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Carrier v. Salvation Army

88 N.Y.2d 298 Court N.Y. Decision date 1996-06-06 English

Delivered by Levine, J.

Contents

Majority

p. 298
[667 NE2d 328, 644 NYS2d 678]
Marc Carrier, Plaintiff, and James Stuart et al., Appellants, v Salvation Army, Doing Business as Booth House II, Respondent.
Argued May 1, 1996;
decided June 6, 1996
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POINTS OF COUNSEL
Ann Pegg Biddle, New York City, and Wayne G. Hawley for appellants.
I. Basic rules of statutory construction require a finding that a private right of action exists in Social Services Law. (Price v Price, 69 NY2d 8 ; Matter of Asman v Ambach, 64 NY2d 989 ; Matter of Eastern Milk Producers Coop. Assn. v State of New York Dept. of Agric. & Mkts., 58 NY2d 1097 ; Snyder v Newcomb Oil Co., 194 AD2d 53 .) II. A private right of action is properly implied from Social Services Law. (Hoxie’s Painting Co. v Cato-Meridian Cent. School Dist., 76 NY2d 207 ; Burns Jackson Miller Summit & Spitzer v Lindner, 59 NY2d 314 ; Condec Corp. v Farley, 578 F Supp 85 ; Izzo v Manhattan Med. Group, 164 AD2d 13 , 77 NY2d 989 ; Doe v Roe, 190 AD2d 463 ; County of Broome v State of New York, 119 AD2d 358 ; Terrigino v Zaleski, 144 Misc 2d 474 ; Buchwalter v Dayton Mgt. Corp., 139 Misc 2d 297 ; Daniels v Christofoletti, 143 Misc 2d 857 .) III. The Court below’s ruling that mandamus to compel New York State Department of Social Services to bring enforcement proceedings is the appropriate remedy, is error of law requiring reversal by this Court. (Klostermann v Cuomo, 61 NY2d 525 ; Matter of Natural Resources Defense Council v New York City Dept. of Sanitation, 83 NY2d 215 ; Matter of New York Pub. Interest Research Group v Dinkins, 83 NY2d 377 ; Matter of Savastano v Prevost, 66 NY2d 47 ; Matter of Mullen v Axelrod, 74 NY2d 580 ; Gaynor v Rockefeller, 15 NY2d 120 ; Matter of Grzyb v Constantine, 182 AD2d 942 ; People v Bunge Corp., 25 NY2d 91 ; Matter of Perazzo v Lindsay, 30 AD2d 179 , 23 NY2d 764 .)
Howard W. Burns, Jr., New York City, for respondent.
I. Plaintiffs have no implied private right of action under Social Services Law § 460-d (5) for appointment of a receiver. (Andres v Mountainview Home for Adults, 92 Misc 2d 136 ; Henry v Isaac, 214 AD2d 188 ; People v Abbott Manor Nursing Home, 70 AD2d 434 , 52 NY2d 766 ; Birnbaum v State of New York, 73 NY2d 638 ; Passenger Corp. v Passengers Assn., 414 US 453 ; Cort v Ash, 422 US 66 ; Securities Investor Protection v Barbour, 421 US 412 ; Botany Mills v United States, 278 US 282 ; Hoxie’s Painting Co. v Cato-Meridian Cent. School Dist, 76 NY2d 207 ; Sheehy v Big Flats Community Day, 73 NY2d 629 .) II. Plaintiffs
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may not raise on appeal new arguments not presented to the courts below. (Recovery Consultants v Shih-Hsieh, 141 AD2d 272 ; Douglas Elliman-Gibbons & Ives v Kellerman, 172 AD2d 307 , 78 NY2d 856 ; Snyder v Newcomb Oil Co., 194 AD2d 53 ; Huston v County of Chenango, 253 App Div 56 , 278 NY 646 ; Bankers Trust Co. v Martin, 51 AD2d 411 ; Mulligan v Lackey, 33 AD2d 991 ; Knolls Coop. Section No. 2 v Evans Dev. Corp., 169 AD2d 690 ; Chimarios v Duhl, 152 AD2d 508 .) III. The Court below did not commit error with respect to the availability of mandamus relief against the Department of Social Services. (Stokes v Foote, 172 NY 327 ; Tober v Schenectady Sav. Bank, 54 AD2d 1049 ; Chiasson v New York City Dept. of Consumer Affairs, 138 Misc 2d 394 ; Matter of Buehler v Board of Supervisors, 260 NY 268 ; 343 E. 77th St. Corp. v Bloom, 45 Misc 2d 545 ; Klostermann v Cuomo, 61 NY2d 525 .)
Robinson Silverman Pearce Aronsohn & Berman LLP, New York City (Eric Rieder of counsel), for Friends and Relatives of the Institutionalized Aged, Inc., and another, amici curiae.
I. An implied private right of action exists to enforce article 7 of the Social Services Law and 18 NYCRR parts 485-487. (Burns Jackson Miller Summit & Spitzer v Lindner, 59 NY2d 314 ; Sheehy v Big Flats Community Day, 73 NY2d 629 ; Izzo v Manhattan Med. Group, 164 AD2d 13 , 77 NY2d 989 ; Trautz v Weisman, 819 F Supp 282 ; Henry v Isaac, 214 AD2d 188 ; Condec Corp. v Farley, 578 F Supp 85 ; CPC Intl. v McKesson Corp., 70 NY2d 268 ; Buchwalter v Dayton Mgt. Corp., 139 Misc 2d 297 .) II. Plaintiffs may seek appointment of a receiver pursuant to the court’s equitable powers. (People v Abbott Manor Nursing Home, 70 AD2d 434 , 52 NY2d 766 ; 64 B Venture v American Realty Co., 194 AD2d 504 ; People ex rel. Doe v Beaudoin, 102 AD2d 359 .)

OPINION OF THE COURT

The narrow issue presented by this appeal is whether Social Services Law § 460-d grants residents of an adult care facility subject to Department of Social Services supervision a private right of action to seek the appointment of a temporary receiver. Because we agree with the courts below that there is no such right under the statute, we now affirm.

Plaintiffs, residents of an adult care facility known as Booth House II, brought an action against the operator, defendant Salvation Army, for the appointment of a temporary receiver

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pursuant to Social Services Law § 460-d (5). Defendant had previously submitted a plan to the Department of Social Services to voluntarily surrender its operating certificate and close the facility (see, 18 NYCRR 485.5 [j]). The proposed plan for closure received Department approval and plaintiffs subsequently sought appointment of a receiver to operate the facility during the decertification period.

In pertinent part, the complaint and accompanying order to show cause papers alleged that defendant was failing to comply with its obligations in connection with the closing of the facility, specifically, the obligation to relocate residents to appropriate settings and to maintain the safety and health standards set forth in the Social Services Law. In the order to show cause plaintiffs moved for appointment of a temporary receiver and other injunctive relief; defendant cross-moved to dismiss the complaint for failure to state a cause of action. Supreme Court granted defendant’s motion and, as pertains to this appeal, held that Social Services Law § 460-d does not expressly or impliedly authorize facility residents to seek the remedy of a temporary receivership.[1] The Appellate Division affirmed, agreeing with Supreme Court that an implied right of action for such relief would be "entirely inconsistent with the purposes, mechanism and the underlying legislative and statutory enforcement scheme” ( 217 AD2d 420 ).

At the time this action commenced, Social Services Law § 460-d (5) provided:

"The supreme court may grant equitable relief against violations or threatened violations of this article or of the regulations of the [Department of Social Services] by any facility subject to the inspection and supervision of the department. The attorney general may seek such equitable relief, in the name of the people, upon the request of the department. * * * The court, after a hearing, may make an order granting such equitable relief as it may deem necessary, including, but not limited to * * * appointment of a temporary or permanent receiver for the protection of the public health or the health, safety and welfare of any individual in such facility.”

1 Supreme Court also dismissed plaintiffs’ second cause of action seeking a declaration that one of the plaintiffs was entitled to the protection of the rent stabilization law. The dismissal of that claim is not before us.

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Manifestly, the statute does not expressly confer on residents such as plaintiffs the right to seek appointment of a receiver, as only the Department of Social Services and the Attorney-General are mentioned (id. ["The attorney general may seek such equitable relief * * * upon the request of the department.”]). Thus, plaintiffs may seek such relief "only if a legislative intent to create such a right of action is 'fairly implied’ in the statutory provisions and,their legislative history” (Hoxie’s Painting Co. v Cato-Meridian Cent. School Dist., 76 NY2d 207 , 211, citing Sheehy v Big Flats Community Day, 73 NY2d 629 , 633). This inquiry involves three factors:
"(1) whether the plaintiff is one of the class for whose particular benefit the statute was enacted; (2) whether recognition of a private right of action would promote the legislative purpose; and (3) whether creation of such a right would be consistent with the legislative scheme” (Sheehy v Big Flats Community Day, supra, 73 NY2d, at 633).

The third factor, which is generally the "most critical” (Hoxie’s Painting Co. v Cato-Meridian Cent. School Dist., supra, 76 NY2d, at 212 ), is determinative of this appeal since we conclude that permitting residents to seek appointment of a temporary receiver to operate the facility would be inconsistent with both the enforcement means chosen by the Legislature and the basic purposes underlying Social Services Law § 460-d (see, Hoxie’s Painting Co. v Cato-Meridian Cent. School Dist., supra, at 212 ).

Article 7 of the Social Services Law governs the operation of residential care programs for adults and children, including residences for adults such as Booth House II.[2] The current extensive regulatory scheme was intended to give the Department of Social Services "comprehensive responsibility” for the administration and supervision of residential care facilities, which had previously been shared by a number of State agencies (s ee, Social Services Law § 460 [statement of purpose]; see also, Governor’s Mem approving L 1977, ch 669, 1977 NY Legis Ann, at 216). In addition to granting the Department considerable supervisory authority, section 460-d of article 7 endows the Commissioner of Social Services with broad enforcement

2 A residence for adults is an adult care facility that provides long-term residential care to adults who are unable to live independently (18 NYCRR 485.2 [d]). Other types of adult care facilities include family-type homes and shelters for adults (18 NYCRR 485.2 [a]).

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powers to ensure proper care and treatment of residents, including the power to investigate facilities (with all the attendant powers available to court-appointed Referees); to issue orders directing the management of a facility to rectify health and safety violations; to revoke, suspend or limit a facility’s operating certificate; and to assess civil penalties for violations of Department regulations and orders (Social Services Law § 460-d [1], [2], [4], [7], [8], [9]; see also, 18 NYCRR 485.5 [j] [5] [facility that obtains Department approval to voluntarily surrender its operating certificate may be subject to civil penalties for failure to comply with the approved decertification plan]).[3]

In addition to these specific statutory enforcement powers, subdivision (5) of section 460-d provides the Department access to court-ordered equitable remedies, including the appointment of a receiver (see also, Social Services Law § 461-f [3] [Department may seek receivership appointment when it revokes or suspends facility operator’s operating certificate]). Because the replacement of a certified operator with a court-appointed receiver violates the statutory requirement that adult care facilities be managed only by operators issued a valid operating certificate (see, Social Services Law §§ 460-b, 461-b [2]), the Department is given discretionary authority in such circumstances to authorize the continuing operation of the facility under the receivership (see, Social Services Law § 461-f).

Thus, in the heavily regulated arena of adult care facilities, statutory enforcement authority under section 460-d is expressly vested only in the Department, with additional equitable enforcement remedies available "upon the request of the [Department” through the Attorney-General (Social Services Law § 460-d [5]). It would be particularly inappropriate under these circumstances to imply a private cause of action to seek appointment of a temporary receiver to operate the facility, a remedy that affects the rights of other residents in addition to the plaintiffs seeking such relief.

"[T]he Legislature has both the right and the authority to select the methods to be used in effectuating its goals, as well as to choose the goals themselves. Thus, regardless of its consistency with

3 With respect to certain residential care facilities for children, these enforcement powers are vested in other State agencies, such as the Division for Youth and the Department of Mental Hygiene (see, Social Services Law § 462-b).

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the basic legislative goal, a private right of action should not be judicially sanctioned if it is incompatible with the enforcement mechanism chosen by the Legislature” (Sheehy v Big Flats Community Day, supra, 73 NY2d, at 634-635 [emphasis supplied]).

Recent amendments to this statutory scheme confirm this conclusion. Subdivision (5) of section 460-d was amended as part of a three-bill package in 1994 to add another equitable remedy — an order directing the facility operator to transfer its records to the Department — and prefatory language indicating that the court-ordered equitable relief available under subdivision (5) is ”[i]n addition to or as an alternative to any power which the [Department may exercise under this article” (L 1994, ch 733, § 3).

As part of the same bill package, the Legislature expressly authorized residents and their representatives to bring private actions for breach of a statutory warranty of habitability as well as violations of the written admission agreements (L 1994, ch 734, § 1 [enacting a new subdivision (2-a) of Social Services Law § 461-c]). The creation of this specific civil remedy, an action personal to each resident, provides further evidence that a private right of action for appointment of a receiver under section 460-d (5) was not intended (see, CPC Intl. v McKesson Corp., 70 NY2d 268 , 282; accord, Varela v Investors Ins. Holding Corp., 81 NY2d 958 , 961 [absence of private right of action in particular statute is indicative of legislative intent not to create implied private right of action where such action is expressly provided in an analogous enforcement statute], rearg denied 82 NY2d 706 ). Thus, we reject plaintiffs’ argument that the 1994 amendment to subdivision (5) of section 460-d was intended to give others (such as residents) in addition to the Department the right to maintain a private right of action for the statutory equitable remedy sought here.

In sum, because it would be inconsistent with the statutory enforcement scheme to imply a private right of action in favor of plaintiff residents for appointment of a temporary receiver under Social Services Law § 460-d, the cause of action seeking such relief was properly dismissed. Henry v Isaac ( 214 AD2d 188 ), upon which plaintiffs place heavy reliance, provides no support for their position as it does not address the remedy sought here. Moreover, the Court’s conclusion in that case that the Legislature intended a general statutory private right of action is undercut by the recent amendment which provides for specific and more narrowly drawn private actions.

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The issue of the existence of any alternative remedy available to plaintiffs in the absence of remedial action sought by the Department is not properly before us. Plaintiffs’ remaining contentions are unpreserved or without merit.

Accordingly, the order of the Appellate Division insofar as appealed from should be affirmed, without costs.

Chief Judge Kaye and Judges Simons, Titone, Bellacosa, Smith and Ciparick concur.

Order, insofar as appealed from, affirmed, without costs.

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