Failure to exhaust the available administrative remedy to challenge a determination held a fatal defect in seeking judicial relief

Failure to exhaust the available administrative remedy to challenge a determination held a fatal defect in seeking judicial relief
Matter of Connor v Town of Niskayuna, 2011 NY Slip Op 01556, Appellate Division, Third Department

A number of police officers submitted applications for membership in the New York State and Local Retirement System. Although advised of the availability of two optional retirement plans available to them pursuant to §§384 and 384-d of the Retirement and Social Security Law, and that an election to become a member of either optional retirement plan must be filed within one year of becoming a police officer or member of the Retirement System, none of the police officers in this action filed an election to become a member of either of the two optional plans when they submitted their applications. Accordingly, they were automatically enrolled in the retirement plan provided by Retirement and Social Security Law §375-c.

The police officers subsequently filed an application for enrollment in the §384-d retirement plan. The Comptroller, however, issued a written determination declining to process their respective applications because the statutory one-year election period had expired.

The police officers involved then commenced this CPLR article 78 proceeding seeking to compel the Comptroller to accept their applications and to make all contributions required in connection with their membership in the §384-d plan. Supreme Court dismissed the petition on the ground that the police officers failed to exhaust their administrative remedies.

The Appellate Division affirmed the lower court’s ruling, pointing out “It is hornbook law that one who objects to the act of an administrative agency must exhaust available administrative remedies before being permitted to litigate in a court of law," citing Watergate II Apts. v Buffalo Sewer Auth., 46 NY2d 52.

Here, said the court, the Retirement and Social Security Law sets out the procedure for challenging a retirement benefit determination made by the Comptroller whereby the disappointed individual is to request a hearing and redetermination and then, upon final determination of the Comptroller, he or she commence a CPLR Article 78 proceeding.

In this instance, despite their dissatisfaction with the Comptroller's decision to reject their applications as untimely, the police officers failed to avail themselves of the proceedures set out in Retirement and Social Security Law §374(d).* The Appellate Division said that that the Comptroller's written refusal to process their applications constituted a "determination" within the meaning of Retirement and Social Security Law §374(c).

As the police officers could have challenged the rejections of their respective applications by requesting a hearing and redetermination, they failed to do so. Accordingly, Supreme Court correctly dismissed their Article 78 petition for failure to exhaust the administrative remedies available to them by statute.

*§374.d provides, in pertinent part, that: “At any time within four months … the applicant or his [or her] counsel may serve a written demand upon the comptroller for a hearing and redetermination of such application. … The comptroller shall have the same power upon such hearing as upon the original application. After such hearing the comptroller shall make his final determination. A copy thereof shall be mailed to the applicant and his [or her] counsel, if any. Such final determination shall be subject to review only as provided in article seventy-eight of the civil practice law and rules.”

The decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2011/2011_01556.htm
.