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In re Halpert

Supreme Court of New York, Second Department

June 12, 2013

In the Matter of Simon Halpert, etc., et al., appellants,
v.
Nirav R. Shah, etc., respondent. (Index No. 17398/12)

Mischel & Horn, P.C., New York, N.Y. (Scott T. Horn and Naomi M. Taub of counsel), for appellants.

Eric T. Schneiderman, Attorney General, New York, N.Y. (Michael S. Belohlavek and Valerie Figueredo of counsel), for respondent.

REINALDO E. RIVERA, J.P., RUTH C. BALKIN, THOMAS A. DICKERSON, JEFFREY A. COHEN, JJ.

DECISION & ORDER

In a proceeding pursuant to CPLR article 78, inter alia, to review a determination of the New York State Department of Health dated July 24, 2012, which, among other things, revoked the operating certificate of Park Manor Adult Home, the petitioners appeal from a judgment of the Supreme Court, Kings County (Vaughan, J.), dated October 24, 2012, which denied the petition and, in effect, dismissed the proceeding.

ORDERED that the judgment is affirmed, with costs.

The petitioners are the operators of Park Manor Adult Home (hereinafter the Home), a licensed adult home with 55 residents located in Brooklyn. On or about May 24, 2011, the New York State Department of Health (hereinafter the DOH) initiated an administrative enforcement proceeding against the petitioners based upon numerous alleged statutory and regulatory violations found at the Home. A hearing was conducted before an administrative law judge; however, before the administrative law judge issued a hearing report and recommendations, the parties resolved the enforcement proceeding by entering into a "Stipulation and Order" (hereinafter the stipulation) dated March 19, 2012.

In the stipulation, the petitioners admitted that there was "substantial evidence" of the alleged violations and agreed to pay a civil penalty of $40, 000. The terms of the stipulation required the petitioners to rectify the subject violations by completing nine separate tasks within certain time constraints. The stipulation also provided that, upon the DOH's determination that the petitioners did not timely and substantially comply with the terms of the stipulation, the DOH, in its "sole discretion, " could, inter alia, revoke the petitioners' operating certificate without first providing the petitioners with an evidentiary hearing. By letter dated July 24, 2012, the DOH revoked the operating certificate of the Home, citing the petitioners' failure to substantially comply with the terms of the stipulation. The DOH also placed the Home on its "Do Not Refer List" pursuant to Social Services Law § 460-d(11). The petitioners commenced the instant proceeding pursuant to CPLR article 78, inter alia, to review the DOH's determination. The Supreme Court denied the petition and, in effect, dismissed the proceeding, and the petitioners appeal.

The agency determination under review was not made after a quasi-judicial evidentiary hearing. Thus, we review the determination under the standard set forth in CPLR 7803(3), and consider only whether the determination was made in violation of lawful procedure, was affected by an error of law, was arbitrary and capricious, or was an abuse of discretion (see Matter of Ward v City of Long Beach, 20 N.Y.3d 1042; Matter of Halperin v City of New Rochelle, 24 A.D.3d 768, 770). Under this standard, courts "examine whether the action taken by the agency has a rational basis" and will overturn that action only "where it is taken without sound basis in reason' or regard to the facts'" (Matter of Wooley v New York State Dept. of Correctional Servs., 15 N.Y.3d 275, 280, quoting Matter of Peckham v Calogero, 12 N.Y.3d 424, 431; see Matter of Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 N.Y.2d 222, 232), or where it is "arbitrary and capricious" (Matter of Deerpark Farms, LLC v Agricultural & Farmland Protection Bd. of Orange County, 70 A.D.3d 1037, 1038). Here, the Supreme Court correctly determined that the DOH's determination was not arbitrary and capricious, because it was rationally based on the petitioners' failure to substantially comply with their obligations under the stipulation (see Matter of Community Related Servs., Inc. v Carpenter-Palumbo, 84 A.D.3d 1450; Matter of Lakeside Manor Home for Adults, Inc. v Novello, 43 A.D.3d 1057; Matter of Dwyer v County of Suffolk, Sheriff's Dept., 29 A.D.3d 904; Matter of Spata v Levy, 306 A.D.2d 534; Matter of Watson v Shew, 282 A.D.2d 467; Matter of 47-40 41st Realty Corp. v New York State Div. of Hous. & Community Renewal, 225 A.D.2d 547).

The petitioners' contention that the penalty imposed by the DOH was an abuse of discretion is without merit. "Judicial review of an administrative penalty is limited to whether the measure or mode of penalty or discipline imposed constitutes an abuse of discretion as a matter of law... [A] penalty must be upheld unless it is so disproportionate to the offense as to be shocking to one's sense of fairness, ' thus constituting an abuse of discretion as a matter of law" (Matter of Kelly v Safir, 96 N.Y.2d 32, 38, quoting Matter of Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 N.Y.2d 222, 237 [citations omitted]; see Matter of Featherstone v Franco, 95 N.Y.2d 550, 554; CPLR 7803[3]). Under the circumstances presented here, including the repeated and multiple violations found to exist at the Home, and in light of the fact that the stipulation specifically set forth that, in the DOH's sole discretion, revocation of the operating certificate of the Home was a penalty that could be imposed, the penalty imposed was not so disproportionate to the petitioners' offense as to be shocking to one's sense of fairness (see Matter of Sherwyn Toppin Mktg. Consultants, Inc. v New York State Liq. Auth., 103 A.D.3d 648; Matter of Community Related Servs., Inc. v Carpenter-Palumbo, 84 A.D.3d at 1455; Matter of Occhiogrosso v New York State Off. of Children & Family Servs., 72 A.D.3d 1092; cf. Uzzillia v Commissioner of Health of State of N.Y., 47 A.D.2d 492).

The petitioners' remaining contentions are improperly raised for the first time on appeal.

RIVERA, J.P., BALKIN, DICKERSON and COHEN, JJ., concur.


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