Matter of Chapin Home for the Aging v. Novello

• Decision Date: 29 October 2009
• Docket Number: 506613.
• Citation: 66 A.D.3d 1288,2009 NY Slip Op 7718,888 N.Y.S.2d 252
• Parties: In the Matter of CHAPIN HOME FOR THE AGING, Petitioner, v. ANTONIA NOVELLO, as Commissioner of Health, et al., Respondents.
• Court: New York Supreme Court — Appellate Division

66 A.D.3d 1288

888 N.Y.S.2d 252

2009 NY Slip Op 7718

In the Matter of CHAPIN HOME FOR THE AGING, Petitioner, v. ANTONIA NOVELLO, as Commissioner of Health, et al., Respondents.

506613.

Appellate Division of the Supreme Court of New York, Third Department.

Decided October 29, 2009.

Proceeding pursuant to CPLR article 78 (transferred to this Court by order of the Supreme Court, entered in Albany County) to review a determination of respondent Commissioner of Health which required repayment of certain disbursements made to petitioner.

Cardona, P.J.

Petitioner operates a skilled nursing facility located in Queens County (hereinafter the Chapin property) and is an enrolled provider in the Medicaid program. In 1981, petitioner applied to the Department of Health (hereinafter DOH) to construct a new facility elsewhere in Queens (hereinafter the Ottilie property). Included in that plan was petitioner's intention to sell the Chapin property in order to partially finance construction of the Ottilie property. Some years later, after failing to receive a satisfactory offer for the Chapin property, petitioner sold the Ottilie property and amended its application to reflect its intention to expand the existing facility on the Chapin property rather than construct a new facility. The Public Health Council approved the application, the expansion moved forward and, in 1993 petitioner submitted to DOH interim certification of the costs of construction. DOH approved the certifications subject to audit and reimbursed petitioner approximately $17 million.

A subsequent audit by DOH concluded that certain expenses should have been disallowed. Following an administrative hearing, the Administrative Law Judge (hereinafter ALJ) reversed two of the disallowances and upheld the others, including certain interim construction expenses associated with the Ottilie property, as well as mortgage interest expenses related to petitioner's mortgage, which was financed by the Medical Care Facilities Finance Agency. Petitioner commenced this CPLR article 78 proceeding challenging the determination.

We find that the determination is not final within the meaning of CPLR 7801 (1) and, accordingly, dismiss the petition. "Administrative actions as a rule are not final `unless and until they impose an obligation, deny a right or fix some legal relationship as a consummation of the administrative process'" (Matter of Essex County v Zagata, 91 NY2d 447, 453 [1998], quoting Chicago &...