ARTIFICIAL INTELLIGENCE IS NOT USED, IN WHOLE OR IN PART, IN THE SUMMARIES OF JUDICIAL AND QUASI-JUDICIAL DECISIONS PREPARED BY NYPPL

June 30, 2016

State Division of Human Rights’ complaint alleging discriminatory housing practices filed in Supreme Court held untimely


State Division of Human Rights’ complaint alleging discriminatory housing practices filed in Supreme Court held untimely
New York State Div. of Human Rights v Folino, 2016 NY Slip Op 04821, Appellate Division, Fourth Department

The New York State Division of Human Rights (SDHR), on the complaint of Housing Opportunities Made Equal, Inc. (HOME), commenced an action in Supreme Court seeking damages from Anthony and Carmeline Folino for their alleged discriminatory housing practices. Supreme Court denied the Folino’s motion to dismiss SDHR’s complaint as untimely and the Folinos appealed the Supreme Court’s ruling.

The Appellate Division said that it agreed with the Folinos that Supreme Court erred in denying their pre-answer motion to dismiss the complaint as time-barred pursuant to CPLR §214(2). 

The court's decision noted that HOME had filed an administrative complaint with the United States Department of Housing and Urban Development, which then forwarded the matter to SDHR pursuant to a work-sharing agreement. Accordingly, said the Appellate Division, the running of the statute of limitations was tolled upon the filing of the administrative complaint, and during its pendency, until the administrative proceeding was terminated.

The Appellate Division explained that the last discriminatory act set forth in the SDHR’s complaint occurred on November 8, 2010, and thus the cause of action accrued and the three-year statute of limitations for the New York State Human Rights Law began to run on that date.

Following a probable cause determination by SDHR, the Folinos had submitted a notice of their election to terminate the administrative proceeding and instead "to have an action commenced in the civil court" by SDHR as authorized by Executive Law §297[9].* 

That election triggered the continuation of the running of the Statute of Limitations, the running of which had been tolled upon the filing of the administrative complaint by HOME.

The Appellate Division, noting that 143 days elapsed after the cause of action accrued and before the tolling period commenced upon HOME's filing of its administrative complaint, found that SDHR had two years and 222 days within which to commence the civil action after the tolling period ended. 

This period, said the court, ended on February 22, 2014. SDHR, however, did not commence its civil action until July 3, 2014. Accordingly, said the court, it was untimely, sustaining the Folino’s motion to dismiss complaint filed by SDHR in a civil court.

*§297[9] of the Executive Law, a statutory exception to the Doctrine of Election of Remedies, in pertinent part provides “…. Any party to a housing discrimination complaint shall have the right within twenty days following a determination of probable cause pursuant to subdivision two of this section to elect to have an action commenced in a civil court, and an attorney representing the division of human rights will be appointed to present the complaint in court, or, with the consent of the division, the case may be presented by complainant's attorney.”

The decision is posted on the Internet at:

June 29, 2016

A probationary employee may not be dismissed from his or her position in bad faith or for an improper or unlawful reason


A probationary employee may not be dismissed from his or her position in bad faith or for an improper or unlawful reason
Castro v Schriro, 2016 NY Slip Op 05105, Appellate Division, First Department

Supreme Court denied Raymond Castro’s CPLR Article 78 petition seeking a court order annulling  his termination from his position as a probationary correction officer with the New York City Department of Corrections [DOC]. The Appellate Division, reversing the lower court’s action, reinstated Castro’s petition and remanded the matter to Supreme Court for further proceedings.

The Appellate Division summarized the events leading to Castro’s termination as follows: Castro was terminated “after an inmate died because [Castro’s] superior, a captain, thwarted the efforts of several people, including Officer Castro, to assist the inmate with his medical condition. Officer Castro cooperated in the investigation of the inmate's death and the federal prosecution of his superior.”

The decision sets out “the present record” with respect to the events that preceded Castro’s termination in some detail and opines that “Officer Castro's termination, without an explanation [by DOC], appears questionable and in bad faith. Under the circumstances, this Court is unable to conclude that his claim of wrongful termination as a probationary correction officer is without foundation to warrant a pre-answer dismissal based solely on the ground that it fails to state a cause of action.”

Citing Swinton v Safir, 93 NY2d 758, the Appellate Division said that a “probationary employee may be dismissed for almost any reason, or for no reason at all, and the employee has no right to challenge the termination in a hearing or otherwise,* absent a showing that he or she was dismissed in bad faith or for an improper or impermissible reason” and the burden falls on the petitioner to demonstrate by competent proof that bad faith exists, or that the termination was for an improper or impermissible reason.”

DOC had asked Supreme Court to dismiss Castro’s Article 78 petition at the pre-answer stage on the sole ground that his petition failed to state a cause of action. The Appellate Division said it disagreed with Supreme Court's determination that the petition failed to sufficiently state a claim of improper termination of a probationary correction officer, noting that Castro alleged that his termination was arbitrary and capricious, and in bad faith and set out “a factual predicate for his allegations.”

Castro’s petition, said the court, “avers that despite serving as a correction officer who acted in complete accord with DOC's rules and proper protocol, pursuant to orders from his supervisor, and in full cooperation with the investigation of inmate Echevarria's death, which lead to Captain Pendergrass' indictment, Officer Castro was inexplicably terminated.”

Noting that in its appeal DOC made no attempt to refute Castro’s allegations but simply argued that, as a probationary employee, it was not required to furnish Castro with the charges against him and he could be dismissed without a reason being stated.

The Appellate Division rejected DOC’s argument, explaining that Castro’s termination was within the ambit of an exception to this general principle. The court ruled that where a substantial issue of bad faith is raised, as was here the case, in that the termination a probationary employee may not have been the result of the probationary employee's failure to perform his or her duties satisfactorily but may have been due to some improper basis, a petition should not be dismissed on the pleadings.

DOC presented nothing other than a pre-answer motion to dismiss Castro based on the sole ground that Castro’s petition failed to state a claim of improper termination. The Appellate Division said that although the burden falls squarely on Castro to demonstrate by competent proof at an evidentiary hearing that his termination was for an improper or impermissible reason, DOC, as the firing agency, “should be required to provide responsive pleadings so as to explain the basis of the termination.”  

Accordingly, the matter was remanded to Supreme Court for further consideration.

* Courts have ruled that probationers are entitled to notice and hearing if the appointing authority seeks to dismiss the individual during his or her minimum period of probation. The rationale for this was noted in McKee v. Jackson, 152 AD2d 54, where the court said that a probationer is entitled to a minimum period of time to demonstrate his or her ability to successfully perform the duties of the position. In contrast, as the Court of Appeals held in Gray v Bronx Developmental Center, 65 NY2d 904, a probationer may be dismissed without notice and hearing after completing his or her minimum period of probation and prior to the expiration of his or her maximum period of probation.

The decision is posted on the Internet at:

_______________

The Discipline Book - A 458 page guide focusing on New York State laws, rules, regulations, disciplinary grievances procedures set out in collective bargaining agreements and selected court and administrative decisions concerning disciplinary actions and the termination of permanent,  provisional, temporary and term state and municipal public officers and employees. For more information click on http://booklocker.com/5215.html
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June 28, 2016

Where the collective bargaining agreement so provides, an allegation that the employer violated the “whistle-blower” statute is adjudicated in accordance with the terms of the agreement


Where the collective bargaining agreement so provides, an allegation that the employer violated the “whistle-blower” statute is adjudicated in accordance with the terms of the agreement
DiGregorio v MTA Metro-N. R.R., 2016 NY Slip Op 04807, Appellate Division, First Department

A former employee of MTA Metro-North Railroad, Lisa DiGregorio, sued MTA Metro-North alleging it had violated §75-b of New York State’s Civil Service Law, the so-called “whistle-blower statute” applicable to employees of the State and political subdivisions of the State.

The Appellate Division, citing Subdivisions (3)(b) and (3)(c) of Civil Service Law §75-b, affirmed Supreme Court’s dismissal of her petition, explaining that Lisa DiGregorio’s complaint “may not be litigated in this forum” because the relevant collective bargaining agreement contained provisions addressing situations involving the employer's taking of adverse personnel actions and which contains a final and binding arbitration provision.

Accordingly, said the court, DiGregorio was required to arbitrate her complaint.* 

CSL §75-b(2)(a) provides that “(a) A public employer shall not dismiss or take other disciplinary or other adverse personnel action against a public employee regarding  the employee's employment because the employee disclosed allegations of  “improper governmental action” to a  governmental body if the employee satisfies certain conditions.

CSL §75-b(3)(b) provides that “Where an employee is subject to a collectively negotiated agreement which contains provisions preventing an employer from taking adverse personnel actions and which contains a final and binding arbitration provision to resolve alleged violations of such provisions of the agreement and the employee reasonably believes that such personnel action would not have been taken but for the conduct protected under [subdivision 2 of CSL §75-b], he or she may assert such as a claim before the arbitrator. The arbitrator shall consider such claim and determine its merits and shall, if a determination is made that such adverse personnel action is based on a violation by the employer of such subdivision, take such action to remedy the violation as is permitted by the collectively negotiated agreement.” [Emphasis supplied].

In contrast, if a public employee is not subject to any of the provisions of CSL §75-b(2)(a) or §75-b(2)(b), the individual may commence “an action in a court of competent jurisdiction under the same terms and conditions as set out in Labor Law Article 25-c.”

Article 25-c[4] of the Labor Law provides that where an employer is alleged to have violated Article 25-c, “An employee who has been the subject of a retaliatory personnel action in violation of this section may institute a civil action in a court of competent jurisdiction for relief as set forth in subdivision five of this section within one year after the alleged retaliatory personnel action was taken.”

* In Kowaleski v New York State Dept. of Correctional Servs., 16 NY3d 85, the Court of Appeals held that an arbitrator’s refusal to hear an employee’s “whistle blower” defense in the course of disciplinary hearing required the vacating of the award.

The decision is posted on the Internet at:


June 27, 2016

A two-prong test is used by courts to determine if a provision in a collective bargaining agreement is subject to arbitration


A two-prong test is used by courts to determine if a provision in a collective bargaining agreement is subject to arbitration
Matter of Cortland County (CSEA, Inc., Local 1000 AFSCME, AFL-CIO), 2016 NY Slip Op 04481, Appellate Division, Third Department

Lawrence Jackson, a correction officer employed by the Cortland County Sheriff’s Department [County], was diagnosed with plantar fasciitis* in his left foot and was subsequently awarded workers' compensation benefits. However, his application for disability benefits pursuant to General Municipal Law §207-c was denied, which administrative determination was affirmed by the Appellate Division [see Matter of Jackson v Barber, 133 AD3d 958].

In August 2013, Jacksonsubmitted a physician's note stating that, as a result of his foot condition, he was restricted from working more than 40 hours and 35 minutes per week. Although the County initially accommodated Jackson's limitation, in September 2013, the County notified Jackson that his "availability to work mandatory overtime [wa]s an essential function of [his] position" and that his "limited availability pose[d] a safety issue . . . [that] could result in an understaffed shift," it could not accommodate his work "restriction on a continuing basis" and was therefore placing him on family and medical leave until such time as he was "able to complete all essential functions of [his] position."

Jackson’s employee organization for collective bargaining, CSEA, Inc., Local 1000 [CSEA], submitted a grievance on behalf of Jackson alleging the County had violated the collective bargaining agreement [CBA] between the parties by refusing to accommodate Jackson's work restriction. The County denied the grievance. In response to CSEA’s demand for arbitration the County filed a petition in Supreme Court pursuant to §7503(b) of the CPLR seeking a permanent stay of arbitration.

Concluding that the dispute was arbitrable, Supreme Court denied the County’s application for the permanent stay of arbitration. The County appealed and the Appellate Division sustained the lower court’s ruling.

The Appellate Division explained that "The court's role in reviewing applications to stay arbitration is . . . a limited one" and a two-prong test is used to determine if the dispute arbitrable.

The court initially considers if the subject of the claim sought to be arbitrated is the type authorized by Civil Service Law Article 14 [the Taylor Law] and is not barred by constitutional, statutory or public policy considerations, the first test. 

If the demand for arbitration meets this test, the court will then consider the grievance and arbitration provisions set out in the collective bargaining agreement. Where the arbitration clause in a collective bargaining agreement is broad, said the Appellate Division, courts "should merely determine whether there is a reasonable relationship between the subject matter of the dispute and the general subject matter of the CBA."

Not discerning any constitutional, statutory or public policy considerations that prohibit arbitration of the dispute, the Appellate Division considered the second prong of the test. Noting that the CBA defines an arbitrable grievance as "any alleged violation of the terms and conditions of employment,” as defined in the CBA, including any misinterpretation or misapplication of the agreement or past practices, the court noted that Article 5 of the CBA addresses employee work schedules, including certain required overtime, and includes a section on "Light Duty Assignments." **

As the CBA specifically addresses overtime and contemplates the availability of light-duty assignments, the Appellate Division found that there was a reasonable relationship between the subject matter of the dispute and the general subject matter of the CBA for the purpose of resolving the matter by arbitration. 

Recognizing that certain substantive clauses in the CBA might not support the grievances, the court said that  issue was irrelevant with respect to the threshold question of arbitrability, as the arbitrator, and not the court, is to resolve any uncertainty concerning the substantive rights and obligations of the parties."

Accordingly, the Appellate Division ruled that Supreme Court had properly determined that the dispute should be submitted to arbitration.

* A pain in the heel resulting from the inflammation the plantar, a thick band of tissue in the heel.

** Additionally, said the court, “Article 20 of the CBA discusses overtime and sets forth the procedure for assigning mandatory overtime shifts.”

The decision is posted on the Internet at:
http://www.nycourts.gov/reporter/3dseries/2016/2016_04481.htm

June 24, 2016

Member service credit in the New York State Teachers' Retirement System upon the reemployment of an individual receiving a disability retirement allowance by a New York State public employer


Member service credit in the New York State Teachers' Retirement System upon the reemployment of an individual receiving a disability retirement allowance by a New York State public employer
Porco v New York State Teachers' Retirement Sys., 2016 NY Slip Op 04777, Appellate Division, Third Department

Supreme Court dismissed Joan Porco's application seeking a review of the New York State Teachers' Retirement System’s [TRS] determination denying her years of service credit for retirement purposes for certain months of service.

Porco joined TRS as a “Tier 2” member upon commencing employment as a public school teacher. Subsequently Porco sustained a serious injury and applied for, and was granted, disability retirement pursuant to Education Law §511. Later Porco returned to work for a period of three months, during which period she continued receiving her disability retirement allowance. In response to Porco's request for clarification regarding earning "member service credit" for those three months of employment, TRS advised Porco that she was ineligible to receive such credit for that period of employment.

Ultimately TRS issued a final determination denying Porco member service credit for the disputed three-month period. Porco then initiated a CPLR Article 78 proceeding challenging that determination. Supreme Court upheld TRS’s decision and dismissed Porco’s petition, which ruling was sustained by the Appellate Division.

The Appellate Division, citing Maillard v New York State Teachers Retirement System, 57 AD3d 1299, explained when an administrative determination is rendered without a hearing, a court’s review "is limited to whether [the determination] is arbitrary, capricious or without a rational basis." Further, said the court, “given that [TRS] is charged with administering the retirement statutes at issue, its interpretations are entitled to deference and should be upheld unless they are irrational, unreasonable or inconsistent with the governing law.”

As a general rule, said the court, "retirement on a pension" causes a person's membership in the retirement system to cease. With respect to an individual receiving a retirement allowance from TRS, Education Law §511(5) permits "Tier 2 disability retirees" to resume active service while still receiving disability retirement benefits subject to certain limitations salary limitations. Such a retiree, however, "shall not become a member of [TRS]."

In contrast, should the retiree be restored to active service at a salary as great as, or greater, than his or her final average salary, "his [or her] retirement allowance shall cease, and he [or she] shall again become a member of [TRS]." Education Law §511[6] provides that such an individual’s "prior service certificate on the basis of which his [or her] service was computed at the time of his [or her] retirement shall be renewed." Upon such individual’s subsequent retirement, he or she "shall be credited" with both the service credit reflected in the prior service certificate and "all [of] his [or her] service as a member subsequent to the period covered by his [or her] prior service certificate"

Finding that TRS’s interpretation of these statutes was rational and reasonable, the Appellate Division concluded that Porco’s membership in TRS cease when she began receiving disability retirement benefits and although she had returned to work during the disputed three months, because her salary did not exceed the statutory cap, Education Law §511(5) explicitly barred her from becoming a member of TRS during that period of time.  

Accordingly, ruled the Appellate Division, TRS’s determination denying years of service credits to Porco for this three-month period would not be disturbed.

Similar rules apply is situations where an individual is receiving a retirement allowance from another New York public retirement system [see §150 of the Civil Service Law, Suspension of pension and annuity during public employment, and, generally, §§210 – 217 of the Retirement and Social Security Law] with respect to the re-employment of such retired individuals in public service of the State or a political subdivision of the State.

* The decision notes that Porco received $6,809.91 in disability retirement benefits as well as her salary during this three-month period.

The decision is posted on the Internet at:

June 23, 2016

Complimentary webinar “Avoiding and managing the threats of ransomware attacks” scheduled to be held on June 28, 2016


Complimentary webinar “Avoiding and managing the threats of ransomware attacks” scheduled to be held on June 28, 2016
Source: NYMuniblog

Ransomware computer attacks are potential disruptors of a organization’s operations. The consulting subsidiary of Harris Beach PLLC, HB Solutions LLC, will hold a complimentary webinar June 28, 2016, focusing on avoiding and managing the threats of ransomware attacks.

Click on HB Solutions Data Privacy and Cybersecurity Team for information about this  program which is being held in conjunction with Access Advisory Group, leaders in cyber protection technology.

For additional information about the webinar and a link to register for the event, click on

Rather than relying on selective information supplied by the employer, the court itself should review the challenged investigative report relied on by the employer


Rather than relying on selective information supplied by the employer, the court itself should review the challenged investigative report relied on by the employer
2016 NY Slip Op 04422, Appellate Division, Second Department

The petitioner [Petitioner], a tenured teacher, filed a complaint with her employer, a school district, alleging that two teachers in her department were bullying and harassing her. 

Following a preliminary investigation of the complaint by the School District’s Director of Human Resources, the School Board [Board] retained an attorney to conduct an investigation and prepare a written report for the Board's consideration.

Ultimately the Board determined that there was insufficient evidence to conclude that the alleged misconduct rose to the level of "harassment, bullying, discriminatory behavior and/or hostile environment" toward Petitioner.*

Petitioner then commenced a CPLR Article 78 proceeding to review the Board's determination and to compel the production of the investigation report submitted to the Board by the attorney.

Supreme Court denied Petitioner’s motion to annul the Board's determination, but, determining that the Board and the School District had waived any attorney-client privilege as to the investigation report, granted that branch of her petition seeking to compel the production of the report. Both parties appealed from the respective portions of the judgment adverse to them.

The Appellate Division ruled that “under the circumstances,” Supreme Court should have reviewed the investigation report in camera* before determining whether the Board's determination was arbitrary or capricious rather than relying on selective information submitted by the Board and the School District.

Further, said the court, Supreme Court also erred in determining that the Board and the School District had waived the attorney-client privilege with respect to the investigation report without first conducting an in camera review of the report.

Reversing the Supreme Court’s judgment “insofar as appealed and cross-appealed” the Appellate Division remitted the matter to the Supreme Court to conduct an in camera review of the investigation report and then to make a new determinations of the branches of the petition seeking to annul the Board's determination and to compel disclosure of the investigation report.

* The Appellate Division’s decision states that the Board noting that “… the relationship between [Petitioner] and the two other teachers had become an impediment to the effective operation of the …  department … directed the school's administration to take appropriate remedial action, including conducting workplace sensitivity training.

** A review of documents by the court in his or her chambers.

The decision is posted on the Internet at:

June 22, 2016

Challenging the denial of a Freedom of Information Law request on the representation that the records are exempt from disclosure


Challenging the denial of a Freedom of Information Law request on the representation that the records are exempt from disclosure
2016 NY Slip Op 04417

The petitioner [Petitioner] in this CPLR Article 78 action had filed a Freedom of Information Law [FOIL] request with the custodian of police department records relating to a recent criminal investigation of allegations concerning events that occurred more than 25 years ago. The custodian of the records denied the request, claiming that the entire case file was exempt from FOIL disclosure.

After an unsuccessful administrative appeal, Petitioner initiated litigation to compel the custodian to produce the case file. Supreme Court denied the petition and dismissed the proceeding. Petitioner appealed the Supreme Court’s decision.

The Appellate Division commenced its review of the Petitioner’s appeal by noting:

1. In a proceeding pursuant to CPLR Article 78 to compel the production of material pursuant to FOIL, the custodian of the records denying access has the burden of demonstrating that the material requested falls within a statutory exemption, which exemptions are to be narrowly construed;

2. The denial requires the entity resisting disclosure to articulate a particularized and specific justification for denying access and conclusory assertions that certain records fall within a statutory exemption are not sufficient; evidentiary support is needed; and

3. If the court is unable to determine whether withheld documents fall entirely within the scope of the asserted exemption, it should conduct an in camera* inspection of representative documents and order disclosure of all nonexempt, appropriately redacted, material.

The Appellate Division also noted that Public Officers Law §87(2)(a) provides that a custodian may deny access to records or portions thereof that "are specifically exempted from disclosure by state** or federal statute" while Civil Rights Law §50-b(1) provides a statutory exemption from disclosure for documents that tend to identify the victim of a sex offense. 

However, said the court, Civil Rights Law §50-b(1) "does not justify a blanket denial of a request for any documents relating to a sex crime. If a requested document does not contain information that tends to identify the victim of a sex crime, and the FOIL request is otherwise valid, the document must be disclosed." Further, the custodian must make a particularized showing that “the statutory exemption from disclosure pursuant to Civil Rights Law §50-b(1) applies to all the records that the petitioner seeks.”

The Appellate Division said that Supreme Court should have conducted an in camera inspection to determine whether the entire case file falls within the exemption from disclosure of Civil Rights Law §50-b(1) as any document in the case file containing identifying information is protected by Civil Rights Law §50-b(1) would be categorically excluded in its entirety and not subject to redaction or deletion.

Accordingly, the Appellate Division remanded the matter to Supreme Court for a new determination based upon the court’s in camera inspection of the records claimed to be exempt from disclosure.  
* An inspection of the documents is to held by the judge in his or her private chambers.

** The release of some public records is limited by statute [see, for example, Education Law, §1127 - Confidentiality of records; §33.13, Mental Hygiene Law - Clinical records; confidentiality]. Otherwise an individual is not required to submit a FOIL request as a condition precedent to obtaining public records where access is not barred by statute unless the custodian of the public record[s] sought declines to “voluntarily” provide the information or record requested. In such cases the individual or organization is required to file a FOIL request to obtain the information. It should also be noted that there is no bar to providing information pursuant to a FOIL request, or otherwise, that falls within one or more of the FOIL exceptions that the custodian could rely upon in denying a FOIL request, in whole or in part, for the information or records demanded.

The decision is posted on the Internet at:


June 21, 2016

Governor Cuomo asks to Port Authority officials to investigate an alleged closure of a Lincoln Tunnel lane for other than official purposes


Governor Cuomo asks to Port Authority officials to investigate an alleged closure of a Lincoln Tunnel lane for other than official purposes
Source: Office of the Governor

On June 21, 2016, Governor Andrew M. Cuomo sent a letter to Port Authority of New York and New Jersey Chairman John Degnan, Vice Chairman Steven Cohen and Executive Director Patrick Foye regarding a reported lane closure in the Lincoln Tunnel.

Governor Cuomo wrote:

Dear Chairman Degnan, Vice Chairman Cohen and Executive Director Foye:

In recent court papers detailing corruption charges against members of the New York City Police Department, it was noted that a businessman “using his connections in local law enforcement agencies, was able to arrange for the closure of a lane in the Lincoln Tunnel and a police escort down that lane for a businessman visiting the United States.” If this is true, it is deeply troubling.

I am hereby directing the New York State and Port Authority Offices of the Inspector General to conduct a thorough examination of what, if any, role agents of the Port Authority played in the circumstances associated with these allegations. The NYPD has no jurisdiction within the tunnels boundaries. If members of the Port Authority or PAPD participated in any fashion – through purpose or neglect – the State will deliver immediate and severe consequences.

The State of New York holds the integrity of public service to the highest standard. When those who are sanctioned to uphold the law use their position for personal gain, it threatens all of us. We will simply not allow Port Authority facilities to be chips in some nefarious pattern of deceit.

Please ensure you are coordinating with the U.S. Attorney for the Southern District of New York and the Federal Bureau of Investigation before commencing any action.

Sincerely,

Andrew M. Cuomo

Governor Cuomo’s letter is posted on the Internet at:


Removing a town, village, improvement district or fire district officer, other than a justice of the peace, from his or her office


Removing a town, village, improvement district or fire district officer, other than a justice of the peace, from his or her office
2016 NY Slip Op 04420, Appellate Division, Second Department

The Village Board [Village] adopted a resolution appointing its Village Clerk/Treasurer [Clerk] for a two-year term. Village subsequently advised Clerk that it had suspended her with pay following her arrest for allegedly “shoplifting” and ultimately adopted a resolution terminating Clerk's “employment by the Village.”

Clerk commenced a CPLR Article 78 action seeking a court order compelling Board to reinstate her to her office retroactively with full back pay, alleging, among other things, that Village’s action terminating her from office was arbitrary and capricious, and in violation of Public Officers Law §36. Village answered the petition and subsequently moved to dismiss the proceeding.

Supreme Court, without deciding the merits of Clerk’s petition, determined that the Village did not raise any objections in point of law that could terminate the entire proceeding, denied the Village's motion to dismiss Clerk’s petition and transferred the proceeding to the Appellate Division.

The Appellate Division opined that, as the challenged determination by Village was not made after a quasi-judicial evidentiary hearing, Supreme Court erred in transferring the matter to it. However, “in the interest of judicial economy,” the court elected to retain jurisdiction and determine the issues raised by Clerk on their merits.

Considering the relevant law, the Appellate Division ruled that Village lacked the authority to remove Clerk, a Village officer, from her position by adopting a resolution to that effect.

The court explaining that a Village officer could only be removed from his or her office in accordance with the procedure set forth in Public Officers Law §36, noting that §36 provides, in relevant part, that any Village officer "may be removed from office by the supreme court for any misconduct . . . An application for such removal may be made by any citizen resident of such . . . village . . . or by the district attorney of the county in which such . . . village . . . is located, and shall be made to the appellate division."

Further, §36 provides that “Such application [to the Appellate Division in the appropriate judicial department] shall be made upon notice to such officer of not less than eight days, and a copy of the charges upon which the application will be made must be served with such notice.”

The Village’s action to terminate Clerk from her public office by adopting a resolution so doing was, in effect, a nullity as Village lacked the authority to remove Clerk from her public office by resolution. As no application to the Appellate Division to remove Clerk from her office had been made as mandated by Public Officers Law §36, the Appellate Division granted Clerk’s petition to the extent that Village’s action was annulled and the matter remitted to the Supreme Court to determine the appropriate remedy.

The decision is posted on the Internet at:

_______________

The Discipline Book - A 458 page guide focusing on New York State laws, rules, regulations, disciplinary grievances procedures set out in collective bargaining agreements and selected court and administrative decisions concerning disciplinary actions involving state and municipal public officers and employees. For more information click on http://booklocker.com/5215.html
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June 20, 2016

If a State Department’s policy memorandum constitutes a "rule or regulation" within the meaning of the State’s Constitution it must be filed with the Secretary of State before it can have the force and effect of law


If a State Department’s policy memorandum constitutes a "rule or regulation" within the meaning of the State’s Constitution it must be filed with the Secretary of State before it can  have the force and effect of law
Plainview-Old Bethpage Congress of Teachers v New York State Health Ins. Plan, 2016 NY Slip Op 04473, Appellate Division, Third Department
[See, also, 2016 NY Slip Op 04472, http://www.nycourts.gov/reporter/3dseries/2016/2016_04472.htm, granting NYSHIP’s motion to reargue the court’s decision.]

Roslyn Teachers Assn. v New York State Health Ins. Plan, 2016 NY Slip Op 04475, Appellate Division, Third Department*
[See, also, 2016 NY Slip Op 04474, http://www.nycourts.gov/reporter/3dseries/2016/2016_04474.htm, granting NYSHIP’s motion to reargue the court’s decision.]*

While the Plainview-Old Bethpage Central School District [School District], a participating employer in the New York State Health Insurance Program [NYSHIP] administered by the New York State Department of Civil Service, was negotiating the terms of new collective bargaining agreements with the Plainview-Old Bethpage Congress of Teachers and its Clerical Unit and Teachers Unit, [Association], the Department of Civil Service issued its "Policy Memorandum No. 122r3" [Memorandum], which limited the circumstances under which an employee of a participating employer such as the School District may decline NYSHIP coverage in exchange for a cash payment.

Although earlier collective bargaining agreements between the parties had included such a "buyout program," the School District took the position that the buyout program was required to conform to the new restrictions set forth in the Memorandum.

In response to the position taken by the School District, the Association commenced a combined CPLR Article 78 proceeding and action for declaratory judgment seeking, among other things, a judicial declaration that the Memorandum is null and void. NYSHIP and the Department of Civil Service [the State] moved for summary judgment.

Supreme Court denied the State’s motion, granted the Association’s petition declaring the Memorandum null and void, and remitted the matter to the State for further action. The State appealed.

In an earlier, and similar action, the Appellate Division, School Administrators Association of New York v New York State Department of Civil Service, 124 AD3d 1174, the State had argued that School Administrators' claims were barred by the four-month statute of limitations. In response to the State’s argument that the Association’s claim was similarly untimely, the Appellate Division ruled that the Association had advanced an argument regarding the timeliness of their challenge that was not before the court in School Administrators.

Here, said the Appellate Division, the Association contended the Memorandum was, in fact, a new, formal rule governing employee eligibility for the NYSHIP buyout program. Thus, argued the Association, its provisions are unenforceable because, among other things, it was not filed with the Department of State in accordance with the mandates of the State’s Constitution** and Executive Law §102[1][a]).

In the words of the Appellate Division, “… the resolution of the [Association's] challenge hinges on whether the policy memorandum is more properly characterized as a rule or regulation, or as an interpretive statement or general policy which are not subject to constitutional and statutory filing requirements.”

The court explained that a rule or regulation is "a fixed, general principle to be applied by an administrative agency without regard to other facts and circumstances relevant to the regulatory scheme of the statute it administers." Interpretive statements and guidelines, in contrast, merely assist agency officials in exercising some aspect of their discretionary authority granted by existing statutes and regulations but do not have, in and of themselves, the force and effect of law.

The primary difference between a rule or regulation and an interpretive statement or guideline, said the court, is that the former “set standards that substantially alter or, in fact, can determine the result of future agency adjudications” while interpretive statements and guidelines simply provide additional detail and clarification as to how such standards are met by the public and upheld by the agency.”

The Appellate Division found that the Memorandum constituted a "rule or regulation" within the meaning of Article IV, §8 of the State Constitution and Executive Law §102 and thus it is “invalid and without effect” until it is filed with the Department of State.

As the State did not comply with this filing requirement, it follows that the statute of limitations never commenced to run on the Association’s claims.

Accordingly, the Appellate Division sustained Supreme Court's determination.

* In Roslyn, which the Appellate Divisions characterized as a case that is virtually indistinguishable from Matter of Plainview-Old Bethpage Congress of Teachers v New York State Health Insurance Plan, 2016 NY Slip Op 04473, [see above], the court said that the new restriction that the policy memorandum imposes on eligibility for the NYSHIP buyout program constitutes "a firm rigid, unqualified standard or policy" that effectively "carves out a course of conduct for the future.” Accordingly the policy memorandum constituted a "rule or regulation" within the meaning of Article IV, §8 New York State’s Constitution and Executive Law §102(1)(a) and, thus, is not effective until it is filed with the Department of State. The Roslyn decision is posted on the Internet at: http://www.nycourts.gov/reporter/3dseries/2016/2016_04475.htm

** Article IV, §8 of the State Constitution provides that “No rule or regulation made by any state department, board, bureau, officer, authority or commission, except such as relates to the organization or internal management of a state department, board, bureau, authority or commission shall be effective until it is filed in the office of the department of state. The legislature shall provide for the speedy publication of such rules and regulations by appropriate laws.”

The Plainview-Old Bethpage Congress of Teachers decision is posted on the Internet at: http://www.nycourts.gov/reporter/3dseries/2016/2016_04473.htm

June 19, 2016

Selected reports issued by the Office of the State Comptroller during the week ending June 18, 2016


Selected reports issued by the Office of the State Comptroller during the week ending June 18, 2016
Click on text highlighted in color to access the entire report 

New York State Comptroller Thomas P. DiNapoli’s office completed audits of the following school districts

These audits, summaries of which are set out below, are designed to assist schools improve their financial management practices and ensure proper policies and procedures are in place to protect public funds from waste, fraud and abuse. For additional background or a comment on a specific audit, contact Brian Butry, 518-474-4015 at the Office of the State Comptroller or email: bbutry@osc.state.ny.us 


Addison Central School District – Financial Condition (Steuben County)
During the last three completed fiscal years (2012-13 through 2014-15), the board and district officials overestimated general fund appropriations by $7.3 million (9 percent) resulting in combined operating surpluses totaling $6.4 million. District officials used the operating surpluses to make interfund transfers totaling approximately $4 million and increase reserves by $1.6 million. As a result, four reserves with balances totaling $2.9 million (48 percent of total reserves) are overfunded and potentially unnecessary. In addition, $570,000 in appropriated fund balance was not needed to finance operations. These practices allowed the district to report year-end unrestricted fund balance at levels that essentially complied with the statutory 4 percent fund balance limit. However, the district’s recalculated unrestricted fund balance ranged between 16 to 18 percent of the ensuing year’s appropriations. As a result, the district’s tax levy was higher than necessary to fund operations.


Cattaraugus-Little Valley Central School District – Financial Management (Cattaraugus County)
The unrestricted fund balance for the district has consistently exceeded Real Property Tax Law limits. The district’s unrestricted fund balance was approximately $3.6 million (14 percent of the ensuing year’s budget) or approximately $2.6 million over the legally allowable limit and is projected to remain at nearly the same level at the end of 2015-16. Although the board and district officials annually appropriated a portion of fund balance towards the subsequent year’s budget, the total amounts appropriated were mostly not used because district officials overestimated appropriations. In addition, district officials consistently budgeted for expenditures that could have been paid for with reserve funds. Had district officials retained the same tax levy each subsequent year as in 2012-13, residents could have realized approximately $410,000 in cumulative tax savings.

Delaware Academy Central School District at Delhi – Fund Balances (Delaware County)
Each year during the audit period (July 1, 2014 through November 9, 2015), district officials appropriated more fund balance than needed, which artificially reduced unrestricted fund balance to within the 4 percent statutory limit percentage. Instead of having operating deficits totaling $2.8 million for the period, as planned, the district’s net result of operations was a surplus of $705,000. In addition, district officials overfunded five of the six reserves as of June 30, 2015. Moreover, district officials did not use debt service funds to make payments on long-term debt. With the inclusion of the unused appropriated fund balance, the overfunded reserves and the unused debt service funds, the fund balance for the five years ranged from 26.7 percent to 29.4 percent of the ensuing year’s appropriations.

Lake Placid Central School District – Claims Auditing (Essex County)
Although claims were generally supported by adequate documentation and were for appropriate purposes, they were not always audited and approved prior to payment. The business manager, who also serves as the district’s treasurer, prints signed checks prior to the claims auditor’s audit and approval of the corresponding claims. When signed checks are generated prior to the claims auditor’s audit and approval, there is an increased risk that improper claims could be paid by the district.

North Rose-Wolcott Central School District – Financial Management (Wayne County)
The district has no written plan that details the appropriate and necessary levels for reserve funds and prescribes how the reserve fund balances are to be monitored, analyzed and maintained. As a result, four of the district’s 11 reserve funds, totaling more than $6.8 million, may be overfunded or unnecessary. Additionally, district officials have not developed formal multiyear financial or capital plans, which would greatly benefit it in meeting its current and future obligations.

Pembroke Central School District – Financial Management (Genesee County)
The board and district officials consistently overestimated appropriations. When the appropriated fund balance not needed to finance operations is included in unrestricted fund balance, the district’s recalculated unrestricted fund balance from 2012 to 2014 ranged from approximately $2 million (9 percent) to $2.2 million (11 percent), exceeding the statutory limit. This trend is projected to continue through 2015-16. The board and district officials have not properly managed four reserves that appear to be overfunded or contain funds that are improperly restricted by approximately $7.6 million, which is approximately 35 percent of 2015-16 budgeted appropriations. District officials also consistently budgeted for expenditures that could have been paid for with reserve funds. Had district officials maintained the same tax levy as in 2012-13, residents could have realized approximately $720,000 in cumulative tax savings.

Pulaski Central School District – Financial Condition (Oswego County)
The board consistently overestimated appropriations in the district’s adopted budgets. Although the district reported year-end unrestricted general fund balance at levels that essentially complied with the 4 percent statutory limit, the board adopted budgets which included appropriated fund balance and reserves that were not needed as funding sources because the board and district officials overestimated appropriations by an average of 8.8 percent over the last three fiscal years. As a result, the district experienced an operating surplus in 2011-12 and operating deficits in 2012-13 and 2014-15 that were significantly less than planned. When the unused appropriated fund balance was added back, recalculated unrestricted fund balance averaged about 8 percent of the ensuing year’s appropriations exceeding the legal limit.

Sackets Harbor Central School District – Financial Condition (Jefferson County)
The board has consistently overestimated appropriations in its adopted budgets by about 9 percent over the past three years. As a result, a significant portion of the fund balance appropriated in the general fund was not needed to finance operations and unassigned fund balance has exceeded the 4 percent legal limit from fiscal years 2012-13 through 2014-15. The district has reduced the reported level of year-end unassigned fund balance from 12 percent of the ensuing year’s budget at the end of 2012-13 to 8.6 percent at the end of 2014-15. However, when the unused appropriated fund balance was added back, the recalculated unassigned fund balance exceeded 15 percent of the next year’s appropriations in all three years.

Somers Central School District – Fixed Assets (Westchester County)
Although the district has procedures specific to the maintenance of IT inventory, the board has not adopted an asset policy establishing capitalization or tagging thresholds, control over assets, or how to maintain records for these assets. Consequently, three assets valued at $1,650 could not be located and 21 assets valued at $69,370 were either not tagged or the asset tag numbers did not agree with the asset records. Furthermore, 10 assets purchased in 2015-16 valued at $57,573 were not recorded on the asset list and nine assets valued at $45,750 were listed as disposed of, but were still in service. Auditors found that 18 of 20 assets listed as disposed of, valued at $32,920, did not have documentation indicating authorization or approval.

South Lewis Central School District – Financial Condition (Lewis County)
The district’s unassigned fund balance has exceeded the 4 percent legal limit from fiscal years 2012-13 through 2014-15. At the end of 2014-15, the district’s fund balance was approximately $2.4 million, or 9.7 percent of the ensuing year’s appropriations. Although the district’s unassigned fund balance has exceeded the statutory limit for the past three fiscal years, the board increased the tax levy from $7.8 million in 2012-13 to $8.3 million in 2015-16, an increase of about 6 percent.

Union Springs Central School District – Retiree Health Insurance Contributions (Cayuga County)
District officials ensured that retiree health insurance contributions were properly billed, collected and deposited. Although the account clerk performs most of the duties, district officials implemented proper compensating controls to ensure bills are accurate, money is collected from all retirees and money is deposited into district bank accounts.

Watertown City School District – Financial Condition (Jefferson County)
The district has overestimated appropriations in the adopted budgets by about an average of 14 percent annually over the past three years. As a result, a significant portion of the fund balance appropriated in the general fund was not needed to finance operations and unassigned fund balance has exceeded the 4 percent legal limit each of the last three fiscal years. The district reduced the reported level of year-end unassigned fund balance from 9.3 percent at the end of 2012-13 to 6.9 percent at the end of 2014-15, but when the unused appropriated fund balance is added back, the recalculated unassigned fund balance exceeds 20 percent of the next year’s appropriations for each of the three years.

Wheelerville Union Free School District – Fund Balance (Fulton County)
The district has not correctly recorded and reported the composition of its fund balance. Since the fiscal year ending June 30, 2013, the treasurer has recorded and reported the amount of unrestricted fund balance that exceeds the statutory limit at the end of each fiscal year as “other restricted fund balance” to keep the unrestricted fund balance within the limit. This accounting practice understates the true amount of the general fund’s unrestricted fund balance and circumvents the statutory limit the district is permitted to retain. As a result, over the four past fiscal years the district retained unrestricted fund balance amounts that ranged from 15 percent to 34 percent of the ensuing year’s appropriations.

Williamson Central School District – Procurement of Professional Services (Wayne County)
Although the board has developed a purchasing policy and district officials have developed corresponding regulations, they do not provide guidance for seeking competition when procuring professional services. The policy and regulations do not indicate when, or at what monetary threshold, it is appropriate to use written requests for proposals, written quotes or oral quotes. Additionally, the policy and regulations do not outline the specific documentation requirements to be used during the solicitation process.

Willsboro Central School District – Financial Condition (Essex County)
The district has accumulated unrestricted fund balance that exceeds the statutory limit by approximately $977,000 (nearly 12 percent) and has levied more taxes than were needed to fund operations during the 2013-14 through 2015-16 fiscal years. The board also overestimated appropriations in the 2012-13 through 2014-15 budgets by more than $2.3 million (10 percent). The district’s budgeting practices made it appear that they needed to both raise taxes and appropriate fund balance and reserves to close projected budget gaps, despite an operating surplus of $51,390 during the 2012-13 fiscal year and smaller-than-planned operating deficits of $24,169 in 2013-14 and $39,578 in 2014-15. 


June 18, 2016

Daughter alleged to have stolen over $148,000 of New York State Public Employees’ Retirement System funds following her failure to report her father’s death to the System


Daughter alleged to have stolen over $148,000 of New York State Public Employees’ Retirement System funds following her failure to report her father’s death to the System

Source: Office of the State Comptroller

[N.B. The charges set out in an indictment are merely accusations and the defendant is presumed innocent until proven guilty.] 

New York State Comptroller Thomas DiNapoli and Attorney General Eric T. Schneiderman reported the unsealing of an indictment charging Renee Kanas, 63, a resident of Tamarac, Florida, with Grand Larceny in the Second Degree, a Class C felony.

Kanas is alleged to have stolen over $148,000 in pension payments from the New York State and Local Employees Retirement System paid to her father, Jacob Yudenfreund, a New York State pensioner who died in March 2010.

According to the indictment and statements made by the prosecutor at the arraignment, Kanas’ father was a New York State pensioner who elected to receive reduced monthly benefits so his wife, Doris Yudenfreund, would continue to receive benefits after his death.  Mrs. Yudenfreund, however, predeceased Mr. Yudenfreund.  As such, upon Mr. Yudenfreund’s passing in March 2010, eligibility for any of his retirement allowance terminated.  

According to the Comptroller and Attorney General, Kanas failed to notify the New York State and Local Employees Retirement System of her father’s death.  Instead, from March 2010 until January 2015, pension benefits totaling over $148,000 were deposited into a bank account jointly held by Mr. Yudenfreund and Kanas.  Kanas allegedly accessed these funds after her father’s death and liquidated all but $1,207.55 in pension benefits over that time period.

The allegations concerning Renee Kanas are posted on the Internet at::

Since taking office in 2007, DiNapoli has committed to fighting public corruption and encourages the public to help fight fraud and abuse.  Individuals can report allegations of fraud involving public funds by calling the toll-free Fraud Hotline at 1-888-672-4555, by transmitting an e-mail to investigations@osc.state.ny.us, by filing a complaint online at http://osc.state.ny.us/investigations/complaintform2.htm or by mailing a complaint to Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236.



Former treasurer of a volunteer fire company indicted for wire fraud and subscribing to false tax returns


Former treasurer of a volunteer fire company indicted for wire fraud and subscribing to false tax returns
Source: Office of the State Comptroller

[N.B. The charges contained in an Indictment are merely accusations and the defendant is presumed innocent until proven guilty.]

Preet Bharara, the United States Attorney for the Southern District of New York, Thomas P. DiNapoli, New York State Comptroller, Shantelle P. Kitchen, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service - Criminal Investigation (“IRS-CI”), Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), and George Beach, Superintendent, New York State Police reported the arrest of Michael Klein, the former treasurer of the Mahopac Volunteer Fire Department (“MVFD”), on charges of wire fraud and subscribing to false tax returns.

Klein, Fire Department’s elected treasurer, is alleged to have stolen $5.7 million of the Fire Department’s monies over a period of more than 13 years.  


Details concerning the allegations involving Michael Klein are posted on the Internet at:

Since taking office in 2007, DiNapoli has committed to fighting public corruption and encourages the public to help fight fraud and abuse.  Individuals can report allegations of fraud involving public funds by calling the toll-free Fraud Hotline at 1-888-672-4555, by transmitting an e-mail to investigations@osc.state.ny.us, by filing a complaint online at http://osc.state.ny.us/investigations/complaintform2.htm or by mailing a complaint to Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236.


Requiring employees to submit to a “dog-sniffing test” for illegal drugs


Requiring employees to submit to a “dog-sniffing test” for illegal drugs
Correction Officers’ Benevolent Assoc. v City of New York, USDC, Southern District of New York, 15-CV-5914

The New York City Department of Corrections established a “zero tolerance” drug policy providing for the termination of any employee, uniformed (i.e., correction officers), or civilian, who violated the policy. Its justification: the policy serves important functions by acting as a deterrent against drug traffic in its facilities and ensured that “the security of penal institutions is not breached.”

A federal judge dismissed the Correction Officers’ Benevolent Association’s [COBA] challenge to the New York City's requiring its correction officers to be searched when “drug-sniffing dogs” react positively to the individual. An officer could be suspended if he or she refused to submit to the search for contraband.

Judge Alison Nathan rejected COBA’s argument that searches aided by the drug-sniffing dogs violated its members' constitutional rights as well as New York State's Civil Service Law.

Judge Nathan ruled that COBA cannot claim its member's constitutional rights were being violated by their employer’s efforts to detect individuals attempting to transport drugs into the facility in violation of the law and the controlling Collective Bargaining Agreement. The court also rejected COBA claim that “drug-sniffing dogs” could produce “false positives.”

Other decision testing New York City’s Zero Tolerance Drug Policy include:

Roberts v New York City Office of Collective Bargaining, 113 AD3d 97, [Fire Department's determination of an appropriate penalty for illegal drug use relates to its primary mission of providing public safety];

New York City Fire Department v Armbruster, OATH Index #1350/12 [Firefighter who tested positive for cocaine in a random workplace drug test failed to demonstrate that he consumed the cocaine unknowingly];

Dept. of Corrections v Robbins, OATH 2030/99, [there are instances, particularly where a civilian employee is involved, when the “automatic penalty” under the department’s zero tolerance drug policy should not be applied].


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