Florida man alleged to have stolen retirement benefit checks issued to deceased brother

Selected reports issued by the Office of the State Comptroller during the week ending September 3, 2016 
Source: Office of the State Comptroller

[Internet links highlighted in color]

Floridaman alleged to have stolen retirement benefit checks issued to deceased brother

N.B. These charges are accusations and the individual is presumed innocent unless and until proven guilty.

New York State Comptroller Thomas P. DiNapoli and Attorney General Eric T. Schneiderman announced the unsealing of an indictment charging Robert J. Schusteritsch, 71, of Florida, with the crimes of Grand Larceny in the Second Degree, a class C felony, and Criminal Impersonation in the Second Degree, a class A misdemeanor, in Albany County Court. Schusteritsch is alleged to have stolen over $180,000 in pension benefits issued by the New York State and Local Employees Retirement System to his deceased brother, Martin Petschauer, between July 2008 and September 2015.

http://www.osc.state.ny.us/press/releases/sept16/090116a.htm?utm_source=weekly+news&utm_medium=email&utm_term=corruption&utm_content=20160904&utm_campaign=fiscal+oversight

Since taking office in 2007, DiNapoli has committed to fighting public corruption and encourages the public to help fight fraud and abuse.  Individuals can report allegations of fraud involving public funds by calling the toll-free Fraud Hotline at 1-888-672-4555, by transmitting an e-mail to investigations@osc.state.ny.us, by filing a complaint online athttp://osc.state.ny.us/investigations/complaintform2.htm or by mailing a complaint to Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236.

Employer contribution rates to remain almost unchanged for Fiscal 2017-2018

Employer contribution rates for the New York State and Local Retirement System expected to be slightly less in Fiscal Year 2017-18 compared to Fiscal Year 2016-17.

The average contribution rate for the Employees' Retirement System (ERS) will decrease from 15.5 percent of payroll to 15.3 percent of payroll. The average contribution rate for the Police and Fire Retirement System (PFRS) will increase to 24.4 percent from 24.3 percent of payroll.

Employer rates are determined based on actuarial assumptions recommended by the Retirement System's Actuary and approved by DiNapoli.

A copy of the Actuary's report can be found here.

Determining eligibility for "prospective surviving spouse pension benefits"

Determining eligibility for "prospective surviving spouse pension benefits"

Tirado v Board of Trustees of N.Y. City Fire Dept. Pension Fund, Subchapter 2, 2016 NY Slip Op 05925, Appellate Division, Second Department

Judicial review of administrative determinations not made after a quasi-judicial hearing is limited to whether the action taken by the administrative agency was made in violation of lawful procedure, was affected by an error of law, or was arbitrary and capricious or an abuse of discretion.

In resolving this action, which did not involve the review of a ruling made after a quasi-judicial hearing but which required the consideration of a number of issues such as the vacating of a default judgment of divorce, the benefits due surviving minor children of a deceased member of the New York City Fire Department Pension System, and claims that the application for certain retirement benefits was barred by the statute of limitations and the doctrine of laches, Supreme Court annulled the Board of Trustees of the New York City Fire Department Pension Fund, Subchapter 2’s, [Fund] determination denying Sheneque Jackson Tirado’s [Tirado] surviving spouse pension benefits and directed that the Fund commence paying Tirado such pension benefits effective as of August 20, 2012, together with any interest due. 

The Appellate Division affirmed the Supreme Court’s ruling, holding that the Fund’s denial of Tirado’s application for prospective surviving spouse pension benefits was arbitrary and capricious and an abuse of discretion.

Tirado had been separated from her husband, Hector Tirado, Jr. [Hector], a New York City firefighter who died responding to the terrorist attacks on September 11, 2001. After Tirado applied for pension benefits as Hector’s surviving spouse she learned the Hector had obtained a default judgment of divorce against her on March 21, 2001. In April 2002 Tirado filed a petition seeking to vacate the default divorce judgment.*In April 2003, the Supervisor of Pension Payroll of the Fire Department notified her that, as the surviving minor children's guardian, that pension benefits would be paid to the five minor children through their 18th birthdays.

Ultimately the relevant parties entered into an agreement in a Surrogate's Court proceedings to settle the estate whereby Tirado agreed to give the minor children any pension benefits from the Fire Department she received as Hector's surviving spouse in the same manner as the benefits would be distributed if there were no surviving spouse and when the minor children reached an age that they would no longer be eligible to receive pension benefits, Tirado would retain for her own exclusive use and enjoyment any remaining pension benefits until her death. Surrogate's Court vacated the judgment of divorce and in support of the present petition, Tirado’s then-counsel averred that he “notified a representative of the Fund of the vacatur of the divorce judgment and that he believed that he informed the representative about the agreement to defer [Tirado’s] surviving spouse pension benefits.”

The Fund continued to make the retirement payments to the benefit of the minor children. In August and September 2012, Tirado’s counsel wrote three letters to representatives of the Fire Department, noting that the youngest child would attain the age of 18 on August 20, 2012 and none of the children was a full-time student, requesting that "thereafter, the Fund commence paying surviving spouse pension benefits" to Tirado.

The Deputy Commissioner for Administration of the Fire Department responded that in November 2001, the Fund had determined that there was "no surviving spouse and that the death benefit was therefore payable to the Hector's minor children." Noting that the Find had not participated in the proceeding leading to the “vacatur of the divorce,”** the Deputy Commissioner said that the death benefit was a mutually exclusive benefit paid to either a surviving spouse or to surviving minor children and that all pension benefits had been paid in full to the minor children and did not revert to Tirado.

Addressing the Fund’s contention that Tirado’s petition was barred by the statute of limitations and laches, the Appellate Division said that Supreme Court correctly held that Tirado’s petition was timely and consistent with New York City’s Administrative Code §13-347(c).*** 

The Appellate Division explained that Tirado had timely commenced her action within four months of the October 2, 2012 communication from the Fund and that this letter “was the first and only unambiguously final decision sent to [Tirado] regarding her claim for surviving spouse pension benefits.” The court pointed out that while Tirado had been notified in 2003 that pension benefits would commence being paid to the minor children, that notification did not advise her “of the Fund's current position that, once such payments to the children began, they could never revert back to [Tirado] even if she obtained vacatur of the default divorce judgment, nor did it address [Tirado's] claim at all.”

Addressing the Fund’s argument that Tirado’s application was barred by the doctrine of laches, the Appellate Division said that having notified the Fund of her claim to entitlement to surviving spouse pension benefits, and her agreement to defer payment in favor of the children until they reached majority, Tirado did not unreasonably delay in seeking to protect her interests. In addition, said the court, as Tirado sought only prospective pension benefits and not recovery of payments which had already been made to the children, the Fund failed to show any prejudice resulting from Tirado’s delay in seeking payments after she obtained vacatur of the default divorce judgment in 2005.

* The vacatur of the default divorce judgment made Tirado Hector’s surviving spouse as if the default divorce judgment had never been entered and the Fund was not a necessary party to the proceeding to vacate the default divorce judgment merely because it administers benefits which flow from Tirado's marital status.

** The Appellate Division observed that the Fund was not a necessary party to the proceeding to vacate the default divorce judgment merely because it administers benefits which flow from Tirado’s marital status and construing the effect of the order and decree vacating the default divorce judgment was a question of law for the court to resolve and did not require deference to the Fund's area of expertise.

*** Administrative Code §13-347(c) provides that pension benefits "shall" be granted to the decedent's surviving spouse for life, or, if there be no surviving spouse, to surviving minor children until they attain the age of 18, or the age of 23 if a student.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_05925.htm

Exceptions to the general rule that only the union or the employer may demand that an issue be submitted to arbitration

Exceptions to the general rule that only the union or the employer may demand that an issue be submitted to arbitration
Sossous v Herricks Union Free Sch. Dist., 2016 NY Slip Op 05924, Appellate Division, Second Department 

The general rule concerning the right to demand that a grievance be submitted to arbitration in accordance with the terms and conditions of a collective bargaining agreement is that only the union or the employer may make such a demand.

In contrast, a unit member could exercise an independent right to demand arbitration if he or she is able to show that the union’s decision not to submit his or her grievance to arbitration was arbitrary, discriminatory, or made in bad-faith and thus demonstrating a breach of the union's duty of fair representation. 

In the absence of such a showing,  however, a union's "decision to conclude the grievance process short of the final step allowed by the contract or law is binding on the employee and precludes resort to additional remedies”.* 

The Sossous decision by the Appellate Division sets out another exception to the general rule.

The grievant, Final Sossous, filed Article 75 petition seeking to compel arbitration involving the terms of a “settlement agreement” entered into by the Herricks Union Free School District and Herricks Teachers' Association. The School Districtasked the court to dismiss Sossous’ petition, contending that “only the Herricks Teachers' Association, and not [Sossous] individually, may seek arbitration of the issues relating to the settlement agreement.** Supreme Court agreed and dismissed Sossous’ petition.

In this case, however, the argument that only the Herricks Teachers' Association and not Sossous, individually, may seek arbitration of the issues relating to the settlement agreement failed.

The Appellate Division vacated the lower court’s ruling explaining that “under the circumstances of this case, the parties charted their own procedural course by entering into a settlement agreement providing that the arbitrator would retain jurisdiction to resolve ‘any dispute that may arise concerning this settlement agreement.’"

The is consistent with judicial rulings holding that questions concerning compliance with a contractual step-by-step grievance process concern matters of procedural arbitrability are to be resolved by an arbitrator.

In the words of the Appellate Division, Sossous “raises a question of procedural arbitrability that must be resolved by the arbitrator” as the School Districtand the Association agreed that the arbitrator would retain jurisdiction to resolve "any dispute that may arise concerning this settlement agreement."

Accordingly, said the Appellate Division, the Supreme Court should have granted Sossous’ petition to compel arbitration and denied the School District’s cross motion to dismiss the petition.

* New York City Tr. Auth. v Gorrick, 72 AD3d 518.

** Comack Union Free School District v Ambach, 70 NY2d 501.
 

The decision is posted on the Internet at:
http://www.nycourts.gov/reporter/3dseries/2016/2016_05924.htm

California Supreme Court opens door for state reimbursing local agencies for unfunded mandates

California Supreme Court opens door for state reimbursing local agencies for unfunded mandates

Department of Finance v Commission on State Mandates, California Supreme Court, S214855

Source: Meyers Nave Legal Alert

A Meyers Nave Internet Newsletter reports that on August 29, 2016 the California Supreme Court handed a victory to local agencies that are seeking to enforce their constitutional right to reimbursement for unfunded mandates imposed by the State. In Department of Finance v Commission on State Mandates,* the Court ruled in favor of public agencies subject to storm water discharge permits, holding that State-mandated storm water permit provisions exceeding federal law requirements may be reimbursable State mandates under Article XIII B, Section 6, of the California Constitution.

While this case arose in the context of storm water regulation, Meyer Nave suggested that the Court's analysis will apply to many unfunded mandate situations going forward and summarized the genesis of the case and the Court's decision as follows: 

“In California, CaliforniaRegional Water Quality Control Boards issue permits under state and federal law for discharges from municipal separate storm sewer systems (MS4s).  Under the federal Clean Water Act, MS4 permits must require controls to "reduce the discharge of pollutants to the maximum extent practicable."  (33 U.S.C. § 1342(p)(3)(B)(iii).)  States may also impose their own requirements so long as they are not less stringent than required under federal law.  (33 U.S.C. § 1370.) 

“In 2001, the Los Angeles Regional Water Quality Control Board (Regional Board) issued an MS4 permit that, among many other things, required local agencies to inspect commercial and industrial facilities, implement programs to inspect and control runoff from construction sites, and place trash receptacles at all transit stops.  The County of Los Angeles and several cities filed test claims with the Commission on State Mandates (Commission) seeking State reimbursement for these permit provisions because they exceeded the federal "maximum extent practicable" standard.  The Commission found all the provisions were unfunded mandates, but the inspection requirements were not reimbursable because local agencies could levy fees or assessments to pay for them.  However, the trial court overturned the Commission's decision, finding that all the permit provisions were mandates imposed by federal law and were not reimbursable state law mandates.  The court of appeal affirmed, and the Supreme Court granted review.

“The Supreme Court held that the California Constitution "establishes a general rule requiring reimbursement of all state-mandated costs," and if the State argues an exception to that rule, such as the federal mandate exception at issue in this case, it "bears the burden of demonstrating that it applies."  The Court found that the State did not carry this burden, and that "[i]t is clear federal law did not compel the Regional Board to impose these particular requirements."  In doing so, the Court also found that in proceedings before the Commission, the Regional Board was not entitled to deference in its conclusion that the permit requirements at issue were federally mandated.  The Supreme Court reversed the Court of Appeal's judgment and remanded the case to the trial court for further proceedings on additional issues raised by the State and on the permittees' cross-appeal that the inspection requirements are reimbursable state mandates.

“In anticipation of the Supreme Court's decision, the Commission has signaled that it intends to clear its backlog of storm water test claims, with hearings beginning in early 2017.  It is also anticipated that another storm water test claim arising out of San Diego County, which is currently fully briefed and pending before the Third Appellate District Court of Appeal, Case No. C070357, may soon be scheduled for supplemental briefing and oral argument.

“In future Commission proceedings, test claimants may argue that once they establish that a statute or executive order (including permits) impose a new program or higher level of service, the State will bear the burden of proving that an exception applies, including exceptions for mandates allegedly imposed by the courts and federal mandates.  Public agencies should now be more vigilant than ever in pursuing their constitutional right to reimbursement of state mandates.”

For additional information e-mail Gregory Newmark, Esq. at gnewmark@meyersnave.com or John Bakker, Esq., at jbakker@meyersnave.com who appeared as Amici Curiae on behalf of Real Parties in Interest and Appellants.

* The text of decision is posted on the Internet at http://www.courts.ca.gov/opinions/documents/S214855.PDF

Disability not a defense to charges of excessive absence from work

Disability not a defense to charges of excessive absence from work

New York City Office of Administrative Tribunals and Hearings Index No. 1410/16

New York City’s Department of Environmental Protection filed disciplinary charges against one of its employees, A.M., alleging that A.M. had been excessively absent since 2014. A.M., who had an absenteeism rate of over 50%, contended that as an individual “hired under the Civil Service Law §55-a Program” due to her diabetes,* §55-a “protected” her from such disciplinary charges and, in addition, presented numerous doctors’ notes to support her absences.

OATH Administrative Law Judge Kara J. Miller found that participation in a §55-a** program position was not a defense to excessive absenteeism and A.M.’s medical notes illustrated her habit of visiting different urgent care clinics every few days in order obtain doctor’s notes and avoid returning to work.

Judge Miller recommended termination of A.M. employment.

Excessive absenteeism as a basis for termination was an issue in Cicero v Triborough Bridge and Tunnel Authority, 264 AD2d 334.

The Authority terminated a toll collector, after finding him guilty of a number of charges including excessive absences. The Appellate Division rejected the toll collector’s argument that his absences were approved and medically justified and therefore excused for the purposes of maintaining any disciplinary action against him.

In Dickinson v New York State Unified Ct. Sys, 99 AD3d 569, the Appellate Division unanimously confirmed the termination of an employee found guilty of “certain disciplinary charges” that alleged both misconduct and incompetency due to excessive absenteeism and lateness. As to the penalty imposed, termination, the court said that it did not shock its sense of fairness as “[b]eing present at work is an essential job function” and an employee’s "disability ... may not be used to shield him [or her] from the adverse consequences of inadequate job performance."

* The Americans with Disabilities Act provides that the determination of whether impairment is a disability is to be made without regard to the ameliorative effects of mitigating measures; diabetes is deemed a disability even if insulin, medication, or diet controls a person's blood glucose levels. 

** §55-a of the Civil Service Law provides for the employment of persons with disabilities by municipalities in position in the competitive class having duties which can be performed by physically or mentally disabled persons who are found qualified to perform satisfactorily such duties. Upon such a determination, the position is jurisdictionally reclassified to non-competitive class.

The A.M. decision is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/16_cases/16-1410.pdf