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Julia Ribaudo Senior Services v. Dep't of Public Welfare

April 29, 2009


Appeal from the Order of the Commonwealth Court entered January 4, 2007 at No. 351 CD 2006, reversing the Order of the Department of Public Welfare, Bureau of Hearings and Appeals, entered January 24, 2006 at No. 4680/94-05-002, and remanding.

The opinion of the court was delivered by: Madame Justice Todd


ARGUED: September 10, 2008


In this appeal, we are asked to determine whether a Department of Public Welfare ("DPW") notice of adjudication that clearly advised the recipient, Julia Ribaudo Senior Services ("JRSS"), of the starting and ending dates of the applicable appeal period, but did not specifically designate the date stamped on the notice as the notice's mailing date, was sufficient to trigger the start of the appeal period. For the following reasons, we reverse the Commonwealth Court's determination that the notice was inadequate in this regard.

The underlying facts and procedural history of this case are as follows. JRSS is a nursing facility enrolled as a provider in DPW's Medical Assistance Program, and periodically submits cost reports to the department for auditing. The audit determines the allowable costs of care under the program, and may either be accepted by the provider or appealed. This case concerns the cover letter and audit report DPW mailed to JRSS on March 31, 2004, informing the facility of its audit results for 2002. The letter was date-stamped "MAR 31, 2004,"*fn1 and stated in pertinent part:

If you disagree with the findings contained in the enclosed audit report, you have the right to appeal by filing a written request for a hearing with the Department's Bureau of Hearings and Appeals [the "Bureau"] within 33 days of the date of this letter. . . .

[The Bureau] has published Rules that relate to your appeal rights. You should review those Rules carefully. The Rules specify, among other things, what information you must include in your written request for hearing (Rule 18(B)) and how the Bureau of Hearings and Appeals will determine whether your request for hearing was filed on time (Rule 19). The Rules are posted on the Department's website at http://www. SPO pdf.

DPW Letter, 3/31/04. Of particular relevance to the present appeal, while the letter was date-stamped, nowhere was the date of mailing specifically designated. JRSS ultimately filed its appeal from the audit report on December 14, 2004, over eight and a half months after the date-stamp.

On December 30, 2004, JRSS filed with the Bureau a motion for leave to file an appeal nunc pro tunc, contending it was never properly served with notice of the 2002 audit results, and that, in any event, the notice sent by DPW was defective for not designating a mailing date. Thereafter, a telephone hearing was conducted before the Bureau's Administrative Law Judge ("ALJ"), Sharon Fox Zanotto, to determine whether JRSS was entitled to a nunc pro tunc appeal. At the hearing, JRSS presented testimony from its office manager, who said that although she was authorized to accept service, she never received the audit report. JRSS further submitted the affidavit of Robert Sobanski, then a reimbursement analyst with JRSS's law firm, Capozzi & Associates. Sobanski represented in the affidavit that, in September 2004, JRSS's Chief Financial Officer, Michael Callan, requested him to prepare projections for the facility's medical assistance rates. In the process of preparing these projections, Sobanski noticed the 2002 audit results were missing from the files, and called Callan to determine their whereabouts. According to Sobanski, Callan told him JRSS never received DPW's audit report for 2002. Sobanski then contacted DPW and requested a copy of the report, which he later obtained on October 27, 2004. JRSS did not contest Sobanski's receipt of the report, but argued he was not authorized to accept service of the report on the facility's behalf.

For its part at the hearing, DPW presented the testimony of Elizabeth Penaranda, the employee who was directly involved with mailing the department's audit reports. She indicated that in accordance with the department's practice and custom, the 2002 audit report would have been mailed out on March 31, 2004. She did not recall DPW experiencing any problems at the time with mailing any of the reports, and noted the report in question was never returned as undelivered. DPW also presented the testimony of its Chief Rate Analyst, Ian Cohen, who testified that the audit report was properly mailed on March 31, 2004, and that it was the department's standard practice to stamp the mailing date on the notices the same day they were mailed. Cohen further testified that he personally provided a copy of the report to Sobanski on October 27, 2004, at which time Sobanski represented he was acting on JRSS's behalf.

Finding Penaranda's testimony credible, ALJ Zanotto determined DPW established a rebuttable presumption that JRSS received a copy of the March 31, 2004 notice, thus shifting the burden to JRSS to demonstrate that it did not receive the notice. ALJ Zanotto then noted that while JRSS offered testimony reflecting it did not receive the notice, testimony alone on this point was insufficient to rebut the presumption. As JRSS offered nothing more than testimony, the judge indicated she could not grant its motion to proceed nunc pro tunc. ALJ Zanotto further found that JRSS failed to act promptly after its agent (Sobanski) obtained a copy of the report on October 27, 2004. For these reasons, the judge concluded JRSS failed to demonstrate it was entitled to a nunc pro tunc appeal, and recommended the appeal be dismissed.

On August 15, 2005, the Bureau's Chief ALJ issued an order adopting ALJ Zanotto's recommendations in their entirety. JRSS then filed a petition for reconsideration with the Secretary of DPW, who upheld the Bureau's decision. JRSS appealed to the Commonwealth Court, arguing that while the notice of adjudication was stamped with the March 31, 2004 date, it was defective because it did not comply with DPW's Standing Practice Order ("SPO")*fn2 Rule 13 requiring the notice to include the date the notice was deposited in the mail. JRSS also argued Sobanski was not an agent authorized to accept personal service on its behalf, and so personal service was not effectuated on JRSS when Sobanski was provided a copy of the audit report. JRSS did not, however, contest the Bureau's determination that JRSS itself received a copy of the report, or otherwise challenge the Bureau's conclusion that the facility was not entitled to an appeal nunc pro tunc.

A three-judge panel of the Commonwealth Court reversed, concluding that because DPW's letter did not specifically designate a mailing date, it did not trigger the start of the appeal period. The majority reasoned that "[w]hen an administrative agency makes service by mail, the date of mailing is required to be listed on the notice of adjudication because that date is 'deemed to be the date of entry of the order . . .' and the date from which the time for appeal begins to run." Julia Ribaudo Senior Serv. v. Dep't of Pub. Welfare, 915 A.2d 700, 703 (Pa. Cmwlth. 2007) (citing SPO Rule 13 and 42 Pa.C.S.A. ยง 5572). Relying on this Court's decision in Schmidt v. Commonwealth, 495 Pa. 238, 433 A.2d 456 (1981), as well as several of its own decisions, the majority noted that because awareness of a decision's mailing date is essential to calculate an appeal period, the administrative agency is obligated to indicate it clearly on the decision notice. The majority observed that a simple date stamp on the notice, as in this case, without any specific indication that it is the mailing date, is not sufficiently informative. Lastly, the majority rejected DPW's claim that personal service of the audit ...

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