Matter of People Care Inc. v City of N.Y. Human Resources Admin. Dept. of Social Servs.
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Matter of People Care Inc. v City of N.Y. Human Resources Admin. Dept. of Social Servs. 2013 NY Slip Op 33493(U) December 20, 2013 Supreme Court, New York County Docket Number: 111467/11 Judge: Peter H. Moulton Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [* 1] SUPREME COURT OF THE STATE OF NEVV YORK -~ NEW YORK COUNTY /lfo v /lh(/\/ 70 Justice INDEX NO. MOTION DATE L ,. -v - MOTION SEQ. NO. C;..,.J Df /lJ.ei,v Y() r /(' (j) ( MOTION CAL. No. The following papers, numbered 1 to _ _ ,, were read on th;s mot;on t o / f o r w ? PAPERS NUMBERED Notice of Motion/ Order to Show Cause Answering Affidavits - Affidavits - Exhibits ... Exhibits ~~~~~~~~~~~~...,--~ Replying Affidavits ~~~~~~~~~~~~~~~~~~ Cross-Motion: Yes No Upon the foregoing papers, it is ordered that this mown- f c1t~ ,___, ~- ). Ll.-1 ~, \_ ~- ~-- /(_, ft- l? / 1 w (/) <t u z 0 i== 0 ~ one: FINAL DISPOSITION if appropriate: NON-FINAL D!SPOSiTIOf\1 DO NOT SUBMIT ORDER/ JUDG. SETTLE JUDG. [* 2] Supreme Court: New York County Part 40B --------------------------------------x In the Matter of the Application of PEOPLE CARE INCORPORATED, d/b/a ASSISTED CARE, Petitioner, For a Judgment under Article 78 of the Civil Practice Law and Rules, Index No. 111467/11 -against- CITY OF NEW YORK HUMAN RESOURCES ADMINISTRATION DEPARTMENT OF SOCIAL SERVICES, Respondent. --------------------------------------x Peter H. Moulton, Justice In this Article 78 proceeding petitioner seeks an order 1) compelling respondent to vacate a performance evaluation "in its entirety," registry, and to and 2) petitioner's Petitioner's remove it from the City's VENDEX contract remanding the matter to respondent to consider objections order to to show evaluation. performance the cause also seeks a preliminary injunction while the petition is pending enjoining and restraining respondent from using the evaluation in awarding or extending contracts, or "in any other way adverse to Petitioner." The parties restraining order agreed that on the prevents 1 return date respondent to from a temporary using the [* 3] evaluation. Respondent has moved to di ss the petition as moot, arguing that it has withdrawn the evaluation and will not reinstate FACTS Petitioner People Care Inc. services agency licensed in with respondent New York is an employee-owned home care State of New York. City Human Resources It contracts Administration ("HRA") to provide home attendant and/or housekeeping services to individuals di who are in stable medical iculty with daily life activities, cleaning, or personal hygiene. contracts with HRA to provi Manhattan. As of condition but who have such as walking, cooking, People Care has performed under services in Brooklyn, Queens and date of the petition these contracts had expired, but HRA continues to refer clients to petitioner under the terms of the contract. The petition avers that the ing of new contracts has been slowed by the State's move to move the client population from Medicaid to managed care. People Care has had an ongoing dispute with HRA concerning 1 The petition was brought in late 2011. After the petit and motion were filed, parties engaged in lengthy settlement negotiations which did not bear fruit. argument on the pet ion was held before court on June 6, 2013. At the request of the court, the rties submitted further papers. Petitioner subsequently brought a motion for contempt, alleging a violation of the TRO. This motion for contempt is not fully submit 2 [* 4] Health Care Reform Act ("HCRA") Retention Funds, Recruitment which petitioner had used to fund an Employee Stock Ownership In ("ESOP"). June 2009, itioner brought an Article an 78 proceeding against HRA challenging its jurisdiction and authority to audit and recoup HCRA Recruitment and Retention Funds ("the ESOP Arti e 78"). 78 was dismissed by the Supreme The ESOP Artie Court on the ground that petitioner had dispute resolution procedures contained in iled to comply with the governing agreement. People Care appeal The First Department reversed the in a decision dat 15, 2011. November It held that the Supreme Court improperly dismissed petition, ho ng that exhaustion of administrative remedies necessary where the itioner brings a substant not claim that the challenged agency action is "wholly beyond its grant of power." The court noted that there was nothing the record to indicate that HRA had been given the authority by the State Department of Health ("DOH") to audit the use of HCRA Recruitment and Retention Funds. [R]espondents cite no speci c statute or regulation that gives them the power to recoup funds awarded pursuant to Public Health Law § 2807-v(l) (bb). Nonetheless, it may be well within DOH's power to egate auditing responsibilities to another agency such as HRA. (Cite omitted.) The First Department went on to hold that: DOH has not been shown to be a necessary party (see CPLR 1001 [a]). Petit r seeks no 3 [* 5] relief against it (cite omitted) and reversal is sought solely on the basis of HRA's lack of power. Furthermore, a finding that HRA is without authority to recoup the subject funds will not impact the DOH Commissioner's ability to recover the funds from petitioner and thus would not inequitably affect his interests. Petitioner opines that its bringing of this ESOP Article 78 proceeding caused respondent to give it the negative performance evaluation that is the subject of this proceeding. On June 29, 2011, HRA issued the performance evaluation at issue herein, which concerned petitioner's Brooklyn Home Attendant Program for fiscal year 2 00 9 ("Evaluation") The Evaluation's overall rating for the Brooklyn program was "poor." Petitioner avers that the Brooklyn Program received ratings in prior fiscal years that were "very good" and "excellent." Petitioner faults several aspects of the Evaluation. First, it avers that HRA applied new standards of performance ex poste facto, after the 2009 fiscal year had expired, which gave petitioner no chance to mold its performance to the new standards. Second petitioner disagrees with the performance" rating of "unsatisfactory." Evaluation's "fiscal Petitioner avers that the 2005 audit upon which this rating was based in fact shows that petitioner is entitled to an "excellent" rating. Third, petitioner disputes the Evaluation's statement that petitioner improperly established an Employee Stock Ownership Plan without HRA's prior approval. According to petitioner, 4 no such [* 6] prior approval was required. Fourth, petitioner argues that the Evaluation inaccurately concludes that it was incorrect for petitioner to include the ESOP as a payable for fiscal year 2005, as that question was the subject of the ESOP Article 7 8 proceeding and the appeal of the ESOP Article 78 had not yet been concluded. The Mayor's Office of Contract Services Evaluation to People Care on June 28, ("MOCS") mailed the 2011. Accompanying the Evaluation were instructions from MOCS that gave People Care notice that it had 15 days to respond to the Evaluation. The instructions stated that MOCS will forward the vendor's response to the agency for review, and conclude "[f]ailure to respond within the specified time shall evaluation, constitute your agreement with the contents of the and the evaluation will be posted and visible on the new VENDEX system.n VENDEX is an automated data contractors base maintained seeking to by work the City with City concerning prospective agencies. Its primary purpose is to provide information about venders to City contract officers. On July 12, 2011, petitioner submitted a formal objection to MOCS pursuant to Section 4-01 of the City of New York Procurement Policy Board Rules ("PPBR"). On July 26, 2011, out of what it describes as an "abundance of caution," petitioner filed a formal Notice of Dispute with respect to 5 the Evaluation pursuant to [* 7] another section of the PPBR, On September 21, § 2011, 4-09. respondent issued its determination denying relief to People Care. The determination was based on the assumption that People Care had not timely grieved the Evaluation. This finding was based on the Notice of Dispute filed on July 26, 2011, and ignores the earlier objection filed on July 13, 2011. Soon after this determination, petitioner filed this Article 78 proceeding. DISCUSSION The petition argues that HRA's finding that the objection was not timely is arbitrary and capricious. It also asserts that the Evaluation contains "numerous factual errors and assumptions" and deviated from "objective standards." HRA responded by withdrawing the Evaluation. HRA vacated the September 21, 2011 determination and MOCS permanently removed the Evaluation from petitioner's VENDEX file. that it would Subsequently, be issuing on April 5, a 2013, new At first, performance HRA stated evaluation. HRA and MOCS determined that no performance evaluation would be conducted for fiscal year 2009. On this basis, respondent argues that the matter is moot as petitioner can no longer be aggrieved by the complained-of agency action. (See Usatynski v Daines, 86 AD3d 914.) 6 [* 8] Petitioner argues could use the same that the matter is not moot because HRA allegedly improper evaluation of People Care's operations. criteria in its next It also argues that HRA has recently made demands, in the context of 2006 and 2007 audits of People Care's operations, that petitioner stop listing the "ESOP payable" in its audit report. Based on these arguments, petitioner argues that the issues present in this lawsuit fall within the "capable of repetition, mootness doctrine. This yet evading (~Avella argument is review" exception to the v Batt, 33 AD3d 77.) unpersuasive. Respondent unequivocally that there will be no 2009 Evaluation. has stated People Care's performance in future evaluations is not before the court. Other facts, other criteria, might enter into HRA's future determination. The First Department faced a similar situation in Encore College Bookstores Inc. v City University of New York (75 AD3d 442). In that of case, debiting the Pell petitioner Grant Funds challenged from respondents' students' accounts practice when they purchased textbooks at another nonparty bookstore that competed with petitioner. During the pendency of the Article 78 proceeding challenging this action, the respondents ceased the program at the Borough of Manhattan Community College ("BMCC") and Kingsborough Community College ("Kingsborough"), the two colleges named in the petition. The First Department found that the proceeding was moot upon 7 [* 9] the cessation of the program at the two named colleges, even though respondents had similar, albeit modified, textbook programs at other colleges, and even though petitioner stated that there was a danger of reinstatement of the program at BMCC and Kingsborough. The First Department said the likelihood of reinstatement, or the institution of one of the modified programs [was] not clear [and] are not sufficient reasons to consider the merits of an appeal that no longer involves an actual controversy between the parties in this particular case and where the issues are not such as to typically evade review and are not substantial. [Ci tat ions omitted.] (Id at 443.) Moreover, if People Care disagrees with a future HRA evaluation there is a means of administrative review that may give it redress, or, at the least, provide the court with a record of the reasons for HRA's determination. ful r Indeed, People Care attempted to invoke administrative review with respect to the nowvacated 2009 Evaluation. Because of agency error concerning the timeliness of People Care's objections, HRA did not respond to the substance of People Care's objections. That does not mean that the parties could not engage in a productive debate via administrative review, assuming some decision adverse to People Care at some point in the future. In any event, there is "a realistic likelihood that the issues presented here will recur with an adequately developed record and with a timely opportunity to review.n 8 [* 10] v Human Resources Administration, 77 NY2d 973, 974-5.) Accordingly the exception to the mootness doctrine does not apply. CONCLUSION For the reasons stated, motion is granted, and this the petition is denied, proceeding is the cross- dismissed. constitutes the Decision and Judgment of the Court. DATED: December 20, 2013 A.J.S.C. HON. PET.ER H. :tvlOULTON SUPREME COURT JUSTICE . . UNFILED JUDGMENT This JUd_gment has not been entered by the County Clerk and _notice of entry cannot be served based hereon. To obtain e:ntry, counsel or authorized representative must appear m person at the Judgment Clerk's Desk (Room J41B). ' 9 ·~.., ' '. .. ;.,,.., .... , This
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