Opinion
1412-17
05-10-2018
Danny ANDERSEN, on Behalf of Himself, and on Behalf of All Individuals Similarly Situated, Petitioner-, Plaintiff, v. Samuel D. ROBERTS, as Commissioner of the New York State Office of Temporary and Disability Assistance, and John F. O'Neill, as Commissioner of the Suffolk County Department of Social Services, Respondents-, Defendants.
Empire Justice Center, Attorneys for Petioner-Plaintiff By: Susan Antos, Esq., and Saima Akhtar, Esq., 119 Washington Avenue, 3rd Floor, Albany, New York 12210 Barbara Underwood, Acting New York State Attorney General, Attorney for Respondent-Defendant Samuel D. Roberts By: Louis Jim, Esq., Assistant Attorney General, The Capitol, Albany, New York 12224 Dennis M. Brown, Suffolk County Attorney, Attorney for the Respondent-Defendant Suffolk County Department of Social Services By: Leonard Kapsalis, Esq., 100 Veterans Memorial Highway, P.O. Box 6100, Hauppauge, New York 11788
Empire Justice Center, Attorneys for Petioner-Plaintiff By: Susan Antos, Esq., and Saima Akhtar, Esq., 119 Washington Avenue, 3rd Floor, Albany, New York 12210
Barbara Underwood, Acting New York State Attorney General, Attorney for Respondent-Defendant Samuel D. Roberts By: Louis Jim, Esq., Assistant Attorney General, The Capitol, Albany, New York 12224
Dennis M. Brown, Suffolk County Attorney, Attorney for the Respondent-Defendant Suffolk County Department of Social Services By: Leonard Kapsalis, Esq., 100 Veterans Memorial Highway, P.O. Box 6100, Hauppauge, New York 11788
David A. Weinstein, J. By verified petition and putative class action complaint, plaintiff-petitioner Danny Andersen, brings this hybrid proceeding under CPLR 3001 and 5239 against defendants-respondents Commissioner of the New York State Office of Temporary and Disability Assistance ("OTDA") Samuel Roberts, and Commissioner of the Suffolk County Department of Social Services ("SCDSS") John O'Neill. The complaint sets forth the following background and allegations:
A recipient of public assistance in New York State who owns real property must execute a mortgage or lien equal to the value of such assistance, which is held by the applicable social service district until repaid (Compl ¶ 1; Social Services Law § 106 [1 ] ). Under the New York Court of Appeals decision in Matter of Carver v. State of New York, 26 N.Y.3d 272, 275, 23 N.Y.S.3d 79, 44 N.E.3d 154 [2015], when an individual is required to perform work assignments as a condition of their public assistance, the minimum value of such work under the Fair Labor Standards Act (FLSA) must be credited against the lien (Compl ¶ 1; see also SSL § 336 [1 ][d] [allowing SSDs to require recipients of public assistance to participate in work experience programs] ). Nevertheless, plaintiff charges that defendant Roberts has instructed social service districts not to comply with this decision (Compl ¶ 2).
Specifically in regard to Mr. Andersen, the complaint alleges that he received public assistance from SCDSS from November 2010 through February 2013 (id. ¶ 31). As a condition of such, he gave SCDSS a mortgage against his property in the amount of the assistance he received (id. ¶ 32). He also participated in the Suffolk Work Experience Program, in which he worked approximately 1,773 hours over a two-year period (id. ¶¶ 32[b] & 34).
On March 21, 2016, Andersen wrote to SCDSS by his attorney and requested a biennial accounting letter — an accounting of the assistance he has incurred which he is entitled to receive under the Social Services Law (id. ¶ 39 & Ex C). By letter dated April 1, 2016, a copy of which is appended to the complaint, SCDSS responded by providing the accounting, and stating the following: "This Department has clarified with [OTDA] that effective August 20, 1997 participation in the Suffolk Work Experience Program (SWEP) is not a related factor in determining the amount of the Temporary Assistance recoverable through the lien process" (Pl Ex D). The accounting, according to the pleading, did not credit him for his participation in SWEP (Pl ¶ 41).
On this basis, Andersen has commenced this action, in which he pleads three causes of action: (1) the refusal of defendants to credit his SWEP work violated Carver; (2) the taking of a lien including the amount earned under SSL § 336-c (2)(b) violated the FLSA; and (3) the taking of a lien unjustly enriched defendants.
The complaint cites CPLR 3001 and 5239 as the basis for the action. The former allows for declaratory judgment actions. The latter states in relevant part as follows:
"Prior to the application of property or debt by a sheriff or receiver to the satisfaction of a judgment, any interested person may commence a special proceeding against the judgment creditor or other person with whom a dispute exists to determine rights in the property or debt...."
Plaintiff seeks the following relief: (1) certification of this case as a class action; (2) a declaration that any debt owed by a current or former recipient of public assistance must be reduced by the value of the work he or she has performed in exchange for the debt; (3) an order directing defendants to comply with Carver, and to reduce the amount of plaintiff's SCDSS mortgage for the value of the work he performed while receiving public assistance, and enjoining them from excluding such in its lien calculations in the future; and (4) attorneys' fees, costs and disbursements (Pl ¶¶ 5-6 & p 11-12).
Defendants now move for dismissal. The County contends that (1) there is no justiciable controversy since there has been no final agency action or determination; and (2) plaintiff has failed to comply with the notice of claim requirements of County Law § 52 to the extent he seeks damages. The State seeks dismissal of the complaint as unripe and (on the understanding that Andersen is seeking damages on his unjust enrichment claim) brought in the improper forum. The State asks that, in the event the motions are denied, it be given leave to answer the complaint and address the merits (see State Mem of Law at 2 n2). Defendants also oppose class certification.
In plaintiff's response, in addition to opposing the motion on the merits, he argues that the matter of class certification is not properly before the Court, and states that he is not seeking damages.
I. Motion to dismiss
A. Ripeness/Justiciability
The State argues that the matter before me is not ripe, because a court does not have subject matter jurisdiction to adjudicate the rights of a mortgagor if no foreclosure action has yet been commenced (State Mem of Law at 6).
The County makes a similar argument, but in slightly different terms. The County maintains that the biennial accounting letter is neither final, nor is it a "determination" (Cty Mem of Law at 3). The letter did not, as the County puts it, "commence[ ] proceedings to effect recoupment and has not caused the Plaintiff to suffer any injury or damages" (id.). As in the State's ripeness argument, the County contends that it has taken no steps to collect on Plaintiff's indebtedness (id. at 4). It also argues that the existence of any legal dispute between the parties is merely "speculative" (id. at 6-7).
In response, Plaintiff argues that these arguments are foreclosed by the Second Department's decision in Matter of Flowers v. Perales, 140 A.D.2d 136, 532 N.Y.S.2d 395 [2d Dept. 1988]. In that case, petitioner brought an article 78 proceeding "against the Commissioner of the Nassau County Department of Social Services ["NCDSS"]...and the Commissioner of the New York State Department of Social Services...to discharge the local agency's bond and mortgage against her property as well as its claims for reimbursement of public assistance benefits received by the petitioner and her household..., and declaring that certain of the local agency's practices relating to the mortgage and reimbursement claims were contrary to law" ( id. at 138, 532 N.Y.S.2d 395 ).
Flowers arose when at petitioner's request, the NCDSS provided her a "Statement of Assistance Granted," which stated that the agency had a $77,809.18 lien on her property, although the agency took "no steps to foreclose the mortgage" ( id. at 140, 532 N.Y.S.2d 395 ). She requested a fair hearing with the State Social Services Department, which determined that "the local agency notification sought to be contested was not a final agency determination subject to review" and was not in any case an appropriate subject for a fair hearing ( id. at 138, 532 N.Y.S.2d 395 ) After petitioner commenced a court action, NCDSS argued inter alia that it was "premature" ( id. at 141, 532 N.Y.S.2d 395 ). Supreme Court dismissed the action on this basis, finding that "the local agency's notice did not constitute final agency action since the statement of assistance issued to the petitioner at her own request did not propose to enforce the lien against the petitioner's property" and in any case "the amount of the lien had no connection to the petitioner's current receipt of public assistance benefits or services" ( id. at 142, 532 N.Y.S.2d 395 [internal quotation marks omitted] ).
The Appellate Division agreed as a "technical" matter that the State agency lacked jurisdiction over the claim, but it found that petitioner had a remedy in a declaratory judgment action ( id. ). Moreover, it held that such an action was not premature, since "the enforcement of the mortgage lien against [plaintiff's] home is not a future event beyond the control of the parties and may indeed occur" and "a dispute as to the amount which is due and owing affects the petitioner's current and existing right to redeem the deed and mortgage" ( id. ). As a result, the Court converted the petition into a declaratory judgment action pursuant to CPLR 103(c), and decided it on the merits.
Flowers is on all fours with this case as concerns the defendants' arguments. The teaching which may gleaned from the decision is that (1) a challenge to a local social services agency report regarding the amount of a lien held by that agency may properly be heard in a declaratory judgment action; and (2) the fact that the agency has not initiated foreclosure proceedings does not render it premature. These holdings simply foreclose defendants' motions. No subsequent decision has called Flowers into question; to the contrary, the Second Department has since adhered to the holdings described above (see Matter of Weisman v. Amrhein, 161 A.D.2d 651, 651-652, 555 N.Y.S.2d 427 [2d Dept. 1990] [modifying dismissal of article 78 proceeding challenging "amount and validity of the lien the local [social services] agency had placed upon the petitioner's real property," instead converting it into a declaratory judgment action and addressing its merits] ).
For its part, the State relies on Fairhaven Props. v. Garden City Plaza, 119 A.D.2d 796, 501 N.Y.S.2d 422 [2d Dept. 1986] ), which affirmed the dismissal as premature of an action brought by a mortgagee seeking a declaration that certain other liens were subordinate to the plaintiff's mortgage ( id. at 796, 501 N.Y.S.2d 422 ). That case involved a dispute between private creditors, which in any case pre-dated Flowers ( id. ). Further, neither Fairhaven Properties nor any of the subsequent trial court decisions cited by the State (see State Mem of Law at 6) concerned a determination as to the amount of a lien; rather, those cases all addressed efforts to seek, via declaratory judgment action, a determination as to the validity, enforceability or priority of particular liens ( Shui Fong Loo v. HSBC Mtge. Corp. (USA), 36 Misc. 3d 1223(A), 2012 WL 3139879 *2 [Sup. Ct., N.Y. County 2012] [Sup. Ct., Suffolk Cty. 2012] [dismissing declaratory judgment action to determine if mortgage can legally be foreclosed]; Smith v. Bank of New York Mellon Corp., 2013 N.Y. Slip Op. 33047(U), 2013 WL 6334835 *1 [Sup. Ct., N.Y. County 2013] [dismissing pre-foreclosure declaratory judgment action to determine "the owner, possessor and location of two promissory notes"]; Wright v. Bank of America, N.A., 2013 NY Slip Op. 33074(U), 2013 WL 6409966 *1 [Sup. Ct., N.Y. County 2013] [dismissing pre-foreclosure "declaratory judgement to determine whether any of the defendants is the owner and in possession of the promissory note"] ). In short, unlike the present dispute or the matter at issue in Flowers, disputes at the heart of these cases all impacted rights that only mattered once a foreclosure action had been brought.
Finally, the County seeks dismissal on the ground that it is not a proper party, since it has no independent policy role in the public assistance scheme, but is required merely to carry out the State's directives (see Cty Mem of Law at 2-3). Plaintiff notes that it is the County that holds the lien at issue, and thus its presence in the case is necessary for effective relief to be granted plaintiff. In any event, since this action may impact a lien it holds to the extent it determines the proper amount thereof, the County clearly must be included in this case as a necessary party under CPLR 1001 (see Galbraith v. Guida, 161 A.D.2d 206, 207, 554 N.Y.S.2d 592 [1st Dept. 1990] [where entity's property right is at issue in litigation "it must be joined as a necessary party to any cause of action seeking to rescind or reform the agreements from which its rights arise"]; cf. Rosen v. 124 State St. Corp., 141 A.D.2d 812, 812, 530 N.Y.S.2d 168 [2d Dept. 1988] [all parties holding the mortgage or debt must be joined in foreclosure action as necessary parties] ).
B. Monetary Damages
Both defendants seek dismissal of the Third Cause of Action to the extent it seeks monetary damages, albeit on different grounds. The State asserts that such a claim can only be brought in the Court of Claims. The County argues that Plaintiff has failed to serve a Notice of Claim as required by County Law § 52.
In response, Plaintiff indicates that he is not seeking damages, but only "modification of the lien on his property" (Pl Mem of Law in Opp at 3). Indeed, a review of the complaint reveals no mention of damages in the relief sought. While the Third Cause of Action refers to unjust enrichment, is does so in the context of making an equitable argument against allowing defendants to maintain the present lien (see Pl ¶ 44 ["The taking of a lien to recover the payment of public assistance that has been earned pursuant to SSL § 336-c[2][b][2] unjustly enriches the Defendants at the Plaintiff's expense, and to permit the Defendants to retain a lien on a debt that has been paid, is against equity and good conscience"] ).
Since there is no damages claim, there is nothing to dismiss based on defendants' arguments in this regard.
II. Class Certification
The State makes numerous arguments against certifying a plaintiff class in this case. Plaintiff responds that the issue is premature, since he has not moved for class certification and it would be inappropriate at this time for him to do so, since such a motion cannot be made before the time to answer has expired, which it has not (Pl Mem of Law in Opp at 3). The State does not dispute this point (see State Mem of Law at 8 ["In the absence of a motion, petitioner's request for class certification is not properly before the Court....In any event, class certification is ‘premature...."] ). Nevertheless, it suggests that I "deny" the "motion" on grounds of prematurity (id.).
Plaintiff has not sought a court ruling on class certification merely by pleading a class action complaint. The statute clearly contemplates that the intent to seek certification be set forth in the pleading, since the proceeding must be "brought as a class action" in the first instance ( CPLR 902 ). Then, plaintiff must later move for class certification, "[w]ithin sixty days after the time to serve a responsive pleading has expired for all persons named as defendants...." (id.). Since there is no motion for certification, there is nothing for me to rule on as to this issue either.
Accordingly, defendants' respective motions to dismiss are denied. Defendants shall file and serve any responsive pleading within 20 days of service of this Decision & Order with notice of entry.
This constitutes the Decision & Order of the Court. The original Decision & Order is returned to the attorney for plaintiff. A copy of the Decision & Order and the supporting papers have been delivered to the County Clerk for placement in the file. The signing of this Decision & Order, and delivery of a copy of the Decision & Order shall not constitute entry or filing under CPLR 2220. Counsel is not relieved from the applicable provisions of that rule respecting filing, entry and notice of entry.