A postscript to "Doctrine of Estoppel not available to bar an administrative action to correct an error notwithstanding its adverse impact on the individual"

A postscript to "Doctrine of Estoppel not available to bar an administrative action to correct an error notwithstanding its adverse impact on the individual" [See: http://publicpersonnellaw.blogspot.com/2011/04/doctrine-of-estoppel-not-available-to.html ]

Source: Administrative Law Professor Blog. Reproduced with permission. Copyright © 2011, All rights reserved http://lawprofessors.typepad.com/adminlaw/

"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."

EMM

Court finds Pension Board's failure discontinue the payment of disability retirement benefits obviates the “suspension” of the retiree’s benefits

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: 
http://www.courts.state.ny.us/reporter/3dseries/2011/2011_03309.htm 

* 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

Statute of limitations for judicial review of a final administrative decision neither tolled nor extended by filing a request for reconsideration

Matter of Chapman v New York State Teachers' Retirement Sys., 2011 NY Slip Op 02994, Appellate Division, Third Department

Cheryl Hogg-Chapman, a former school counselor, applied for disability retirement benefits after falling on the stairs at work.

Following a review of Hogg-Chapman's medical records, the New York State Teachers’ Retirement System’s Medical Board concluded that there was no basis upon which to grant her request for disability retirement benefits. Hogg-Chapman was advised of the Medical Board’s determination and ultimately TRS informed petitioner it would be recommending such to respondent. Thereafter, NYSTRS notified Hogg-Chapman that it accepted the Medical Board's recommendation, and her application for disability retirement benefits was denied.

Hogg-Chapman filed an Article 78 petition challenging NYSTRS’ August 2008 determination. Supreme Court dismissed her petition, finding that the challenge was barred by the applicable four-month statute of limitations.

The Appellate Division affirmed the lower court’s ruling.

The court pointed out that §217(1) of the Civil Practice Law and Rules requires that "a proceeding against a body or officer must be commenced within four months after the determination to be reviewed becomes final and binding upon the petitioner."

Explaining that "an administrative determination becomes final and binding when it definitively impacts and aggrieves the party seeking judicial review," the Appellate Division said that there is no dispute that NYSTRS notified Hogg-Chapman in August 2008 that her application for disability retirement benefits was denied. Although Hogg-Chapman sent the Medical Board additional medical evidence and requested that it reconsider its recommendation, this did not serve to toll the statute of limitations period or make NYSTRS’ determination any less final.

Thus, said the court, as Hogg-Chapman’s Article 78 petition was filed more than four months after NYSTRS rendered its determination, Supreme Court properly dismissed the petition as time barred.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_02994.htm

Proof of filing a timely application for disability benefits critical

Proof of filing a timely application for disability benefits critical

Jarek v McCall, 268 A.D.2d 654

It may prove critical to have proof that an application was filed with an agency as the Jarek case demonstrates.

John Jarek, a school custodian suffered a heart attack on January 31, 1993. Unable to work, Jarek resigned from his position on March 4, 1993.

Jarek filed an application for ordinary disability retirement with the New York State Employees’ Retirement System [ERS] within 90 days of his last day of service.

The application form was notarized and sent by first class mail to ERS. Not having heard from ERS, some six months later Jarek asked ERS to advise him of the status of his application. ERS told him that it never received his application form.

Ultimately, ERS denied Jarek ordinary disability retirement benefits because he had not filed a timely application form for benefits.*

Although an ERS hearing officer recommended that Jarek’s application be accepted since he had mailed it in a timely manner and through no fault of his own it had not be received by ERS, the Comptroller sustained ERS’s initial decision denying Jarek benefits. Jarek appealed.

Did the fact that Jarek mailed his application in a timely manner qualify him for benefits? The Appellate Division said because Jarek could not prove he had filed his application within 90 days of his last day of service, the Comptroller’s determination must be sustained.

The court pointed out that in other situations it had held that simply mailing an application for benefits does not constitute filing of the required application form. According to the ruling, filing for the purposes of establishing eligibility for benefits “only occurs upon actual delivery to and receipt” by ERS.

Thus, if the application is mailed, some means of demonstrating that the application was received by the System is critical to an individual’s ability to prove that his or her application for benefits was filed within the time period required.

Upholding the Comptroller’s decision that Jarek’s “act of mailing his application for ordinary disability retirement benefits” was not the equivalent of filing such an application, the Appellate Division said that this determination was reasonable and thus must be sustained under the circumstances.

The court said that “[w]hile the result is harsh, it is one the law compels.

The Appellate Division noted that Jarek claimed that he “did everything within his power to meet the 90-day deadline ....”

However, said the court, Jarek “failed to use available mailing methods which would have provided him with notice of [ERS’s] receipt (or lack thereof) of his application and further waited over six months to check on its status.”

It is clearly prudent to make certain that the individual can prove that he or she timely filed such an application.

Had Jarek used certified or registered mail -- or delivered his application in person and obtained a receipt -- he would have had a better chance of prevailing even if ERS had lost his application after receiving it. 

* Sections 62 and 63 of the Retirement and Social Security Law require a member to file his or her application for ordinary disability retirement benefits within 90 days of his or her last day of service. Accordingly, Jarek had to file his application within 90 days of March 4, 1993.

Considering the employee's personnel record in setting a disciplinary penalty

Considering the employee's personnel record in setting a disciplinary penalty

Thomas v Mt. Vernon, 267 AD2d 241

The Thomas ruling points out the elements that must be observed if the appointing officer wishes to consider an employee’s personnel record in setting a disciplinary penalty.

Robin Thomas was employed by the Mount Vernon Department of Public Safety. She was terminated from her position after being found guilty of habitual lateness. Thomas appealed the Commissioner of Public Safety’s determination.

Although the Appellate Division sustained the commissioner’s decision finding her guilty of the charges filed against her, it remanded the matter to him “for a new determination as to the penalty to be imposed” (Thomas v City of Mount Vernon, 249 AD2d 483).

When the original penalty - dismissal - was again imposed, Thomas again appealed. She contended that her “prior disciplinary record” was considered in setting the penalty.

Thomas argued that although the commissioner considered her prior disciplinary record, he failed to comply with the procedures set out by the Court of Appeals in Bigelow v Village of Gouverneur (63 NY2d 470) in such situations.

The Appellate Division observed that an employee’s prior disciplinary history could be considered in setting a disciplinary penalty if:

1. The individual is advised that his or her prior disciplinary record would be considered in setting the penalty to be imposed; and

  

2. The employee is given an opportunity to submit a written response to any adverse material contained in the record or offer “mitigating circumstances.”

The court said that there was nothing in the record to support Thomas’ claim that she was denied an opportunity to review her personnel record or to submit her objections in writing prior to the commissioner making his determination as to the appropriate penalty to be imposed. Accordingly, it ruled that the commissioner had complied with the standards set out by the Court of Appeals in Bigelow.

As to the penalty imposed - dismissal - the Appellate Division said that it was persuaded that the penalty met the Pell standard as it was not “so disproportionate to the offense, in the light of all the circumstances, as to be shocking to one’s sense of fairness” [Pell v Board of Education, 34 NY2d 222].

Commenting that Thomas’ conduct that resulted in this disciplinary action, together with her conduct underlying a previous suspension, “established a pattern of excessive absences and a failure to correct this behavior after her suspension,” the Appellate Division sustained her termination and dismissed her appeal.

Termination for violating the employee’s “last chance agreement” disqualifies individual for unemployment insurance benefits

Termination for violating the employee’s “last chance agreement” disqualifies individual for unemployment insurance benefits

Matter of Brown v Lincoln Ctr. for The Performing Arts, Inc., 2011 NY Slip Op 02982, Appellate Division, Third Department

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.

An Unemployment Insurance Administrative Law Judge concluded that Brown was terminated for misconduct and upheld the initial determination denying her unemployment benefits.

The Unemployment Insurance Appeal Board, however, overruled the Administrative Law Judge and awarded Brown benefits, finding that Lincoln Center “had not enforced the last chance agreement by allowing claimant to commit other disciplinary infractions without consequence prior to the December 2009 meeting.” Lincoln Center appealed and the court vacated the Board’s decision.

Noting that insubordinate behavior and, or, disrespectful conduct toward a supervisor has been held to constitute misconduct disqualifying a claimant from receiving unemployment insurance benefits, the Appellate Division found that the record contained ample evidence that Brown became loud, boisterous and disrespectful toward her supervisor during the December 2009 meeting. This clearly amounted to insubordination violative of the last chance agreement and was the equivalent of disqualifying misconduct.

As to the Board's finding that the Center “had not enforced the last chance agreement,” the Appellate Division said found “the record is devoid of evidence” establishing that the employer neglected to enforce the last chance agreement with respect to disciplinary infractions committed by Brown prior to the December 2009 meeting and that Brown was somehow misled thereby.

Although the Center’s director of human resources testified that Brown committed some minor violations, the nature and extent of them were not disclosed. However, said the Appellate Division, “it was the employer's prerogative” to determine if such acts constituted a level of misconduct warranting termination and the director stated that they did not.

Thus, said the court, substantial evidence does not support the Board's decision awarding Brown unemployment insurance benefits.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_02982.htm

Doctrine of Estoppel not available to bar an administrative action to correct an error notwithstanding its adverse impact on the individual

Doctrine of Estoppel not available to bar an administrative action to correct an error notwithstanding its adverse impact on the individual

Matter of Olick v D'Alessandro, 2011 NY Slip Op 50718(U), Supreme Court, New York County, Judge Manuel J. Mendez [Not selected for publications in the Official Reports]

Alice D. Olick filed petitions pursuant to Article 78 of the Civil Practice Law and Rules in an effort to annul and the determination by the New York Teachers’ Retirement and the New York City Employees’ Retirement Systems that reduced the amount of her retirement allowance and barring deductions from future retirement allowance payments for alleged “overpayments” made to her during the past seven years since her retirement.

For more than seven (7) years since her retirement Olick had been receiving an annual retirement allowance of $62,381. On March 16, 2009 she was advised that she would receive a "revised benefits letter" with a larger Annual Retirement Allowance. In addition in conversations had with NYCERS employees she was advised that she would receive a bulk payment for each of the seven years since her retirement.

In December 2009, however, Olick was advised that her retirement allowance informing her that her pension was not being increased, instead it was being decreased and she was responsible for the return of excess payments in the amount of $32,879.82 made to her over the past seven years.*  The Retirement System attributed the original mistaken pension calculation to "a programming error….”

Olick appealed NYCERS' reduction of her pension, contending, among other things, that the decision was arbitrary and capricious. She also argued that [1] NYCERS failed take into account that in reliance on the original calculation she and her husband had planned and budgeted for their retirement, making life altering decisions relying on the certainty that her pension would be $62,381, plus Social Security and that [2] she paid taxes on this amount and that she received the Annual Pension Allowance for seven years before any alleged error was detected.

In its defense the Retirement System said that Estoppel is not available against a governmental agency seeking to recoup overpayment of a benefit.

Judge Mendez said that the applicable statute, New York City Administrative Code §13-182 Retirement and Pensions, provides, in pertinent part: "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."

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.

Citing Freda v. Board of Education of the City of New York, 224 AD2d 360, Judge Mendez said the statement of an employee of the agency later found to be incorrect, even if relied upon by the employee does not bar the agency from correcting an error later discovered and recouping any overpayment made to the retiree.

The bottom line: as Olick received a greater annual retirement allowance than she was entitled to receive, once the error was discovered, under the statute, NYCERS is entitled to recover the amount paid in excess of what Olick was entitled to receive. 

Further, the overpayment can be recovered by withholding or reducing the current pension benefit Olick is receiving.

  

In an Article 78 proceeding such as this one, the court's function is limited to a determination whether the administrative determination is arbitrary and capricious in that it is "without sound basis in reason and is generally taken without regard to the facts" and unless the decision is arbitrary, the court cannot substitute its judgment, even if it would have reached a different result if presented with the issue in the first instance.

Applying this standard, Judge Mendez denied Olick’s petition.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_50718.htm

* Olick’s monthly gross retirement allowance was reduced by almost $1,000 from $5,264.44 to $4,333.12.  

POSTSCRIPT: 

In his blog, Administrative Law Professor [ http://lawprofessors.typepad.com/adminlaw/ ], Edward M. McClure comments: 

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.

EMM

Procedure for requesting a disciplinary hearing

Procedure for requesting a disciplinary hearing
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.”

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The Discipline Book, - a concise guide to disciplinary actions involving public employees in New York State is a 1272 page e-book available from the Public Employment Law Press. Click on http://thedisciplinebook.blogspot.com/ for additional information concerning this electronic reference manual.

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Appointing authority may reject a proposed disciplinary settlement

Appointing authority may reject a proposed disciplinary settlement

Tetro v Safir, App. Div., First Dept

It is not uncommon for an employee to offer to, or to agree to, “settle” disciplinary charges that have been filed against him or her.

Is the appointing officer bound to accept the “negotiated settlement?” Not necessarily, as the Tetro decision by the Appellate Division demonstrates.

In Tetro, the Appellate Division affirmed the appointing authority’s rejection of the terms of the settlement of a disciplinary action previously agreed to by the employee and impose a harsher penalty -- termination -- upon the individual.

Anthony Tetro, a New York City police officer, was dismissed from his position after he was found guilty of giving “false testimony at the criminal trial of a former police officer.”

Tetro testified that his partner discovered a gun in their patrol car while he was removing a prisoner from the vehicle.

The evidence showed that Tetro and his partner failed to check underneath the back seat of the patrol car and that other police officers later found the weapon.

Tetro had “negotiated a plea agreement” in order to settle the disciplinary charges filed against him but the Commissioner rejected it and decided that the appropriate penalty to impose was dismissal from the department.

The Appellate Division ruled that Tetro’s “contract rights were not violated” when the Commissioner declined to accept the settlement agreement and imposed a different penalty. The court cited Silverman v McGuire, 51 NY2d 228, in support of its ruling.

Elected official removed from public office for failing to be a domiciliary of the jurisdiction as required by law

Elected official removed from public office for failing to be a domiciliary of the jurisdiction as required by law

Board of Trustees of the Vil. of Sodus, N.Y. v Allen, 2011 NY Slip Op 31035(U), Supreme Court, Wayne County, Docket Number: 71473/2010, Judge Dennis M. Kehoe [Not selected for publication in the Official Reports]

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 [1] 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; [2] 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; [3] that he did not move his personal belongings to the apartment; and [4] 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:

http://www.courts.state.ny.us/reporter/3dseries/2010/2010_05447.htm 

The Allen decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/pdfs/2011/2011_31035.pdf

* 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 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

Montefiore Med. Ctr. v. Teamsters Local 272, 10-1451-cv, USCA 2^nd Circuit

The question presented in this appeal: May a healthcare provider’s breach of contract and quasi-contract claims against an ERISA health benefit plan were completely preempted by federal law under the two-prong test for preemption established in Aetna Health Inc. v. Davila, 542 U.S. 200?

The Davila two-prong test to determine whether a claim falls “within the scope” of §502(a)(1)(B). provides that claims are completely preempted by ERISA if they are brought:

a. by “an individual [who] at some point in time, could have brought his claim under ERISA § 502(a)(1)(B),”; and

b. under circumstances in which “there is no other independent legal duty that is implicated by a defendant’s actions.”

The Circuit Court noted that the test is conjunctive; i.e., a state-law cause of action is preempted only if both prongs of the test are satisfied.

The Circuit Court of Appeals ruled that:

1. An “in-network” health care provider may receive a valid assignment of rights from an ERISA plan beneficiary pursuant to ERISA §502(a)(1)(B)*;

2. Where a provider’s claim involves the right to payment and not simply theamount or execution of payment, i.e.,  where the claim principally implicates coverage and benefit determinations as set forth by the terms of the ERISA benefit plan, and not simply the contractually correct payment amount or the proper execution of the monetary transfer—that claim constitutes a colorable claim for benefits pursuant to ERISA §502(a)(1)(B).

In this instance, said the court, at least some of Montefiore's claims for reimbursement are completely preempted by federal law. However, the Circuit Court noted, the remaining state-law claims are properly subject to the exercise of the District Court’s supplemental jurisdiction.

The decision is posted on the Internet at:

http://www.ca2.uscourts.gov/decisions/isysquery/638f47ad-5866-4fe6-b0b7-de8642e536f7/1/doc/10-1451Complete_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/638f47ad-5866-4fe6-b0b7-de8642e536f7/1/hilite/

* 1 Section 502(a)(1)(B) provides, in relevant part: A civil action may be brought -- (1) by a participant or beneficiary -- (B) to recover benefits due to him [or her] under the terms of his [or her] plan, to enforce his [or her] rights under the terms of the plan, or to clarify his [or her] rights to future benefits under the terms of the plan.

Creating and abolishing a temporary position

Creating and abolishing a temporary position

Wilson v Madison-Oneida BOCES, 268 AD2d 625

Frequently a public employer will establish a temporary position to handle a particular need that is expected to be resolved in a relatively short period. The Wilson case addresses the creation and abolishment of temporary positions and the rights of individuals appointed to such temporary positions.

 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.*

BOCES initially wrote to Wilson telling him that his appointment was effective February 9, 1996 and would run through June 30, 1996. He was to be compensated at an annual salary rate of $40,000. BOCES later wrote Wilson advising him that he was appointed “temporary clerk of the works” for the period July 1, 1996 through June 30, 1997 at the same rate of compensation.

When the work at Cazenovia was nearing completion, Wilson commenced working at Stockbridge. When Stockbridge’s project was shut down due to poor weather conditions, Stockbridge asked BOCES to “adjust its contract” for clerk of the works services. As a result, BOCES abolished Wilson’s position effective January 17, 1997 and discontinued his employment.

Wilson sued, contending that BOCES violated its “employment agreement” to employ him through June 30, 1997 and, in addition, urged that it had terminated him without just cause.

The Supreme Court, treating this as an “Article 78” proceeding rather than as an action for “breach of contract,” dismissed his petition, finding that it was untimely. Wilson appealed.

First, the Appellate Division pointed out that the four-month Statute of Limitations contained in Section 217 of the Civil Practice Law and Rules is applicable to proceedings contesting the abolishment of positions in the public service. It then said that the time period to challenge the decision runs from the date abolition. Agreeing with the lower court, the Appellate Division said that Wilson’s Article 78 petition was untimely.

In an effort to avoid this result, Wilson tried to convince the court that this was a “breach of contract” case and thus his petition was timely as it was subject to a longer Statute of Limitations provision.

The Appellate Division rejected Wilson argument, holding that there was insufficient evidence to demonstrate a formal employment contract between Wilson and BOCES or the school districts. It said that the “employment notices” he relied do not establish the existence of such an agreement.

Thus, said the court, Wilson’s claims involve the abolition of the position of temporary clerk of the works, a matter that may be properly challenged only via an Article 78 proceeding.

According to the ruling, Wilson’s position was officially abolished effective January 17, 1997 at a meeting of BOCES held on February 13, 1997. The Appellate Division concluded that regardless of whether the four-month Statute of Limitations is measured from the date of the BOCES meeting or the effective date of abolition of the position, Wilson’s commencement of the action in January 1998 was untimely.

* The decision refers to Wilson’s temporary position as being in the “civil service” when it would be more accurate to describe it as being in the “classified service.” In New York, the civil service consists of the classified service and the unclassified service. Educators, typically serving in positions in the unclassified service, are also in the civil service. 

Disqualifying misconduct for the purposes of Unemployment Insurance benefits

Disqualifying misconduct for the purposes of Unemployment Insurance benefits

Matter of Jacquelyn M. Cody v Commissioner of Labor, 37 AD3d 920

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:

http://nypublicpersonnellawarchives.blogspot.com/2007/02/disqualifying-misconduct-for-purposes.html

* According to the decision, Cody’s “transgressions include her failure to report the possession of illegal drugs by one of her students, attempts to surreptitiously distribute an unauthorized survey on school property, and 36 instances of improper revisions to student records or transcripts.”

Request for reconsideration of a final administrative decision does not toll the running of the relevant statute of limitations

Request for reconsideration of a final administrative decision does not toll the running of the relevant statute of limitations 

Matter of Cappellino v Town of Somers, 2011 NY Slip Op 03234, Appellate Division, Second Department

Cappellino v Town of Somers demonstrates, once again, that a disappointed individual’s reliance on a request for reconsideration of a final administrative decision to toll or extend the statute of limitations to file a timely appeal is misplaced

The Town of Somers and the Town of Somers Police Department denied a request submitted by James Cappellino and other individuals for reimbursement of the cost of their Medicare Part B benefits.

In an action characterized as “in the nature of mandamus,* Cappellino asked Supreme Court to order the Town of Somers to provide the appropriate amounts to reimburse them for those costs.

Supreme Court, however, never considered the merits of the petition, finding that it was untimely.

The Appellate Division agreed, explaining on June 18, 2009 Cappellino and the others involved in this action received “a final and binding determination within the meaning of CPLR 217(1), as it unequivocally denied the petitioners' request for reimbursement, and it therefore commenced the running of the statute of limitations.”

Cappellino and the other plaintiffs, however, did not commence this proceeding, until October 22, 2009, which was beyond the applicable four-month statute of limitations of CPLR 217(1). 

Although Cappellino contended that there were communications with the Town’s counsel after June 18, 2009, including an alleged request for further administrative review, neither such a request nor related correspondence extended or tolled the running of the statute of limitations.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_03234.htm

* “Mandamus was one of a number of ancient common law writs and was issued by a court to compel an administrative body to perform an act required by law.

Employee’s claims of disparate treatment on the basis of gender, sexual harassment and retaliation by the employer dismissed for lack of sufficient evidence

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

Robin Grovesteen was employed as a field representative by the New York State Public Employees Federation, a union representing various professional, scientific and technical employees of New York State, among others.

Grovesteen sued the Federation, alleging “disparate treatment on the basis of gender, sexual harassment and retaliation.” Supreme Court dismissed her petition and the Appellate Division affirmed the lower court’s action.

With respect to her claims of disparate treatment claim, Grovesteen alleged that because of her gender, she was, among other things, denied separate office space, required to conduct excessive training sessions, forced to cover work assignments in other regions, and denied direction, assistance and support from her supervisors.

As to her claims related to sexual harassment, Grovesteen said that the director of field services at the time she was hired, who eventually became her direct supervisor, made disparaging sexual remarks about her at the onset of her employment and that the elected regional coordinator in her region, who was a union member, created a sexually hostile environment by, among other things, voicing his opinion that plaintiff was hired because of her sexual relationship with another field representative and making inappropriate comments about her attire.

Lastly, Grovesteen contended that due to her disability and exercise of her rights under the Human Rights Law, the Federation retaliated against her by, among other things, closing the Region 7 office and contesting her claim for workers' compensation benefits.

The Appellate Division found that notwithstanding the fact that Grovesteen was a woman and thus a member of a protected class, the evidence she presented was insufficient to establish a prima facie case of sexual discrimination or harassment.

The court explained that “Even considering the totality of the alleged incidents in a light most favorable to [Grovesteen], the terms and conditions of her employment, which clearly caused her stress and frustration, were not so severe and pervasive as to create an adverse employment action in support of her claim of disparate treatment based on gender.

Turning to Grovesteen’s contention with respect to a hostile work environment, the Appellate Division said that there was not sufficient evidence to demonstrate that the conduct so permeated the workplace and altered the conditions of her employment as to support the claim of sexual harassment based on a hostile work environment. Further, said the court, although Grovesteen’s allegations demonstrate “the existence of personality conflicts and disagreements with the management's style, as well as the inherent demands and autonomous nature of being the only field representative in a large remote geographic region, the record does not demonstrate any material adverse change in her employment as a result of the alleged conduct warranting the inference of a discriminatory motivation.”

As to Grovesteen’s claim of retaliation, the Appellate Division ruled this aspect of her petition was also properly dismissed. Here, said the court, Grovesteen’s “sporadic complaints” during her employment are insufficient to establish that she was engaged in a protected activity, “particularly given the fact that no formal claim of unlawful discrimination was made until after the allegedly retaliatory action occurred.”

Finally, the court rejected Grovesteen’s argument that the Federation’s challenging her application for workers’ compensation benefits constituted retaliation within the meaning of the Human Rights Law, indicating that “an employer's exercise of its right to challenge a workers' compensation claim cannot be linked to a retaliatory motivation.”

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_03168.htm

Unfair labor practices - protected activities

Unfair labor practices - protected activities

CSEA Local 1000 v PERB, 267 AD2d 935

CSEA appealed a determination by the New York State Public Employment Relations Board [PERB] that the Holbrook Fire District did not commit an improper employer practice when it disciplined one of its employees, Jason Feinberg.

The district had filed eight charges against Feinberg, a firehouse attendant, alleging misconduct and, or, incompetence pursuant to Section 75 of the Civil Service Law.

Feinberg was alleged to have “permitted unauthorized personnel in his work area, participated in inappropriate activities during work hours, failed to timely complete certain work assignments and follow standard operating procedures in performing certain work-related activities.”

CSEA filed an improper employer practice charge against the district pursuant to Civil Service Law Section 209-a with PERB on behalf of Feinberg. CSEA contended that the district had filed disciplinary charges against Feinberg “in retaliation for his efforts at organizing a union.”

While CSEA’s charges were pending before PERB, the disciplinary hearing officer issued a report and recommendation finding Feinberg guilty of six of the charges. The penalty recommended by the hearing officer: Feinberg should be terminated from his employment. The District accepted the hearing officer’s findings and recommendations and dismissed Feinberg.

CSEA and the district stipulated that rather than holding a separate hearing, the record of the proceedings conducted in connection with the disciplinary charges would be used by PERB’s Administrative Law Judge (ALJ) in resolving the improper practice charge. Finding that other employees who had engaged in similar misconduct had not been disciplined by the district, the ALJ ruled that the district “had committed an improper practice by discharging Feinberg in retaliation for protected union activities.” PERB reversed its ALJ’s ruling.

PERB said that “the ALJ should have deferred to the findings of the hearing officer that the charges against Feinberg were brought by the District for proper business reasons and not to retaliate against him for his organizing activities”.

The Appellate Division initiated its review of CSEA’s appeal from PERB’s ruling by noting that “the relevant inquiry in a proceeding pursuant to Civil Service Law Section 75 is very different than that in an improper practice proceeding under Civil Service Law Section 209-a.” The court, citing City of Albany v Public Employment Relations Board, 43 NY2d 954, said:

1. In considering an appeal involving Section 75, the focus is upon whether there was cause for the employee’s dismissal.

2. In considering an appeal involving Section 209-a, the focus it is whether the employer‘s action was motivated by anti-union animus and “it is irrelevant ... whether or not cause for the employer’s action in terminating [the employee] actually existed.”

The Appellate Division said that PERB relied upon its policy of deference and the disciplinary hearing officer’s determination when it reversed ALJ’s determination.

However, said the court, its review of the decision in the Section 75 proceeding indicates that the disciplinary hearing officer “did not fully consider the dispositive issue in the improper practice proceeding, i.e., whether Feinberg’s firing was improperly motivated.” Accordingly, the Appellate Division said that “PERB’s deference to the [Section 75] Hearing Officer’s findings as the sole basis in resolving the improper practice charge was inappropriate.”

The Appellate Division annulled PERB’s determination and remanded the case to PERB “for an independent review of the ALJ’s decision of [CSEA’s] improper practice charge in light of all the evidence contained in the record of the Civil Service Section 75 proceeding.”

Transfer of functions

Transfer of functions

Metacarpa v Johnston, App. Div., Third Dept., 268 AD2d 938

[decided with Terrusa v Wing, 268 AD2d 938]

In 1997 the Department of Social Services [DSS] was dissolved and its functions were distributed among one existing State agency -- the Department of Health [DOH] and -- and two newly created State agencies -- the Office of Children and Family Services [OCFS] and the Office of Temporary and Disability Assistance [OTDA].

Some of the former DSS employees (the Metacarpa plaintiffs) were transferred to OCFS while others (the Terrusa plaintiffs) were transferred to OTDA.

The basic argument advanced in both actions: because these employees were engaged in Medicaid audit functions, which were transferred to DOH, Civil Service Law Section 70.2 required that they be transferred to Health rather than to other agencies.

The Appellate Division said that the sole issue to be determined was whether the determinations transferring these employees to either OCFS or OTDA were arbitrary, capricious or affected by error of law.

The court commenced its review by stating that the transfer of employees under Section 70(2) of the Civil Service is controlled by the State Department of Civil Service’s State Personnel Management Manual. The manual provides that the agency losing the function [here DSS], after consultation with the gaining agencies [i.e., OCFS and OTDA] and the appropriate control agencies [presumably Civil Service Department and the Division of the Budget], determines which employees in which titles are ‘substantially engaged in the performance of the function’ to be transferred.”

Addressing the objections raised by the Metacarpa and Terrusa plaintiffs with respect to their inclusion on the list of employees to be transferred to OCFS or OTDA and their exclusion from the DOH list, the Appellate Division found that: 

1. DSS employees who worked in defined program units within DSS (2,285 out of the total 4,450 DSS employees) followed those units when entire program units were transferred; and

2. The Metacarpa and Terrusa plaintiffs were determined not to work in a particular program unit because they carried out functions and duties, which supported a variety of programs and thus held “generic administrative support positions.” 

The court took special note of the fact that the Manual stated that “.... interdepartmental titles which primarily provide support of a variety of functions ... shall not generally be considered to be substantially engaged in the function being transferred.”

In other words, the duties of the Metacarpa and Terrusa plaintiffs were not sufficiently limited in scope so as to be deemed “substantially engaged in the functions transferred to Health.

This guideline, said the court, was “not irrational.” Further, the Appellate Division pointed out that former DSS officials making the transfer decisions had determined that the Metacarpa and Terrusa petitioners’ respective expertise and experience relating to Medicaid were not necessary for the continuation and integrity of the Medicaid program, which had been transferred to DOH.

Noting that a number of the plaintiffs “tacitly acknowledge” this point by arguing that the same “could be said” of others transferred to DOH, the Appellate Division decided that the rejection of the Metacarpa and Terrusa plaintiffs’ objection to the administrative decision was neither irrational nor arbitrary. The Supreme Court’s dismissal of the petitions was affirmed.

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

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

Shih v Waterfront Commn. of N.Y., 2011 NY Slip Op 03190, Appellate Division, First Department

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.

The Appellate Division agreed with the lower court determination that the Commission’s terminating Shih without such a hearing was neither arbitrary nor capricious.

Key to the Appellate Division’s decision was Howard v Wyman, 28 NY2d 434. In Howard the Court of Appeals said that “An agency has broad power to construe and interpret its own rules” and its interpretation must be upheld where, as here, it is rational.

As a nontenured employee, said the court, Shih was not entitled to a full adversarial hearing concerning the reasons for his termination. Further, the Appellate Division said that Shih “failed to show that his termination was for an improper reason or in bad faith,” citing Beneky v Waterfront Commn. of N.Y. Harbor, 42 NY2d 920, Certiorari denied 434 US 940.

Applying the “Pell Doctrine,”* the court ruled that “Given [Shih’s] attempt to steal a DVD from a music store and failure to report his arrest on related charges, we cannot say that the penalty imposed was so disproportionate to the offense as to shock one's sense of fairness.”

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_03190.htm

* Matter of Pell v Board of Education, 34 NY2d 222.

Vacating a disciplinary arbitration award

Vacating a disciplinary arbitration award

Roemer v NYC Bd. of Ed., 268 AD2d 479, Motion for leave to appeal denied, 94 NY2d 763

The Roemer decision serves as a reminder that the grounds for appealing a Section 3020-a disciplinary determination are very limited. In order to overturn a Section 3020-a arbitration award, it is necessary to prove that one or more of the statutory reasons set out in Article 75 of the Civil Practice Law and Rules for vacating the award exist.

Under Article 75, [Section 7511.b] an arbitrator’s award can be vacated if a court finds that the rights of a party were violated because of corruption, fraud or misconduct in obtaining the award; the arbitrator was not impartial; to one party; the arbitrator exceed his or her powers or so imperfectly exercised them that a final determination was not made or the arbitration procedures were not followed [unless the party objecting to the award continued with the arbitration without objection after becoming aware of the defect].

Here David Roemer, a New York City schoolteacher, was terminated after the Section 3020-a arbitrator found him guilty of charges of incompetence and insubordination. He attempted to vacate the award. However, the Appellate Division sustained the Supreme Court’s dismissal of Roemer’s petition to vacate the award because Roemer “did not demonstrate” any basis for vacating the award under Section 7511.

In addition to the limited grounds for vacating the arbitration award set in Section 7511, Section 3020-a set a very short statute of limitations for filing a petition to overturn or modify the award as well as settling other limitations in such cases. Section 3020-a.5 sets out the following limitations with respect to challenging a Section 3020-a disciplinary determination:

1. Not later than ten days after receipt of the hearing officer’s decision, the employee or the employing board may make an application to the New York state supreme court to vacate or modify the decision of the hearing officer pursuant to CPLR Section 7511.

2. The court’s review shall be limited to the grounds set forth in Article 75. Further, the hearing panel’s determination shall be deemed final for the purpose of such proceeding.

3. In no case shall the filing or the pendency of an appeal delay the implementation of the decision of the hearing officer.

Point 3 is particularly significant as it allows the appointing authority to impose the penalty determined by the arbitrator while the decision is being challenged.

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The Discipline Book, - a concise guide to disciplinary actions involving public employees in New York State is a 1272 page e-book available from the Public Employment Law Press. Click on http://thedisciplinebook.blogspot.com/ for additional information concerning this electronic reference manual.

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Accidental disability retirement benefits application based on a training-related injury

Accidental disability retirement benefits application based on a training-related injury

Geraci v Hevesi, 37 AD3d 941

Joseph Geraci, a police officer, injured his left knee while participating in training course. Geraci said that his injury occurred when his left foot sank into an exercise mat and his sneaker gripped the mat, thereby causing his left leg to twist as he attempted to move to his right.

Claiming that the injury resulted from an accident, Geraci applied for accidental disability retirement benefits. The Retirement System’s hearing officer found that Geraci failed to establish that the incident resulting in his injury constituted an accident within the meaning of the Retirement and Social Security Law. The State Comptroller accepted the Hearing Officer's findings and conclusions, and disapproved Geraci ’s application for accidental disability retirement benefits.

The Appellate Division confirmed the Comptroller’s determination. The court said that based on its review of the record, “we cannot characterize the subject incident as a “'sudden, fortuitous mischance, unexpected, out of the ordinary, and injurious in impact'“ that would support a finding that Geraci’s injury resulted from an accident.

Rather, said the court, Geraci ’s injury “was the result of a training program constituting an ordinary part of petitioner's job duties and the normal risks arising therefrom,” citing Matter of Felix v New York State Comptroller, 28 AD3d 993, and other rulings.*

For the full text of the opinion, go to:

http://www.nycourts.gov/reporter/3dseries/2007/2007_01046.htm

* The Appellate Division also commented that “regarding [Geraci’s argument concerning] the inappropriateness of his footwear, even if accepted, would not transform the incident into an accidental event.”

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

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

Kathleen Rockwell et al v Broadalbin-Perth Central School District, Supreme Court, Fulton County, Judge Joseph M. Sise, Decision [RJI #27-1-2009-05091. Motion #13, April 18, 2011]

The Broadalbin-Perth Central School District was providing active employees and their dependents represented Broadalbin-Perth Teacher’s Association with health insurance. Upon retirement, the District continued to provide the same level of benefit to Association retirees and their dependents.

The District and the Association then entered into a “memorandum of understanding” that modified the District’s Health Insurance Plan. One of the key components of the new plan, and the focus of this litigation, was the creation of a “District-funded Health Reimbursement Arrangement" [HRA] providing for the payment of unreimbursed medical, dental, and other allowable expenses "permitted by the Internal Revenue Code."

The HRA provided for an annual contribution of $500 by the District for each employee in the negotiating unit to the individual’s HRA. It also featured a “rollover” permitting the HRA account to accumulate up to a $10,000 “maximum balance cap.” Upon retirement the plan provided for a one-time $3,000 HRA contribution. While a retiree could submit qualified medical expenses for reimbursement from his or her HRA fund, no additional contributions would be made to their HRA.

Contending that HRA with respect to retirees violated the mandates set out in Chapter 30 of the Laws of 2009,* Rockwell sued the District seeking a court order to compel the District to reimburse the retirees affected by the change for certain medical care expenses they had incurred as a result of the implementation of the HRA program.

The thrust of Rockwell's argument was that District's HRA contribution for retirees violated Chapter 30 insofar as it provided a different level of benefit for retirees than it did for active employees. Judge Sise disagreed.

The court said that HRA accounts only provide a means for active members to pay their unreimbursed medical and other qualified expenses and that the District’s contributions to an HRA account, or the possibility of underwriting the cost of insurance copayments from an HRA account, were not within the scope of, or in violation of, Chapter 30 as claimed by Rockwell.

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.

Indeed, said Judge Sise, the District demonstrated that “even considering the $500 annual HRA contribution … retirees are each still saving an average of $264.17 more per year [in health insurance costs] than each active employee” and dismissed Rockwell's petition.

* Chapter 30 of the Law of 2009 temporarily** extended the provisions of §1 of Chapter 566 of the Laws of 1967, which Chapter, in pertinent part, provided that BOCES and school districts could not diminish the health insurance benefits and employer contributions for such benefits provided to retirees “unless a corresponding diminution of benefits or contributions is effected from the present level … from the corresponding group of [active] employees….”

** N.B. Part B of §14 of Chapter 504 of the Laws of 2009 made this provision "permanent."

.

Guidelines followed in determining if an individual was provided administrative due process in a quasi-judicial hearing

Guidelines followed in determining if an individual was provided administrative due process in a quasi-judicial hearing

Matter of Hildreth v New York State Dept. of Motor Vehicles Appeals Bd., 2011 NY Slip Op 03066, Appellate Division, Second Department

In considering this appeal from an adverse administrative decision that resulted in the  revocation of Wilbur Hildreth’s driver's license pursuant to Vehicle and Traffic Law §1194 for one year as the result of his refusal to submit to a chemical blood-alcohol test, the Appellate Division addressed a number of issues concerning administrative adjudication procedures.

The court said that:

1. In order to annul an administrative determination made after a hearing, a court must conclude that the record lacks substantial evidence to support the determination;

2. Substantial evidence is "such relevant proof as a reasonable mind may accept as adequate to support a conclusion or ultimate fact;

3. The courts may not weigh the evidence or reject the choice made by an administrative agency where the evidence is conflicting and room for choice exists; and

4. Unlike the constitutional right to confrontation in criminal matters, parties in administrative proceedings have only a limited right to cross-examine adverse witnesses as a matter of due process.

In response to Hildreth’s argument that the administrative proceeding should have been dismissed” for failure to hold a hearing within a reasonable time as required under the State Administrative Procedure Act §301 or within six months from the date the DMV received notice of his chemical test refusal as required under 15 NYCRR 127.2(b)(2),” the Appellate Division said that the time limitations imposed on administrative agencies by their own regulations are not mandatory.

Unless the individual can show the delay caused “substantial prejudice,” he or she is not  entitled to relief for an agency's noncompliance with its own “time limits” controlling the proceeding.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_03066.htm

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