Saturday, April 30, 2011
A postscript to "Doctrine of Estoppel not available to bar an administrative action to correct an error notwithstanding its adverse impact on the individual"
Friday, April 29, 2011
Court finds Pension Board's failure discontinue the payment of disability retirement benefits obviates the “suspension” of the retiree’s benefits
Matter of Seiferheld v Kelly, 2011 NY Slip Op 03309, Court of Appeals
New York City police officer James J. Seiferheld retired for alleged disability in 2004 and was awarded accident disability benefits. Seiferheld had applied for disability retirement benefits claiming that he suffered from constant pain in his right shoulder and neck, loss of range of motion in his neck and shoulder, and pain radiating into his arm as the result of a line-of-duty accident. This injury, he contended, prevented him from performing police duty. His application was granted, and he was awarded accident disability retirement on May 12, 2004.
Subsequently the police department received information that Seiferheld was working. It instituted an investigation that ultimately reported that Seiferheld was "performing construction work on a daily basis," which work included “picking up siding, passing it to others, lifting it over his head and nailing materials above his head with both arms extended for some time — all tasks performed without apparent difficulty.” A number of these activities were recorded on videotape.
The police department notified the Police Pension Fund that Seiferheld "may no longer be disabled" and the Pension Fund subsequently reexamined him. During his interview with the Pension Fund’s Medical Board Seiferheld said that he "cannot lift any heavy objects . . . cannot work overhead . . . has no outside work and his major occupation is babysitting his two children."
The Pension Fund's Medical Board concluded that Seiferheld’s condition "has improved dramatically," and recommended disapproval of his retirement application. Ultimately the Pension Fund board of trustees voted, over the dissent of several trustees, to invoke New York City Administrative Code §13-254** entitled "Safeguards on disability retirement," under which a disability pensioner found to be able to work may be returned to city service. Seiferheld was placed on a list of candidates eligible to become police officers, but subsequently he was informed that he was "medically disqualified" for that position "due to the presence of an unauthorized substance, cocaine, in your hair sample."*
When the Pension Fund's Director of Pension Payroll advised Seiferheld "that your pension benefit will be suspended beginning with the July 2007 payroll," Seiferheld filed an Article 78 petition seeking to annul the determination to suspend his pension benefits.
Supreme Court denied the application; the Appellate Division reversed, annulling the suspension of benefits; the Court of Appeals “reluctantly” affirmed the Appellate Division’s ruling.
Characterizing New York City Administrative Code §13-254 as “complicated,” the Court of Appeals explained, in a “simplified summary,” that a “disability pensioner found to be able to work is put on a civil service list, and his or her pension is reduced based on outside earnings and the amount ‘earned . . . or earnable’ in any City job that is offered.”
Noting that the application of the statute to this case presents something of a puzzle, because although Seiferheld was put on a civil service list, he was not, and evidently could not be, offered a job because of his cocaine us, the court commented that “if the statute is mechanically applied, [Seiferheld] might actually benefit from using cocaine, because he presumably does not want to be offered a City job; he wants to remain retired and receive his pension.
Supreme Court, in a thoughtful opinion, correctly concluded that this anomaly could not have been intended by the statute's authors.
The Appellate Division, however, reversed Supreme Court's order, without discussing Supreme Court's analysis of the statute, because the suspension of Seiferheld's benefits "was not directed by the Board of Trustees" of the Pension Fund.
The Court of Appeals concluded that the Appellate Division was correct as it is “clear from a reading of the safeguards statute that action under that statute must be taken by the board.” The court explained that “However well justified a reduction or termination of benefits may be … the board of trustees has to do it.”
The majority*** of the Court of Appeals, at the conclusion of its opinion, wrote:
“Though [Seiferheld] is entitled to prevail here, the case as a whole is very troubling. It seems from the record that [Seiferheld] either has received or is in a position to claim accident disability benefits for the last seven years, and counting. Yet any reader of this record must have serious doubt that he was ever really disabled. Whether any of the benefits paid to him may be recouped is a subject on which we express no opinion. But we do express the hope that the Pension Fund's board of trustees will generally act to protect the Fund and the public with more efficiency than it has displayed in this case.”
The decision is posted on the Internet at:
* General Municipal Law §207-a5 provides “The appropriate municipal or fire district officials may transfer such a fireman to a position in the same or another agency or department where they are able to do so pursuant to applicable civil service requirements and provided the fireman shall consent thereto.” while General Municipal Law §207-c4 provides “The appropriate municipal officials may transfer such a policeman to a position in another agency or department where they are able to do so pursuant to applicable civil service requirements and provided the policeman shall consent thereto.”
** The "safeguards" statute, New York City Administrative Code § 13-254, under which the Pension Fund tried to bring Seiferheld back to work, provides, in relevant part: "Once each year the board [of trustees of the Police Pension Fund] may . . . require any disability pensioner, under the minimum age or period for service retirement elected by him or her, to undergo medical examination. . . . Upon the completion of such examination the medical board shall report and certify to the board whether such beneficiary is or is not totally or partially incapacitated physically or mentally and whether he or she is or is not engaged in or able to engage in a gainful occupation. If the board concurs in a report by the medical board that such beneficiary is able to engage in a gainful occupation, he or she [sic] shall certify the name of such beneficiary to the appropriate civil service commission . . . and such commission shall place his or her name as a preferred eligible on such appropriate lists of candidates as are prepared for appointment to positions for which he or she is stated to be qualified. Should such beneficiary be engaged in a gainful occupation, or should he or she be offered city-service as a result of the placing of his or her name on a civil service list, such board shall reduce the amount of his or her disability pension . . . if any, to an amount which, when added to that then earned by him or her, or earnable by him or her in city-service so offered him or her, shall not exceed the current maximum salary for the title next higher than that held by him or her when he or she was retired."
*** Justice Pigott, in his dissent, said: “In my view, the Appellate Division erred in finding that the Board of Trustees had not considered what action should be taken with respect to revocation of the Accident Disability Retirement benefits. This error, which the majority of this Court repeats, rests on an assumption that the Board's final determination had merely been that Seiferheld should be returned to work as a police officer. This leaves out a crucial part of the Board's ruling. The Board's final determination was that Seiferheld was not disabled, should not receive disability benefits, and should be returned to work” and would “reverse, deny the petition and dismiss the article 78 proceeding.”
Statute of limitations for judicial review of a final administrative decision neither tolled nor extended by filing a request for reconsiderationll the statute of limitations for filing a timely judicial challenge to the determination
Cheryl Hogg-Chapman, a former school counselor, applied for disability retirement benefits after falling on the stairs at work.
Thursday, April 28, 2011
Termination for violating the employee’s “last chance agreement” disqualifies individual for unemployment insurance benefits
Gloria Brown worked for as a security guard at a performing arts center for more than nine years. Brown had a history of disciplinary violations and after an incident in which she left her post without authorization, she and Lincoln Center entered into a “last chance agreement” that provided that her employment would be terminated if she committed further disciplinary infractions.
In December 2009, Brown met with representatives of the employer to discuss certain policy violations, including her failure to dress in the appropriate manner and to remain attentive at her post. The meeting was prematurely ended because of Brown’s behavior and another meeting was scheduled for early January 2010 with her union representative was present. Ultimately Brown was terminated and she applied for unemployment insurance benefits.
Doctrine of Estoppel not available to bar an administrative action to correct an error notwithstanding its adverse impact on the individual
* Olick’s monthly gross retirement allowance was reduced by almost $1,000 from $5,264.44 to $4,333.12.
In his New York Public Personnel Law blog, Harvey Randall reviews a case involving one kind of administrative law issue that often darkens an attorney's door: The government has given your client something by mistake and now intends to take it back. But your client, ignorant of the error, has spent the money or made plans or persuaded investors or otherwise reasonably relied on the erroneous decision and doesn't want to pay it back, change plans, return investments, or otherwise reverse course. In the case discussed by Mr. Randall in "Doctrine of Estoppel not available to bar an administrative action to correct an error notwithstanding its adverse impact on the individual", a retired city government lawyer finds out seven years after retirement that she has been overpaid almost $1000 per month, and the New York City Employees' Retirement System is going to deduct 25% of her (reduced) pension until it is repaid. She has spent the money and made all sorts of plans that depend on the original monthly payment. Sounds like a job for Equitable Estoppel!
Not. The opinion from the reviewing court cites to a lot of state precedent, but doesn't really get to the meat of the law here. The City is relying on a N.Y. statute:
Should any change or error in records result in any member or beneficiary receiving from the retirement system more or less than he or she would have been entitled to receive otherwise, on the discovery of any such error such Board shall correct such error, and as far as practicable, shall adjust the payments in such a manner that the actuarial equivalent of the benefit to which he or she was entitled shall be paid.New York City Administrative Code §13-182 (emphasis added).
According to Mr. Randall,
Accordingly, in the event an overpayment is made, the agency has authority to recoup the overpayment by withholding or reducing the current pension benefits to which the retiree would otherwise be entitled. As to applying the doctrine of estoppel in this case, Judge Mendez ruled that the doctrine could only be applied against a governmental entity if failure to apply the doctrine would defeat a right legally and rightfully obtained.Not just the authority to recoup the overpayment, but the obligation to recoup the overpayment. The court's opinion does not explain the law behind why estoppel fails in this case, but we can look at what is sometimes termed the first maxim of equity: "Aequitas sequiture legem" - "equity follows the law". 30A C.J.S. Equity § 128 (updated March 2011); Story, Joseph. Commentaries on equity jurisprudence : as administered in England and America (Boston, 1836), §64. This maxim means different things in different contexts. For our purposes in this case, equity will not contradict a statute or common law rule on point (subject to a bunch of exceptions that rarely apply against governments and that don't apply here). Here we have a statutory - a legal - requirement that the City get the money back.
I'm sorry but your client is, ummmm, going to be disappointed.
Gagnon v Wappingers CSD, 268 AD2d 472
Section 3020-a.2(c) of the Education Law requires the individual against whom disciplinary charges have been filed to advise the district’s clerk or secretary whether or not he or she wishes to provided with a hearing. Such a request must be filed within 10 days of the individual’s receiving the statement of the charges. If the individual fails to notify the clerk or secretary that he or she wishes to have a hearing within this ten-day period, and this defect is “unexcused,” the individual is deemed to have waived his or her right to a hearing.
This was the situation facing Conrad Gagnon. Gagnon had been served with disciplinary charges pursuant to Section 3020-a of the Education Law. He, however, failed to advise the district’s clerk or secretary that he wanted a hearing within the statutory 10-day period allowed for this purpose. The district issued its disciplinary determination without holding a hearing.
Gagnon filed a petition pursuant to Article 78 of the Civil Practice Law and Rules contending that “his failure to make a timely demand for a hearing was excusable” and therefore the district’s refusal to accept his untimely request for a Section 3020-a disciplinary hearing was arbitrary and capricious and an abuse of discretion. A Supreme Court judge was not persuaded and dismissed Gagnon’s petition.
The Appellate Division affirmed the lower court’s ruling, noting that Gagnon “failed to proffer any evidence that he in fact requested permission to file a late demand for a hearing, or to rebut the sworn assertions proffered by the Board that no such request was ever made.” In other words, not only did Gagnon concede that he fail to file a timely request for a disciplinary hearing, he was unable to demonstrate that he had made any request for such a hearing whatsoever.
The decision clearly demonstrates the importance of both the employer and the employee, respectively, establishing what some refer to as a “paper trail” demonstrating that all procedural elements in such cases were complied with.
In contrast to Section 3020-a, Section 75 of the Civil Service Law mandates that a hearing to consider disciplinary charges filed against an individual in the classified service be scheduled and held if discipline is to be imposed on an employee subject to its provisions.
Going forward with the Section 75 disciplinary hearing is not contingent on the employee’s requesting such a proceeding. Although Section 75.2 requires that the employee be allowed not less than eight days to file an answer to the charges and specifications, there is no statutory requirement that he or she do so.*
The appointing authority must hold a Section 75 disciplinary hearing – and prove the charges and specifications filed against the employee -- even if the individual does not submit an answer the charges.
Further, case law indicates that the hearing must go forward, even if the employee fails to appear at, or participate in, the proceeding if the employer wishes to impose discipline on the individual.
* Section 75.2, in pertinent part, provides “A person against whom removal or other disciplinary action is proposed shall have written notice thereof and of the reasons therefore, shall be furnished a copy of the charges preferred against him and shall be allowed at least eight days for answering the same in writing.”
Wednesday, April 27, 2011
Elected official removed from public office for failing to be a domiciliary of the jurisdiction as required by law
The Village Board of the Town of Sodus filed a petition in Supreme Court seeking to remove Kelley M. Allen from his position of Village Mayor.
The Village Board contended that Allen was not a resident of the Village the time of election in November 2008, nor is he now, and thus ineligible to serve as the Village Mayor, citing Village Law §300(1).
In rebuttal, Allen said that he maintained a residence in an apartment on the second floor of a building located within the Village at 29 West Main Street. The building is owned by Allen’s wife, Tracey L. Fox, Esq., who has maintained her law office at that address for some eleven years.*
Judge Kehoe, noting that the Village Law does not define the term "resident", said that under Election Law §1-104(22) the term refers to "that place where a person maintains a fixed, permanent and principal home, and to which he, whenever temporarily located elsewhere, intends to return"** of his or her domicile.
The court then said that while “numerous cases have held that it is possible for an individual to maintain more than one bona fide residence, in People v. O'Hara, 96 NY2d 378, the Court of Appeals held that the "crucial" factor in determining the legitimacy of a particular residence under the Election Law is that the individual must manifest an intent to live there, coupled with a physical presence, "without any aura of sham."
Having been reviewed the deposition testimony of Mr Allen and his wife at length and considering all the evidence in the light most favorable to the Allen, Judge Kehoe that the Village Board made a prima facia showing of entitlement to summary judgment as a matter of law, and that the Allen has failed to rebut the showing.
Based on Allen’s deposition testimony that  he had rented the upstairs apartment from his wife four days before the election, for an annual rental of $1.00, for a period which extends through December 31, 2012, the date his term as Mayor expires;  that the furnishings of the apartment consist of one bed with a crate used as a night table, had no appliances such as a refrigerator, stove, or microwave - and no television or computer;  that he did not move his personal belongings to the apartment; and  that he regularly ate dinner with his wife and children at the residence in the Town of Sodus; and spent the majority of his nights there, Judge Kehoe said he must conclude that the Allen’s attempt to establish a residence in the Village of Sodus was contrived for the purpose of making him eligible to run for the office of Mayor.
Having not met the criteria necessary to establish himself as a resident of the Village of Sodus, the court granted the Village Board’s motion for summary judgment, citing Public Officers Law §30(1)(d).
Public Officers Law §30(1)(d) provides that a public office becomes vacant if the incumbent of such office ceases to be “an inhabitant of the state, or if he be a local officer, of the political subdivision, or municipal corporation of which he is required to be a resident when chosen....”
As the Appellate Division noted in Johnson v Town of Amherst, 74 AD3d 1896, having a residence in a jurisdiction is not always the same as having a domicle in that jurisdiction.
The Town of Amherst’s Town Code required its employees to be “domiciliaries of the Town.” James I. Johnson’s family’s home, however, was in Elba, New York and the evidence in the action showed that he “listed the Elba address on his New York State income tax forms, that he had no intention of moving his family to [Amherst] and that he established residency in [Amherst] solely to comply with the original residency requirements of his employment.” As a result Johnson was terminated from his position with Amherst for failing to comply with the Code’s requirement that he be a domiciliary of the Town.
The Appellate Division explained that "[D]omicile means living in [a] locality with intent to make it a fixed and permanent home."* and the evidence presented at the hearing established that Johnson’s family lived in a home in Elba, and that he established a residency in the Town “solely to comply with the original residency requirements of his employment.”
The court concluded that the determination that Johnson is a domiciliary of Elba rather than the Town is supported by substantial evidence and dismissed his appeal.
Although an individual may have, and maintain, a number of different residences simultaneously, he or she can have, and maintain, only one domicile at a given time.
The Johnson decision is posted on the Internet at:
The Allen decision is posted on the Internet at:
* The decision notes that Allen and his wife own a residence located within the Town of Sodus but outside the Village limits, and have lived there with their two children since the year 2000.
The ability of an “in-network” health care provider to sue an ERISA health benefit plan for breach of contract in state court depends on the nature of its claim
The Madison-Oneida BOCES appointed Dana Wilson as “temporary clerk of the works” to perform construction oversight services for the Cazenovia Central School District and the Stockbridge Valley Central School District. The item was established as a temporary position in the civil service.*
Jacquelyn M. Cody, a tenured guidance counselor employed by the New York City Department of Education, was served with disciplinary charges pursuant Section 3020-a of the Education Law . The charges set out 42 specifications of misconduct for actions she committed during the 2001-2002 and 2002-2003 school years.
The Section 3020-a hearing panel found Cody guilty of 38 specifications of conduct unbecoming her profession.*
Terminated from her position, Cody applied for unemployment insurance benefits.
Ultimately, the Unemployment Insurance Appeal Board determined that Cody was disqualified from receiving such benefits because she lost her employment due to misconduct. Cody appealed the Board’s decision.
Citing Limoncelli [Commissioner of Labor], 32 AD3d 1066, the Appellate Division sustained the Board’s ruling. The court said that that “An employee's actions that are contrary to established policies and have a detrimental effect upon an employer's interests have been found to constitute disqualifying misconduct.”
Finding that there was substantial evidence in the record that Cody’s behavior represented “a departure from established procedures pertinent to faculty members engaged in similar activities or confronted by like circumstances,” the Appellate Division dismissed her appeal.
The decision is posted on the Internet at:
Tuesday, April 26, 2011
Request for reconsideration of a final administrative decision does not toll the running of the relevant statute of limitations
Employee’s claims of disparate treatment on the basis of gender, sexual harassment and retaliation by the employer dismissed for lack of sufficient evidence
Grovesteen v New York State Pub. Employees Fedn., AFL-CIO, 2011 NY Slip Op 03168, Appellate Division, Third Department
Monday, April 25, 2011
Untenured employee must demonstrate his or her termination was made bad faith or for an unlawful reason in order to successfully challenge his or her dismissal
As Conrad Shih’s status as an auditor with the New York City Waterfront Commission was not within the Commission’s definition of a "permanent employee" Supreme Court ruled that Shih was not entitled to the due process protections of a “permanent employee” i.e. a pretermination hearing.
Friday, April 22, 2011
Payment of unreimbursed medical expenses permitted by the Internal Revenue Code via a “Health Reimbursement Arrangement Plan” held not the same as health insurance premiums
Further, said the court, Rockwell failed to show that the retirees had sustained any diminution of health insurance benefits greater than those experienced by active employees as a result of the implementation of the HRA for both active employees and retirees of the District.
** N.B. Part B of §14 of Chapter 504 of the Laws of 2009 made this provision "permanent."
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