NEW FRANKLIN NURSING HOME INC v. NOVELLO

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Supreme Court, Appellate Division, Second Department, New York.

NEW FRANKLIN NURSING HOME, INC., etc., et al., Appellants-Respondents, v. Antonia NOVELLO, etc., et al., Respondents-Appellants.

Decided: September 23, 2002

ANITA R. FLORIO, J.P., SONDRA MILLER, STEPHEN G. CRANE and WILLIAM F. MASTRO, JJ. Salamon, Gruber, Newman & Blaymore, P.C., Roslyn Heights, N.Y. (Sanford Strenger of counsel), for appellants-respondents. Eliot Spitzer, Attorney-General, New York, N.Y. (Marion R. Buchbinder and David Axinn of counsel), for respondents-appellants.

In an action, inter alia, for a judgment declaring that a moratorium issued on August 3, 2000, by the defendant Department of Health of the State of New York on the processing of applications for the establishment and construction of nursing homes is unconstitutional and inapplicable to the plaintiffs, the plaintiffs appeal, as limited by their brief, from so much of (1) an order of the Supreme Court, Queens County (Kitzes, J.), dated April 2, 2001, as denied their motion for an injunction pursuant to Public Health Law article 28, and (2) an order of the same court, dated June 28, 2001, as, upon granting that branch of their motion which was for leave to reargue the motion for an injunction, adhered to the original determination, and the defendants cross-appeal from so much of (1) the order dated April 2, 2001, as denied their cross motion to dismiss the complaint pursuant to CPLR 3211(a)(7) for failure to state a cause of action, and (2) the order dated June 28, 2001, as purportedly adhered to the original determination denying their cross motion to dismiss the complaint.

ORDERED that the appeal by the plaintiffs from so much of the order dated April 2, 2001, as denied their motion for an injunction pursuant to Public Health Law article 28 is dismissed, as that portion of the order was superseded by the order dated June 28, 2001, made upon reargument;  and it is further,

ORDERED that the cross appeal by the defendants from the order dated June 28, 2001, is dismissed, as they are not aggrieved by that order (see CPLR 5511);  and it is further,

ORDERED that the order dated April 2, 2001, is reversed insofar as cross-appealed from, on the law, the defendants' cross motion to dismiss the complaint pursuant to CPLR 3211(a)(7) is converted to one for summary judgment (CPLR 3211[c] ), the cross motion is granted, so much of the complaint as sought an injunction is dismissed, the matter is remitted to the Supreme Court, Queens County, for the entry of a judgment dismissing the complaint and declaring that the moratorium is constitutional and applicable to the plaintiffs' proposed project, and the defendants shall submit the methodology in question to the State Hospital Review and Planning Council on or before the latest date for it to be considered at the December 5, 2002, meeting of the State Hospital Review and Planning Council;  and it is further,

ORDERED that the order dated June 28, 2001, is affirmed insofar as appealed from;  and it is further,

ORDERED that the defendants are awarded one bill of costs.

In 1990 the plaintiffs applied to the defendant Department of Health of the State of New York (hereinafter the DOH) for permission to establish and construct a nursing home in Queens.   The following year, the application received conditional approval.   The plaintiffs then took steps to satisfy the various contingencies which were placed on its approval.

On August 3, 2000, the DOH announced that there would be a temporary moratorium on the processing of all applications for the establishment and construction of nursing homes which had only been conditionally approved.   Those applications were denominated as “pipeline” applications.   During the time that the moratorium was in effect, the DOH, which was concerned about a possible overabundance of nursing home beds in this State in the future, would consider possible changes to the existing methodology by which the need for nursing home beds was determined (see 10 NYCRR 709.3).   By August 3, 2000, the plaintiffs satisfied all applicable contingencies, except for the requirement that they secure a commitment for a permanent mortgage from a recognized lending institution at a prevailing rate of interest deemed acceptable by the DOH.

The plaintiffs, whose project application, according to the DOH, was among those in the “pipeline” subject to the moratorium, commenced this action in late 2000, seeking declaratory and injunctive relief, essentially claiming that the moratorium was unconstitutional and, in any event, inapplicable to their application.   Without ruling on the validity of the moratorium, the Supreme Court ultimately denied the plaintiffs' motion for injunctive relief pursuant to Public Health Law § 2801-c, finding that theirs was a “ pipeline” project subject to the moratorium.

 The plaintiffs contend that the Supreme Court erred in failing to invalidate the moratorium on the ground that it was not a valid exercise of the DOH's authority.   This claim is without merit, as we have recently determined in Sheffield Towers Rehabilitation & Health Care Ctr. v. Novello, 293 A.D.2d 182, 741 N.Y.S.2d 103, that the declaration of this particular moratorium was within the Commissioner's inherent discretionary power and was consistent with the proper exercise of a statutory duty to authorize only construction of necessary facilities (see also Matter of Jay Alexander Manor v. Novello, 285 A.D.2d 951, 727 N.Y.S.2d 560).

 The plaintiffs further contend that the Supreme Court erred in finding that their project was subject to the moratorium.   Contrary to the plaintiffs' contention, the approval for their project application was non-final, and remained as such when the moratorium was issued, as they had not yet satisfied all necessary contingencies for final approval by the DOH. Accordingly, the Supreme Court properly denied the plaintiffs' motion for an injunction pursuant to the Public Health Law (see Matter of Hamptons Hosp. & Med. Ctr. v. Moore, 52 N.Y.2d 88, 436 N.Y.S.2d 239, 417 N.E.2d 533;  Sheffield Towers Rehabilitation & Health Care Ctr. v. Novello, supra).

 However, we agree with the defendants' contention that they are entitled to summary judgment for a declaration in their favor.   Summary judgment treatment of a motion to dismiss for failure to state a cause of action is appropriate where, as here, the parties charted a course for summary judgment, and the questions presented are purely legal, even though formal notice to do so has not been given (see Kulier v. Harran Transp. Co., 189 A.D.2d 803, 804, 592 N.Y.S.2d 433;  cf. Mihlovan v. Grozavu, 72 N.Y.2d 506, 508, 534 N.Y.S.2d 656, 531 N.E.2d 288).   Under the circumstances, the defendants established their entitlement to judgment as a matter of law.

In light of the representations made by the Assistant Solicitor General at oral argument of this appeal, we direct the defendants to submit to the State Hospital Review and Planning Council (hereinafter the SHRPC) the methodology in question on or before the latest date for it to be considered at the December 5, 2002, meeting of the SHRPC.

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