Appellate Division denies defendant's efforts to dismiss plaintiff's cause of action alleging legal malpractice

Plaintiff's attorneys [Defendants] in this action appeal a Supreme Court order denying Defendants motion for summary judgment dismissing Plaintiff's cause of action alleging legal malpractice.

Plaintiff had brought the instant action after her Federal Employers' Liability Act, 45 USC §51 et seq., [FELA] lawsuit against the Metropolitan Transportation Authority [MTA] was dismissed, with prejudice. Plaintiff alleged that the dismissal of her MTA litigation with prejudice was the result of her Defendants "failure to prosecute" her lawsuit. 

Defendants argued that in light of the denial of Plaintiff's application for accidental disability retirement benefits and the dismissal of the Plaintiff's proceeding pursuant to CPLR Article 78 to review the denial of said application, the Plaintiff was collaterally estopped from claiming that she suffered a work-related injury. Thus, Defendant contended, Plaintiff could not establish that she would have prevailed in the FELA action but for the Defendants' "alleged negligent failure to prosecute that action". 

The Appellate Division affirmed the Supreme Court's ruling explaining:

1. "A plaintiff in an action alleging legal malpractice must prove the defendant attorney's failure to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession proximately caused the plaintiff to suffer damages;

2. "To establish proximate causation, the plaintiff must show that [he or] she would have prevailed in the underlying action ... but for the defendant attorney's negligence; and

3. "A defendant seeking summary judgment dismissing a legal malpractice cause of action has the burden of establishing prima facie that he or she did not fail to exercise such skill and knowledge, or that the claimed departure did not proximately cause the plaintiff to sustain damages."

The Appellate Division held that "Contrary to the [Defendants'] contention, they failed to establish their prima facie entitlement to judgment as a matter of law dismissing the cause of action alleging legal malpractice based upon the doctrine of collateral estoppel". 

The Court noted that "The doctrine of collateral estoppel, a narrower species of res judicata, precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party or those in privity." Further, said the Appellate Division, the doctrine applies "only if the issue in the second action is identical to an issue which was raised, necessarily decided and material in the first action, and the ... party to be bound had a full and fair opportunity to litigate the issue in the earlier action'".

The Appellate Division ruled that, contrary to the Defendants' contention, the  Defendants failed to demonstrate an identity of issues between the FELA action and the determination of either the Plaintiff's application for accidental disability retirement benefits or the CPLR Article 78 proceeding. 

In the words of the Appellate Division, "the FELA action involved the issue of whether the MTA's alleged negligence played any part in producing the injuries for which the [Plaintiff] sought damages, that issue was not litigated and necessarily decided against the [Plaintiff] either in the context of her application for accidental disability retirement benefits or in the CPLR article 78 proceeding ... [thus] the defendants failed to establish their prima facie entitlement to judgment as a matter of law dismissing the cause of action alleging legal malpractice based upon the doctrine of collateral estoppel".

The Appellate Division further observed that Defendants "also failed to establish, prima facie, that the MTA neither created nor had actual or constructive notice of the alleged dangerous conditions at issue in the FELA action .... Thus, the [Defendants] failed to demonstrate, prima facie, that the [Plaintiff] would not have prevailed in the FELA action but for their alleged failure to prosecute that action". 

Click HERE to access the decision of the Appellate Division posted on the Internet.

 

Selected items posted on the Internet during the week ending June 28, 2025:

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Audits of state departments and agencies issued by New York State Comptroller Thomas P. DiNapoli

On March 26, 2025, New York State Comptroller Thomas P. DiNapoli announced the following audits have been issued.

Click on the text highlighted in BLUE to access the text of the Comptroller's report

Empire BlueCross – Overpayments for Physician-Administered Drugs (Follow-Up) (2024-F-34)  The New York State Health Insurance Program (NYSHIP) is administered by the Department of Civil Service (Civil Service). The Empire Plan is the primary health insurance plan for NYSHIP, and Civil Service contracts with Anthem Blue Cross (Anthem), formerly Empire BlueCross, to administer the Hospital Program of the Empire Plan and to process and pay claims for hospital services. Hospital benefits cover a range of services including physician-administered drugs, which are drugs administered by health care professionals in a hospital or facility setting. A prior audit, issued in September 2023, identified over $2.7 million in actual and potential overpayments for physician-administered drugs. Anthem officials made progress in addressing the problems identified in the initial audit, recovering over $600,000 of the overpaid claims and taking steps to make more recoveries. Of the initial report’s seven audit recommendations, two were implemented, four were partially implemented, and one was not implemented.

New York City Department for the Aging – Case Management (Follow-Up) (2025-F-3) The New York City Department for the Aging (DFTA) contracts with community-based organizations (providers) to provide case management services, which help older persons with functional impairments gain access to appropriate services, benefits, and entitlements needed to age safely at home and maintain their quality of life. Case management providers must adhere to DFTA’s Case Management Standards of Operations and Scope of Services (Standards), which detail when intake assessments and reassessments must be performed, as well as wait list prioritization. A prior audit, issued in July 2023, found that DFTA did not ensure that its contracted providers adhered to the Standards; therefore, key milestones for delivering and monitoring services needed for vulnerable seniors were not always met. Additionally, DFTA reimbursed providers for $10,480 in claimed expenses that had insufficient supporting documentation or were unrelated to the case management program. DFTA made some progress in addressing the initial audit report’s eight recommendations, implementing one, partially implementing four, and not implementing three.

Department of Health – Improper Medicaid Payments During Permissible Overlapping Medicaid and Essential Plan Coverage (Follow-Up) (2024-F-40) The Department of Health (DOH) administers the State’s Medicaid program and the Essential Plan, both of which provide health care services to individuals who are economically disadvantaged. As eligibility factors change, individuals may transition between Medicaid and the Essential Plan, resulting in DOH-authorized periods of overlapping coverage and the Essential Plan should be the primary payer and Medicaid, as secondary payer, should pay any remaining liabilities, such as deductibles and coinsurance. A prior audit, issued in September 2023, found Medicaid improperly paid $93.7 million in claims during periods of overlapping Medicaid and Essential Plan coverage because DOH did not account for the Essential Plan as a liable primary payer. DOH officials made some progress in addressing the problems identified in the initial audit report, but minimal progress in recovering the improper payments identified by the initial audit. Of the initial report’s two audit recommendations, one was partially implemented and one was not implemented.

Homes and Community Renewal: Division of Housing and Community Renewal – Physical and Financial Conditions at Selected Mitchell-Lama Developments in New York City (Follow-Up) (2024-F-30)  The Mitchell-Lama Housing program was created to provide affordable rental and cooperative housing to middle-income families. A prior audit, issued in June 2023, found DHCR did not adequately oversee the physical and financial conditions at the sampled developments, likely causing management at those developments to misspend funds and fail to provide a safe and clean living environment for their residents. DHCR officials made some progress in addressing the issues identified in the initial audit report, but auditors observed additional hazardous and unsanitary conditions on follow-up, including rodent infestations, mold, and peeling paint. Of the initial report’s nine audit recommendations, one was implemented, six were partially implemented, and two were not implemented.

Department of Health – Medicaid Claims Processing Activity April 1, 2024 Through September 30, 2024 (2024-S-5)  During the 6-month period ended September 30, 2024, the Department of Health’s eMedNY computer system processed almost 249 million claims, resulting in payments to providers of nearly $50.6 billion. OSC’s audit of claims processing activity identified over $11.5 million in improper Medicaid payments for claims that were not processed in accordance with Medicaid requirements. The audit also identified 14 Medicaid providers who were charged with or found guilty of crimes that violated laws or regulations governing certain health care programs.

Department of Health: Medicaid Program – Improper Fee-for-Service Pharmacy Payments for Recipients With Third-Party Health Insurance (Follow-Up) (2024-F-25) When Medicaid recipients have other third-party health insurance (TPHI) in addition to Medicaid, fee-for-service (FFS) providers are required to coordinate benefits with the recipient’s TPHI for payment prior to billing Medicaid. The Office of the Medicaid Inspector General (OMIG) contracted with Gainwell Technologies to identify and recover Medicaid payments made for services that should have been paid for by a recipient’s TPHI. A prior audit, issued in May 2023, determined DOH and OMIG lacked adequate oversight of Gainwell’s recovery process to ensure all available recoveries on FFS pharmacy payments were made. The audit also found claims processing improvements could be made to prevent TPHI overpayments from occurring. DOH and OMIG officials made minimal progress in addressing the problems identified in the initial audit report. Of the initial report’s eight recommendations, one was implemented, two were partially implemented, and five were not implemented.

Office for People With Developmental Disabilities – Pandemic Planning and Care for Vulnerable Populations (Follow-Up) (2024-F-23)  The Office for People with Developmental Disabilities (OPWDD) is responsible for certifying and regulating all residential facilities and providing guidance and best practices to its own staff at State-operated facilities and voluntary agencies that deliver direct care to people with intellectual and developmental disabilities. One component of OPWDD’s mission is providing a safe environment, including disaster preparedness. A prior audit, issued in April 2023, found OPWDD developed and issued specific COVID-19 pandemic plans to only State-operated Intermediate Care Facilities, which accounted for less than 1% of OPWDD’s residential clients. Additionally, while OPWDD’s emergency management and overarching emergency planning documents considered pandemics as a risk even before COVID-19, OPWDD did not take proactive steps to ensure that all homes had followed suit in their own emergency plans. OPWDD made progress in addressing the problems identified in the initial audit report, partially implementing all four recommendations.

New York State Health Insurance Program – Incorrect Payments by CVS Caremark for Medicare Rx Drug Claims That Were Improperly Paid Under the Commercial Plan (Follow-Up) (2025-F-1)  The Empire Plan is the primary health benefits plan for the New York State Health Insurance Program, administered by the Department of Civil Service (Civil Service). Civil Service contracts with CVS Caremark to administer the prescription drug program for the Empire Plan, which includes the Empire Plan Medicare Rx drug plan (Medicare Rx Plan) for retired members and their dependents who qualify for Medicare, and the Commercial Plan for members and their dependents who do not qualify for Medicare. Claims paid under the Medicare Rx Plan are eligible for enhanced drug manufacturer discounts and federal subsidies that are not available for claims paid under the Commercial Plan. A prior audit, issued in September 2023, identified claims totaling $12,358,531 that were incorrectly paid under the Commercial Plan instead of the Medicare Rx Plan. Civil Service and CVS Caremark made some progress in addressing the issues identified in the initial audit, partially implementing all three of initial report’s recommendations and reprocessing over $5 million in claims under the Medicare Rx Plan. However, they did not evaluate or put in place additional controls to prevent claims from being inappropriately paid under the Commercial Plan, and, consequently, auditors identified $1.37 million in claims paid under the Commercial Plan for Medicare-eligible members since the initial audit (from April 2022 through December 2024).

Office of Addiction Services and Supports – Addiction Support Services During Emergencies (Follow-Up) (2024-F-39)  The Office of Addiction Services and Supports (OASAS) certifies providers to operate substance use disorder and problem gambling treatment and prevention programs (Programs)  and conducts unannounced recertification reviews to assess providers’ compliance with regulatory requirements. OASAS also requires providers to maintain waiting lists for clients awaiting treatment and certain providers to develop, maintain, and update an Emergency Preparedness Plan (Plan) to address emergencies that may present an immediate danger to personnel, patients, Programs, and/or property. Further, the state created the New York State Evacuation of Facilities in Disasters System (eFINDS) application to track in real time the location of individuals being cared for in facilities and on-duty staff when relocation occurs during an emergency. A prior audit, issued in November 2023, found OASAS should improve the extent and clarity of its guidance to include strategies to manage and mitigate prolonged service disruptions and continue to deliver addiction support services; improve its monitoring of providers’ Plans; and do more to ensure that providers have access to and use eFINDS and improve the accuracy and usefulness of its waiting lists. OASAS has made little progress in addressing the problems identified in the initial audit report, implementing none of the initial report’s three recommendations.

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New York City's Office of Administrative Trials and Hearings Administrative Law Judge recommends agency dismissed disciplinary charges filed against one of its employees

A New York City Office of Administrative Trials and Hearings Administrative Law Judge [ALJ], Kara J. Miller, recommended the dismissal of disciplinary charges against filed against a child protective specialist supervisor [Employee] employed by the Administration for Children’s Services [Employer] after disciplinary hearing. Judge Miller found that the Employer had not proven that the Employee had engaged in misconduct. 

The Employer had alleged that the Employee had used disrespectful language and had acted in a threatening manner towards the Employee's supervisors and was insubordinate when she refused to complete an assignment, among other charges. 

The Employer sought to offer two internal religious discrimination complaints the Employee had filed with the Employer’s Office of Equal Employment Opportunity to impeach the Employee’s witnesses for hostility and bias. 

The ALJ accepted the documents because evidence that a witness bears some bias may be adduced to show that the Employer’s factual allegations are untrue but rejected the offering of any exhibits that went beyond the limited scope of impeachment. 

Although Judge Miller found that the Employee was impolite, the Employer’s witness testimony was insufficient to prove misconduct as "the testimony was exaggerated, embellished, and exhibited bias against the Employee]" 

Further, the ALJ found that the Employee was given ambiguous directions with respect to the assignment she allegedly refused to complete and therefore was not insubordinate for lack of requisite intent. 

Accordingly, the ALJ recommended the Employer dismiss the disciplinary charges it filed against the Employee.

Click HERE to access Judge Miller's decision posted on the Internet.

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Retirees failed to prove a School District agreed to charge a specific percentage as a retiree contribution for health insurance upon their retirement

Petitioners in this appeal to the Commissioner of Education served with a School District for more than 20 years ago in positions designated confidential. This designation for the purposed of the Taylor Law made them ineligible to join any of the collective bargaining units recognized by the School District. Documents entitled “Terms of Employment for Civil Service Positions Non-Contract Confidential Employees" indicated that all “terms of employment and other benefits” were deemed “equal to those” negotiated by the Support Staff Association [SSA] bargaining unit, with limited exceptions.

One exception specified that Petitioners would contribute to health insurance premiums at the rate of six percent but did not indicate the health insurance contribution rates that such employees would pay upon their retirement.

Subsequent to their retirement the School District's Board [Board] advised Petitioners that it had agreed to a new collective bargaining agreement [CBA] and that Petitioners’ contribution rate for health insurance premiums would be increased to reflect this change. Petitioners attended Board meetings to contest this change but were ultimately were advised that the Board's determination concerning  the health insurance premiums to be paid by Petitioners was final. 

Petitioners appealed the Board's decision to the Commissioner.

The Commissioner, observing that in an appeal to the Commissioner the petitioner has the burden of demonstrating a clear legal right to the relief requested and establishing the facts upon which he or she seeks relief, concluded that Petitioners had not proven that the Board agreed to maintain the six percent contribution rate for the Petitioners' upon their retirement.  

Although Board's Policy 9510 indicated that “health insurance will continue to be provided for retired employees … at the same level of district/employee contribution as the corresponding bargaining unit", the Commissioner found that Policy 9510 was "inapplicable to [Petitioners]" as they were not members in any collective bargaining unit and "neither the [CBAs] nor policy 9510" guaranteed Petitioners a specific percentage of the contribution for health insurance to be paid by the retirees upon their retirement.

The Commissioner, concluding that Plaintiffs' appeal must be dismissed, then said  she "encourage [the Board] to develop a consistent policy regarding retirement benefits for confidential employees". 

The Commissioner's decision is set out below.

Appeal of MICHAEL CAMBARERI and LORI KREBS from action of the Board of Education of the Sandy Creek Central School District regarding retirement benefits.

Decision No. 18,568

(June 9, 2025)

Office of Inter-Municipal Legal Services, Jefferson Lewis Board of Cooperative Educational Services, attorneys for respondent, George R. Shaffer III, Esq., of counsel

ROSA., Commissioner.--Petitioners challenge the determination of the Board of Education of the Sandy Creek Central School District (“respondent” or “board”) to modify their health insurance premiums in retirement.  The appeal must be dismissed. 

Petitioners began their employment with respondent over 20 years ago.  Both of their positions were designated “confidential,” which made them ineligible to join any of the bargaining units recognized by respondent.  Petitioners’ employment conditions were identified in documents entitled “Terms of Employment for Civil Service Positions Non-Contract Confidential Employees” (the “agreements”).[1]  The agreements indicated that all “terms of employment and other benefits” were deemed “equal to those” negotiated by the Support Staff Association (“SSA”) bargaining unit, with limited exceptions.  One exception specified that petitioners would contribute to health insurance premiums at the rate of six percent.  The agreements did not address health insurance contribution rates in retirement.[2]  Petitioners Krebs and Cambareri retired from their employment with respondent in 2021 and 2024, respectively. 

By letter dated August 19, 2024, respondent informed petitioners that it had agreed to a new collective bargaining agreement (“CBA”) with the SSA that would increase petitioners’ contribution rate for health insurance premiums.[3]  Petitioners attended a September 12, 2024 board meeting to contest this change.  By letters dated September 17, 2024, respondent informed petitioners that its determination to change the health insurance premiums was final.  This appeal ensued.

Petitioners contend that respondent is estopped from modifying the terms of their employment, which they characterize as binding contracts.  Petitioners submit statements from two other confidential employees who indicate that their health insurance contribution rate will remain the same in retirement (the “confidential retirees”).  Petitioners seek an order maintaining their contributions to the health insurance plan at six percent.

Respondent contends, among other arguments, that it exercised its right to unilaterally modify the provision of the terms of employment regarding health insurance contributions.  Alternatively, respondent argues that petitioners lack standing to challenging respondent’s past practice of providing health insurance benefits to confidential retirees.  Respondent further submits that the two confidential employees are dissimilar to petitioners as these employees negotiated specific provisions regarding health insurance in retirement.

In an appeal to the Commissioner, a petitioner has the burden of demonstrating a clear legal right to the relief requested and establishing the facts upon which he or she seeks relief (8 NYCRR 275.10; Appeal of P.C. and K.C., 57 Ed Dept Rep, Decision No. 17,337; Appeal of Aversa, 48 id. 523, Decision No. 15,936; Appeal of Hansen, 48 id. 354, Decision No. 15,884).

Petitioners have not proven that respondent agreed to maintain the six percent contribution rate throughout their retirement.  As indicated above, petitioners’ agreements do not address retirement benefits.  Board policy 9510 indicates that “health insurance will continue to be provided for retired employees … at the same level of district/employee contribution as the corresponding bargaining unit….”  This provision is inapplicable to petitioners as they did not belong to any bargaining unit.  Therefore, neither the agreements nor policy 9510 guaranteed petitioners a specific contribution rate in retirement.  While respondent has a past practice equating such rates with those negotiated by the SSA, petitioners were not aggrieved by this benefit (Matter of Aenas McDonald Police Benevolent Assn v City of Geneva, 92 NY2d 326, 330-331 [1998]).[4]

The language of the agreements between respondent and the two confidential retirees are not to the contrary.  These retirees, unlike petitioners, separately negotiated provisions regarding health insurance in retirement.  These provisions were then memorialized in the confidential retirees’ agreements under headings such as “health insurance in retirement” and “medical benefits/insurance post employment.”  Petitioners’ agreements do not contain comparable provisions.[5]  Thus, I find that petitioners have failed to demonstrate a clear legal right to a six percent contribution rate through retirement.

While the appeal must be dismissed, I encourage respondent to develop a consistent policy regarding retirement benefits for confidential employees.  If such benefits (including health insurance) are commensurate with those afforded to SSA members, respondent’s policy or agreements should so state.

In light of this disposition, I need not address the parties’ remaining contentions, including respondent’s procedural contentions.

THE APPEAL IS DISMISSED.

---

[1] Respondent issued separate agreements to each petitioner.  The material provisions of these agreements are identical.

[2] Retirement benefits for employees are generally addressed in board policy 9510, discussed below.

[3] Consistent with its past practice described below, respondent determined that these changes applied to petitioners.

[4] In this decision, the Court of Appeals also held “that there is no legal impediment to [a] municipality’s unilateral alteration of [a] past practice” and that “a public employer’s statutory duty to bargain does not extend to retirees.” Id. at 330-31, 332.

[5] Petitioners also submit statements from two current confidential employees, who indicate that when their supervisor “presented [them] with … Terms of Conditions that included a 6% insurance premium,” she represented “that it would carry through into … retirement.”  While petitioners argue that this reflects the binding nature of the six percent rate, it is equally plausible that the supervisor’s statement referred to the past practice described above.