Nesconset Center for Nursing and Rehabilitation, etc., appellant, v. Commissioner of Health of the State of New York, et al., respondents. (2026)

Argued—December 16, 2025

DECISION & ORDER

C/

In an action, inter alia, for a judgment declaring that a final audit report issued by the Office of the Medicaid Inspector General is null and void, the plaintiff appeals from (1) an order of the Supreme Court, Suffolk County (Andrew A. Crecca, J.), dated May 26, 2021, and (2) an order of the same court dated September 28, 2021.  The order dated May 26, 2021, insofar as appealed from, granted that branch of the defendants' motion which was pursuant to CPLR 3211(a) to dismiss the complaint for lack of standing.  The order dated September 28, 2021, insofar as appealed from, denied that branch of the plaintiff's motion which was for leave to renew its opposition to that branch of the defendants' prior motion which was pursuant to CPLR 3211(a) to dismiss the complaint for lack of standing.

ORDERED that the orders are affirmed insofar as appealed from, with one bill of costs.

The plaintiff owned and operated a residential health care facility located in Nesconset (hereinafter the facility), which was licensed by the New York State Department of Health (hereinafter DOH) and enrolled as a Medicaid provider.  The Office of the Medicaid Inspector General (hereinafter OMIG), an independent entity within DOH responsible for assessing providers' compliance with the applicable laws and rules of the Medicaid program, audited the facility's Medicaid reimbursements from February 2008 through December 2014.  In 2018, the plaintiff filed Medicaid reimbursement rate appeals with DOH. In February 2019, before OMIG issued a final audit report, the plaintiff sold the facility to its current operator, Nesconset Operating, LLC (hereinafter Nesconset Operating).  In April 2019, OMIG issued the final audit report concluding that there had been Medicaid overpayments made to the facility.

Thereafter, the plaintiff commenced this action, inter alia, for a judgment declaring that the final audit report was null and void because it violated Social Services Law § 368–c(3) and a 2016 universal settlement agreement entered into between New York State and various residential health care facilities, including the facility.  The defendants moved, among other things, pursuant to CPLR 3211(a) to dismiss the complaint for lack of standing.  In an order dated May 26, 2021, the Supreme Court, inter alia, granted that branch of the defendants' motion.  Subsequently, the plaintiff moved, among other things, for leave to renew its opposition to that branch of the defendants' prior motion.  In an order dated September 28, 2021, the court, inter alia, denied that branch of the plaintiff's motion.  The plaintiff appeals from both orders.

“Standing is a threshold determination, resting in part on policy considerations, that a person should be allowed access to the courts to adjudicate the merits of a particular dispute that satisfies the other justiciability criteria” (Society of Plastics Indus. v. County of Suffolk, 77 N.Y.2d 761, 769;  see Matter of Association for a Better Long Is., Inc. v New York State Dept. of Envtl.  Conservation, 23 NY3d 1, 6).  “To establish standing, a party must show that it has suffered an injury in fact, distinct from the general public, and that the injury falls within the zone of interests to be protected by the statute challenged” (Kinsella v. Long Is. Power Auth., 236 AD3d 770, 772;  see Matter of Green v. Town of Ramapo, 227 AD3d 994, 994–995).  “Where a defendant seeks dismissal pursuant to CPLR 3211(a)(3) based on lack of standing, the burden is on the moving defendant to establish, prima facie, the plaintiff's lack of standing” (Kraus v Credit Control Servs., Inc., 237 AD3d 1083, 1084 [internal quotation marks omitted];  see Alsaidi v. Alsaede, 227 AD3d 643, 645).  “To defeat a defendant's motion to dismiss, the plaintiff has no burden of establishing its standing as a matter of law, but must merely raise a question of fact as to the issue” (Sizova v. Union Mut. Fire Ins. Co., 217 AD3d 1007, 1008 [internal quotation marks omitted];  see Wilmington Trust, N.A. v. Teo, 204 AD3d 735, 736–737).

Here, the defendants established, prima facie, that the plaintiff lacked standing to commence this action.  The injury asserted by the plaintiff, as a former owner and operator of the facility, does not fall within the zone of interests sought to be protected because the governing statute and regulations contemplate the payment of Medicaid reimbursements to and the recovery of overpayments of Medicaid funds from “the current provider of medical services or the current operator of a nursing home facility” (Matter of Park Manor Rehabilitation & Health Care Ctr., LLC v Shah, 129 AD3d 1276, 1277–1278;  see Social Services Law § 367–a[1][a];  Public Health Law § 2801[2], [3], [4][b];  10 NYCRR 86–2.1[a];  401.2[b];  401.3[c];  18 NYCRR 518.1[a];  518.6).  Thus, Nesconset Operating, as the current owner and operator of the facility, is responsible for any Medicaid overpayments made to the facility (see Matter of Park Manor Rehabilitation & Health Care Ctr., LLC v Shah, 129 AD3d at 1278;  Matter of Astor Gardens Health Care Ctr. v Novello, 304 A.D.2d 961, 963).  Indeed, in order to obtain its operating certificate, Nesconset Operating was obligated to submit an affidavit to DOH expressly stating that Nesconset Operating would remain liable and responsible for any Medicaid overpayments made to the facility “with respect to the period of time prior to ․ Nesconset Operating, LLC acquiring its interest.”

In opposition to the defendants' prima facie showing, the plaintiff failed to raise a question of fact.  Accordingly, the Supreme Court properly granted that branch of the defendants' motion which was pursuant to CPLR 3211(a) to dismiss the complaint for lack of standing.

A motion for leave to renew “shall be based upon new facts not offered on the prior motion that would change the prior determination” (CPLR 2221[e][2] ) and “shall contain reasonable justification for the failure to present such facts on the prior motion” (id. § 2221[e][3] ).  “Although the requirement that a motion for renewal must be based on new facts is a flexible one, a motion to renew is not a second chance freely given to parties who have not exercised due diligence in making their first factual presentation” (HSBC Bank USA, N.A. v. Joseph, 238 AD3d 1009, 1011).  “Thus, the court lacks discretion to grant renewal where the moving party omits a reasonable justification for failing to present the new facts on the original motion” (Ok Sun Chong v. Scheelje, 218 AD3d 691, 692 [internal quotation marks omitted];  see P.J. 37 Food Corp. v George Doulaveris & Son, Inc., 189 AD3d 858, 859).

Here, the Supreme Court providently exercised its discretion in denying that branch of the plaintiff's motion which was for leave to renew its opposition to that branch of the defendants' prior motion which was pursuant to CPLR 3211(a) to dismiss the complaint for lack of standing.  The plaintiff failed to provide a reasonable justification for failing to submit an email pertaining to the universal settlement agreement in opposition to the defendants' prior motion (see Joseph v. Simmons, 114 AD3d 644, 644–645).  With respect to the remaining documents submitted in support of its motion, the plaintiff failed to demonstrate that the alleged new facts contained in those documents would have changed the prior determination (see Ok Sun Chong v. Scheelje, 218 AD3d at 692;  Seegopaul v. MTA Bus Co., 210 AD3d 715, 716).

The defendants' remaining contentions either are without merit or need not be reached in light of our determination.

BARROS, J.P., GENOVESI, VENTURA and GOLDBERG VELAZQUEZ, JJ., concur.

ENTER:

Darrell M. Joseph

Clerk of the Court