Rejection of a hearing officer's finding of fact and determination by the appointing authority

Rejection of a hearing officer's finding of fact and determination by the appointing authority

Kelly v New York State Justice Ctr. for The Protection of People With Special Needs, 2018 NY Slip Op 03407, Appellate Division, Third Department

The Petitioner in this action was employed by the Office for People with Developmental Disabilities at the Brooklyn Developmental Disabilities Service Office as a treatment aid.

The New York State Justice Center for The Protection of People With Special Needs [Justice Center] received a report alleging that Petitioner "committed acts of neglect when [she] breached [her] duty towards multiple service recipients by failing to use appropriate and professional language in their presence."

Ultimately Justice Center informed Petitioner that after reviewing the evidence presented, it determined that a preponderance of the evidence supported a finding of abuse or neglect pursuant to Social Services Law §494 and the matter involving Petitioner's alleged "acts of neglect" was referred to Respondent's Administrative Hearings Bureau.

Following the hearing, an Administrative Law Judge [ALJ] concluded that the evidence did not establish that Petitioner had committed an act of neglect. Justice Center, however, rejected the ALJ's recommendation, finding that, "by a preponderance of the evidence," Petitioner had committed neglect. Petitioner then commenced an CPLR Article 78 proceeding challenging Justice Center's determination, which was transferred to the Appellate Division.

Petitioner argued that the Justice Center was required to adopt the ALJ's recommended decision.* The Appellate Division held that Petitioner's argument was "without merit."  It also disagreed with Petitioner's contention that Justice Center's regulation 14 NYCRR 700.13 conflicts with Social Services Law §494(1)(b), noting that the statute does not require that the ALJ's decision be final and binding upon Justice Center. Instead, the statute merely states that, in the event that a petition is not sustained by the ALJ, such finding must be reflected upon an amended record.

Addressing the authority of Justice Center's "Chief of Staff" to render a final determination, the Appellate Division ruled that "the death of Justice Center's Executive Director did not diminish the Chief of Staff's authority to act as a designee of the Executive Director and, as such designee, render a final determination."

Public Officers Law §9, in pertinent part, provides ... Deputies, their appointment, number and duties. Every deputy ... in case of [the officer's] absence from the office or  his [or her] inability to act, or in case of a vacancy in the office, and if he [or she] shall fail to make such designation, the deputy ... shall so act. If a vacancy in a public office shall be caused by the death of the incumbent, the deputies shall, unless otherwise provided by law, continue to hold office until the vacancy shall have been filled in  accordance with law.

* With respect to court upholds appointing authority's rejection of hearing officer findings, In the Matter of Linda Ziehm, 90 A.D.2d 677, Affd, 59 N.Y.2d 757, the Appellate Division held that where the record contained substantial evidence affording a rational basis for the appointing authority determination, the appointing authority's determination will be sustained. See, also, Delgrande v Greenville Fire Dist., 126 AD3d 968 and Perfetto v Erie Co. Water Auth., 298 A.D.2d 932.  [The appointing authority may reject the findings and recommendations of a hearing officer if its decision is supported by substantial evidence.] Further, in Weill v New York City Dept. of Educ., 61 AD3d 407, the decision notes that the administrative body, rather than its attorney, must indicate the basis for its administrative action or decision.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_03407.htm

Commissioner of Education found it unnecessary to certify "that respondent appeared to have acted in good faith" for the purposes indemnifying them for costs and expenses

Commissioner of Education found it unnecessary to certify "that respondent appeared to have acted in good faith" for the purposes indemnifying them for costs and expenses

Appeal of William King Moss III regarding a staff appointment, Decisions of the Commissioner of Education, Decision No. 17,409

Although the Commissioner dismissed this appeal for failure to serve a "necessary party" -- here the staff member whose appointment was challenged by Mr. Moss -- the Commissioner addressed an administrative matter.

The respondents in this appeal to the Commissioner had requested that the Commissioner "certify that “all board members” and the superintendent acted in good faith within the meaning of Education Law §3811(1) thereby authorizing the board to indemnify certain individuals for legal fees and expenses incurred in defending a proceeding arising out of the exercise of their powers or performance of duties.

 

Education Law §3811, in relevant part, provides that "Whenever the trustees or board of education of any school district ... [shall] defend any action brought against them ...  all their costs and reasonable expenses, as well as all costs and damages adjudged against them, shall be a district charge and shall be levied by tax upon the district."

Although the Commissioner observed that is appropriate to issue such certification unless it is established on the record that the requesting respondent[s] acted in bad faith, in this instance the Commissioner found it unnecessary to so certify because, in the words of the Commissioner, respondent’s costs in defending this proceeding are, by operation of statute, a cost upon the district, and no claims are interposed against any individual board members."

Accordingly, as respondent’s costs in defending an action or proceeding against the board are deemed a cost upon the district by Education Law §3811 and no individual board members are a party to this appeal, the Commissioner found that she "need not certify that respondent appeared to have acted in good faith."

In addition, the Commissioner found it unnecessary to grant respondent’s request with respect to the superintendent as he is not a party to the instant proceeding and, thus, was  not obligated to defend himself within the meaning of Education Law §3811.

The decision is posted on the Internet at:

http://www.counsel.nysed.gov/Decisions/volume57/d17409

An adminsitrative tribunal may not rely on evidence not in the record in arriving at its decision

An adminsitrative tribunal may not rely on evidence not in the record in arriving at its decision

Kaplan v New York City Tr. Auth., 2018 NY Slip Op 04068, Appellate Division, Third Department

It is "black letter law" that all administrative agencies must render decisions based on the evidence contained in the record pertaining to the particular case before it.

In this case the Workers' Compensation Board [Board] ruled that the employee's death did not arise out of and in the course of his employment* and denied his survivor's [Claimant] application for workers' compensation death benefits.

The Appellate Division, noting that as required of every administrative agency, the Board must render decisions based on the evidence contained in the record pertaining to the particular case before it said that here the Board relied on medical records "apparently contained in the case file for a separate claim" filed by decedent based on a 2014 fall at work and that one page is the only medical record from 2014 that was included in the current record.

The Board, said the court, relied heavily upon medical records contained in the case file for the 2014 claim although the employer did not request that the Board rely on those 2014 records. Further was the procedure for introducing additional evidence into the administrative appeal that was not before the Workers' Compensation Law Judge was not complied with and the Board's rule provides that, if that procedure is not followed, the Board "will not" consider such new evidence.

The Appellate Division said that Claimant was prejudiced because she was not on notice  until she received the Board decision that the Board would rely on documents from another case file.

The employer contended that 2014 medical reports cannot be objectionable because they accurately reflect the treatment rendered. The court said it could not verify that claim without reviewing those reports.

The Appellate Division also rejected the employer's argument "that no response to the medical records would change the strength of either side's argument"  as constituting "mere speculation" and had those records been properly introduced, either party "may have chosen to submit additional medical records reflecting on decedent's medical treatment from November 2014 until his death in July 2015 had the parties been on notice that this period of treatment would be at issue."

Finally, the court said it could not assume that the Board would have reached the same decision had it not considered the medical records from the earlier case file in view of the fact that "[t]he Board referred to more than one of those medical records, indicated that it considered at least 27 pages and quoted at length from one 2014 document that it found to be 'most telling with respect to the cause of the decedent's death,'" noting that "[i]n one specific finding, the Board stated that any presumption of compensability was rebutted by Brief's medical opinion and the medical evidence in the case file associated with the other claim."

Finding that the Board improperly relied upon documents outside the record, which were not before Court for its review, the Appellate Division reversed the Supreme Court's ruling dismissing Claimant's appeal and remitted the matter to the Board "for further proceedings not inconsistent with this Court's decision."

* To be compensable under the Workers' Compensation Law, an accidental injury must arise both out of and in the course of employment. In situations where there an unwitnessed or unexplained death occurs during the course of employment is involved, the claimant is relieved of the obligation to submit prima facie medical evidence of a causal relationship but that presumption "may be rebutted if substantial evidence demonstrates that the death was not work related."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_04068.htm

Adjudicating the impact of a statute or a regulation that impairs obligations of the parties set out in collective bargaining agreements

Adjudicating the impact of a statute or a regulation that impairs obligations of the parties set out in collective bargaining agreements

Buffalo Teachers Fedn., Inc. v Elia, 2018 NY Slip Op 04061, Appellate Division, Third Department

This appeal sought court review of three determinations of the Commissioner of Education resolving disputes between the Buffalo Federation of Teachers [Federation] and the Buffalo City School District [District] concerning the negotiation of a receivership agreement pursuant to the Education Transformation Act of 2015* which provided for the "[t]akeover and restructuring of failing schools."

The Act restricts the subject matter of the receivership agreement to "the length of the school day; the length of the school year; professional development for teachers and administrators; class size; and changes to the programs, assignments, and teaching conditions in the school receivership." The Act further provides that if the parties are unable to reach an agreement with regard to "unresolved issues" must ultimately be submitted to the Commissioner for resolution, whereupon "the Commissioner has five days to resolve the issues in accord with standard collective bargaining principles."

One of the question presented in this appeal was whether the Act was "reasonable and necessary to further the significant and legitimate public interest in 'maximiz[ing] the rapid achievement of students' at schools deemed to be persistently struggling and struggling" with respect to the impairment of provisions set out in a collective bargaining agreement between the parties.

Citing Energy Reserves Group, Inc. v Kansas Power and Light Co., 459 US 400, the Appellate Division observed that "[g]enerally, where a statute or regulation impairs a private contract, courts will defer to a legislature's rationale with regard to its necessity."

In contrast, said the court, less deference is warranted [to the legislature's rationale] where the statute or regulation "is self-serving and impairs the obligations of [the state's] own contracts" because "a [s]tate is not completely free to consider impairing the obligations of its own contracts on a par with other policy alternatives." Further, the Appellate Division continued, "less deference [to the legislature's rationale] may be warranted even where, as here, the state is not a party to an impaired public contract."

The tests applied in determining if an impairment is reasonable and necessary under a "less deference scrutiny" analysis, must be shown that the state did not:

"(1) consider impairing the contracts on par with other policy alternatives; or

"(2) impose a drastic impairment when an evident and more moderate course would serve its purpose equally well; nor

"(3) act unreasonably in light of the surrounding circumstances."

Assuming, without deciding, that the "less deferential standard" applied in this instance, the Appellate Division found that applying the relevant provision of the Education Law was  reasonable and necessary both on its face and as applied, explaining that "the receivership agreement was necessary in order to implement available methods to address the immediate issues that were facing the struggling or persistent struggling schools."

The court observed that the statute provides that the Superintendent of Schools must act in accordance with the existing collective bargaining agreement and, "where, as here, a receivership agreement is requested, the statute limits the scope of the agreement — and impairment." Further, "no modification or impairment can be unilaterally imposed but instead must be negotiated."

The Appellate Division concluded that "As applied, although an agreement was not reached with regard to all issues, the modifications imposed were applicable to the affected schools only for the time limited by the statute" which applied prospectively and limited the scope, application and duration of any modifications to existing agreements, while prohibiting any adverse financial impact. This, said the court, "was reasonably designed and necessary to further the goal of helping students to succeed."

Noting that the Federation contended that there were "means and methods that would be much more effective," the Appellate Division decided that "the relative wisdom of the statute is not for [it] to consider" and  remitted the matter to State Education Department for "further proceedings not inconsistent with this Court's decision."

* Laws of 2015, Chapter 56, Part EE, Subpart H, §§1 and 2.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_04061.htm

A police officer's accident disability retirement benefits are to be offset against the injured retiree's jury award for future lost earnings and pension

A police officer's accident disability retirement benefits are to be offset against the injured retiree's jury award for future lost earnings and pension

Andino v Mills, 2018 NY Slip Op 04273, Court of Appeals

Does a retired New York City police officer's accident disability retirement (ADR) benefits are a collateral source that a court must offset against the injured retiree's jury award for future lost earnings and pension?

The Court of Appeals held that a New York City retired police officer's accident disability retirement (ADR) benefits does so operate by [1] replacing earnings during the period when the officer could have been employed absent the disabling injury and then [2] serving as pension allotments. Accordingly, a court must offset the retiree's projected ADR benefits against the jury award for both categories of economic loss.*

Niurka Andino [Plaintiff] is a retired police officer who was injured on duty while riding in a police car that collided with a vehicle owned by the New York City Transit Authority (NYCTA) and operated by NYCTA employee Ronald Mills [Defendants].

Defendants moved to offset the jury award pursuant to CPLR §4545, which permits a court to find that certain awarded damages were or will, with reasonable certainty, be replaced or indemnified from a collateral source. Defendants contended that "when a police officer retires due to an on-the-job injury that leaves the officer disabled, the ADR benefits allotted to that officer for those years when the officer could have been working, if not for the disability, operate as lost earnings. Once the retired officer reaches the age for regular retirement from service, absent the retirement-inducing injury, ADR benefits serve as a pension."

Andino argued that [1] "there is no direct correspondence between her ADR benefits and the categories of economic loss awarded by the jury" and [2] "that ADR displaces Ordinary Disability Retirement (ODR), and the higher amount of ADR benefits as compared with ODR allotments is paid as a reward for services previously rendered." As the Court of Appeals characterized Andino's argument, "... the premium in ADR benefits as compared to ODR benefits is neither "earnings" nor "pension" but paid in gratitude for past services".

The Court of Appeals explained that ADR benefits, and the text and legislative intent of CPLR §4545, as interpreted by the court in Oden v Chemung County, 87 NY2d 81,** provide the basis for concluding that "ADR benefits operate sequentially as payment for future lost earnings and pension benefits." Accordingly, said the court, on a motion pursuant to CPLR §4545, "a court must apply ADR benefits, dollar-for-dollar, to offset the jury award for future lost earnings during the period they represent lost earnings, and future lost pension during the period they represent lost pension."

The court also rejected Andino's alternative argument that "ADR benefits are a 'reward' for the retiree's service which may not be offset against a jury award" as unpersuasive, explaining that "there is no support in the Administrative Code or CPLR §4545 or any available legislative history to treat ADR benefits as a category on its own, exempt from mandatory offset." In any event, said the court, "even if the Legislature sought to reward service members like Andino, who suffer an injury in the line of duty, that would not change the classification of ADR benefits as a replacement for lost earnings and pension allowances" as there is no legal justification for treating a portion of ADR benefits as a reward based on the 25% differential between ODR and ADR benefits. In the words of the Court of Appeals, "CPLR 4545 anticipates a dollar-for-dollar  offset" and that offset "is based on the category of reimbursement, not on a stratification of the collateral source total amount."

The case was remitted Supreme Court for further proceedings "in accordance with the opinion herein and, as so modified, affirmed," Judges Wilson dissenting in an opinion in which Judge Fahey concured.

* By stipulation, the parties agreed to set the period for future lost earnings at 19.24 years and future lost pension at 17.7 years.

** The specific facts of Oden, said the court, explain why that decision provides a different disposition than is called for Andino's case. In Oden, the plaintiff's private sector retirement pension benefits could not offset the jury's award for his future lost earnings because the pension allotments did "not necessarily correspond to any future earning capacity plaintiff might have had," because Oden "would have been free to earn income from his labor in other capacities without loss of his disability retirement pension benefits."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_04273.htm

New York State Comptroller Thomas P. DiNapoli announced the following audits and examinations have been issued

New York State Comptroller Thomas P. DiNapoli announced the following audits and examinations have been issued

Source: Office of the State Comptroller, June 19, 2018

Click on text highlighted in color to access the full report.

State Education Department (SED): Infant and Child Learning Center (ICLC) - The Research Foundation for the State University of New York: Compliance with the Reimbursable Cost Manual (2017-S-22)

For the three fiscal years ended June 30, 2015, auditors identified $1,727,960 in reported costs that did not comply with SED requirements for reimbursement, including $1,519,114 in improperly calculated parent agency administrative allocation costs.

New York State Health Insurance Program (NYSHIP): Preventing Inappropriate and Excessive Costs in the New York State Health Insurance Program (2016-D-1)

Based on the findings of 35 reports, auditors determined significant cost savings to NYSHIP would occur if more out-of-network providers who improperly waive members’ out-of-pocket costs ended this practice and joined the Empire Plan network. Additionally, out-of-network providers who join the Empire Plan benefit plan members by expanding the number of in-network providers from which members can choose. Auditors recommended that action be taken to recover overpayments and prevent out-of-network providers from improperly waiving members’ out-of-pocket costs.

Department of Health (DOH): Examination of Official Station Designation (2015-BSE1-04)
DOH’s designation of the official station for an employee in calendar years 2013 and 2014 was not made in accordance with the state’s travel rules and regulations. As a result of an improper official station designation, DOH paid $16,089.56 and $22,033.71 in travel expenses during calendar years 2013 and 2014 for the employee to commute between his residence and an alternate work location.

New York City Department of Social Services (DSS): Oversight of Security Expenses in Single Adult and Adult Family Homeless Shelters (2016-N-6)

The city’s Department of Homeless Services, working under DSS, did not have adequate written standard operating procedures to guide staff on how to perform and document the required oversight reviews and inventory record-keeping practices at shelter locations. DHS did not consistently comply with its own policies to perform periodic reviews of shelter providers’ security expenditures. Auditors found significant compliance-related issues that accounted for $2.2 million in insufficiently documented and/or questionable security expenses. DHS also did not ensure that providers complied with competitive bidding requirements and maintained adequate supporting documentation.

Find out how your government money is spent at Open Book New York. Track municipal spending, the state's 145,000 contracts, billions in state payments and public authority data. 

 

Determining if a police officer acted within the scope of his or her employment for the purposed of the employer providing for defense and indemnification

Determining if a police officer acted within the scope of his or her employment for the purposed of the employer providing for defense and indemnification

Lemma v Nassau County Police Officer Indem. Bd., 2018 NY Slip Op 04382, Court of Appeals

General Municipal Law § 50-1 provides for defense and indemnification of Nassau County police officers, requiring indemnification for civil "damages, including punitive or exemplary damages, arising out of a negligent act or other tort of such police officer committed while in the proper discharge of [the officer's] duties and within the scope of [the officer's] employment."

In this CPLR Article 78 proceeding, the issue is whether the Nassau County Police Officer Indemnification Board's determination revoking a prior defense and indemnification determination in favor of a Nassau County police officer, [Petitioner] was irrational. To answer that question, the Appellate Division said that it must determine the meaning of the phrase "proper discharge of . . . duties" in the context of this statute. Its conclusion: the Board's finding that Petitioner's conduct was not "proper" within the meaning of the statute was rational.

The genesis of this action was an arrest of one Raheem Crews [Crews] for a crime. A few days later, on June 1, 2005, Petitioner questioned another suspect, who admitted his own involvement but said that Crews was in jail at the time of the robbery. That same day, Petitioner confirmed via a police database search that Crews was incarcerated on the date of the robbery. Despite knowledge that Crews could not have been one of the perpetrators, Petitioner told no one.

It was not until September, after Crews was arraigned on an indictment listing the date of the robbery as March 26, 2005, that defense counsel demonstrated that Crews had been incarcerated on that date, securing his immediate release and dismissal of the charges.

Crews commenced an action in federal court pursuant to 42 USC §1983 against Petitioner, among others and Nassau County, unaware at that time that Petitioner had known and failed to disclose that Crews was in jail on the date of the crime, offered to represent and indemnify Petitioner pursuant to General Municipal Law §50-1, based on the Board's initial determination that any actions taken by Petitioner that might give rise to liability were within the scope of Petitioner's employment and a proper discharge of his duties. When some years later, as the result of Petitioner being deposed in the Crews case, it was revealed for the first time that Petitioner had learned a few days after the arrest that Crews was in jail on the date of the robbery, the Board reopened its decision to indemnify Petitioner and held a hearing. Ultimately the Board voted to revoke defense and indemnification.

In affirming the Board's decision, the Appellate Division held, among other things, that "the Board rationally interpreted General Municipal Law §50-1 to limit defense and indemnification, reasoning that the word "proper" was "added . . . to exclude indemnification for intentional misconduct."

Petitioner next sought permission to appeal the Appellate Division's ruling and the Court of Appeals granted Petitioner's motion.

The Court of Appeals affirmed the Appellate Division decision, noting that "Where, as here, no administrative hearing was required, judicial review of an agency determination is limited to whether the Board's determination was irrational or arbitrary and capricious." Citing Williams v City of New York, 64 NY2d 800, the court explaining that an administrative determination of a board or agency involving employee indemnification "may be set aside only if it lacks a factual [or legal] basis, and in that sense, is arbitrary and capricious."

Noting that General Municipal Law §50-1 authorizes Nassau County to defend and indemnify police officers named as defendants in civil actions or proceedings, providing indemnification from "any judgment . . . for damages, including punitive or exemplary damages, arising out of a negligent act or other tort of such police officer committed while in the proper discharge of [the officer's] duties and within the scope of [the officer's] employment" the statute provides that "[s]uch proper discharge and scope shall be determined by a majority vote of a panel" appointed by various Nassau County officials, the Court of Appeals concluded that "[t]he legislature, thus, left the determination of whether the statutory prerequisites are met to the discretion of the Board."

Significantly, the Court of Appeals said that "[t]he decision whether to defend and indemnify a police officer is typically made by the Board at the beginning of litigation or upon discovery of facts previously unknown — long before the facts are litigated and a judgment of punitive damages is ever rendered. The Board may take a different view of the facts than is ultimately adopted by a jury in the underlying civil action against the officer."

Concluding that the Board's determination that Petitioner's conduct was not in the "proper discharge of his duties" was not arbitrary and capricious and that there was evidence supporting the Board's finding the decision notes that "despite knowledge that Crews could not have committed the robbery for which he had been arrested and charged (and for which he remained in pretrial detention for four months), [Petitioner], by his own admission, remained silent — conduct antithetical to proper police work that resulted in a man's loss of liberty."

Holding that the Board's determination was rational, the Court of Appeal held that it was entitled to deference and must be sustained."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_04382.htm

Proper service of the petition and notice of the petition of an appeal to the Commissioner of Education critical to the Commissioner assuming jurisdiction

Proper service of the petition and notice of the petition of an appeal to the Commissioner of Education critical to the Commissioner assuming jurisdiction

Appeal of J.M from action of the Board of Education of the Croton-Harmon Union Free School District, Decisions of the Commissioner of Education, Decision No. 17,402

In some instances an appeal to the Commissioner of Education is dismissed for failure to comply with certain procedural requirements. The appeal of J.M. illustrates one of the reasons why an appeal is rejected on technical grounds, in this instance for lack of proper service of the appeal on the respondent parties.

Croton-Harmon Union Free School District, in its reply to J.M.'s appeal, contended that the appeal must be dismissed for lack of proper service. The Commissioner agreed, explaining that the Commissioner’s regulation requires that the petition be personally served upon each named respondent as set out in 8 NYCRR §275.8(a).*

In the event a school district is named as a respondent, 8 NYCRR §275.8(a) requires that service upon the school district "shall be made personally by delivering a copy of the petition to the district clerk, to any trustee or any member of the board of education, to the superintendent of schools, or to a person in the office of the superintendent who has been designated by the board of education to accept service."

J.M.'s affidavit of service indicated that the appeal was served upon the secretary to the superintendent.  Although the affidavit of service attests that the secretary was “duly authorized to accept service,” Croton-Harmon said that the secretary has not been designated by it to accept service on behalf of the school district or the superintendent. 

The Commissioner, noting that J.M. did not submitted a reply or otherwise responded to the Croton-Harmon’s "motion to dismiss" J.M.'s appeal, said that in the event there is no proof that an individual is authorized to accept service on behalf of respondent, "service is improper and the appeal must be dismissed."

The Commissioner observed that considering the record before her, "I cannot conclude that [J.M.] properly served a copy of the notice of petition and petition on [Croton-Harmon]" and, accordingly, J.M.'s appeal must be dismissed.

Another common procedural defect resulting in the dismissal of the appeal is the petitioner's failure to serve a "necessary party" as required by 8 NYCRR 277.1(b).**

A "necessary party" is a  party whose rights would be adversely affected by a determination of an appeal in favor of a petitioner and must be joined as such. Further, joinder as a necessary party requires that an individual be clearly named as a necessary party by name in the caption of the petition and served with a copy of the notice of petition and petition to inform the individual that he or she should respond to the petition and enter a defense.

Further, it is the petitioner's burden to properly serve the petition and the service of the petition and the petitioner must submit evidence that that has been done. In the absence of such evidence, the Commissioner has ruled that the appeal must be dismissed "for improper service."

* 8 NYCRR 275.8, service of pleadings and supporting papers, provides as follows:

(a) Petition. A copy of the petition, together with all of petitioner's affidavits, exhibits, and other supporting papers, except a memorandum of law (unless the appeal is a charter school location/co-location appeal pursuant to section 276.11 of this Title, in which case the memorandum of law shall be served with the petition) or an affidavit in support of a reply, shall be personally served upon each named respondent, or, if a named respondent cannot be found upon diligent search, by delivering and leaving the same at the respondent's residence with some person of suitable age and discretion, between six o'clock in the morning and nine o'clock in the evening, or as otherwise directed by the commissioner. If a school district is named as a party respondent, service upon such school district shall be made personally by delivering a copy of the petition to the district clerk, to any trustee or any member of the board of education of such school district, to the superintendent of schools, or to a person in the office of the superintendent who has been designated by the board of education to accept service. If a board of cooperative educational services is named as a party respondent, service upon such board shall be made personally by delivering a copy of the petition to the district superintendent, to a person in the office of the district superintendent who has been designated by the board to accept service, or to any member of the board of cooperative educational services. Pleadings may be served by any person not a party to the appeal over the age of 18 years. If the last day for service of the petition falls on a Saturday or Sunday, service may be made on the following Monday; and if the last day for such service falls on a legal holiday, service may be made on the following business day.

** In Decisions of the Commissioner of Education, Decision #16,853 the Commissioner noted that although a necessary party had not been named in "the original petition," her Office of Counsel had advised the all the parties that the petitioner's earlier request to join an individual as a necessary party was granted. Consequently, said the Commissioner, “in this instance, I find the failure to include that [individual] in the original petition is not a basis for dismissal of this appeal."

The decision is posted on the Internet at:

http://www.counsel.nysed.gov/Decisions/volume57/d17402

Arbitration award found "imperfectly executed" vacated

Arbitration award found "imperfectly executed" vacated

Matter of The Professional, Clerical, Tech. Empls. Assn. (Board of Educ. for Buffalo City Sch. Dist.), 2018 NY Slip Op 04128, Appellate Division, Fourth Department

Supreme Court granted the petition submitted by The Professional, Clerical, Technical Employees Association [Association] seeking to confirm an arbitration award and denied the Board of Education for Buffalo City School District's [Board] cross petition seeking a court order vacating the arbitration award. The Appellate Division unanimously reversed the Supreme Court's ruling, on the law, and vacated the arbitration award, explaining:

1. The arbitration proceeding arose from Board's plan to transfer certain employees previously assigned to work at a single location to new positions requiring them to alternate between two different work locations.

2. The arbitrator's opinion and award, among other things, found that Board had  involuntarily transferred* the Association's grievants "to new positions" in violation of the collective bargaining agreement between the parties, and directed the Board to compensate the grievants "for work performed at more than one location from November 30, 2013 until the end of the 2016 Budget Year."

3. Vacatur of the arbitration award is appropriate where the award failed to set forth the manner of computing monetary damages as CPLR Article 75 provides, in pertinent part, that an arbitration award "shall be vacated" where the arbitrator "so imperfectly executed [the award] that a final and definite award upon the subject matter submitted was not made."**

The court noted that the Board's affidavit in support of the cross petition contained a statement that "none of the affected employees was terminated or had his or her compensation reduced as a result of the allegedly wrongful transfers."

However, said the Appellate Division, the arbitration award does not explain the basis for the arbitrator's directing the Board provide compensation allegedly owed to the grievants, nor does the award detail how that compensation should be calculated. Rather, said the court, "[i]t appears that the arbitrator merely copied verbatim the remedy requested by [the Association] rather than making findings of his own."

Accordingly, the Appellate Division reverse the Supreme Court's order, denied the Associations petition, granted the Association's cross petition, vacated the arbitration award, and remitted the matter to Supreme Court.

In addition, Supreme Court was instructed to then remit the matter to the arbitrator to determine whether any compensation is due the Association's grievants, and, if so, "to determine the amount of such compensation or how it can be calculated with reasonable precision."

* Although the term "transfer" is used to describe the personnel change that resulted in the submission of this grievance, the term "reassignment" would be a more accurate of the personnel change in this instance. A movement of an individual from one position to a second position subject to the jurisdiction of the same appointing authority is typically described as a "reassignment." In contrast, the movement of an employee from one position to a second position under the jurisdiction of a different appointing authority would constitute a "transfer" [see Rules for the Classified Civil Service of the County of Erie, Rule XVI].

** An award is indefinite or nonfinal within the meaning of the statute only if it leaves the parties unable to determine their rights and obligations; if it does not resolve the controversy submitted; or if it creates a new controversy.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_04128.htm

A party filing a motion seeking a permanent stay of a demand for arbitration must satisfy a "two-part test" to prevail

A party filing a motion seeking a permanent stay of a demand for arbitration must satisfy a "two-part test" to prevail

Village of Garden City v Professional Firefighters Assn. of Nassau County, Local 1588, 2018 NY Slip Op 03688, Appellate Division, Second Department

This proceeding involved a dispute between Village of Garden City [Village],  and the Professional Firefighters Association of Nassau County, Local 1588 [PFA] concerning  Village's implementation of a staffing protocol that was formulated to ensure compliance with a prior arbitration award that was earlier confirmed by this court.* The arbitrator in the earlier arbitration had found that the Village violated the parties' collective bargaining agreement [CBA] by assigning the operation of first-line equipment to volunteer firefighters rather than to paid firefighters represented by PFA.  

PFA filed a grievance contending that the new protocol continued to improperly assign the operation of first-line equipment to volunteer firefighters and demanded arbitration. The Village objected to submitting this new grievance to arbitration and filed an Article 75 petition seeking a permanent stay of the arbitration. Supreme Court issued denied the Village's petition and granting PFA's motion to compel arbitration of the grievance. The Village appealed the Supreme Court's ruling.

The Appellate Division ruled that Supreme Court properly denied the Village's petition to permanently stay arbitration of the grievance and granted PFA's motion to compel the arbitration of the grievance noting that in the earlier proceeding it had ruled that  grievances challenging the operation of first-line equipment by volunteers were arbitrable.

Referring to the two-part test used by the courts to determine whether a dispute between a public sector employer and employee is arbitrable** the court explained that:

1. "Initially, the court must determine whether there is any statutory, constitutional, or public policy prohibition against arbitrating the grievance;

2. "If there is no prohibition against arbitrating, the court must examine the parties' collective bargaining agreement and determine if they in fact agreed to arbitrate the particular dispute;

3. "In examining the collective bargaining agreement, the court must merely determine whether there is a reasonable relationship between the subject matter of the dispute and the general subject matter of the [agreement];

4. "If there is, the court should rule the matter arbitrable, and the arbitrator will then make a more exacting interpretation of the precise scope of the substantive provisions of the CBA, and whether the subject matter of the dispute fits within them."

As the Village was unable to demonstrate that arbitration of PFA's instant grievance was prohibited by statutory or public policy or that PFA's instant grievance was not reasonably related to the general subject matter of the CBA, the court again ruled that the question of the scope of the substantive provisions of the CBA was a matter of contract interpretation and application reserved for the arbitrator.

* See Matter of Professional Firefighters Assn. of Nassau County, Local 1588, Intl. Assn. of Firefighters, AFL-CIO v Village of Garden City, 119 AD3d 803.

** See Locust Val. Cent. Sch. Dist. v Benstock, 144 AD3d 758.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_03688.htm

An adminsitrative tribunal may not rely on evidence not in the record in arriving at its decision

An adminsitrative tribunal may not rely on evidence not in the record in arriving at its decision

Kaplan v New York City Tr. Auth., 2018 NY Slip Op 04068, Appellate Division, Third Department

It is "black letter law" that all administrative agencies must render decisions based on the evidence contained in the record pertaining to the particular case before it.

In this case the Workers' Compensation Board [Board] ruled that the employee's death did not arise out of and in the course of his employment* and denied his survivor's [Claimant] application for workers' compensation death benefits.

The Appellate Division, noting that as required of every administrative agency, inistrative agency, the Board must render decisions based on the evidence contained in the record pertaining to the particular case before it said that here the Board relied on medical records "apparently contained in the case file for a separate claim" filed by decedent based on a 2014 fall at work and that one page is the only medical record from 2014 that was included in the current record.

The Board, said the court, relied heavily upon medical records contained in the case file for the 2014 claim although the employer did not request that the Board rely on those 2014 records. Further was the procedure for introducing additional evidence into the administrative appeal that was not before the Workers' Compensation Law Judge was not complied with and the Board's rule provides that, if that procedure is not followed, the Board "will not" consider such new evidence.

The Appellate Division said that Claimant was prejudiced because she was not on notice  until she received the Board decision that the Board would rely on documents from another case file.

The employer contended that 2014 medical reports cannot be objectionable because they accurately reflect the treatment rendered. The court said it could not verify that claim without reviewing those reports.

The Appellate Division also rejected the employer's argument "that no response to the medical records would change the strength of either side's argument"  as constituting "mere speculation" and had those records been properly introduced, either party "may have chosen to submit additional medical records reflecting on decedent's medical treatment from November 2014 until his death in July 2015 had the parties been on notice that this period of treatment would be at issue."

Finally, the court said it could not assume that the Board would have reached the same decision had it not considered the medical records from the earlier case file in view of the fact that "[t]he Board referred to more than one of those medical records, indicated that it considered at least 27 pages and quoted at length from one 2014 document that it found to be 'most telling with respect to the cause of the decedent's death,'" noting that "[i]n one specific finding, the Board stated that any presumption of compensability was rebutted by Brief's medical opinion and the medical evidence in the case file associated with the other claim."

Finding that the Board improperly relied upon documents outside the record, which were not before Court for its review, the Appellate Division reversed the Supreme Court's ruling dismissing Claimant's appeal and remitted the matter to the Board "for further proceedings not inconsistent with this Court's decision."

* To be compensable under the Workers' Compensation Law, an accidental injury must arise both out of and in the course of employment. In situations where there an unwitnessed or unexplained death occurs during the course of employment is involved, the claimant is relieved of the obligation to submit prima facie medical evidence of a causal relationship but that presumption "may be rebutted if substantial evidence demonstrates that the death was not work related."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_04068.htm

Status of a spouse named as the primary beneficiary of a life insurance policy or similar instrument in the event the marriage is terminated by divorce

Status of a spouse named as the primary beneficiary of a life insurance policy or similar instrument in the event the marriage is terminated by divorce

Sveen, et el v Melin, United State Supreme Court, 584 U.S. ___ (Decided June 11, 2018)

Mark Sveen purchased a life insurance policy, naming his then spouse, Kaye Melin, as the primary beneficiary and designating his two children from a prior marriage, Ashley and Antone Sveen, as contingent beneficiaries. The Sveen-Melin marriage ended in 2007, but the divorce decree made no mention of the insurance policy and Sveen took no action to revise his beneficiary designations.

After Sveen passed away in 2011, Melin and the Sveen children made competing claims for the insurance proceeds. The Sveen children argued that under Minnesota’s revocation-on-divorce law, their father’s divorce canceled Melin’s designation as the primary beneficiary, leaving them as the lawful beneficiaries. Melin, on the other hand, contended that because the law* did not exist when the policy was purchased and she was therein named as the primary beneficiary, applying the later-enacted law to the policy with respect to her rights as the beneficiary violates the Contracts Clause of the Constitution of the United States.**

The Supreme Court observed that the legal system in the United States has long used default rules to resolve estate litigation in a way that conforms to the decedents’ presumed intent. In terms of the instant action, the law would assume that Mark would want the "default result," but, if he did not, he could have rename Melin as the beneficiary after the divorce took effect.

The Supreme Court held that the retroactive application of Minnesota’s statute does not violate the Contracts Clause, which restricts the power of States to disrupt contractual arrangements, but it does not prohibit all laws affecting pre-existing contracts.

The court noted that two tests are applied in such situations:

1. Does the state law result in as a "substantial impairment of a contractual relationship” by undermining a party’s reasonable expectations, and prevents the party from safeguarding or reinstating his, her or its rights.

2. If such factors show a substantial impairment, the inquiry turns to whether the state law is drawn in an “appropriate” and “reasonable” way to advance “a significant and legitimate public purpose.”

The Legal Department [Legal] of the New York State Teachers' Retirement System [NYSTRS] noted that Chapter 173 of the Laws of 2008, codified in the State's Estates, Powers and Trusts Law §5-1.4, addressed the impact of a divorce on the status of a former spouse's designation as a beneficiary. Legal also noted that NYSTRS "Fact Sheet Chapter 173 of the Laws of 2008", posted on the Internet  at http://www.nystrs.org/NYSTRS/media/PDF/Library/Publications/Ch173FactSheet.pdf, provides an overview of the law and the revocatory effect of divorce on designations or nominations of former spouses.

Legal also noted a recent court decision involving Chapter 173, McCauley v New York State Local Employees' Retirement System, 37 Misc 3d 868. In McCauley the court sustained the revocation of a former spouse as the beneficiary of a death benefit on the authority of Chapter 173.

In McCauley the court noted that the Laws of 2008, Chapter 173, §2 provides that "This act shall take effect immediately and shall apply only where the marriage of a person executing a disposition, appointment, provision or nomination in a governing instrument, as defined in EPTL 5-1.4(f)(5), such section as added by section one of this act, to or for the benefit of a former spouse ends in a divorce or annulment, as defined in EPTL 5-1.4(f)(2), on or after such effective date or, where such a marriage ends prior to such effective date, only where such a disposition, appointment, provision or nomination takes effect only at the death of the person who executes it and such person dies on or after the effective date of this act." (Emphasis supplied by the court.)

Significantly, Supreme Court observed that "While the member designated petitioner as a beneficiary and was divorced from petitioner prior to the enactment of chapter 173, the member passed away following its creation. ('This act shall take effect immediately . . . or, where such a marriage ends prior to such effective date, only where such a disposition, appointment, provision or nomination takes effect only at the death of the person who executes it and such person dies on or after the effective date of this act' [citing the Laws of 2008, Chapter 173, §2].) As the law, by its own terms, applies to all deaths on or after July 7, 2008, petitioner's claim has no merit."

The court also agreed with NYSLERS' contention that it was not required to give notice mandated by the State Administrative Procedure Act and Article IV, §8 of the New York State Constitution, explaining that "In this case there was no need for a 'rule,' since EPTL 5-4.1 prescribes by law that the death benefit in question was revoked upon the dissolution of the member's marriage to petitioner. EPTL 5-4.1 is self-implementing."

Further McCauley's reliance on internal policies and procedures adopted by NYSLERS following the enactment of Chapter 173 was misplaced, as these were "internal memoranda meant to explain how [NYSLERS's] employees should proceed under the newly enacted law." The memoranda, said the court, relied on existing regulations and laws for their stated conclusions and thus are interpretive and fall within the exception provided in the State Administrative Procedure Act.

* Minn. Stat. §524.2–804, subdivision 1 provides that if one spouse has made the other the beneficiary of a life insurance policy or similar asset, their divorce automatically revokes that designation.

** United States Constitution, Article I, §10.

The Sveen decision is posted on the Internet at: 

https://www.supremecourt.gov/opinions/17pdf/16-1432_7j8b.pdf

The McCauley decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2012/2012_22283.htm