N.J.S.A. 30:4-69. In addition N.J.S.A. 30:4-24, as summarized in Guempel, 159 N.J.Super. at 172-173, 387 A.2d 399, provides that the admission and commitment of the mentally ill and retarded shall be treated equally within Title 30. In Clark, 83 N.J. at 397, 416 A.2d 816, the Court "specifically held that N.J.S.A. 30:4-78 provides a formula for dividing the maintenance costs of 'mentally ill and mentally retarded patients cared for in state institutions.' " This was reaffirmed in Levine, 84 N.J. at 242-244, 418 A.2d 229.

The judge refused to accept the State's interpretation of the second sentence of N.J.S.A. 30:4-68.1 which says:

Should a state hospital for the mentally ill lose accreditation and subsequently not receive Federal Medicaid and Medicare payments, the Counties shall not be liable for the maintenance of...