Katz v. Shapiro

• Decision Date: 27 April 1978
• Citation: 62 A.D.2d 231,405 N.Y.S.2d 315
• Parties: Simon KATZ, doing business as Elmhurst Manor Home for Adults, et al., Appellants, v. Bernard SHAPIRO, as Executive Director of the Board of Social Welfare of the State of New York, et al., Respondents.
• Court: New York Supreme Court — Appellate Division

Page 315

405 N.Y.S.2d 315

62 A.D.2d 231

Simon KATZ, doing business as Elmhurst Manor Home for

Adults, et al., Appellants, v. Bernard SHAPIRO, as Executive Director of the Board of

Social Welfare of the State of New York, et al.,

Respondents.

Supreme Court, Appellate Division,Third Department.

April 27, 1978.

Austrian, Lance & Stewart, P.C., New York City (Julius J. Rosen, New York City, of counsel), for appellants.

Louis J. Lefkowitz, Atty. Gen., Albany (Clifford A. Royael and Jean M. Coon, Albany, of counsel), for respondents.

Before SWEENEY, J. P., and KANE, STALEY, LARKIN and MIKOLL, JJ.

STALEY, Justice.

Petitioners are duly licensed operators of private proprietary homes for adults (PPHA) as defined in subdivision 26 of section 2 of the Social Services Law which provide suitable care, for compensation and profit, to persons who, though not requiring medical or nursing care, are in such condition by reason of their age, infirmities or disabilities as to require, in addition to lodging and board, the services of attendants to assure their safety and comfort, and to enable them to be bathed, dressed, fed or to move about.

Pursuant to the provisions of subdivision 9 of section 758 of the Executive Law, effective October 1, 1976, each PPHA with a capacity of more than four persons was required to file an annual financial statement with the State Board of Social Welfare within 90 days after the close of its fiscal year upon forms prescribed by the board. This subdivision was repealed, effective October 1, 1977, and, in its place, subdivision 5 of section 461-b of the Social Services Law was enacted, effective October 1, 1977, which requires the filing of annual financial statements with the State Department of Social Services. The financial statements involved here relate to the requirements provided by subdivision 9 of section 758 of the Executive Law.

All residents of PPHA's who are eligible to receive Supplemental Security Income benefits receive aid from New York State through that program for the purpose of paying for their residential care (Social Services Law, § 209, subd. 2, par. (d)).

A hearing on the issues was held at Supreme Court, Trial Term, Albany County on September 26, 1977 at which time the parties stipulated that PPHA's are not in receipt of or eligible to receive public funds within the meaning of section 2 of article XVII of the New York State Constitution, and that there are no significant differences between PPHA's and nonprofit facilities. At the hearing, the court was informed that the respondents were revising the annual financial report forms which were completed on September 30, 1977. The court made no finding as to the relationship between the financial data sought in the form prepared by the board and the health, safety and welfare of the residents of PPHA's, but concluded that petitioners had failed to establish the unconstitutionality of subdivision 9 of section 758 of the Executive Law.

Petitioners' main contentions are that the Board of Social Welfare is precluded by section 2 of article XVII of the New York State Constitution from requiring PPHA's to prepare and submit annual financial reports; that the provisions of subdivision 9 of section 758 of the Executive Law deny petitioners' right to equal protection of the laws; and that the unreasonable costs compelled by the requirement to prepare annual financial reports constitute an arbitrary and capricious interference with petitioners' right to conduct its business in violation of their due process rights.

Article XVII of the New York State Constitution provides for Social Welfare and section 2 thereof states, in part, as follows:

§ 2. (State board of social welfare; powers and duties)

The state board of social welfare shall be continued. It shall visit and inspect, or cause to be visited and inspected by members of its staff, all public and private institutions, whether state, county, municipal, incorporated or not incorporated, which are in receipt of public funds and which are of a charitable, eleemosynary, correctional or reformatory character.

As to institutions, whether incorporated or not incorporated, having inmates, but not in receipt of public funds, which are of a charitable, eleemosynary, correctional or reformatory character, and agencies, whether incorporated or not incorporated, not in receipt of public funds, which exercise custody of dependent, neglected or delinquent children, the state board of social welfare shall make inspections, or cause inspections to be made by members of its staff, but solely as to matters directly affecting the health, safety, treatment and training of their inmates, or of the children under their custody.

Petitioners argue that, since they receive no public funds and do not qualify as charitable, eleemosynary, correctional or reformatory institutions, they are not subject to regulation by the State Board of Social Welfare or the Department of Social Services, and the State Constitution empowers the board to visit and inspect all institutions which are not in receipt of public funds which are of a charitable, eleemosynary, correctional or reformatory character, but solely as to matters directly affecting the health, safety and treatment and training of their inmates. They thus contend that if there is any power in the board to regulate PPHA's, it must be derived from section 2 of article XVII of the State Constitution, and they do not come within the terms of that section.

In State of New York v. Hudson Home for Aged, 86 Misc.2d 1063, 386 N.Y.S.2d 283, affd., App.Div., 405 N.Y.S.2d 319 (decided herewith), the Special Term rejected the argument that section 2 of article XVII of the New York State Constitution limits the power of the board to visit, inspect and supervise homes for the aged not in receipt of public funds, stating as follows Article XVII, section 2, rather than limiting the powers of the State Board of Social Welfare, affirms the right of the Board to properly exercise its inherent police powers to further regulate the operation of homes for the aged such as defendant's. The owner of private property does not acquire immunity against the valid exercise of the police power. We are dealing here with one of the most essential powers of government; one that is the least limitable. It may, indeed, seem harsh in its exercise and it usually is on some individual property owner, but the imperative necessity for its existence precludes any limitation upon it when not exerted arbitrarily. All property is held subject to the right of the State reasonably to regulate its use under the police power in order to secure the general safety and public welfare, especially of our aged and senior citizens in view of the recent public disclosures of abuses in nursing home and homes for senior citizens. (Id. at 1066, 386 N.Y.S.2d at 285.)

It is further provided in section 2 of article XVII of the State Constitution as follows:

Subject to the...