New York State Court of Claims

New York State Court of Claims
WEAVER v. THE STATE OF NEW YORK, # 2009-010-054, Claim No. 115531, Motion No. M-77475

Synopsis

Defendant's motion to dismiss class action is granted.

Case information

UID: 2009-010-054
Claimant(s): SHERRIE WEAVER and DAVID SHEPS, on behalf of himself and all others similarly situated
Claimant short name: WEAVER
Footnote (claimant name) :
Defendant(s): THE STATE OF NEW YORK
Footnote (defendant name) :
Third-party claimant(s):
Third-party defendant(s):
Claim number(s): 115531
Motion number(s): M-77475
Cross-motion number(s):
Judge: Terry Jane Ruderman
Claimant's attorney: DISABILITY ADVOCATES, INC.
By: Timothy A. Clune, Esq.
Nina Loewenstein, Esq.
Cliff Zucker, Esq.
William Schurtman, Esq., Of Counsel
Defendant's attorney: HON. ANDREW M. CUOMO
Attorney General for the State of New York
By: Michael E. Peeples, Assistant Attorney General
Third-party defendant's attorney:
Signature date: January 14, 2010
City: White Plains
Comments:
Official citation:
Appellate results:
See also (multicaptioned case)

Decision

The following papers numbered 1-3 were read and considered by the Court on defendant's motion to dismiss the Amended Claim:

Notice of Motion, Attorney's Supporting Affirmation and Exhibit, and Memorandum of Law........................................................................................................................1

Attorney's Affirmation in Opposition and Memorandum of Law.............................2

Attorney's Reply Memorandum of Law....................................................................3

Defendant moves to dismiss so much of the Amended Claim as asserts a class action claim. The individual claims of Weaver and Sheps are not subject to this motion to dismiss nor are the merits of their individual claims or the merits of the class action claim before the Court on this application.(1)

Background

Sheps' Individual Claim

Claimant Sheps, the putative representative of the class, is an inpatient at South Beach Psychiatric Center (SBPC). In his individual claim, Sheps alleges that from June 2004 through May 2009, the SBPC facility director, as an authorized representative payee under the Mental Hygiene Law 29.23, received in excess of $54,881.19 in Social Security benefits on behalf of Sheps and then applied $33,659.36 of those benefits to Sheps' hospital care charges. Sheps seeks reimbursement of the monies applied to his hospital care charges. Sheps argues, inter alia, that the facility director had a conflict of interest by acting as a representative payee on behalf of Sheps while also acting as the facility's director and that, therefore, an independent guardian should have been appointed to receive and manage Sheps' benefits. Sheps also argues that the facility director violated his fiduciary duties under Mental Hygiene Law 29.23 and 33.07(e) by using Sheps' Social Security benefits to pay the hospital charges Sheps incurred at the facility. Rather, Sheps maintains that the funds received in excess of $5,000 should have been used "in the first instance, for luxuries, comforts and necessities for such patient" and should have been preserved in a trust for Sheps' future needs (Mental Hygiene Law 29.23).

It is noted that federal law has specially provided that, when a person receiving Social Security benefits is incapable of managing those benefits, a representative payee may receive the benefits on behalf of the beneficiary and a facility director may act as a representative payee (20 CFR 405[j], 1383[a][2][2][A][ii][I]). Social Security benefits are intended to be used for basic needs which include, housing, food, and health care (see 20 CFR 404.2040[a], 416.110, 416.640) and "a representative payee serves the beneficiary's interest by seeing that basic needs are met, not by maximizing a trust fund * * * " (Washington State Dept. of Social and Health Serv. v Guardianship Estate of Danny Keffeler, 537 US 371, 390). When a covered person receives care at a State institution, benefits are properly expended towards the "customary charges made by the institution" and for other items that will aid the patient's recovery or discharge (20 CFR 404.2040[b], 416.64[b]). There is no federal statute limiting the amount of Social Security benefits a representative payee may receive on behalf of a beneficiary or may apply to the cost of the patient's maintenance or medical care.

Class Action Claim

The proposed class does not name its individual members, but rather defines the class as follows:

1) all current NYS OMH [New York State Office of Mental Health] psychiatric facility inpatients, and all former NYS OMH psychiatric facility inpatients discharged within 2 years of the filing of this action, for whom a facility director used patient funds to pay the facility for inpatient psychiatric care; and

2) all current NYS OMH psychiatric facility inpatients, and all former NYS OMH psychiatric facility inpatients discharged within 2 years of the filing of this action, for whom a facility director received more than $5,000 in patient funds and did not seek an independent guardian of the property to manage the funds.

(Amended Claim, 88).

The claims asserted on behalf of this proposed class are that the facility directors, who acted as representative payees, violated:

1) Mental Hygiene Law 29.23 by receiving funds in excess of $5,000 and failing to appoint independent guardians;

2) Mental Hygiene Law 29.23 by failing to apply Social Security benefits in the first instance to luxuries, comforts, and necessities of the patient;

3) Mental Hygiene Law 33.07(e) and had a conflict of interest by acting as a representative payee for the patient's Social Security benefits and then using the funds to pay the charges incurred by the patient in the director's facility;

4) Mental Hygiene Law 33.07(e) by failing to preserve the Social Security benefits received so that they may be used for future needs of the beneficiary.

(Amended Claim 7).

Court of Claims Act 11(b) requires that a claim state the time and place where the claim arose, the nature of same, the items of damage or injuries sustained, and, with some exceptions not relevant here, the total sum claimed. These pleading requirements have been held to be jurisdictional in nature and the failure to comply with this provision of the Court of Claims Act warrants dismissal of the claim (see Kolnacki v State of New York, 8 NY3d 277 [failure to allege the total sum claimed is a jurisdictional defect warranting dismissal]; Lepkowski v State of New York, 1 NY3d 201 [failure to comply with all pleading requirements of Court of Claims Act 11(b) is a jurisdictional defect warranting dismissal of the claim]).

In rare instances, class action lawsuits have been recognized in the Court of Claims (see Brown v State of New York, 9 AD3d 23; St. Paul Fire & Mar. Ins. Co. v State of New York, 99 Misc 2d 140). The majority of the Court of Claims decisions have held that a class action, like any other case brought in the Court of Claims, must satisfy all of the jurisdictional requirements of Court of Claims Act 11(b) and, to be included as a member of a certified class in the Court of Claims, the individual must be a named claimant in a filed claim (see Arroyo and Springer v State of New York, Ct Cl, June 29, 2006, Midey, J., Claim Nos. 111362 and 111361, Motion Nos. M-71063 and M-71115, UID 2006-009-037; Woolley v State of New York, Ct Cl, July 2, 2001, Collins, J., Claim No.103781, Motion Nos. M-63263, M-63409, UID 2001-015-160; Partridge v State of York, Ct Cl, May 31, 2000, Patti, J., Claim No. 90710, Motion Nos. M-58210, CM-58893, UID 2000-013-002; Brown v State of New York, Ct Cl, Aug. 21, 1997, Hanifin, J., Claim No. 86979, Motion No. M-55344, affd 250 AD2d 314, 319-20). Claimants' reliance upon Bertoldi v State of New York, 164 Misc 2d 581, the one Court of Claims decision which held to the contrary, is misplaced. That decision has not been followed and the judge's reasoning has been criticized. Accordingly, this Court rejects claimants' argument that, pursuant to Article 9 of the CPLR, the members of the proposed class need not be identified. The CPLR governs in all actions, "except where the procedure is regulated by inconsistent statute" (CPLR 101). Court of Claims Act 11(b) is an inconsistent statute and, without an expressed legislative exclusion to the contrary, it applies to all actions brought in the Court of Claims including class actions (see Lepkowski v State of New York, supra [all claims in a consolidated action must comply with the requirements of Court of Claims Act 11(b)]).

Claimants also argue that "the State knows which of its facility directors have been appointed representative payees and for which patients, and how much money those facility director representative payees have paid to the State for hospital charges" (Memorandum of Law in Opposition to Defendant's Motion to Dismiss the Amended Claim, p 11, fn 7) and that, therefore, claimants need not identify the individual members of the class action or specify the amount of damages sustained by those individuals because that information is ascertainable by the State. This argument has been expressly rejected by the Court of Appeals in Lepkowski v State of New York, supra at 208, wherein the Court stated that "[t]he Court of Claims Act does not require the State to ferret out or assemble information that section 11(b) obligates the claimant to allege" (see also Kolnacki v State of New York, supra at 280 ["(t)he Court (in Lepkowski) observed that the State is not responsible for uncovering information that the claimant is required to allege under section 11(b)"]). A fortiori, in a class action, where according to claimants there are potentially in excess of 5000 members of the class, it is not incumbent upon the State to ascertain the identity of the potential claimants who would qualify as members of a class or the time and place where the claim arose or the nature and extent of the damages.

In this matter, the Amended Claim fails to name any individual, other than Sheps, as a member of the class. Additionally, as to those unnamed individuals, the Amended Claim fails to specify the time and place where the claim arose and the items of damage, or the total sum claimed. Since the State has conditioned its waiver of immunity upon compliance with the requirements of Court of Claims Act 11(b), this Court cannot, without a legislative mandate to the contrary, entertain a claim which fails to satisfy all of the pleading requirements set forth in the Court of Claims Act.

Accordingly, defendant's motion to dismiss the class action is GRANTED.

January 14, 2010

White Plains, New York

Terry Jane Ruderman

Judge of the Court of Claims


1. Prior to service of the Amended Claim, defendant moved for summary judgment dismissing the original claim (M-75599, M-76480); claimants cross-moved to certify a class action (CM-75883) and moved to amend the claim (M-76915). The motion to amend is rendered moot (M-76915) and the other motions and cross-motion are being held in abeyance until after the determination of defendant's motion to dismiss the class action claim asserted in the Amended Claim.