Original jurisdiction in case of Commonwealth of Pennsylvania, Department of Public Welfare v. Ludlow Clinical Laboratories, Inc., Leonard Edelman, and Joseph C. Mogil.
Lawrence Silver, Deputy Attorney General, with him Robert P. Kane, Attorney General, for plaintiff.
Harold Gondelman, with him Ralph D. Tive, Philip Baskin, and Baskin, Boreman & Tive, for defendants.
Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer, Rogers and Blatt. President Judge Bowman did not participate. Opinion by Judge Rogers.
[ 22 Pa. Commw. Page 615]
The Commonwealth of Pennsylvania, Department of Public Welfare, has filed a complaint in assumpsit and trespass against Ludlow Clinical Laboratories, Inc., Leonard Edelman and Joseph C. Mogil.
Count I of the Complaint, in assumpsit, alleges that the corporate defendant, of whom the individual defendants are officers, was approved by the United States Department of Health, Education and Welfare and by the Pennsylvania Department of Welfare to provide medical laboratory services for eligible recipients under Federal and State programs authorized by the Social Security Act; that as a participant in the State program the plaintiff was required to charge its customers, eligible recipients under the State program, the same amounts as it charged its private customers; that Ludlow overbilled the plaintiff $2,365,470.62 for services allegedly performed from February 1, 1973 to November 30, 1974; that the plaintiff holds unpaid invoices from Ludlow in the amount of $1,063,891.18 for the period August 15, 1974 through November 30, 1974; and that there is therefore due the plaintiff the sum of the difference, $1,301,579.44, for which judgment against Ludlow is demanded.
Count II of the Complaint, also in assumpsit, alleges that Ludlow by fraudulently altering age records submitted fraudulent invoices amounting to $43,263.50 for services to certain customers eligible for both Medicare and the State's Medical Assistance program to the plaintiff; that these invoices had been paid by the State; and that there is therefore due the plaintiff the sum of $43,263.50 for which judgment is demanded.
Counts III and IV, in trespass, allege that the individual defendants, with fraudulent intent, submitted the false and fraudulent invoices described in Counts I and II and demand judgment against them in the same amounts as claimed against Ludlow in Counts I and II.
[ 22 Pa. Commw. Page 616]
The defendants have filed an Answer and New Matter, denying on behalf of Ludlow the irregularities alleged in Counts I and II of the Complaint and on behalf of the individual defendants the fraudulent conduct described in Counts III and IV. Under the heading New Matter the defendants claim to be owed the sum of $1,063,891.18 on the unpaid invoices held by the plaintiff, the sum of $323,394.50 on unpaid invoices for the period December 1, 1974 through January 10, 1975, and the sum of $34,630.88 for invoices submitted to the United States, but rejected. The defendants demand judgment against the Commonwealth in the sum of $1,421,916.56.
The Commonwealth, Department of Public Welfare, has filed preliminary objections to the defendants' Answer and New Matter, (1) raising a question of our jurisdiction to consider the defendants' claim; (2) a motion to strike for a defect in the verification of the Answer and New Matter and because the defendants' claim is not made under the heading "Counterclaim" as required by Rule of Civil Procedure 1031(a); and (3) a motion for a more specific pleading because of the alleged unintelligibility of a paragraph of the New Matter and because the defendants' pleading does not specify whether their claim is in the nature of a counterclaim, set off or recoupment.
The defendants have not, it is true, set forth their cause of action or claim for the sum of $1,421,916.56 under the heading "Counterclaim." It is clear, however, that they intend their claim to be so treated. Their Answer asserts that by suing them the Commonwealth has waived its sovereign immunity; they demand judgment in the full amount of their claim, which exceeds the Commonwealth's by some $77,000; their ...