The party objecting to an arbitration award has a heavy burden to meet to prevail

The party objecting to an arbitration award has a heavy burden to meet to prevail
Matter of Cherry v New York State Ins. Fund, 2011 NY Slip Op 02797, Appellate Division, First Department

Supreme Court denied Stephanie Cherry’s Article 75 petition seeking to vacate the arbitration award upholding State Insurance Fund’s determination to terminate her employment based on violations of its zero-tolerance workplace violence policy.

Cherry appealed but the Appellate Division ruled that Cherry failed to meet her heavy burden of establishing that the arbitration award was irrational, or in violation of any of the grounds enumerated in CPLR 7511(b).*

Further, said the court, “There exists no basis to disturb an arbitrator's finding because ‘unless there is no proof whatever to justify the award so as to render it entirely irrational . . .the arbitrator's finding is not subject to judicial oversight.’”

Addressing another argument raised by Cherry, -- the award should be vacated due to [the State Insurance Fund’s] non-compliance with the procedures of CPLR Article 75 – the Appellate Division said that she had waived such a basis for challenging the award because she had continued participating in the arbitration proceeding “without objection."

* In addition to the grounds for vacating an arbitration award set out in CPLR Article 75, awards have been vacated by the courts based on a finding that the award violated a strong public policy.

The decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2011/2011_02797.htm
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Parties directed to proceed to arbitration based on the court finding that its decision could not be made “without extensive fact-finding or legal analysis”

Parties directed to proceed to arbitration based on the court finding that its decision could not be made “without extensive fact-finding or legal analysis”
Matter of Newburgh v McGrane, 2011 NY Slip Op 02665, Appellate Division, Second Department

The City Council of the City of Newburgh passed a resolution reappointing Jean-Ann McGrane to the position of City Manager for the City of Newburgh for a three year period ending May 31, 2009. Subsequently the City and McGrane entered into an employment agreement consistent with that resolution passed by the City Council which provided that McGrane was entitled to severance pay and other benefits if the City terminated her employment.


In addition, the agreement set out a broad arbitration provision applicable to "[a]ll claims, disputes and other matters in question between the parties to this Agreement arising out of or relating to this Agreement or the breach thereof."
When the City Council passed a resolution dated January 12, 2009 terminating McGrane's employment as City Manager "effective immediately," McGrane filed a demand for arbitration seeking an award of her salary and all benefits pursuant to the employment agreement.

The City filed a petition seeking to vacate the demand for arbitration and permanently stay arbitration on the ground that the employment agreement was void as against public policy. The City contended that the agreement violated the “term limits rule” by binding the successor members of the City Council to a contract relating to the area of governance entered into by members of the predecessor City Council.

The Supreme Court denied the City’s petition, dismissed the proceeding, and directed the parties to proceed to arbitration.

The Appellate Division affirmed Supreme Court’s ruling, explaining tha:

Arbitration is favored in the State of New York as a means of resolving disputes, and courts interfere as little as possible with agreements to arbitrate.

1. "The courts may intervene in a dispute which the parties had agreed to arbitrate where the arbitrators could not grant any relief without violating public policy."

2. Where a court examines an arbitration agreement ". . . on its face and concludes that the granting of any relief would violate public policy without extensive fact-finding or legal analysis, [it] may then intervene and stay arbitration.";

3. Citing Matter of Karedes v Colella, 100 NY2d 45, the Appellate Division noted that "The term limits rule prohibits one municipal body from contractually binding its successors in areas relating to governance unless specifically authorized by statute or charter provisions to do so"; and

4. "An agreement that violates the term limits rule is against public policy (see Matter of City of Utica Urban Renewal Agency v Doyle, 66 AD3d 1495; Karedes v Village of Endicott, 297 AD2d 413, 415)."

In this instance the Appellate Division found that any determination as to whether an arbitrator could not grant any relief without violating public policy on the ground that the employment agreement violated the term limits rule could not be made at this stage in the proceeding without extensive fact-finding or legal analysis.

Accordingly, said the court, the Supreme Court properly denied the petition and dismissed the proceeding, directing the parties to proceed to arbitration.

The Appellate Division noted that in the event that the arbitrator's award violates public policy, the Supreme Court retained the power to vacate the award."

The decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2011/2011_02665.htm
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Collateral Estoppel may bar a lawsuit involving essentially the same issues earlier adjudicated in a quasi-judicial administrative hearing

Collateral Estoppel may bar a lawsuit involving essentially the same issues earlier adjudicated in a quasi-judicial administrative hearing
Pisano v NYC Board of Education, 2002 WL 484305, [not selected for publication in the Official reports ], Affd. 303 A.D.2d 735

Sometimes an individual, unsuccessful in one lawsuit, will commence another legal action involving essentially the same issues and parties. However, applying the doctrine of collateral estoppel prevents a party from relitigating an issue which has already been decided by the courts involving the same parties and issues. The Pisano case involves such multiple litigations and illustrates how the court will apply the doctrine of collateral estoppel in case the subsequent litigation involves a challenge to an administrative determination.

In Abiele Contracting, Inc. v New York City School Construction Authority, 91 NY2d 1, the court held that the doctrine may apply to bar relitigating issues decided by administrative agencies if those decisions are "quasi-judicial" in nature. According to the ruling, an administrative agency is quasi-judicial in nature if it is given express statutory authority to act adjudicatively.

In contrast, if an agency only invokes its executive powers under the governing statute in making its determination, it is not exercising "quasi-judicial powers." In Venes v Community School Board, 43 NY2d 520, the Court of Appeals indicated that challenging the administrative agency's decision in court in situations where the agency did not arrive at its decision as a result of its acting in an adjudicative or judicial capacity would not be barred under the doctrine of collateral estoppel.

In this case, a State Supreme Court judge decided the doctrine prevented Sheila Pisano from pursuing this lawsuit against the New York City Board of Education.

This action arose after a medical arbitrator sustained the New York City Board of Education Medical Board's ruling that Pisano's absence from work did not result from her job-related injury. According to the record, Pisano had fallen at work on October 18, 1996. As a result of injuries she alleged she suffered because of her fall, Pisano did not return to work.

After receiving the Medical Board's determination, Pisano asked for, and was granted, an independent evaluation by a medical arbitrator accordance with the provision of the collective bargaining agreement between the United Federation of Teachers and the Board. She also authorized the Board of Education Medical Board to release her entire medical file to the medical arbitrator.

Dr. David Kaufman, the medical arbitrator, sustained the Medical Board's decision based on his medical examination of Pisano as well as a review of her available medical records and his conversations with Pisano's personal physician. Dr. Kaufman noted in his report that he had not reviewed all of Pisano's medical records because Pisano "failed to provide the Medical Board with this essential material." His conclusion: the Medical Board therefore acted correctly in not accepting the accident as being the cause of [Pisano's] absence from October 18, 1996 until the present" on the basis of the record before it.

Pisano challenged the arbitrator's determination pursuant to Article 75 of the Civil Practice Law and Rules. Her argument: the arbitrator's determination "was the result of misconduct by the Board and that the arbitrator failed to examine all of [her] medical records and thus did not conduct a thorough and exhaustive record."

A State Supreme Court justice dismissed Pisano's petition, ruling that the arbitration award was proper notwithstanding her allegations, as the award was "rational and unambiguous."

When Pisano filed second lawsuit based on the Medical Board's determination, the City asked the court to apply the doctrine of collateral estoppel and dismiss her petition. The court granted the City's motion, noting that the Medical Board is an agency within the meaning of 2 NYCRR 353, which provides for medical examinations, the creation of a medical board and the right to a hearing to challenge any adverse findings adopted by the Board.

The court said that "[t]hese procedures demonstrate that the determinations of these agencies are not merely the exercise of any rule-making or policy-making resolutions but are adjudications pursuant to their specific authority to actually decide cases. The court's conclusion: the Medical Board acted in a quasi-judicial capacity and its rulings bar any subsequent proceedings pursuant to the doctrine of collateral estoppel.

In addition, the court rejected Pisano's argument that "the arbitration award should be vacated since [she] was denied her Due Process at the arbitration hearing," noting that a Justice of the Supreme Court already ruled on "the propriety and manner of the arbitration proceeding and found that it fully conformed with the law." Thus, said the court, applying the doctrine of collateral estoppel in this action is appropriate.

The court also commented that "while the [Pisano] apparently did not appear with an attorney when she underwent her medical examinations, she was represented by the Union, which under a collective bargaining agreement with the Board, represents the interests of its members." In addition, said the court, "a party's election to appear without counsel will not invalidate the award of any part of the proceeding in which the right to counsel was not exercised."

New parking placard policies for the executive branch and Legislature

New parking placard policies for the executive branch and Legislature
Source: Office of the Governor

In response to State Inspector General Ellen Biben finding systemic problems with how parking placards were distributed and how they were used by some state employees, Governor Cuomo set new rigorous new policies for state issued parking placards.

Currently, the state distributes two types of parking placards. One says "police" in all capital letters, the other says "official business."

The new parking placard policies for the executive branch and Legislature provide that:

1. State officials are required to fill out a form before receiving the placard indicating why the placard is needed and what vehicle it will be used in.


2. State officials are required to sign a certification acknowledging the proper use of a placard.

3. The Executive Chamber is recalling all outstanding "Police" placards so they can be redistributed to police personnel only.

4. State officials without police powers will be issued "Official Business" placards.

5.The State Police will review and distribute all "Police" placards.

6. The Governor's Office of Public Safety will review and distribute all "Official Business" placards.

7. Agencies will review requests by employees to ensure that their duties and responsibilities would require the use of a placard.

8. Complaints of improper use of "Police" placards will be handled by State Police.

9. Complaints of improper use of "Official Business" placards will be handled by the Inspector General's office. 

10. An employee who misuses the placard could face disciplinary action.

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A statutory general power of appointment implies a power to terminate the services of the appointee

A statutory general power of appointment implies a power to terminate the services of the appointee
Matter of City Council of City of Mount Vernon v Batra, 2011 NY Slip Op 02664, Appellate Division, Second Department

Ravi Batra, former counsel to the Office of the Mayor of the City of Mount Vernon, contended that he was unlawfully terminated from his position, arguing that his appointment pursuant to Section 66 of the Mount Vernon City Charter was irrevocable and not at the pleasure of the mayor.

The Appellate Division, sustaining Supreme Court’s dismissal of Barta’s petition, held that “Where, as here, the power of appointment is conferred in general terms and without restriction, the right to remove the appointee is within the discretion or at the pleasure of the appointing power.”

The decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2011/2011_02664.htm
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