Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Signature Health Center, LLC v. State

Ct Cl

May 20, 2010

Signature Health Center, LLC, Claimant,
State of New York, Defendant.

Claimant's attorney:Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, LLC, David M. Barshay, Esq. and Douglas H. Sanders, Esq.

Defendant's attorney:Hon. Andrew M. Cuomo, NYS Attorney General, Michael C. Rizzo, Assistant Attorney General, Of Counsel.

Judith A. Hard, J.


In February 2009, this Court granted claimant's motion for summary judgment on the issue of liability, holding that a 2003 Supreme Court decision collaterally estopped the State from relitigating the issue of whether there had been ministerial neglect (Signature Health Center, LLC v State of New York, UID #2009-032-109, Claim No. 111043, Motion Nos. M-75867, M-75868, CM-75983 [Ct Cl Feb. 17, 2009]). Implicit in this Court's ruling on the summary judgment motion was its understanding that, pursuant to the State's waiver of sovereign immunity, governmental entities could be liable under the traditional principles of tort law for injury caused by the ministerial negligence of its employees. Later that year, McLean v City of New York, (2 N.Y.3');">12 N.Y.3d 194');">2 N.Y.3');">12 N.Y.3d 194 [2009]) and Dinardo v City of New York, (13 N.Y.3d 872');">13 N.Y.3d 872 [2009]), raised doubts about that understanding, as the Court of Appeals held that a governmental entity cannot be held liable for ministerial negligence unless there was a "special relationship" between the parties, one [*2]giving rise to a "special duty" owed to the injured party by the government. Neither the 2003 Supreme Court proceeding nor this Court's earlier summary judgment decision contained any inquiry into whether such a special relationship/special duty existed between defendant and claimant in this matter. The damages trial was subsequently held, but mindful that "a change in decisional law usually will be applied retrospectively to all cases still in the normal litigating process" (Gager v White, 53 N.Y.2d 475, 483 [1981]), the Court directed the parties to submit supplemental briefs regarding the impact, if any, that McLean and Dinardo would have on this claim. In applying McLean to the instant action, the Court determines that claimant was owed a special duty by the State, based on a statutory private right of action, but that it has failed to sufficiently prove that it is entitled to damages.


In 1999 Signature Health Center, LLC (Claimant) was approved as a new medical diagnostic and treatment center by the New York State Department of Health (DOH). Its budgeted rate for Medicaid billing purposes was $132.84 per threshold patient visit. Pursuant to Public Health Law (PHL) § 2807, this budgeted rate was subject to a retroactive adjustment based upon actual costs incurred for the first full year of operation (see 10 NYCRR §86-4.19[b]). In October 2001, claimant sought its initial adjustment, based upon a "cost report" [1] for 2000. The cost report was reviewed, endorsed and approved by DOH, and a new threshold rate was calculated. This new rate, which was an increase of approximately $35.00 per threshold visit over the original budgeted rate, was then certified by the New York State Division of the Budget (DOB). In May 2002, claimant made a revision of its cost report for 2000 and sought a further rate adjustment. The second revision request was approved by DOH, in an amount approximately $12.00 per threshold visit higher than the rate certified in claimant's initial rate adjustment, and certified by DOB in 2002. Despite the foregoing, DOH failed to publish the revised rates and, as a result, failed to pay claimant in conformance with the revised rates.

Claimant initiated an article 78 proceeding seeking orders of mandamus directing defendant to "publish" [2] the new reimbursement rates and to release payments due to claimant. In June 2003, Supreme Court Albany County found that posting of new rates, after they were approved by DOH and certified by DOB, was a ministerial act, one in which the duty to be performed was required by law and involved no exercise of discretion. [3] As such, it was subject to an order of mandamus.

[O]nce the revised rates have proceeded through the administrative review and approval process to the point where the [Division of Budget] has approved the revised rates and returned them to respondent for posting, there is no statutory, regulatory or other authority for providing for another "final approval" by respondent.

(Signature Health Center, LLC v New York State Department of Health, Index No. 2263-03, Decision, Order and Judgment [Sup Ct, Albany County, June 19, 2003], Sheridan, J.). Because there was no authority for defendant to refrain from posting the rates once they were approved by DOB, Supreme Court directed that they had to be posted and that DOH had to make "all payments due to petitioner in accordance with the revised reimbursement rates" (id. at 11). This resulted in, among other things, payment of $3 million in retroactive reimbursement (id., p 3). Following the mandamus decision, claimant moved in Supreme Court to recover additional amounts representing attorney fees, costs, and the loss of pre-judgment and post-judgment interest. That motion was denied on the ground that claimant was not entitled to attorney fees pursuant to Article 86 of the CPLR and there was no statutory authority for awarding interest on retroactive Medicaid reimbursements (id., Letter Decision and Order [Sept. 16, 2003]).

Thereafter, claimant commenced the instant action to recover for consequential damages resulting from DOH's delay in posting the rates. The damages demand includes, among other things, "the substantial loss of value of Signature's business caused by the illegal acts or failure to act on the part of the DOH, the legal fees and expenses of Signature's Chapter 11 proceeding, the loss of business which resulted from a lack of funds, additional expenses incurred by Signature because of its poor credit standing and inability to pay its obligations as they became due, the interest expenses borne by Signature for borrowing necessitated by DOH's wrongful withholding of approval, and interest on the money wrongfully withheld by DOH" (Claim, ¶ 14).

PRE-2009 LAW

In 1929, the State waived its immunity from civil liability and consented to have actions against it "determined in accordance with the same rules of law as applied to actions in the supreme court against individuals or corporations" (Laws 1929, c.467 §1; CCA §12-a, recodified as CCA § 8). This waiver also removed immunity from counties, cities, towns and villages (see Bernardine v City of New York, 294 NY 361 [1945]). Since then, courts have developed various tests to define the nature and extent of this waiver. The general rule of liability for governmental actions [4] was articulated in Tango v Tulevech, 61 N.Y.2d 34');">61 N.Y.2d 34, 40 [1983]:

[W]hen official action involves the exercise of discretion, the officer is not liable for the injurious consequences of that action even if resulting from negligence or malice. Conversely, when the action is exclusively ministerial, the officer will be liable if it is otherwise tortious and not justifiable pursuant to statutory command.

Discretionary or quasi-judicial acts were defined as those that "involve the exercise of reasoned judgment which could typically produce different acceptable results, " while ministerial acts were defined as those that "direct adherence to a governing rule or standard with a compulsory result" (id. at 41). Tango did not address either qualified immunity or special duty which, at the time that decision was issued, ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.