New York State Court of Claims

New York State Court of Claims

THE CITY OF NEW YORK v. THE STATE OF NEW YORK, #2006-015-097, Claim No. 111772, Motion Nos. M-71274, CM-71332


Synopsis


The Court of Claims lacks subject matter jurisdiction over an action for tuition reimbursement pursuant to Education Law § 3202 which may be pursued in Supreme Court as an action for declaratory judgment or as an article 78 proceeding. As to an action grounded in ministerial negligence claimants failed to show that any of the facilities in which the 156 eligible students resided were owned or operated by the State. Furthermore, it appears claimants neither served a notice of intention nor served and filed a claim within 90 days of accrual. Late claim relief was not properly supported.

Case Information

UID:
2006-015-097
Claimant(s):
THE CITY OF NEW YORK and THE CITY SCHOOL DISTRICT OF THE CITY OF NEW YORK
Claimant short name:
THE CITY OF NEW YORK
Footnote (claimant name) :

Defendant(s):
THE STATE OF NEW YORK
Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
111772
Motion number(s):
M-71274
Cross-motion number(s):
CM-71332
Judge:
FRANCIS T. COLLINS
Claimant’s attorney:
Michael A. Cardozo, Esquire
Corporation Counsel of the City of New York
By: Alan H. Kleinman, EsquireAssistant Corporation Counsel
Defendant’s attorney:
Honorable Eliot Spitzer, Attorney General
By: Glenn C. King, EsquireAssistant Attorney General
Third-party defendant’s attorney:

Signature date:
July 7, 2006
City:
Saratoga Springs
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

Defendant's pre-answer motion pursuant to CPLR 3211(a) (2) seeks an order dismissing the claim on the grounds that the Court lacks subject matter jurisdiction, the action is time barred because the claimants failed to serve a notice of intention or serve and file a claim within 90 days of the claim's accrual as required by Court of Claims Act § § 10 (3) and 11 (a) and the Court lacks jurisdiction in that the claim was not verified as required by Court of Claims Act § 11(b). Claimants'[1] cross-moved for an order allowing the late filing of a verified claim pursuant to Court of Claims Act § 10 (6) . Defendant's motion is granted to the extent set forth below and claimant's cross-motion is denied. In an unverified claim dated December 23, 2005 the claimants asserted four causes of action. The first cause of action seeks $8,116,684.88 in damages allegedly arising under Education Law § § 3202 (5) (b) and 3202 (5) (d) (4). The second cause of action alleges that the State negligently breached its statutory duty to notify the claimants of all children residing in OMRDD facilities and being educated in the New York City Public Schools. The third cause of action alleges an implied contract arising out of the State's requirement that claimants provide education and education-related services while at the same time depriving claimants of information necessary to receive statutorily authorized reimbursement for such services. The fourth cause of action sounds in unjust enrichment asserting that "[t]he State received the benefit of the education provided to Chapter students, who under State law are the financial obligation of the State".

Education Law § 3202 (5) (b) provides:
Children who reside in a school for the mentally retarded operated by the department of mental hygiene and for whose support and maintenance the department assumes responsibility on or after July one, nineteen hundred seventy-seven and who are thereafter placed in a family home at board, a duly incorporated orphan asylum or other institution for the care, custody and treatment of children shall be admitted to the schools of the school district in which such family home or institution is located. The education department is authorized to reimburse each school district furnishing educational services to such children for the direct cost of such services in accordance with regulations promulgated by the commissioner and approved by the director of the budget. The educational costs for these children shall not be otherwise aidable or reimbursable. The school district in which the child resided at the time the department of mental hygiene assumed responsibility for the support and maintenance of such child shall reimburse the education department for its expenditure on behalf of such child in an amount equal to the school district basic contribution, as such term is defined in subdivision eight of section four thousand four hundred one of this chapter. The comptroller may deduct from any state funds which become due to a school district an amount equal to the reimbursement required to be made by such school district in accordance with this paragraph, and the amount so deducted shall not be included in the operating expense of such district for the purpose of computing the apportionment for operating expense pursuant to subdivision eleven of section three thousand six hundred two of this chapter. The department of mental hygiene shall notify the education department of the name of the child, the location of the family home or institution where the child is to be placed and the name of the school district in which such child resided at the time the department of mental hygiene assumed responsibility for his support and maintenance.

Education Law § 3202 (5) (d) (4) provides:
The education department shall reimburse the school district in which such intermediate care facility is located for the full cost of all nonfederally reimbursable services which shall, notwithstanding any inconsistent provision of law, include transportation services, provided pursuant to a contract authorized by this paragraph. Such reimbursement shall be for the period from July first through June thirtieth, except that in the case of individualized residential alternatives, state reimbursement for July and August programs shall be in accordance with subdivision one of section forty-four hundred eight of this chapter. The provisions of subdivision two of such section forty-four hundred eight shall apply to all July and August programs provided pursuant to this section.

Education Law § 3202 (5) (d) (7) provides:
Within forty-five days of the placement of a child in a school district, the intermediate care facility shall notify the school district in which the child resided at time of entrance to the intermediate care facility and the school district in which the facility is located. Such notice shall include the name of the child, the location of the intermediate care facility, and the name of the school district in which such child resided at the time of placement.

Education Law § 3202 (5) (e) provides:
Notwithstanding the provisions of paragraph a of subdivision five of section thirty-six hundred four of this chapter, the commissioner shall be authorized to grant a waiver excusing the late filing of claims submitted for costs incurred pursuant to this subdivision, upon findings that the school district has submitted a timely request for a waiver and has submitted proof satisfactory to the commissioner that the delay in filing was caused by a party other than the school district. A request for such a waiver, together with all supporting documentation, shall be submitted to the commissioner within sixty days after the date on which this paragraph was enacted, or within fourteen months after the end of the school year in which services were provided pursuant to this subdivision, whichever is later.

At the risk of over-simplifying the statutory scheme the Court offers the following synopsis.

Education Law § 3202 (5) (b) recognizes that children residing in facilities operated by the New York State Office of Mental Retardation and Developmental Disabilities (OMRDD) or placed in family homes at board or in incorporated orphan asylums will be educated in school districts in which the children reside. Such districts will likely not be the same school districts in which the children resided at the time the State assumed responsibility for their support and maintenance and which initially bore the responsibility and costs of educating these children. The Legislature therefore adopted section 3202 (5) (b) to allow the State Education Department (SED) to reimburse those districts (hereinafter referred to as "receiving districts") required to educate residentially re-located children for the direct cost of furnishing educational services and education- related services (see Education Law § 3202 [5][d][4]). Section 3202 (5) (b) further directed the Department of Mental Hygiene (DMH) to notify the SED of the name of the child, the location of the family home or institution where the child is to be placed and the name of the school district in which the child resided when DMH assumed responsibility for the child's support and maintenance.

Education Law § 3202 (5) (d) (7) requires an intermediate care facility to notify the school district in which the new residence is located and the school district in which the child resided at the time he or she entered the intermediate care facility of a child's placement in the receiving school district within 45 days of such placement. The former home district must reimburse the SED for its expenditure on behalf of each child in an amount equal to that district's basic contribution, a term defined in Education Law § 4401 (8) (see Education Law § 3202 [5] [b]).

The Court on the motion also considered the following unrefuted factual allegations set forth in the claim:

OMRDD adopted no regulations governing notifications to the SED pursuant to Education Law § 3202 (5) (b) of the name of the child, location of the family home or institution where the child was to be placed and the name of the school district in which the child resided when DMH assumed responsibility for the child. The SED likewise adopted no regulations implementing the statutorily-directed reimbursement of the receiving districts. It did, however, develop a system aimed at tracking children covered by the statute. The system was designated "System for Tracking and Accounting for Children" (STAC). The information reporting form developed for the system was called a STAC 200 form.

Claimants allege that OMRDD was/is required to send completed STAC 200 forms to SED and the receiving district to identify the child as one covered by the statute. Once a STAC 200 form is received the receiving school district reviews the form and completes a corresponding form (STAC-1) detailing the child's disability and identifying the educational services provided during the academic year, i.e., a period defined as July 1 - June 30 (see Education Law § 2 [15]). Claimants allege that the submission of the STAC-1 form to the SED initiates the statutory reimbursement process which includes SED's review and approval, or disapproval. If approved the SED sends the receiving district an Automated Verification Listing (AVL) on which the district notes any minor corrections from the information previously provided. The receiving district signs the AVL and returns it to SED for reimbursement.

Claimants aver that OMRDD and its facilities regularly failed to notify them of the placement of children in New York City schools for whom reimbursement pursuant to the Education Law was available. OMRDD and its facilities also failed to notify the SED of the placement of eligible students in New York City schools. Claimants allege in somewhat amorphous language that despite an alleged awareness of difficulties with the STAC reporting system and the potential deleterious effects upon reimbursement of the educational and education-related costs for eligible students which a failure of timely notice could engender, SED did nothing to correct the problems thereby precipitating gross under-reimbursement relative to actual costs incurred.

In December 2003 the City[2] commenced a combined article 78 proceeding/declaratory judgment action challenging SED's failure to properly reimburse the City for eligible students pursuant to the Education Law. The instant claim alleges that although that proceeding/action was discontinued, the discontinuance was without prejudice as to claims subsequent to the 1999-2000 school year and any prospective injunctive relief.

On October 28, 2004 claimants requested in writing a list of all eligible students attending NYC schools and a list of the addresses of all OMRDD facilities that place or may place eligible students in NYC schools. The SED was copied on the request which was sent to Kathleen Broderick, Associate Commissioner of OMRDD and Director of OMRDD's NYC Regional Office. An immediate response was not forthcoming and a meeting of the parties was requested. At the meeting held sometime in 2005 OMRDD purportedly agreed to assume responsibility for the preparation and dissemination of STAC 200 forms including forms for eligible students already placed for whom no STAC 200 forms existed. Despite that purported assumption by OMRDD claimants allege that no STAC 200 forms were received following the meeting and that none have been received since March 2004.

On May 16, 2005 OMRDD provided claimants with a partially illegible spreadsheet containing the names of 260 eligible students. Efforts to obtain additional information regarding these students were unsuccessful until July 18, 2005 when the SED forwarded decipherable data regarding the subject students. Using that data claimants determined that it had STAC 200 forms on file for only 104 of the 260 eligible students. The remaining 156 students were added to the STAC system and claimants received reimbursement for costs associated with these students for the 2003-04 school year[3].

On July 19, 2005 claimants requested reimbursement of $4,016,508.32 from SED for educational expenses and education-related expenses for eligible students whose placement dates rendered them eligible for reimbursement for the 2002-03 school year. By email dated August 26, 2005 Harold Matott, Coordinator of STAC and Special Aids Unit of the SED denied as untimely claimant's request for payment for 2002-03 and earlier years.

By letter dated September 8, 2005 claimants requested that SED waive the statutory time limits applicable to such claims and requested that their application for reimbursement for the 2002-03 school year be processed. That request was denied by letter of Theresa Savo[4] dated November 15, 2005.

Claimants made a further request for reimbursement of educational expenses and education-related costs associated with those children on the list of 156 whose placement dates would have rendered them eligible for reimbursement for the school years 2000-01 and 2001-02 seeking $4,100,126.56 in statutory reimbursement for those school years. The instant claim was filed on December 27, 2005, six days following that December 21, 2005 request, and claimants have not stated on the motion what response, if any, they received. For purposes of this motion the Court assumes that claimants' request for reimbursement for the 2000-01 and 2001-02 school years was rejected as untimely based upon the reported language contained in Harold Matott's August 26, 2005 email mentioned above.

A cause of action for tuition reimbursement pursuant to Education Law § 3202 can be pursued either as a statutorily created action akin to a declaratory judgment action (see Board of Educ. of City School Dist. of City of New Rochelle v County of Westchester, 282 AD2d 561 lv denied 97 NY2d 677; Connetquot Cent. School Dist. v Greenport Union Free School Dist., 100 AD2d 923; Brentwood Union Free School Dist. v City of New York, 237 AD2d 141) or as an article 78 proceeding seeking review of the Commissioner of Education's determination regarding eligibility for reimbursement (see, Education Law § 3202 (5) (d) (12); Matter of Board of Educ. Union Free School Dist. No. 6, Harrison, NY v Allen, 29 AD2d 24). Jurisdiction over such an action or proceeding is vested in Supreme Court (see CPLR § § 7804 (b) and 3001) and is not available in the Court of Claims (see Safety Group No. 194 - New York State Sheet Metal Roofing & A.C. Contrs. Assn. v State of New York, 298 AD2d 785; Sidoti v State of New York, 115 AD2d 202; see also Psaty v Duryea, 306 NY 413).

A litigant seeking tuition reimbursement pursuant to Education Law § 3202 is pursuing a statutorily created remedy and its right to recovery is based upon the statute, not contract (see Brentwood Union Free School Dist. v City of New York, supra). Claimants' efforts to characterize this action as one sounding in implied contract or unjust enrichment therefore fail.

On the other hand there is "ample authority for imposing liability upon the State based upon the negligent performance of a ministerial act (see, e.g., Marx v State of New York, 169 AD2d 642; National Westminister Bank v State of New York, 155 AD2d 261, affd 76 NY2d 507)" (Boland v State of New York, 218 AD2d 235, 245). "Ministerial negligence involves the potential liability of a governmental entity for negligently performed ministerial acts of its employees meaning conduct requiring adherence to a governing rule with a compulsory result (Lauer v City of New York, 95 NY2d 95, 99)" (Perez v State of New York, Ct Cl, October 5, 2000 [Claim No. 97844, UID 2000-018-049], Fitzpatrick, J. unreported[5]).

To the extent that any of the 156 eligible students resided in intermediate care facilities[6], such facilities are obligated by Education Law § 3202 (5) (d) (7) to provide within 45 days of placement to the receiving district notice of the name of the child, the location of the intermediate care facility and the name of the school district in which the child resided at the time of placement. Failure to provide such timely notification would constitute a breach of the intermediate care facility's statutory duty and to the extent that such intermediate care facility is owned or operated by the State of New York could subject the State to liability for ministerial neglect (Tango v Tulevech, 61 NY2d 34; County of Nassau v State of New York, 1 AD3d 732)

However, neither the claim itself nor claimants' submissions on the motions make clear which, if any, of the 156 students at issue resided in an intermediate care facility owned and/or operated by the State of New York. Absent such information it cannot be determined whether the claimants may possess a cause of action for ministerial negligence.

Even affording the claimants the benefit of the doubt in this regard, a claim seeking money damages for ministerial negligence is subject to the time constraints of Court of Claims Act § 10 (3). That section requires either the service of a notice of intention upon the Attorney General or the filing and service of a claim upon the Attorney General within 90 days of the claim's accrual.

It is difficult to pinpoint when a claim for ministerial neglect might have accrued since the mere failure of the intermediate care facility to notify claimants did not in and of itself cause the claimants any damage but rather made it impossible for claimants to determine their eligibility for reimbursement under Education Law § 3202. "Where ... the amount of the loss represents sums to which the injured party would have been entitled if the error had not occurred, it has been held that the cause of action arises when the right to receive such sums is legally extinguished (Flushing Natl. Bank v State of New York, 210 AD2d 294; Johnson v State of New York, 131 Misc 2d 630)" (Penske v State of New York, Ct Cl, May 24, 2002 [Claim No. 104086, Motion No. M-64766, UID # 2002-013-017] Patti, J., unreported).

Determining the date of extinguishment in this matter requires referral to Education Law § 3604 (5) (a) which deals with State aid adjustments. In relevant part that section provides: "For claims for which payment is first to be made in the nineteen hundred ninety-seven – ninety-eight school year and thereafter, the commissioner shall certify no payment to a school district based on a claim submitted later than one year after the close of such school year." Viewed in light of this section of the Education Law claimants' right to receive damages for ministerial negligence would have been extinguished on or about July 1, 2003 for the school year 2001-02, July 1, 2004 for the school year 2002-03 and July 1, 2005 for the school year 2003-04. Accordingly claimants would have had 90 days from each of the above extinguishment dates to either serve a notice of intention or serve and file a claim. Claimants never served a notice of intention and service of the instant claim on December 27, 2005 was well beyond the 90 day period prescribed by Court of Claims Act § 10 (3). The instant claim is therefore untimely[7].

As the Appellate Division, Second Department observed in Welch v State of New York (286 AD2d 496, 497 - 498):
Pursuant to Court of Claims Act § 10, '[n]o judgment shall be granted in favor of any claimant' for personal injuries due to negligence, unintentional tort, or intentional tort of a State employee, unless a claim is filed and served upon the Attorney General within 90 days after the accrual of the claim, or the claimant, within 90 days after the accrual of the claim, serves upon the Attorney General a written notice of intention to file a claim therefor, and thereafter files and serves the claim upon the Attorney General within two years after the accrual of the claim (see, Conner v State of New York, 268 AD2d 706; Coleman v Webb, 158 AD2d 500). As a condition of the State's limited waiver of sovereign immunity, those requirements are strictly construed and a failure to comply therewith is a jurisdictional defect compelling the dismissal of the claim (see, Alston v State of New York, 281 AD2d 741; Crair v Brookdale Hosp. Med. Ctr., 259 AD2d 586, affd 94 NY2d 524; Phillips v State of New York, 237 AD2d 590; Voulgarelis v State of New York, 211 AD2d 675).

Under the pertinent facts of this case the claim was untimely served and filed and defendant's pre-answer motion to dismiss the claim for lack of jurisdiction must be granted.

Although claimants filed what purports to be a cross-motion seeking late claim relief pursuant to Court of Claims Act § 10 (6) it was not accompanied by a proposed claim as required by section 10 (6). The failure to submit a proposed claim has been found to be fatal to a late claim application (see Grant v State of New York, Ct Cl, September 6, 2000 [Claim No. None, Motion No. M-61919, UID # 2000-001-049] Read, P.J., unreported; Larocco v State of New York, Ct Cl, May 24, 2004 [Claim No. None, Motion No. M-68085, UID # 2004-009-33] Midey, J.). In addition claimants' counsel offered no factual support relative to the merit of a claim for damages incurred as a result of ministerial neglect (as described above) nor did the cross-motion papers address any of the statutory factors which the Court must consider on a late claim motion pursuant to Court of Claims Act § 10 (6).

Given the lack of factual detail it is impossible for this Court to discern from the instant application the true nature of the claim, whether there is merit to any underlying claim, whether the claim might be barred by the appropriate Statute of Limitations, whether the State received notice of the underlying events and was thereby afforded an opportunity to investigate the allegations in order to avoid prejudice and whether claimants might have an alternative remedy available.

Claimants' cross-motion must therefore be denied (see Morrison v State of New York, Ct Cl, May 9, 2002 [Claim Nos. 104475, 104946, Motion Nos. M-64078, M-64257, M-64339, UID # 2002-018-136] Fitzpatrick, J., unreported; Rogers v State of New York, Ct Cl, October 16, 2001 [Claim No. None, Motion No. M-63626, UID # 2001-028-565] Sise, J., unreported).

Defendant's motion to dismiss the claim for lack of subject matter jurisdiction is therefore granted and the claim is dismissed.


July 7, 2006
Saratoga Springs, New York

HON. FRANCIS T. COLLINS
Judge of the Court of Claims


The Court considered the following papers:
  1. Notice of motion dated February 3, 2006;
  2. Affirmation of Glenn C. King dated February 3, 2006 with exhibits;
  3. Notice of cross-motion dated February 22, 2006;
  4. Affirmation of Alan H. Kleinman dated February 22, 2006 with exhibit;
  5. Reply affirmation of Glenn C. King dated February 27, 2006;
  6. Affirmation of Glenn C. King dated March 8, 2006.

[1].For simplicity's sake the Court has chosen to refer to claimants in the plural since the matter was captioned that way. References to claimant in the singular may, where appropriate, be deemed to refer to the City School District of the City of New York or as it has also been referred to in the motion papers, i.e., the Department of Education.
[2].So identified in the claim (para 21). No copy of the petition/complaint was provided.
[3].An application is pending for reimbursement for the 2004-05 school year.
[4].Not otherwise identified.
[5].Unreported decisions from the Court of Claims are available via the internet at http://www.nyscourtofclaims.state.ny.us./decision.htm.

[6].An intermediate care facility is defined in Social Services Law § 2 (30) as follows:


"30. An intermediate care facility shall mean a facility or part thereof approved by the state department of health to provide therein health-related care and services to persons who because of their physical or mental condition, or both, require institutional care and services, in addition to board and lodging, but who did not have such an illness, disease, injury, or other condition as to require the institutional care and services provided only by a hospital or nursing home, providing such facility meets standards of safety and sanitation in accordance with state and federal requirements in addition to those applicable to nursing homes under state law."

It is further defined within the definition of a "community residence" found in Mental Hygiene Law § 1.03 (28) as a community residence with fourteen or fewer residents approved pursuant to law.
[7].Under the relevant facts even if the extinguishment of claimants' right to pursue reimbursement was to be measured from the end of the 14-month period for seeking a waiver of the filing deadline from the Commissioner pursuant to Education Law § 3202 (5) (e) each of the yearly claims at issue (2001-02, 2002-03, 2003-04) would still be untimely.