Date: 01-15-2002

Case Style: Barry Hultman, et al. v. Richard Blumenthal

Case Number: CA 21369

Judge: Dupont

Court: Appellate Court of Connecticut

Plaintiff's Attorney: Norman A. Pattis, with whom, on the brief, was Dawne Westbrook, for the appellant (plaintiffs).

Defendant's Attorney: Mark F. Kohler, assistant attorney general, for the appellant (defendant).

Description: The plaintiffs, Barry Hultman and his mother, Dorothy Hultman, appeal from the judgment rendered in favor of the defendant, Richard Blumenthal, 1 after the trial court granted the defendant’s motion to dismiss the plaintiffs’ cause of action for emotional distress arising from the defendant’s allegedly defamatory statements about the plaintiffs. The plaintiffs claim that the court improperly granted the motion, which was based on the lack of subject matter jurisdiction. The issue raised in the motion was whether the doctrine of sovereign immunity2 or the statutory immunity provided by General Statutes § 4-1653 is a jurisdictional bar to the maintenance of the plaintiffs’ action. We conclude, as did the trial court, that the doctrine of sovereign immunity does apply and thereby deprives the court of subject matter jurisdiction.4

The plaintiffs’ complaint is in four counts. The first and second counts allege that the defendant’s publication of a news release on the state of Connecticut attorney general’s Internet web site every day during the calendar year 1999 was defamatory as to the plaintiffs. The third and fourth counts allege that the defendant’s statement to a Hartford Courant newspaper reporter on or about December 15, 1998, was defamatory as to the plaintiffs.

Blumenthal is not described in the complaint as the attorney general of the state of Connecticut, but the defendant’s brief describes the defendant as the attorney general. The statements attributed to him are alleged to have been published on the attorney general’s web site, and the summons describes him as the attorney general.

The determination of whether subject matter jurisdiction exists is a question of law and, thus, our review is plenary. Lawrence Brunoli, Inc. v. Branford, 247 Conn. 407, 410, 722 A.2d 271 (1999); SLI International Corp. v. Crystal, 236 Conn. 156, 163–64, 671 A.2d 813 (1996). If the motion is accompanied by supporting affidavits containing facts, as is the case here, we review the case by looking at the content of the affidavits, as well as the complaint, to determine the jurisdictional issue, and we need not conclusively presume the validity of the allegations of the complaint. Shay v. Rossi, 253 Conn. 134, 140, 749 A.2d 1147 (2000); Barde v. Board of Trustees, 207 Conn. 59, 62, 539 A.2d 1000 (1988); see also Practice Book § 10-31.6

The judgment of dismissal in this case was based on the inferences to be drawn from the plaintiffs’ complaint, the additional evidence submitted by the defendant in this action, and the facts found in an administrative appeal entitled Hultman v. Dept. of Social Services, 47 Conn. Sup. 228, A.2d (2000). In that case, the plaintiffs appealed to the trial court from an order of the department of social services (department) suspending them from the medicaid program and ordering restitution by the plaintiffs to the department of overpayments received by them. The court dismissed that appeal, and the plaintiffs did not appeal from that dismissal.

The first question to be resolved is whether, on the basis of the legal inferences to be drawn from the complaint, the facts found in Hultman v. Dept. of Social Services, supra, 47 Conn. Sup. 228, and the other evidence, the defendant is barred from using a defense of sovereign immunity.7

The following procedural history and the facts that were before the trial court are relevant to our resolution of the plaintiffs’ appeal. From October 1, 1993, through September 30, 1995, Countryside Manor, Inc. (Countryside), was a long-term health care facility in Bristol that furnished goods and services to medicaid recipients. During that period, Dorothy Hultman was president of Countryside, and Barry Hultman was the administrator of Countryside.

The plaintiffs submitted cost reports to the department to allow the department to determine the rate of medicaid reimbursement to Countryside. The plaintiffs signed under oath those cost reports for the years 1994 and 1995. They certified that they had read the reports and that the information contained in the reports was ‘‘ ‘true and correct’ ’’ to the best of their knowledge ‘‘ ‘under the penalty of perjury.’ ’’ Id., 230. The reports also certified that all of the expenses cited in the reports were incurred to provide patient care at Countryside.

The department had a contract with Ernst & Young to audit the cost reports of long-term care facilities. Together, the department and Ernst & Young audited the cost reports for Countryside. When the audit was completed, Countryside was in bankruptcy, and the plaintiffs no longer were operating Countryside. The bankruptcy court had appointed a trustee and receivermanager as administrator for Countryside. The trustee sent a preliminary draft of the audit report to the plaintiffs outlining the proposed disallowances and a letter offering the plaintiffs an opportunity to explain the proposed disallowances. The audit report states that the plaintiffs never paid, as they swore they had, $10,829 in payroll taxes and $678,509 in employee 401 (k) withholdings. Barry Hultman responded that the audit report was not valid, but did not agree to meet with the department.

On April 4, 1997, the department issued to the plaintiffs a notice of regulatory violations and proposed sanctions. On April 17, 1997, the plaintiffs filed an answer denying each of the allegations in the notice issued by the department. Following a hearing before a hearing officer, the department ordered the plaintiffs to reimburse the department for the overpayments set forth in the notice of violations and suspended them from the medicaid program.

‘‘At the hearings before the hearing officer, the plaintiffs were represented by counsel and had the opportunity to cross-examine the witnesses. The hearing officer made ninety-six specific findings of fact. Included were findings that the plaintiffs failed to maintain time records for Countryside employees, the salaries and wages paid to these employees were not supported by documentation, and salaries paid to these employees, including Barry W. Hultman, were not related to patient care. Among the costs in the cost reports that were disallowed were the expenses of a trip the plaintiffs made to India, meals bought at Hooters [restaurant], the purchase of guns and ammunition, and the cost of supplies and materials for the plaintiffs’ residence constructed at 82 Meadow Ridge in Avon.’’ Id., 232.

In this case, the defendant filed an affidavit from an assistant attorney general in connection with his motion to dismiss and the facts contained in that affidavit were identical to many of the facts found in Hultman v. Dept. of Social Services, supra, 47 Conn. Sup. 228.

On April 7, 1997, the defendant, through the attorney general’s office, issued a news release. The defendant posted the news release on the attorney general’s web site. The news release contained the headline, ‘‘Blumenthal and Starkowski charge mother and son with allegedly blinking [sic] state of over $1 million in medicaid money in nursing home scheme.’’ Some of the relevant parts of the body of the article were:

‘‘Attorney General Richard Blumenthal and Department of Social Services Deputy Commissioner Michael P. Starkowski today charged a mother and son who operated a Bristol nursing home with cheating the state out of more than $1 million in medicaid reimbursements. They allegedly used the money to help build their state-of-the-art, luxury home in Avon and for other personal expenses.

‘‘Dorothy Hultman and Barry Hultman of Avon are accused of billing the state for approximately $1.15 million in medicaid reimbursements that they allegedly used for personal benefit— including $551,853 in salaries for people who built their home and payments to relatives and others who spent little or no time working at the Countryside Manor nursing home in Bristol.

‘‘ ‘Our audit showed that the Hultmans pocketed money meant for medical care—looting programs designed to help our most vulnerable citizens,’ Blumenthal said. ‘Their luxury home in Avon was literally built on the backs of taxpayers and their self-dealing deprived people in real need of aid. This case is one of the most reprehensible and outrageous medicaid frauds we have seen. We want the money back and we want to shut these people out of the medicaid program.’ ‘This administration will not tolerate fraud or abuse in our programs, whether it be provider fraud, client fraud or fraud by any other participant in our programs,’ Starkowski said. ‘We cannot afford to have scarce dollars removed from the system by unscrupulous providers.’ The state is seeking sanctions against the Hultmans for violations of laws governing reimbursement of medicaid providers.’’

On or about December 15, 1998, the defendant told a reporter for the Hartford Courant that the plaintiffs were guilty of the most ‘‘egregious’’ and ‘‘blatant’’ abuse of medicaid funds he had ever seen. On January 27, 2000, Barry Hultman was indicted on federal charges in connection with alleged embezzlement against a bankruptcy estate and theft concerning programs receiving federal funds, specifically the medicare and medicaid programs.

On appeal to this court, the plaintiffs argue that the defendant’s statements were ‘‘wanton, reckless or malicious’’ under § 4-165.8 The trouble with the plaintiffs’ argument is that the trial court did not reach the question of the immunity provided by § 4-165. The court did not reach that question because the immunity provided by § 4-165 does not apply if the doctrine of sovereign immunity does apply. See Shay v. Rossi, supra, 253 Conn. 164.

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Click the case caption above for the full text of the Court's opinion.

Outcome: Affirmed

Plaintiff's Experts: Unavailable

Defendant's Experts: Unavailable

Comments: None