Joshua A. Becker, M.D. & Associates, P.C. v. State

• Decision Date: 04 June 1980
• Docket Number: No. 60434,60434
• Citation: 428 N.Y.S.2d 843,104 Misc. 2d 588
• Parties: JOSHUA A. BECKER, M.D. & ASSOCIATES, P.C., Movant, Claimant, v. The STATE of New York, Respondent, Defendant. Claim
• Court: New York Court of Claims

Page 843

428 N.Y.S.2d 843

104 Misc.2d 588

JOSHUA A. BECKER, M.D. & ASSOCIATES, P.C., Movant, Claimant, v.The STATE of New York, Respondent, Defendant.

Claim No. 60434.

Court of Claims of New York.

June 4, 1980.

Van Voorhis & Van Voorhis, by John Van Voorhis, Rochester, for movant, claimant.

Robert Abrams, Atty. Gen., by Albert O. Marston, Asst. Atty. Gen., New York City, for respondent, defendant.

MEMORANDUM OPINION

ALBERT A. BLINDER, Judge.

THE MOTIONS BEFORE THE COURT

Movant moves by Motion M-23090 for permission to file a late claim pursuant to Court of Claims Act, Section 10, subdivision 6.The proposed claim seeks $256,550.38 with interest from January 1, 1975 and is premised solely on the legal theory of recovery for money had and received which accrued after September 1, 1974.

Motion M-23222 relates to ClaimNo. 60434, which was an amended claim filed on June 20, 1979(pursuant to an order of Amann, J., filed on June 14, 1979) and sought the recovery of $2,054,349.95.The claim states that it is for damages arising out of a failure of the State of New York to pay claimant for services which were furnished from January 1, 1975 through December 31, 1978.By Motion M-23222 claimant seeks further to amend ClaimNo. 60434 to eliminate that portion of it sounding in expressed or implied contract and to substitute exclusively as the theory of recovery the following, "(t)his claim is for money had and received by the State of New York which it collected illegally and without authority from inpatients and inpatients' third party carriers . . .".The period in which the services were rendered by claimant is from January 1, 1975 through December 31, 1979.

The State of New York has cross-moved for judgment dismissing ClaimNo. 60434 pursuant to CPLR 3211(a) 5 and 7 on the doctrines of res judicata and collateral estoppel ". . . and for an order denying Motion M-23090 . . ." which seeks permission to file a late claim.

HISTORY OF THE CLAIM

This is a complex matter.The facts have been previously discussed in detail in the decision of Hon. Henry W. Lengyel, which was filed on April 4, 1977.A brief discussion of these are, however, necessary fully to comprehend the legal issues involved.The following succinct statement of fact appears in the decision of the Third Department, which reviewed Judge Lengyel's decision:

"In 1969, SUNY, on behalf of Downstate and a partnership of certain of Downstate's faculty-doctors known as the Downstate Medical Group (Group), entered into an agreement whereby the members of the Group would bill their private patients directly for services rendered and Downstate would bill hospital patients directly and all fees received for services rendered by members of the Group would be split between the Group and the hospital according to certain percentage applications.The agreement was reduced to writing but was never signed by SUNY or by or on behalf of the Group and its doctors."

"On or about December 31, 1970, the physicians comprising the department of radiology formed the corporation which is the claimant herein.The corporation and/or its members thereafter rendered services in the hospital, and until April, 1971, the claimant received from the State a percentage of fees, as provided in the unsigned 1969 agreement between SUNY and the Group.In 1971, the Comptroller of the State of New York refused to honor any vouchers for payments to the claimant based upon the 1969 agreement upon the ground that formal approval as required by section 112 of the State Finance Law had not been given.The claimant nevertheless continued to render services, and SUNY permitted the relationship to continue after the Comptroller's refusal."Becker v. State of New York, 65 A.D.2d 65 at 66, 410 N.Y.S.2d 699 at 700.

The Appellate Division agreed with the trial court's finding that the claimant was not induced to render any services or confer any benefits upon the State by any misrepresentation.It also stated that it was undisputed that Section 112 of the State Finance Law was applicable to the 1969 agreement and the relationship between the parties, as a matter of contract.It further confirmed the trial court's finding that the contract was never approved by the Comptroller, which precluded a recovery based on contract, citing Blatt Bowling & Billiard Corp. v. State of New York, 14 A.D.2d 144, 217 N.Y.S.2d 766;Becker v. State of New York, 65 A.D.2d 65, 67, 410 N.Y.S.2d 699.

Judge Lengyel, however, made an award to the claimant based on services rendered by invoking equitable considerations.The Appellate Division reversed the award stating:

"The trial court had no such equitable jurisdiction (Psaty v. Duryea, 306 N.Y. 413, 118 N.E.2d 584;Westgate North v. State Univ. of N.Y., 77 Misc.2d 611, 616, 354 N.Y.S.2d 281, affd.47 A.D.2d 1004, 368 N.Y.S.2d 1020).To consider the instant relief as being merely incidental would not be realistic and would exceed the reference thereto in the Psaty case(Psaty v. Duryea, supra, 306 N.Y. pp. 416-417, 118 N.E.2d 584)."

Becker v. State of New York, 65 A.D.2d 65, 67, 410 N.Y.S.2d 699, 701, supra.The Appellate Division further stated:

"There is no merit to any suggestion of equities favoring the claimant in this action and, as hereinbefore observed, the equitable relief granted by the trial court is not within its jurisdiction (citations omitted)."

Becker v. State of New York, supra, p. 68, 410 N.Y.S.2d p. 701.

Upon appeal to the Court of Appeals, the decision reversing the award was affirmed by a short memorandum which reads as follows:

"The order appealed from should be affirmed, with costs.Insofar as appellant seeks to recover on a theory of money had and received, no claim therefor was properly asserted.We would note that we do not construe the decision in the Court of Claims as holding that the agreement allegedly entered into between the Downstate Medical Group and the State University of New York in 1969 was not approved by the State Comptroller.Rather, the court held that no agreement between appellant and the State University has been approved by the Comptroller (seeState Finance Law, § 112)."

Becker v. State of New York, 48 N.Y.2d 867, 868-869, 424 N.Y.S.2d 353, 354, 400 N.E.2d 295, 296.

THE CONTENTIONS OF THE PARTIES

Claimant's able counsel contends with respect to both of the motions presented to this Court that the Court of Appeals decision was not intended finally to dispose of all rights of this professional corporation and its members to recover for those otherwise unpaid professional services.It is asserted that the Appellate Division's decision which denied the right to recover on the 1969 agreement should be interpreted as also invalidating that portion of the contract between the claimant professional corporation and the State University which authorized the State University to collect the professional component of the fees for the radiological services rendered.It should, therefore, be construed by this Court as a holding that the State had no right to collect the moneys which do not belong to it but rather to the claimant corporation.¹

Claimant also states that the reversal of the Appellate Division and the dismissal of the claim was ". . . without prejudice to any further proceeding the claimant may institute, if so advised."Becker v. State of New York, 65 A.D.2d 65, 68, 410 N.Y.S.2d 699, 701, supra.

In opposition, the defendant's able counsel states that by the full litigation of ClaimNo. 59429, the trial court was ". . . tendered a testimonial and evidentiary panoply of fact and law which manifestly enabled it to define exhaustively the issues involved and painstakingly to rationalize its conclusions."He submits that no fragment of the claimant's action was left unburnished.

Defendant's counsel continues to state his position, as follows:

"The claimant now, in effect, seeks to relitigate the precise issues which have consumed the confined (sic) efforts of no less than twelve judges (and now the thirteenth) to resolve.In what is simply an exercise in casuistry, the claimant now moves to achieve redress by demonstrating to the nisi prius Court that which has already abundently (sic) been made clear that the claimant corporation performed services for which it was not, and cannot be recompensed.In this exaltation of form over substance the claimant merely reiterates the precise facts which it urged before albeit in a different time frame, but, mirabile dictu, these facts are now transcendentally endowed with validity because their label has been deleted and new catchwords have been affixed: 'Moneys had and received.' "

THE LAW

Claimant has contended that the roots of its proposed claim and those of the requested amendment of its previously filed claim are based in quasi-contract for money had and received.The law of quasi-contract is employed by courts on the assumption that unless there was such intervention, one party would be unjustly enriched or benefitted at the expense of another.In such cases a contract is implied by law, as though it had been executed or, otherwise, consummated, when, in fact, it had not been.Cf.Williams v. State of New York, 175 Misc. 972, 25 N.Y.S.2d 968.The cases cited by claimant are authorities for this proposition.SeeLindlots Realty Corp. v. County of Suffolk, 278 N.Y. 45, 15 N.E.2d 393;Miller v. Schloss, 218 N.Y. 400, 113 N.E. 337;People ex rel. Dusenbury v. Speir, 77 N.Y. 144.

As was stated in Miller v. Schloss, supra, 218 N.Y. at p. 407, 113 N.E. at p. 339:

"A quasi or constructive contract rests upon the equitable principle that a person shall not be allowed to enrich himself unjustly at the expense of another.In truth it is not a contract or promise at all.It is an obligation which the law creates, in the absence of any agreement, when and because the acts of the parties or others have placed in the possession of one person money, or its equivalent, under such...