Employee's conduct following an acrimonious end of a romantic relationship with a coworker basis for disciplinary action and termination

An employee [Petitioner] was involved in a romantic relationship with a coworker that ended acrimoniously. The appointing authority [Respondent] thereafter served Petitioner with an notice of discipline pursuant to Civil Service Law §75 alleging that Petitioner had "made numerous prank telephone calls to the coworker, mailed letters disparaging the coworker to other employees and mailed packages containing underwear and notes disparaging the coworker to one particular individual." The Petitioner was also charged that when questioned by representatives of the Respondent, Petitioner made numerous false statements to the interviewers.

Following a hearing, the Hearing Officer dismissed all but one of the allegations of harassment as untimely under Civil Service Law §75(4)* but determined that petitioner was guilty of the sole remaining allegation of harassment involving sending a package to another employee that contained underwear with a note suggesting that the employee may have contracted a sexually transmitted disease from the coworker. In addition, the Hearing Officer determined that Petitioner made three false statements during his questioning by the interviewers.

Based on these findings the Hearing Officer recommended that Petitioner be terminated, which findings and recommendations were adopted by the appointing authority, resulting in Petitioner's dismissal from the position.

Petitioner appealed, contending that efforts to questions the Hearing Officer "to determine if there was any basis to argue that the Hearing Officer was biased" and objected to Respondents' opening statements as being  improper as they "referenced conduct underlying charges that were ultimately dismissed as well as conduct for which no charges were filed."

The Appellate Division ruled that contrary to Petitioner's claim of a right to inquire as to whether the Hearing Officer was biased, Petitioner was not entitled to question the Hearing Officer to determine if there was any basis to argue that the Hearing Officer was biased, explaining that "There is a presumption of integrity on those serving as adjudicators . . . and hearing officers are presumed to be free from bias," citing Donlon v Mills, 260 AD2d 971, leave to appeal denied, 94 NY2d 752 . The court then opined that since Petitioner "failed to establish any reason to question the Hearing Officer's impartiality, [it found] no basis to annul the determination on that ground."

Addressing Petitioner's contention that Respondents' opening statements were improper inasmuch as they referenced conduct underlying charges that were ultimately dismissed as well as conduct for which no charges were filed, the court reject those contention's, indicating that with respect to statements concerning conduct underlying the charges that were ultimately dismissed as untimely, there was no impropriety because, had Respondents established that such conduct would have constituted a crime, they would not have been untimely. 

With respect to Petitioner's objections to statements concerning uncharged conduct, the Appellate Division said that the record "establishes that references to uncharged conduct were 'necessary to refute petitioner's attempts to explain his behavior' and his denials of guilt of the charged misconduct." Further, the decision indicates that the Hearing Officer "based his determination on specific and distinct findings as to each [specification] sustained; the dismissal recommendation was based on his finding that [Petitioner] was guilty of [four] very serious [specifications] of misconduct' . . . There is no record support for the contention that the determination or penalty recommendation was based on uncharged conduct."

In contrast, the Appellate Division found that Petitioner correctly contended that the Hearing Officer erred in relying on the preponderance of the evidence standard. However, opined the court, that error does not require it to annul the determination, explaining that the "preponderance of the evidence standard" used by the Hearing Officer "is a higher standard than the substantial evidence" standard Petitioner asserts should have been employed. Accordingly, the court found that Respondents satisfied a higher, rather than lower, standard of proof."

Concluding that Respondent's determination was supported by substantial evidence and the penalty of termination is not "so disproportionate to the offense as to be shocking to one's sense of fairness," the Pell Doctrine**, there was no abuse of discretion as a matter of law and unanimously confirmed Respondent's determination and dismissed Petitioner's complaint.

* Section 75.4, in pertinent part, provides that "no removal or disciplinary proceeding shall be commenced ... more than more than one year after the occurrence of the alleged incompetency or misconduct complained of and described in the charges, provided, however, that such limitations shall not apply where the incompetency or misconduct complained of and described in the charges would, if proved in a court of appropriate jurisdiction, constitute a crime."

** See Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale and Mamaroneck, 34 NY2d 222, generally referred to as the "Pell Doctrine."  Essentially the Pell Doctrine instructs that any permissible disciplinary penalty may be imposed on an employee found guilty of one or more disciplinary charges and specifications by an appointing authority or arbitrator unless the court finds that, considering the circumstances underlying the disciplinary action, such a penalty is "shocking to one's sense of fairness."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_04834.htm

The traditional common-law elements of negligence are "substantially relaxed" in cases where an employee of an interstate railroad seeks compensation for on-the-job injuries resulting from the railroad's alleged negligence

The Plaintiff in this action was working as an assistant conductor on MTA's Metro-North's New Haven Line [MTA] when she was physically attacked by a passenger while seeking to collect the passenger's fare. MTA Metro-North Railroad submitted a motion for summary judgment dismissing Plaintiff's sole claim under the Federal Employee Liability Act [FELA]. Supreme Court denied MTA's motion and the Railroad appealed. The Appellate Division unanimously affirmed the Supreme Court's ruling.

The Appellate Division explained:

1.  FELA, 45 USC §51 et seq., provides that operators of interstate railroads shall be liable to their employees for on-the-job injuries resulting from the railroad's negligence.

2. In an action brought pursuant to FELA, "... the traditional common-law elements of negligence: duty, breach, damages, causation and foreseeability" are "substantially relaxed" and "negligence is liberally construed to effectuate the statute's broadly remedial intended function."

3. FELA claim "must be determined by the jury if there is any question as to whether employer negligence played a part in the employee suffering an on-the-job injury, however small," but, citing Pidgeon v Metro-North Commuter R.R., 248 AD2d 318, the court noted that "A case is deemed unworthy of submission to a jury only if evidence of negligence is so thin that on a judicial appraisal, the only conclusion that could be drawn is that negligence by the employer could have played no part in an employee's injury."

4. To establish the element of foreseeability, a plaintiff must show that the employer had either actual or constructive notice of the defective condition but notice generally presents an issue of fact for the jury to determine.

Thus, under the FLEA "relaxed standard" applicable here, the court found that Plaintiff had submitted sufficient evidence to raise an issue of fact concerning MTA's actual or constructive notice of a risk of assault to conductors on the New Haven Line sufficient to be submitted to a jury based on Plaintiff testimony that:

[a] she was previously assaulted by a passenger;

[b] there was an ongoing problem of physical intimidation by large groups of adolescents refusing to pay their fares;

[c] Plaintiff had testified that she has called the MTA's rail traffic controllers for police assistance at least 250 times to deal with abusive passengers;

[d] another conductor was punched in the face and knocked out; and

[e] a passenger attempted to stab and rob another conductor on the Harlem Line.

Considering this testimony, the Appellate Division held that Supreme Court's summary judgment rejecting MTA's motion to dismiss Plaintiff's complaint was properly denied.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_05004.htm

State audits and examinations issued during the week ending June 21, 2019

On June 21, 2019, New York State Comptroller Thomas P. DiNapoli announced today the following audits and examinations have been issued.

Click on the text highlighted in blue to access the full text of the item.

Department of Agriculture and Markets: Annual Assessment of Market Orders for 2015 and 2016 (2018-S-44)
The department established procedures to accurately report its assessable expenses for the two years ended June 30, 2016 for the Apple and Sour Cherry Market Orders and for the two years ended March 31, 2016 for the Apple, Cabbage, and Onion Research and Development Programs. The department should work with the state Urban Development Corporation to improve oversight of the Market Order Program, specifically the Apple Market Order and the New York Apple Association Inc. contract.

Department of Agriculture and Markets: Safety of Seized Dogs (Follow-Up) (2019-F-5)
An initial report issued in April 2018 determined the department was adequately overseeing the seizure of dogs to ensure their safety and protect the rights of owners. However, auditors identified four minor deficiencies at four of the 48 shelters they visited. In a follow-up, auditors found the department made progress in addressing the problems identified.

New York City Department of Education (DOE): Compliance With Special Education Requirements: Evaluations (2017-N-3)
The DOE had difficulty meeting the 60-calendar-day time frame requirement for completing evaluations, resulting in potential delays in the provision of services for students. A delay in services could adversely impact students’ educational growth.

Department of Health: Medicaid Program: Improper Medicaid Payments for Recipients Diagnosed With Severe Malnutrition (2017-S-85)
Auditors identified $416,237 in overpayments on inpatient claims that hospitals billed to Medicaid that contained a severe malnutrition diagnosis that medical records did not appear to support. Auditors found the hospitals were not following recommended guidelines for identifying and documenting severe malnutrition.

Department of Health: Medicaid Overpayments for Inpatient Care Involving Mechanical Ventilation Services (2018-S-45)
Auditors identified $975,795 in overpayments on 32 inpatient claims that reported 96 consecutive hours or more of mechanical ventilation services. Auditors found claims processing weaknesses that prevent eMedNY from identifying claims where 96 consecutive hours or more of mechanical ventilation services was not possible.

Metropolitan Transportation Authority (MTA) – New York City Transit and MTA Bus Company: Bus Wait Assessment and Other Performance Indicators (2017-S-54)
Transit’s Service Guidelines Manual contains transit and MTA bus minimum service frequency standards; however, auditors found the guidelines are not always met. Further, there was insufficient documentation to determine if scheduled service was reasonable. Auditors found there is a risk that the number of buses may have been inappropriate to meet customer needs.

New York State Health Insurance Program: CVS Health: Accuracy of Drug Rebate Revenue Remitted to the Department of Civil Service (2018-S-50)
Auditors reviewed the rebate revenue generated from agreements with six drug manufacturers and found that CVS Health did not always invoice drug manufacturers for rebates, collect rebates from the manufacturers, or remit all rebate revenue to Civil Service. As a result, Civil Service is due $2,240,798 in rebates.

Office for People With Developmental Disabilities: Fuel Card (2018-BSE7-02)
Auditors found 119 purchases totaling nearly $8,000 made by one employee were not for legitimate business purposes, but instead for personal use. As a result of our examination, the employee was terminated, arrested, pled guilty to petit larceny (a Class A misdemeanor) and is required to make restitution to the state.

Port Authority of New York and New Jersey (PANYNJ): Selected Aspects of Leasing Practices for Real Estate Services Department and Port Commerce (2017-S-58)
The PANYNJ did not always accurately account for its leases. Discrepancies existed in the lease information contained in two primary systems. Moreover, neither system accounted for all PANYNJ leases. Auditors also found two properties that were vacant for a combined 45 months as of Nov. 29, 2018, resulting in forgone revenue totaling $828,290, and the authority could not document that it attempted to lease the properties examined at the market rate.

State Commission of Correction: Facility Oversight and Timeliness of Response to Complaints and Inmate Grievances (Follow-Up) (2019-F-4)
An audit released in January 2018 found the commission received data such as complaints and unusual incidents regarding various aspects of Department of Corrections and Community Supervision facilities operations, but had not analyzed and tracked the information to identify any trends or patterns that may have warranted monitoring or review. In a follow-up, auditors found the commission made significant progress in addressing the issues identified.

State Education Department (SED): Amerimed Kids LLC: Compliance With the Reimbursable Cost Manual (2018-S-17)
Amerimed Kids is a New York City-based for-profit organization authorized by SED to provide Preschool Special Education Itinerant Teacher services to children with disabilities who are between the ages of three and five years. For the three fiscal years ended June 30, 2015, auditors identified $975,845 in reported costs that did not comply with state requirements in the RCM, including $479,500 in compensation to the executive and assistant executive directors.

State Education Department: Family and Educational Consultants (FEC): Compliance with the Reimbursable Cost Manual (2018-S-29)
FEC is an SED-approved, for-profit special education provider located in Ulster County. FEC provides preschool special education services to children with disabilities who are between three and five years of age. For the three fiscal years ended June 30, 2015, auditors identified $161,956 in ineligible costs that FEC reported for reimbursement. The ineligible costs included $96,006 in personal service costs and $65,950 in other than personal service costs.

SUNY Maritime College: Review of Procurement Card (PCard) Transactions and Travel Card Expenses (2017-Credit Card-01)
Auditors found 58 of 59 PCard transactions in a sample were inappropriate, did not comply with state or Maritime PCard guidelines or had insufficient documentation to determine appropriateness. This includes $12,340 in inappropriate transactions. Maritime also approved up to $3,750 in unnecessary luxury lodging accommodations over a six-year period for a professor who taught an annual course on a Carnival Cruise ship.

Department of Transportation (DOT): Welcome Center and Rest Area Planning and Implementation (2017-S-25)
DOT did not follow its own policies and procedures for capital project planning and implementation for welcome centers and rest areas, prioritizing those ahead of other projects. DOT also incurred cost overruns of more than $8.8 million and needlessly spent approximately $4 million due to poor planning for one rest area and four welcome center capital projects.

###

Find out how your government money is spent at Open Book New York. Track municipal spending, the state's 160,000 contracts, billions in state payments and public authority data.

To prevail in an action challenging an unsatisfactory performance rating the individual must show that the rating was arbitrary and capricious or made in bad faith

In this CPLR Article 78 action the Petitioner challenged the "Unsatisfactory" annual performance rating she had received for the 2013-2014 academic year and [2] the calculation of her pension. Supreme Court dismissed both of these claims advanced by the Petitioner and, in addition, rejected her contention that she had suffered a "discontinuance of employment." The Appellate Division unanimously affirmed the Supreme Court's rulings.

Citing Murname v Department of Education of the City of New York, 82 AD3d 576, the Appellate Division explained that Petitioner failed to show that the U-rating she had been given for the academic year by the New York City Board of Education [Respondent] was arbitrary and capricious or made in bad faith. Rather, said the court, Respondent's determination to uphold the U-rating has a rational basis in the record, which shows repeated instances of pedagogical deficiencies during the 2013-2014 school year, as well as a failure to improve.

With respect to Petitioner's appeal concerning the calculation of her pension , the court's decision indicates  that there were two obstacles to its consideration of her complaint: [1] the Respondent was not the proper party against which to bring her claims and [2] "[t]hese claims could not in any event be entertained, because [Petitioner] failed to exhaust her administrative remedies."

Addressing Petitioner's contention that she had been "discontinued from service", the court found that "there was no discontinuance of employment." Rather, said the Appellate Division, Petitioner had voluntarily resigned from her position.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_04887.htm

Proceeding with a disciplinary action notwithstanding the appointing authority's receipt of the employee's written resignation from the position

The Petitioner in this Article 78 action sought to have Supreme Court annul a determination of City of New York Civil Service Commission [Commission] affirming the decision of the New York City Administration for Children's Services [ACS] terminating Petitioner's employment for misconduct and incompetence. In addition, Petitioner attempted to have the court to annul the Commission's affirming a ruling by the New York City Department of Citywide Administrative Services [Citywide] disqualifying Petitioner from employment with the New York City Taxi and Limousine Commission based on ACS's findings. Supreme Court dismissed the proceeding, which resolution of the matter the Appellate unanimously affirmed.

The Appellate Division observed that Petitioner had submitted both a "conditional resignation" and "a handwritten resignation letter" while disciplinary charges were pending against him. ACS, however, elected to disregard these resignations and continue to prosecute the charges against Petitioner.  Citing 4 NYCRR 5.3[b], the court found that the appointing authority could, and did, ignore Petitioner's consistent with the provisions of the rule which, in pertinent party, provides "... when charges of incompetency or misconduct have been or are about to be filed against an employee, the appointing authority may elect to disregard a resignation filed by such employee and to prosecute such charges and, in the event that such employee is found guilty of such charges and dismissed from the service, his* termination shall be recorded as a dismissal rather than as a resignation."

Further, said the court, "Petitioner failed to establish that respondents acted in excess of their jurisdiction, citing Civil Service Law §76[1], [3]. The court explained that Petitioner, a probationary employee, could be dismissed "for almost any reason, or no reason at all," failed to allege facts that would establish that he was dismissed in bad faith or for an improper or impermissible reason.

* §22 of the General Construction Law, in pertinent part, provides that “Whenever words of the masculine or feminine gender appear in any law, rule or regulation, unless the sense of the sentence indicates otherwise, they shall be deemed to refer to both male or female persons.”

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_04880.htm

The statute of limitations for filing an Article 78 petition challenging an regulation adopted by a government entity starts to run on the effective date of the regulation

General Municipal Law §209-q(1)(a) requires that individuals satisfactorily complete an approved municipal police basic training program prior to appointment as a police officer on a permanent basis. A certificate of completion issued upon completion of an approved training course remains valid, as relevant in this appeal, during the holder's continuous service as a police officer and during certain specified periods of "interruption" from service (see General Municipal Law §209-q[1][b]).* The State's Division of Criminal Justice Services [DCJS] is required by law to maintain a registry of all full-time and part-time police officers in the State and all agencies employing police officers are required to immediately report to DCJS when any officer it has employed ceases to so serve.

Executive Law §837[13] authorizes DCJS to adopt such regulations "as may be necessary or convenient to the performance of its duties." DCJS had adopted regulations requiring an agency employing police officers immediately notify DCJS when a police officer it had employed ceased to serve as a police officer and to indicate the reason for his or her ceasing to serve as a police officer, including reporting his or her "removal for cause".** 

Removal for cause included, as relevant in this action, resignation while a disciplinary proceeding was pending against the police officer pursuant to Civil Service Law §75 or pursuant to another statute or a contract disciplinary procedure negotiated pursuant to the Taylor Law.***

Among the issues addressed by the Appellate Division in this action was the effective date of a regulation adopted by DCJS for the purposes of determining the statute of limitations for timely filing a CPLR Article 78 petition seeking to annul a determination made by DCJS pursuant to the challenged regulation.

In April 2018, two former police officer [Plaintiffs] initiated proceedings and actions for declaratory judgments seeking to annul DCJS's determinations to invalidate their respective police officer basic training certificates. Supreme Court "converted these proceeding/action to a CPLR Article 78 proceeding upon consent of the parties" and then dismissed the Article 78 action as untimely. Plaintiffs appealed.

The Appellate Division noted that although the parties concede that this proceeding was governed by the four-month statute of limitations set forth in CPLR §217(1), they disagree as to when their respective causes of action arose and, in the words of the court, "their claims for relief are ultimately grounded on challenges to the validity of the regulations that were promulgated by DCJS in 2016 and 2017" in consideration of their status as police officers.

Citing Thrun v Cuomo, 112 AD3d 1038, the Appellate Division opined that as the challenged regulations "were quasi-legislative acts ... challenges to the validity of regulations accrued when the regulations become effective." Accordingly, explained the court, "inasmuch as the regulations became effective more than four months before this proceeding was commenced, Supreme Court properly found that [Plaintiffs' claims are time-barred."

Addressing an argument raised by one of the Plaintiffs whereby the Plaintiff asserted that he had submitted "his irrevocable resignation letter" on September 19, 2016 and that it had expressly provided that his resignation would be effective on October 31, 2016, five days after the regulations were adopted, the Appellate Division observed that the resignation was submitted in settlement of disciplinary charges that could have resulted in Plaintiff's removal.

Thus, said the court, Plaintiff's "arguments that he resigned before the regulations were enacted or, alternatively, that no disciplinary charges were pending on the effective date of his resignation are precluded by his acceptance of the benefits of the settlement, namely, being permitted to resolve the pending disciplinary charges by resigning and his further receipt of employment benefits from September 19, 2016 through the effective resignation date of October 31, 2016." 

* Interruption means separation from employment as a police officer "by reason of such officer's leave of absence, resignation or removal, other than removal for cause" (see General Municipal Law §209-q[1][c]).

** See 9 NYCRR 6056.2(g), employees removed for incompetence or misconduct.

*** 4 NYCRR 5.3(b) provides in pertinent part, "... when charges of incompetency or misconduct have been or are about to be filed against an employee, the appointing authority may elect to disregard a resignation filed by such employee and to prosecute such charges and, in the event that such employee is found guilty of such charges and dismissed from the service, his termination shall be recorded as a dismissal rather than as a resignation." Also, where necessary and appropriate, such disciplinary action may be conducted in absentia [see Mari v Safir, 291 AD2d 298].

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_04524.htm

An individual receiving a pension benefit from a New York State public retirement system reemployed by New York State or political subdivision of the State must report such her reemployment and his or her earning derived from such reemployment to the retirement system

The individual [Respondent] in this action had served with the City Fire Department in various capacities for some twenty years. In May 2000 Respondent retired from the Department and after obtained a license to practice law in New York State, was reemployed by City Fire Department.

New York's Retirement and Social Security Law provides that retirees within the New York State and Local Police and Fire Retirement System [NYSLPFR]who return to employment with the State of New York or a political subdivision of the State can earn up to $30,000 per year before their retirement benefits are suspended, unless a waiver is obtained. Respondent neither reported his return to public service nor the earnings he received in excess of $30,000 to NYSLPFR. Further, Respondent did not obtain a waiver of the earnings limit. This resulted in Respondent receiving approximately $95,106 in pension benefits to which he was not entitled via wire transfer from Florida to his bank account in New York.

Respondent admitted that he "returned to public service after approximately ten years of being in retirement" but when he took the job, he did not obtain the required waiver. He further stated "[w]ell, the required waiver that would allow me to continue to receive my entire pension, and I did understand that I needed that waiver. And I just, I didn't do it." He then stated that in 2014 he "contacted the retirement system, notified them that I was receiving the benefits and to make those arrangements necessary to suspend my retirement and to start paying back the benefits I had received."

Respondent was convicted of wire fraud in violation of 18 USC §1343, which is essentially similar to the New York felony of grand larceny in the second degree, in violation of Penal Law §155.40, a Class C felony. By virtue of his felony conviction, Respondent was automatically disbarred and ceased to be an attorney pursuant to Judiciary Law §90(4)(a) and, among other penalties imposed, was directed to pay restitution to the NYSLPFR in the amount of $95,106.15, a fine of $50,000, and an assessment fee of $100.

With respect to Respondent's admission to the New York Bar, New York State's Judiciary Law, in pertinent part, provides for automatic disbarment in the event an attorney is convicted of a felony. Under this section, an offense committed in any other State, district or territory of the United States where it is classified as a felony is determined to be a felony when it would constitute a felony in this state. (see Judiciary Law, §90, subdivision 4, paragraph  e.) For purposes of this determination, the Court of Appeals has ruled that a felony in the other jurisdiction need not be a mirror image of the New York felony, precisely corresponding in every detail, but it must have essential similarity.

In response to the Grievance Committee for the Ninth Judicial District's motion to strike Respondent's name from the roll of attorneys and counselor-at-law, the Appellate Division concluded that Respondent's conviction of wire fraud in violation of 18 USC §1343 is essentially similar to the New York felony of grand larceny in the second degree, in violation of Penal Law §155.40, a Class C felony and granted the Committee's motion. The court noted that "[b]y virtue of his felony conviction, [Respondent] was automatically disbarred and ceased to be an attorney pursuant to Judiciary Law §90(4)(a)."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_04704.htm

Expulsion from membership of an organization created by the New York State Legislature

Following a member [Petitioner] of a veteran's organization [Organization] created by the New York State Legislature in 1868 expulsion from the Organization.  he commenced a CPLR Article 78 proceeding seeking reinstatement. Supreme Court granted the petition to the extent of annulling Petitioner's expulsion and ordering the Organization to reinstate him as a member. Organization reinstated Petitioner's membership but then file new charges against him, which again resulted in his expulsion from membership in the Organization.

Petitioner, contending that by expelling him a second time, the Organization is in contempt of the Supreme Court's judgment asked the Appellate Division to find the Organization in civil contempt of the Supreme Court's directive.

Citing Garcia v Great Atlantic and Pacific Tea Co., 231 AD2d 401, the Appellate Division rejected Petitioner's claim. The court explained that in order to find a party in civil contempt, it must be determined that:

 [1] a lawful order of the court, clearly expressing an unequivocal mandate, was in effect;

 [2] that the party charged with contempt had notice of the order and disobeyed it; and

[3] the failure to comply with the order prejudiced the rights of a party to the litigation.

Here, however, the Appellate Division determined that although the Supreme Court's judgment mandated Petitioner's reinstatement, it did not address any future charges and nor did it hold that Petitioner could never be discharged from the Organization. In the words of the court, "[t]he sole mandate of the judgment, which was based exclusively on the first charges brought against [Petitioner], was for [the Organization] to reinstate Petitioner. As the Organization admittedly complied with that mandate, there was no violation such that a finding of contempt would be appropriate.

The Appellate Division also noted Petitioner's argument that he is entitled to [1] a determination as to his allegations of fraudulent conduct by other members of the Organization and [2] whether Organization followed proper procedure in expelling him a second time.

However, ruled the Appellate Division, as Petitioner's initial petition did not seek such determinations in his initial petition and only sought a determination involving the first set of charges brought against him by Organization, the Supreme Court's determination concerning that matter was fully disposed of by the court.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_04101.htm

Determining the timeliness of an appeal of an administrative decision to an administrative appellate body within the agency

The critical lesson set out in this decision by the Appellate Division is that a request to reconsider a "final administrative determination" does not toll the running of the statute of limitations for initiating litigation challenging the decision.

The Appellate Division said it agreed with the Supreme Court's determination that the commencement of a proceeding pursuant to CPLR Article 78 was untimely as the retiree [Petitioner] did not file the action within four months of receiving the Retirement Systems determination informing her of the effective date of her retirement. Although Petitioner's subsequent asked the Retirement System to reconsider its determination regarding the effective date of her retirement, requests for "administrative reconsideration" do not extend or toll the running of the statute of limitations.

A related question concerns the timeliness of filing an administrative appeal of an agency's determination concerning a matter when a statute authorizes an individual to file an appeal from an administrative determination by mail. Is the controlling date the date the appeal was mailed to the agency's administrative appellate body or the date on which the appeal was received by the administrative appellate body?

In McLaughlin v Saga Corp., NYS Appellate Division, 242 A.D.2d 393, the Appellate Division overturned the traditional view was that the notice of appeal is untimely if it physically received by the appellate body after the Statute of Limitations had passed.

Rather, decided the Appellate Division, if the party is able to submit "proof of mailing within the limitations period," the application or appeal is timely.

The case arose under a provision of the Workers' Compensation Law that allowed a party to "serve" its appeal on the WCB by mailing it to the Board within 30 days. However, the Board took the position that unless it received the application for review on or before the last day of the 30-day limitations period, it was untimely. In Saga's case, although mailed within the 30-day period allowed for filing the application, WCB did not physically receive it until eight days after the statute of limitations had expired.

The rationale underlying the revised ruling is clear. If a person has a statutory right to make a decision, which may be then filed by mail, this period would necessarily be shortened if the appellate body could insist that it physically receive the mailed notice no later than the last day of the period of limitation.

In effect the Appellate Division concluded that the method of service of a notice of appeal, mail or personal delivery, should not determine the time period available to the party to decided whether or not to appeal an administrative ruling.

However, it appears that such a final action must be reduced to writing in order to start the running of the statute of limitations. In McCoy v San Francisco, City and County, 14 F.3d 28 , theU.S. Court of Appeals, 9th Circuit, ruled that a public employee's civil rights suit against his employer accrued when the appointing authority issued a  written statement suspending him from work, rather than from the date of a hearing held earlier at which time McCoy was orally told he was suspended from his position.

The Retirement System decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_04177.htm

The McLaughlin v Saga decision is posted on the Internet at:

https://casetext.com/case/matter-of-mclaughlin-v-saga-corporation-1

The McCoy v San Francisco decision is posted on the Internet at:

https://www.leagle.com/decision/19944214f3d28130

School District held not a party to the long-term disability insurance policy issued by the insurer covering certain District employees

Arroyo v Central Islip UFSD

2019 NY Slip Op 04669

Decided on June 12, 2019

Appellate Division, Second Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on June 12, 2019 SUPREME COURT OF THE STATE OF NEW YORK Appellate Division, Second Judicial Department 
ALAN D. SCHEINKMAN, P.J. 
CHERYL E. CHAMBERS 
LEONARD B. AUSTIN 
COLLEEN D. DUFFY, JJ.

2016-09188 
(Index No. 32465/09) 

Gail Arroyo, appellant, 

v

Central Islip UFSD, et al., respondents, et al., defendants.

Law Offices of Wayne J. Schaefer, LLC, Smithtown, NY, for appellant.

Devitt Spellman Barrett, LLP, Smithtown, NY (John M. Denby of counsel), for respondents.

DECISION & ORDER*

In an action, inter alia, to recover damages for breach of contract, the plaintiff appeals from an order of the Supreme Court, Suffolk County (Joseph C. Pastoressa, J.), dated June 30, 2016. The order granted the motion of the defendants Central Islip UFSD and Central Islip Union Free School District pursuant to CPLR 3211(a)(7) to dismiss the complaint insofar as asserted against them.

ORDERED that the order is affirmed, with costs.

The plaintiff was employed as a security guard by the defendants Central Islip UFSD and Central Islip Union Free School District (hereinafter together the District). She sustained injuries in the course of her employment and sought benefits under a long-term disability insurance policy issued by the defendant Sun Life and Health Insurance Company (U.S.) (hereinafter Sun Life), which covered certain employees of the District. The named policyholder was the Trustee of the New York State Group Insurance Trust. The policy provided that a written notice of claim for long-term disability benefits had to be sent to "us," defined as Sun Life, at its home office. The policy further provided that no legal action could be commenced against Sun Life for the claim until 60 days after the filing of the notice of claim.

A handbook which Sun Life provided to employees of the District stated that as participants in an employer benefit plan, employees were entitled to rights and protections under the Employee Retirement Income Security Act of 1974 (29 § USC 1001 et seq.; hereinafter ERISA). The handbook named Sun Life as the claims fiduciary with the obligation, and the discretion, to determine claims in its sole and exclusive discretion and to construe all issues relating to eligibility for benefits. The handbook stated that benefit determinations could be appealed to a named office of Sun Life and that, while the determination was final, an employee could bring an action in federal court under section 502(a) of ERISA (29 USC § 502[a]).

The plaintiff was initially granted long-term disability benefits by Sun Life but, after receiving benefits for almost three years, the plaintiff was notified by Sun Life in a letter dated September 11, 2008, that she was no longer eligible for benefits as she was no longer totally disabled. The plaintiff was given written notice of her right to appeal to a designated Sun Life office [*2](the same one named in the handbook). She was also advised that she may have the right to bring a civil action under ERISA in the event of an adverse appeals determination. The plaintiff exercised her right to appeal the determination to Sun Life; however, her appeal was denied. The plaintiff commenced this action against Sun Life, the District, and others, alleging breach of contract and wrongful denial of benefits under ERISA. The District moved pursuant to CPLR 3211(a)(7) to dismiss the complaint insofar as asserted against it based, inter alia, on a lack of privity. In an order dated June 30, 2016, the Supreme Court granted the District's motion. The plaintiff appeals.

The plaintiff's arguments on this appeal are predicated largely upon excerpts from a Summary Plan Description which the plaintiff asserts was issued by Sun Life's predecessor as policy issuer. The Summary Plan Description identifies the District as the plan administrator and as the agent for service of legal process. The Summary Plan Description also states that any denial of benefits would be provided by the named plan administrator, which was the District, and that the claimant has 60 days after receipt of a written denial to request review. The Summary Plan Description further states that a decision would be rendered within 60 days of receipt of the request for review and that plan participants have rights under ERISA which may be enforced by a lawsuit in federal court. The Summary Plan Description states that it does not constitute a part of the insurance plan or part of the insurance policy.

The plaintiff acknowledges that ERISA is not applicable to the subject Sun Life plan as it constitutes a governmental plan exempt from ERISA (see 29 USC §§ 1002[32]; 1003[b][1]; Lyndaker v Board of Educ. of W. Can. Val. Cent. Sch. Dist., 129 AD3d 1561, 1562-1563). Nevertheless, the plaintiff contends that, based on the language of portions of the Summary Plan Description, the District subjected itself to ERISA's statutory scheme governing appeals from denials of claims. We disagree.

An insurance policy is a contract to which standard provisions of contract interpretation apply (see Universal Am. Corp. v National Union Fire Ins. Co. of Pittsburgh, Pa., 25 NY3d 675, 680; Omanoff v Rohde, 129 AD3d 510, 510). "Liability for breach of contract does not lie absent proof of a contractual relationship or privity between the parties" (Hamlet at Willow Cr. Dev. Co., LLC v Northeast Land Dev. Corp., 64 AD3d 85, 104; see Siskin v Cassar, 122 AD3d 714, 717; CDJ Bldrs. Corp. v Hudson Group Constr. Corp., 67 AD3d 720, 722). "One cannot be held liable under a contract to which he or she is not a party" (Victory State Bank v EMBA Hylan, LLC, 169 AD3d 963, 965; see Maki v Travelers Cos., Inc., 145 AD3d 1228, 1230; 1911 Richmond Ave. Assoc., LLC v G.L.G. Capitol, LLC, 90 AD3d 627, 627).

Here, the District was not a party to the long-term disability policy issued by Sun Life to a different named policyholder. Even assuming the authenticity of the Summary Plan Description excerpts relied upon by the plaintiff, nothing in the record reflects that the District authored, published, or agreed to be bound by the Summary Plan Description, which, by its terms, did not form part of the insurance policy. Nor do the terms of the insurance policy incorporate the provisions of ERISA (cf. Advanced Refractory Tech. v Power Auth. of State of N.Y., 81 NY2d 670, 678). While portions of the handbook, distributed to District employees by Sun Life, assert the applicability of ERISA to those employees, the record does not indicate that the District issued or agreed to be bound by the provisions of the handbook. Further, the record indicates that the plaintiff followed the claims review and appeal procedures set forth by Sun Life and that the determinations were made by Sun Life without the involvement of the District. The plaintiff's lack of privity with the District is fatal to her breach of contract cause of action against the District (see Siskin v Cassar, 122 AD3d at 717; 1911 Richmond Ave. Assoc., LLC v G.L.G. Capitol, LLC, 90 AD3d at 627).

Additionally, the plaintiff failed to timely serve a notice of claim on the District, which is a condition precedent to the commencement of an action against a school district (see Education Law § 3813[1]; Matter of Zelin v Blind Brook-Rye Union Free Sch. Dist., 164 AD3d 1352, 1352; Santostefano v Middle Country Cent. Sch. Dist., 156 AD3d 926, 927). The plaintiff contends that the District waived the notice of claim requirements by agreeing to an ERISA-based appeal procedure as outlined in Sun Life's September 11, 2008, letter. This argument is without merit as the letter was issued by Sun Life, not by the District (cf. Matter of Geneseo Cent. School [*3][Perfetto & Whalen Constr. Corp.], 53 NY2d 306, 311).

Accordingly, we agree with the Supreme Court's determination granting the District's motion to dismiss the complaint insofar as asserted against it.

In light of this determination, we need not address the parties' remaining contentions.

SCHEINKMAN, P.J., CHAMBERS, AUSTIN and DUFFY, JJ., concur.

ENTER:

Aprilanne Agostino

Clerk of the Court

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_04669.htm

* N.B. See, also, Matter of Gail Arroyo v Central Islip UFSD, et al., posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_04688.htm

Failing to call the trial court's attention to a law, rule or regulation may preclude citing such provisions in an appeal from an adverse decision by the lower court

The New York State Department of Financial Services [DFS] appeal the District Court denial of its post-verdict motion for judgment as a matter of law, or, alternatively, for a new trial, after a jury found DFS liable under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., for unlawfully discriminating against an individual [Petitioner] based on his national origin when it failed to promote him.

On the issue of liability, DFS argued that the jury’s answer to a special interrogatory on the verdict form demonstrated [1] a level of jury confusion that warranted a new trial and that [2] the evidence presented at trial was insufficient to support Petitioner’s claims. After reviewing the record, the Circuit Court of Appeals, Second Circuit, reject DFS' arguments and affirm the judgment substantially for reasons stated in the District Court opinion and order.

Addressing DFS' challenge to the damages awarded by the District Court, the Circuit Court said that DFS contended that the District Court erred in calculating the Petitioner's  damages award when it used "a comparator hired from outside of the civil service," citing for the first time the New York State Department of Civil Service’s State Personnel Management Manual [Manual], which, in pertinent part, states that §131.1-a of the State Civil Service Law* applies only to external candidates hired from outside the New York Civil Service.

Finding that DFS failed to make the District Court aware of these provisions set out in the Manual and relying on §131.1-a for the first time on appeal, the Circuit Court, noting that the District Court had some discretion in using the salaries of comparators to determine back pay in this case, the affirmed the District Court’s damages award.

* Civil Service Law §131.1-a, Appointment above minimum salary in certain cases, provides that "Notwithstanding any other provision of this chapter, with respect to positions allocated to salary grades in section one hundred thirty of this chapter the director of the classification and compensation division, subject to the approval of the director of the budget, may authorize an increased hiring rate, not to exceed the job rate of the salary grade of the position to which a person is to be appointed when the training or experience of such appointee substantially exceeds requirements necessary for appointment. The salaries of other employees serving in the same title in the same geographical area or location having qualifications of training or experience equivalent to those of the person appointed shall be increased by such amount as may be necessary to equal the rate of compensation of the person appointed.

The decision is posted on the Internet at: http://www.ca2.uscourts.gov/decisions/isysquery/ebddfaba-00e1-4235-a653-50e2d8616b95/1/doc/18-2614_so.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/ebddfaba-00e1-4235-a653-50e2d8616b95/1/hilite/

An arbitral awards may vacated, in whole or in part, if it violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on an arbitrator's power

An individual [Petitioner] employed by the Department of Corrections and Community Supervision [DOCCS] was suspended without pay and subsequently served by DOCCS with a notice of suspension charging her with six instances of misconduct and imposing a penalty of dismissal.*

Petitioner waived her right to an agency-level hearing and the matter proceeded directly to arbitration. Following a hearing, the arbitrator, among other things, found Petitioner guilty of two of the charges of misconduct and imposed a one-month suspension as a penalty. The arbitrator also awarded Petitioner back pay for the period of interim suspension prior to the hearing. When DOCCS failed to pay Petitioner back pay for the time of her interim suspension, Petitioner commenced a CPLR Article 75 proceeding to confirm the award. DOCCS cross-moved to vacate the award insofar as it required the payment of back pay for the period of the interim suspension.

Supreme Court confirmed the award, denied DOCCS' cross motion and DOCCS appealed the court's ruling, contending that the arbitrator's award of back pay for the period of interim suspension exceeded his authority.

The Appellate Division overturned the Supreme Court's ruling, pointing out that:

1. "Judicial review of arbitral awards is extremely limited [but] a court may vacate an award when it violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on an arbitrator's power";

2.  "[A]lthough an arbitrator's interpretation of contract language is generally beyond the scope of judicial review, where a benefit not recognized under the governing CBA is granted, the arbitrator will be deemed to have exceeded his or her authority"; and

3. "[I]f the arbitrator imposes requirements not supported by any reasonable construction of the CBA, then the arbitrator's construction[,] in effect, made a new contract for the parties, which is a basis for vacating the award."

Here, the Appellate Division noted, "the arbitrator's award of back pay for the period of interim suspension was based upon a determination that DOCCS lacked probable cause to suspend petitioner." However, said the court, the relevant provision set out in the CBA states that "[s]uspensions without pay . . . shall be reviewable by a disciplinary arbitrator . . . to determine whether the [respondent] had probable cause."

Citing Matter of Livermore-Johnson [New York State Dept. of Corr. & Community Supervision], 155 AD3d at 1394, the court pointed out that it had previously held that hearing evidence should be considered by the arbitrator in determining probable cause." Here, however, the Appellate Division found that the arbitrator "did not rely on the hearing evidence to reach this determination, but instead relied solely on the information contained in the notice of suspension and referenced the Livermore-Johnson decision, which is an earlier decision that he rendered regarding the same CBA but a different employee."

In the words of the Appellate Division, "[i]n Livermore-Johnson, the arbitrator concluded that the suspension notice at issue in and of itself did not establish probable cause [and when reviewed by this Court] we affirmed Supreme Court's judgment vacating the arbitrator's award, holding that the arbitrator exceeded his authority by failing to consider hearing evidence and imposing the new requirement that probable cause be established in the notice of suspension."

Finding the record underlying the instant action "makes clear that the same error occurred here," the Appellate Division said that that portion of the order and judgment that orders back pay for [Petitioner] during the period of interim suspension must be vacated and the matter remitted for a rehearing on that issue."

* The terms of Petitioner's employment were governed by a collective bargaining agreement [CBA] that contained procedures that DOCCS was required to follow when seeking to discipline an employee.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_04526.htm