A municipality may discontinue a retiree’s health insurance benefit in the absence of a contract or provision of law granting the retirees a vested right to such a benefit

A municipality may discontinue a retiree’s health insurance benefit in the absence of a contract or provision of law granting the retirees a vested right to such a benefit

Iasillo v Pilla, 2014 NY Slip Op 06056, Appellate Division, Second Department

Former mayors and former members of the Board of Trustees of the Village of Port Chester [Plaintiff] continued to receive health care benefits payable by the Village pursuant to Board of Trustee resolutions dated June 1, 1988, and November 2, 1994 upon retirement.

On April 21, 2010, the then Board rescinded both the June 1, 1988, and November 2, 1994, resolutions, thereby terminating the post-retirement health care benefits being provided to Plaintiff by the Village.

Plaintiff sued, seeking a court decision declaring that the resolution dated April 21, 2010, “null and void and without legal effect” as to them. In addition, Plaintiff sought a “permanent injunction enjoining the [Village] from terminating or otherwise modifying [Plaintiff’s] post-retirement health care benefits.”

Plaintiff argued that [1] the Village was contractually obligated to provide them with post-retirement health care benefits, and that [2] the Village was estopped from terminating those benefits.

Supreme Court dismissed Plaintiff’s complaint, holding that the Village’s resolution dated April 21, 2010, was neither “null and void” nor “without legal effect.”

The Appellate Division affirmed Supreme Court’s ruling, holding that the Village had established, prima facie, its entitlement to judgment as a matter of law by demonstrating that the then sitting Board was entitled to terminate the post-retirement health care benefits afforded by the June 1, 1988, and November 2, 1994, resolutions. Those resolutions, said the Appellate Division, did not establish a vested interest in those post-retirement health care benefits, explaining that "A municipal resolution is, in general, a unilateral action that is temporary in nature and, thus, it does not create any vested contractual rights."

The court also noted that the Village was not barred by the doctrine of equitable estoppel from terminating Plaintiff’s post-retirement health care benefits.

In McDonald PBA v City of Geneva, 92 N.Y.2d 326, the Court of Appeals concluded that "there is no legal impediment to the municipality's unilateral alteration of the past practice" regarding its providing health insurance benefits to its retirees and their dependents where there was neither a Taylor Law agreement nor some other contract or provision of law granting retirees a vested right to such a benefit.

The Court of Appeals has also ruled that health insurance for retirees is not a retirement benefit protected against being diminished or impaired by the State's Constitution [see Lippman v Sewanhaka Central High School District, 66 NY2d 313].

The Iasillo decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2014/2014_06056.htm

Selected reports and information published by New York State's Comptroller

Selected reports and information published by New York State's Comptroller

Click on text highlighted in color  to access the full report

On Friday, September 12, 2014, New York State Comptroller Thomas P. DiNapoli announced that the following audits have been issued by his office:

Office of Children and Family Services (OCFS): Day Care Licensing (2013-S-66)

OCFS’s licensing and inspection activities assure licensed and registered child care facilities are in compliance with applicable laws and are safe for children. Although the office investigates complaints about unlicensed or unregistered child care providers, it does not have proactive measures in place to identify illegal child care providers and otherwise mitigate illegal operations.

New York City Department of Education (DoE): Accuracy of Reported Discharge Data (2014-F4)

An initial audit issued in March 2011 found DoE classified some students as discharged without sufficient documentation under state guidelines to support a discharge classification. By classifying them as discharged, DoE’s reported graduation rate was higher than the actual rate and the reported dropout rate was lower than actual. In a follow-up, auditors found DoE has made significant progress in addressing the issues identified in the initial report and has implemented the report’s three recommendations.

Office of General Services (OGS): ReStacking Occupancy Initiative (2013-S-68)

OGS’ implementation of the ReStacking initiative, aimed at decreasing the amount of leased property occupied by State agencies, was successful in achieving - and in fact exceeding – the cost savings expectations established by the SAGE commission and the Division of the Budget. OGS has achieved about $51 million in lease costs savings which, after adjusting for move costs that total about $18 million, resulted in about $33 million in net savings. However, OGS calculated cost savings separately from expenses and only accumulated costs on an agency by agency basis, not at a statewide level.

Department of Health (DOH): Multiple Same-Day Procedures on Ambulatory Patient Groups Claims (2012-S-163)

The Medicaid program, run by DOH, reimburses outpatient services through the use of the Ambulatory Patient Groups (APG) payment methodology, which is based on patient condition and complexity of service. Auditors found Medicaid made $1,083,836 in actual and potential APG claim overpayments. Of this amount, payments of $614,260 were made for the same medical procedure billed multiple times on the same date of service, and $469,576 was paid for rehabilitation services beyond the allowed limits. Medicaid also made questionable APG claim payments totaling $10,195,755 for dental clinic claims that were processed without sufficient scrutiny of the propriety or frequency of the services billed.

State Education Department (SED): Controls over Cash Advance Accounts (2014-S-11)

Cash advances are issued to state agencies for purposes such as petty cash, travel and other funding needs. Advances are issued from agency appropriations and the cash is transferred from the State Treasury to a local bank account for use by the agency. SED was authorized to have three advance accounts with a total value of $300,000 as of March 31, 2012. Auditors found SED no longer issues checks for travel advances and infrequently issues checks for petty cash expenses. However, SED does not routinely resolve old outstanding items or review any paid checks and consequently has no assurance that potentially improper or fraudulent transactions are detected.

New York State Thruway Authority: Travel Plaza Revenues and Capital Improvements (Follow-Up) (2014-F-8)

In an initial audit report from January 2010, auditors found that the authority’s efforts were adequate to ensure fuel and food concessionaires pay full rent on time and make required capital improvements. Auditors also found some improvement opportunities and discovered that a fuel concessionaire under reported its fuel deliveries in one month tested, and as a result underpaid its rent for that month. In a follow-up, auditors found six of seven recommendations had been implemented while another was no longer applicable.
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Circumstantial evidence used to establish employee’s misconduct

Circumstantial evidence used to establish employee’s misconduct

OATH Index Nos. 587/14 & 1545/14

A laboratory assistant was charged with committing errors in processing specimens. OATH Administrative Law Judge Astrid B. Gloade found that the hospital met its burden of proving that the laboratory assistant had [1] sent a patient's specimen for testing which was accompanied by the documentation for a different patient and that the laboratory assistant and [2] had entered the wrong code on a requisition form for the testing of a patient’s specimen, which resulted in the wrong test being performed on the specimen, based solely on circumstantial evidence.*

The ALJ noted that although there was no direct evidence that the laboratory assistant was responsible for the errors underlying the charges, “circumstantial evidence supports finding that [the laboratory assistant] made the error." Judge Gloade then explained that “In a disciplinary proceeding, where the burden of proof is by a preponderance of the credible evidence, misconduct may be established solely by circumstantial evidence" [citations omitted]. 

Further, said the ALJ, “[i]n order to establish a fact in issue by circumstantial evidence, the inference sought to be drawn must be based on proven facts. The inference must be reasonably taken from the proven collateral facts.” Although the charging party “need not disprove all other possible explanations or inferences in order to sustain its case, it must show that the inference drawn is the only one that is fair and reasonable.”

Judge Gloade recommended that the laboratory assistant be terminated in view of her prior disciplinary history and because her misconduct endangered the safety of others.

* The ALJ's decision notes that "Circumstantial evidence is defined as ‘evidence of a collateral fact, that is, of a fact other than a fact in issue, from which, either alone or with other collateral facts, the fact in issue may be inferred,’" citing Richardson on Evidence §4-301.

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