The following papers numbered 1 to 7 were fully submitted on the 23rd day of January, 2014:

Pages

Numbered

Application Pursuant to CPLR Article 78 to Reverse

the Fair Hearing Decision of the New York State Department of Health

Regarding the Calculation of Medicaid Eligibility,

with Supporting Papers and Exhibits

(dated October 4, 2013)..................................................................................................1

Notice of Cross Motion to Dismiss

by Respondent New York City Human Resources Administration,

with Supporting Papers, Exhibits and Memorandum of Law

(dated November 4, 2013)..............................................................................................2

Affirmation of Daniel J. Tarantino, Esq., Division of Legal Affairs

for Respondent New York State Department of Health

with Supporting Papers and Exhibits

(dated December 12, 2013).............................................................................................3

Petitioner's Opposition to City Respondent's

Cross Motion to Dismiss

(dated January 6, 2014)...................................................................................................4

Verified Answer

by Respondents Commissioner of the State of New York Department

of Health and the New York State Office of Temporary and Disability Assistance,

with Supporting Papers and Exhibits

(dated January 6, 2014)...................................................................................................5 [*2]

Reply to Petitioner's Opposition

to City Respondent's Cross Motion to Dismiss

(dated January 16, 2014)..............................................................................................6

Petitioner's Reply to State Respondent's Answer,

with Supporting Papers and Exhibits

(dated January 17, 2014)..............................................................................................7

Upon the foregoing papers, petitioner's application pursuant to CPLR article 78 to reverse respondents' Fair Hearing Decision issued on June 11, 2013 with regard to the computation of eligibility for Medicaid coverage for Mindy Backer, an incapacitated person, is denied; the cross motion to dismiss is granted and the proceeding is dismissed.

To the extent relevant, in an order and judgment entered on December 15, 2010, this Court (Anthony I. Giacobbe, J), appointed petitioner Gay Lee Freedman as the guardian of the person and property of her sister, Mindy Backer, an incapacitated person (hereinafter "IP") (see Petitioner's Exhibit "B"). As therein provided, it was "Ordered and Adjudged that pursuant to Section 366 of the Social Services Law, the accumulated funds and assets in the aforementioned guardianship account shall be deemed unavailable' by the NYC Human Resources Administration for the purposes of determining the Incapacitated Person's Medicaid eligibility" (id. at p10), and that "any income and assets of the Incapacitated Person, including, but not limited her Social Security income and pension income, which shall be deposited into the aforementioned guardianship account shall be deemed unavailable' income in the month received, and an unavailable' resource thereafter, by the NYC Human Resources Administration for the purposes of determining... Medicaid eligibility" (id. at pp 10-11).

Subsequently, i.e., on February 29, 2012, the New York City Human Resources Administration (hereinafter "HRA") issued a notice and determination to the effect that the IP, Ms. Backer, was eligible for Medicaid benefits subject to a net available monthly income (hereinafter "NAMI") of (1) $1,781.00 for the period of April 1, 2011 through December 31, 2011 and (2) $1,847.00 for the period of January 1, 2012 through August 31, 2012. Based upon the contention that the IP's NAMI should be calculated at zero (i.e., without reference to her pension and social security income), petitioner administratively appealed that determination to the State of New York Department of Health (hereinafter "DOH") which, after a Fair Hearing, issued the challenged decision on June 11, 2013, upholding the notice and determination of the HRA (see Petitioner's Exhibits "A"). As a result, petitioner brought the instant CPLR article 78 proceeding, inter alia, to reverse the Fair Hearing Decision and direct the HRA to re-budget the IP's NAMI without reference to her pension and social security income, as provided in this Court's December 15, 2010 order and judgment.

In reviewing the determination of an administrative agency pursuant to CPLR 7803(3), a court is not permitted to vacate the determination or substitute its judgment for that of the agency unless its decision is found to be illegal, arbitrary and capricious, irrational, an abuse of discretion or affected by an error of law. In that event, the decision may be vacated and the matter remitted to said agency for further proceedings (see CPLR 7803[3]; Matter of Birch Tree Partners, LLC v. Town of E Hampton, 78 AD3d 693 [2nd Dept 2010]). "In applying the arbitrary and capricious standard, a court inquires [only] whether the determination under review ha[s] a rational basis... [and the] determination [will] not be disturbed unless the record shows that the agency's action was unreasonable, irrational or indicative of bad faith" (id. at 694 [internal quotation marks omitted] see Halperin v. City of New Rochelle, 24 AD3d 768, 770 [2nd Dept 2005]). Here, respondents cannot [*3]be said to have acted arbitrarily, capriciously or without reason, notwithstanding the contradictory provisions of the order and judgment appointing the guardian.

In Matter of Deanna W. [Rosenblut] (76 AD3d 1096, 1097 [2nd Dept 2010]), the Appellate Division found that the Supreme Court erred when it directed the Department of Social Services (hereinafter "DSS") to disregard certain sums set aside for the payment of legal and other fees associated with the guardianship proceeding in calculating an IP's NAMI. DSS appealed, arguing that the Supreme Court had exceeded its authority in making said determination, and the Appellate Division agreed, noting that although New York's regulations governing the calculation of an individual's NAMI for the purpose of determining his or her Medicaid eligibility contain an extensive list of income and resource "disregards" (see 18 NYCRR 360-4.6), there is no provision authorizing the "disregard" of those funds set aside to pay an individual's expenses, "even where those expenses are non-discretionary expenses related to the condition contributing to the individual's need for Medicaid assistance" (id. at 1097). In the course of reversing, the Court also noted that the agency's interpretation of its own regulations, including those regarding Medicaid eligibility, are entitled to great weight, and will be upheld where, as in the case before it, the agency's determination has not been shown to be unreasonable, irrational, arbitrary or capricious (id.).

Here, it is undisputed that respondent HRA was served with (1) the order to show cause commencing the underlying guardianship proceeding; (2) the notice of settlement of the proposed order and judgment directing that certain funds be disregarded for the purpose of determining the IP's Medicaid eligibility; and (3) a notice of entry of the order and judgment containing the above provisions and appointing a guardian (see Petitioner's Exhibits "C", "D"). In response, the HRA filed neither a counter-order nor a notice of appeal, although it remains unclear whether the matter of the court-ordered "disregard" was ever litigated in that proceeding (cf. Matter of Deanna W. [Rosenblut], 76 AD3d at 1097). In any event, this Court is bound by the decisions issued by the Appellate Division, Second Judicial Department, and under the reasoning espoused in Deanna W, it is not free to reinterpret respondents' regulations absent a showing that the subject agency acted arbitrarily, capriciously, irrationally or in bad faith. No such showing can be made in the case at bar, as neither an applicant's pension or social security income appears in the exhaustive list of income and resource "disregards" set forth in 18 NYCRR 360-4.6 (cf. 18 NYCRR 360-4.6[a][1][xix] [b][2][v]).

Neither does the conflict between this Court's prior order and the Fair Hearing Decision constitute an error of law within the meaning of CPLR 7803(3) (see Matter of West Irondequoit Teachers Assn v. Helsby, 35 NY2d 46 [1974]). Where the issue before the court in an article 78 proceeding is whether an administrative determination was affected by an error of law, the scope of review is similarly limited to whether the challenged determination has a rational basis and was not arbitrary and capricious or abuse of discretion (see CPLR 7803[3]). Therefore, so long as the agency's decision be not legally impermissible or violative of the petitioner's constitutional rights and protections, the court is powerless to alter that determination on the strength of what, e.g., the court might do in a similar situation (id. at 51).

Accordingly, it is

ORDERED that the petition is denied and the cross motion is granted; and it is further

ORDERED that the proceeding is dismissed; and it is further

ORDERED that the Clerk enter judgment in accordance herewith.

ENTER,

/s/ Philip G. Minardo [*4]

J.S.C.

DATED: March 6, 2014