Exhausting one's administrative remedy

Exhausting one's administrative remedy

Sabino v DiNapoli, 2011 NY Slip Op 09244, Appellate Division, Third Department

Anthony J. Sabino, an attorney, provided legal services to a number of political subdivisions of the State including serving with the Town of Oyster Bay, and Bethpage Water District. Both Oyster Bay and Bethpage had reported Sabino as an employee to the New York State Employees’ Retirement System [ERS].

In 2008, Comptroller promulgated regulations to provide guidance to the ERS as to whether individuals providing professional services such as those provided by Sabino should be deemed employees or as independent contractors. Significantly, independent contractors were not eligible for member service credit for the services provided to a public employer as an independent contractor.

After reviewing Sabino's status with the Water District, ERS determined that Sabino was an independent contractor and revoked a portion of his service credits in the Retirement System. Sabino was advised he was entitled to an administrative hearing if he wished to contest ERS' determination revoking such member service credit with the System.

In addition to requesting such a hearing,  Sabino filed a petition pursuant to CPLR Article 78 seeking a court order annulling ERS’ determination. Sabio contended that ERS had violated his rights under Article V, § 7 of the New York State Constitution and the 14th Amendment to the US Constitution by retroactively applying new standards and factors that were not in effect at the time he became a member of the Retirement System.

ERS moved to dismiss Sabino’s petition contending that he had failed to exhaust his administrative remedies. Supreme Court granted ERS’ motion, rejecting Sabino’s argument that “he was excused from the exhaustion requirement” because he had raised constitutional issues and that pursuing the available administrative remedy would be futile because he could not factually dispute the factors enumerated in support of ERS' determination. Sabino appealed the Supreme Court’s ruling.

Affirming the lower court’s decision, the Appellate Division said that “It is well settled that a party seeking to challenge the action of an administrative agency must first exhaust available administrative remedies.” 

Noting that in some instances a party may be excused from comply with the exhaustion requirement, such as when “a party asserts a constitutional challenge to an agency's action” or "when resort to an administrative remedy would be futile," the Appellate Division said that merely asserting that a constitutional right is involved will not excuse an individual's failure to pursue established administrative procedures that can provide adequate relief.

In this instance, said the court, there was a factual issue as to whether the regulation represents a meaningful and substantial change in ERS’ policy or was it merely the codification of existing policy. Such a determination, explained the Appellate Division, involves interpretation of the Retirement System's own regulations and should be left, in the first instance, to the administrative agency "so that a clearer formulation of and the rationales for agency policy may be fully aired."

As there was nothing in the record "which clearly indicates that [ERS has] predetermined the issue . . . or [has] construed the relevant regulation in a way that would dictate an adverse result of an administrative hearing,” the court concluded that Sabino has “failed to make the requisite showing that pursuit of administrative remedies would be futile" and thus Supreme Court properly granted ERS' motion to dismiss the petition, without prejudice.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_09244.htm 

Aggrieved individual’s request for reconsideration of an administrative decision does not toll the running of the statute of limitations

Aggrieved individual’s request for reconsideration of an administrative decision does not toll the running of the statute of limitations

Matter of Cowan v Kelly, 2011 NY Slip Op 08294, Appellate Division, First Department

It is “black letter law” that an individual seeking to file a petition pursuant to CPLR 78 proceeding against a body or officer challenging an administrative decision must file the petition within four months after the determination to be reviewed becomes final and binding upon the aggrieved individual. When does such a determination become final and binding on the individual? When, said the Appellate Division citing Yarbough v Franco, 95 NY2d, the individual has received notice of the administrative determination and “has been aggrieved thereby."

Supreme Court rejected Richard Cowan’s 78 petition challenging an administrative decision, holding it was untimely as it had been filed more than four months after the decision had become “final and binding” on him. The Appellate Division agreed and dismissed his appeal from the Supreme Court’s ruling.

Cowan, said the court, “became aggrieved by and received notice of the [Kelly’s] determination” and had to file his petition within four months of that date, which he failed to do.

The Appellate Division rejected Cowan’s argument that had not become aggrieved until he failed to receive a response to a memorandum he had sent seeking to have the administrative determination changed. The court explained that his memorandum “constituted nothing more than a request for reconsideration of [Kelly’s] determination of his status, and therefore, did not toll or revive the statute of limitations.”

Sometimes there is a question concerning the “service” of a final administrative decision with respect when the statute of limitations commences to run. This was the underlying issue in Kalinsky v SUNY at Binghamton, 214 A.D.2d 860. The general rule is that:

1. If an individual is not represented by an attorney, the statute of limitations begins to run when the individual is served with the administrative determination.

2. If an individual is represented by an attorney, the administrative body may send a copy of the determination to the individual but the statute of limitations begins running upon service of the individual’s attorney.

3. If the individual is represented by a person who is not an attorney, the administrative body may send a copy to the representative but it must serve the individual to start the statute of limitations running.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_08294.htm

Termination of an employee during the probationary period

Termination of an employee during the probationary period

Matter of Matter of Deitch v City of New York, 2011 NY Slip Op 09322, Appellate Division, Second Department

Terence J. Deitch, a probationary police officer, was terminated from his position without a hearing. Deitch sued and Supreme Court directed the New York City Police Department to “reinstate [Deitch] and directed a hearing on the issue of the [Deitch’s] damages” that resulted from his dismissal from his position.

The Appellate Division reversed the lower court’s determination and denied Deitch’s petition.

The Appellate Division explained that "A probationary employee may be discharged without a hearing and without a statement of reasons in the absence of any demonstration that the dismissal was in bad faith, for a constitutionally impermissible or an illegal purpose, or in violation of statutory or decisional law."

Further, said the court, the individual ”bears the burden of establishing bad faith or illegal reasons by competent evidence."

Finding that Deitch failed to establish that his termination was made in bad faith or was otherwise illegal or arbitrary and capricious, the Appellate Division ruled that the Supreme Court should have denied Deitch’s petition and confirmed the Department’s decision to terminate him.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_09322.htm

Individual’s letter of resignation and settlement agreement contingent on appointing authority’s approval may be rescinded while such approval is pending

Individual’s letter of resignation and settlement agreement contingent on appointing authority’s approval may be rescinded while such approval is pending

Matter of Civil Serv. Empls. Assn. Inc., A.F.S.C.M.E., Local 1000, A.F.L.-C.I.O. v Baldwin Union Free School Dist., 84 AD3d 1232

Francesco Pignataro filed an Article 78 petition seeking a court order allowing him to revoke his letter of resignation from his position of school custodian and the settlement agreement he submitted to his then former employer, the Baldwin Union Free School District.

The agreement, in pertinent part, stated that: (1) it was in settlement of the grievance for available leave accruals; (2) Pignataro would be paid $50,000 for accumulated leave days from October 1, 2007; and (3) Pignataro "shall" submit a letter of resignation for purpose of retirement, to be effective as of the close of business on August 12, 2009.

Significantly, the agreement also stated that it was subject to Board approval and in the event the Board "does not approve this agreement, such resignation shall be deemed withdrawn, and Mr. Pignataro shall remain an employee of the District.*

Prior to the Board’s approving the agreement Pignataro sent a letter to the district stating that he rescinded his resignation and the "proposed settlement". Notwithstanding this, the Board, by its President, signed the settlement agreement, and thereby refusing to permit Pignataro to “withdraw his resignation”** and repudiate the settlement agreement.

Supreme Court ruled that the settlement agreement was binding on Pignataro and under its terms he was not able to repudiate the settlement, rescind his resignation nor revive his employment with the District.

The Appellate Division disagreed, holding that “[c]ontrary to the Supreme Court's holding, the settlement agreement was not binding on Pignataro when he sought to withdraw his resignation and to reject the settlement.”


The court explained that "[a]s Pignataro withdrew his resignation and rejected the terms of the settlement agreement before the Board had accepted the terms of the settlement, there was no enforceable settlement agreement and Pignataro … was entitled to revoke his offer to settle his grievance.”

Accordingly, Pignataro’s revocation of the offer to settle prior to the Board’s approval of the settlement agreement terminated the Board's power to accept it. Thus, said the court, Pignataro effectively revoked the settlement and rescinded his resignation and thus he is entitled to reinstatement to his former position with the school district.

* The agreement provided that in the event the Board rejected the agreement, Pignataro's leave entitlements would be restored to him, "retroactive to July 17th 2009"; the District, Board, and its employees would be released from "all actions, suits, charges, claims, grievances, etc.,” and all pending arbitrations and grievances filed on behalf of Mr. Pignataro shall be withdrawn with prejudice."

** Typically once the employee has delivered his or her resignation to the appointing authority or its designee, he or she may not withdraw or rescind the resignation without the approval of the appointing authority. For example, 4 NYCRR 5.3(c), which applies to employees in the classified service of the State and public authorities, public benefit corporations and other agencies for which the Civil Service Law is administered by the State Department of Civil Service, provides that “A resignation may not be withdrawn, cancelled or amended after it is delivered to the appointing authority, without the consent of the appointing authority.” Many local civil service commissions and personnel officers have adopted a similar rule. 

Failure to preserve “First Amendment” argument in the course of arbitration bars appeal on that ground

Failure to preserve “First Amendment” argument in the course of arbitration bars appeal on that ground

Matter of Adolphe v New York City Bd. of Educ., 2011 NY Slip Op 08203, Appellate Division, First Department

           

The Appellate Division ruled that Marsiste Adolphe improperly raised his First Amendment argument for the first time in his petition appealing an arbitration award before the court because he failed to preserve his First Amendment claim in the arbitration proceding. Further, said the court, were it to consider his First Amendment argument, “we would find it without merit.”

As to Adolphe’s claim that the hearing officer's decision was based on mistakes of law and a disregard of the evidence, the Appellate Division held that such an argument “is unavailing,” as these are not grounds for vacating an arbitration award set out in Article 75 of the CPLR.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_08203.htm