An administrative agency’s acknowledgment of its authority to reconsider its determination, without more, neither rendered its determination nonfinal nor extended the relevant statute of limitations

An administrative agency’s acknowledgment of its authority to reconsider its determination, without more, neither rendered its determination nonfinal nor extended the relevant statute of limitations

2015 NY Slip Op 04369, Appellate Division, Third Department

The general rule followed in situations where an aggrieved party asks an administrative agency or tribunal to reconsider its determination is that the statute of limitations to appeal the administrative determination begins to run when notice of the final administrative action or decision is received by the party or, if the party is represented by an attorney, the party's attorney, notwithstanding the submission of such a request.

This point is illustrated in the Cardo case.* In Cardo one of the issues concerned the question of the timely filing of an appeal. The court said that although Cardo asked his employer to "reconsider" its administrative decision, such a request "did not extend the period within which the [Article 78] proceeding must be commenced." Indeed, in Kahn v New York City Department of Education 79 AD3d 52, the Appellate Division held that the statute of limitations for initiating a lawsuit is not tolled by the individual’s pursuing his or her opportunity to seek an administrative review of the determination.

In contrast to the legal impact of an individual merely submitting a "request for reconsideration," should the administrative actually agree to reconsider the matter and issue a new determination, the statute of limitations will begin running from the date of the new "final determination." This is true even if the new "final determination" confirms the original administrative decision.

In Orange County Economic Development Corporation, [Corporation], v State Of New York Authorities Budget Office, [Budget], the Appellate Division indicated that the same general rule applied with respect to challenges to Budget’s administrative determinations.

Corporation is a not-for-profit local economic development corporation. In November 2011 Budget wrote to Corporation stating that Budget considered Corporation to be a local authority subject to the reporting, disclosure and governance requirements of the Public Authorities Law. That letter also stated that “the lack of any response from Corporation by December 6, 2011 would indicate Corporation's acceptance of [Budget’s] determination.”

Corporation responded to Budget’s November 2011 notice by letter dated January 2012.

In the months that followed Corporation and Budget exchanged communications regarding Corporation's disagreement with Budget’s determination and Corporation requested that Budget reconsider its decision. Budget consistently responded that it considered Corporation to be a covered local authority and, in July 2013, publicly listed Corporation as noncompliant.

In November 2013 Corporation  filed a petition pursuant to CPLR Article 78 challenging Budget's determination. Supreme Court granted Budget's pre-answer motion to dismiss Corporations' petition on the ground that the proceeding was untimely, which ruling Corporation appealed to the Appellate Division.

In its appeal Corporation contended that the proceeding was not subject to a four-month statute of limitations because Budget acted in excess of its jurisdiction. The Appellate Division said that Corporation’s argument was unpersuasive. The court explained that Budget is authorized to ensure that "local authorities" comply with the reporting requirements of the Public Authorities Law and Corporation's claim that Budget's determination was in conflict with the relevant statutory language is "reviewable in a CPLR Article 78 proceeding, subject to a four-month statute of limitations."

The Appellate Division agreed with Supreme Court that Budget’s determination that Corporation was a local authority subject to the reporting, disclosure and governance requirements of the Public Authorities Law, became final and binding on the Corporation on December 6, 2011. Indeed, said the court, “Budget's November 2011 letter left no doubt that it had reached a definitive position regarding Corporation's status.”

The Appellate Division ruled that the fact that Corporation was not on the two public lists of noncompliant entities issued by Budget between December 2011 and July 2013 neither changed Budget's determination nor Corporation's obligation to comply with the Public Authorities Law. Further, said the court, “Budget's acknowledgment of its authority to reconsider did not render its determination nonfinal or extend the statute of limitations.”

* Cardo v Sielaff, 186 A.D.2d 424

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_04369.htm

Submitting, demanding and withdrawing a resignation from public employment

Submitting, demanding and withdrawing a resignation from public employment
2015 NY Slip Op 04408, Appellate Division, First Department

The rules of the New York State Civil Service Commission provide that "every resignation shall be in writing" [4 NYCRR 5.3(a)]. The rules further provides that if no effective date is specified in the resignation, it takes effect when delivered to or filed in the office of the appointing authority. If a date is specified, it takes effect on the date indicated. 4 NYCRR 5.3(c) also provides that a resignation may not be withdrawn, canceled 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 similar rules concerning resignations of employees subject to their respective jurisdictions.

The genesis of this appeal was Supreme Court’s order directing the New York City Department of Education (DOE) to reinstate an individual [Petitioner] to her teaching position with back pay and all other economic benefits of employment from August 28, 2008. DOE appealed and the Appellate Division unanimously reversed the lower court’s ruling, on the law and the facts.

The Appellate Division held that Petitioner’s action was time-barred because it was filed more than four months after Petitioner's receipt of DOE's letter notifying her that she was taken off the payroll as a result of her resignation. (see CPLR 217[1]; see also Matter of Biondo v New York State Bd. of Parole, 60 NY2d 832, 834 [1983]). The court explained that Supreme Court had failed to distinguish the regulations applicable to employee requests to "rescind" a resignation, which are made before the effective date of the resignation, and requests to "withdraw" a resignation, which are made after the effective date of the resignation. Further, the "delivery or filing" of a written resignation is the operative element and “acceptance” of the employee’s resignation by the appointing authority is not required.

In this instance Petitioner sought to rescind her resignation before it was effective. Under the relevant Chancellor's Regulation [C-205(26)], a resignation was deemed final upon submission and the Chancellor had no obligation to specifically notify Petitioner that her request to rescind was denied. The record, said the Appellate Division, indicates that DOE notified Petitioner on August 26, 2008 that she was being taken off the payroll based on her resignation. Thus, said the court, “[f]urther action by DOE was not required nor did Petitioner's letters to DOE after that date extend the statute of limitations, citing Lubin v Board of Education of the City of New York, 60 NY2d 974.

In any event, the Appellate Division noted that there was “a rational basis for DOE's determination terminating Petitioner’s employment based on her resignation in the face of disciplinary charges, and the determination was not arbitrary and capricious, made in bad faith, or made in violation of lawful procedure.”

In an earlier case, Smith v Kunkel, 152, AD2d 893 [appeal dismissed, 74 N.Y.2d 944] the Appellate Division considered the issue of an employee's attempt to withdraw his written resignation prior to its effective date. Smith, a permanent State employee had submitted his resignation for "personal reasons." The resignation was dated August 21 and was to take effect the following September 3. On August 29 Smith wrote the Division "seeking to withdraw and rescind" his resignation.

Kunkel, the Division's Administrative Officer, refused to approve Smith’s request to withdraw his resignation, citing 4 NYCRR 5.3(c) of the rules. Further, in Hazelton v Connelly, 25 NYS2d 74 the court said that all that is required for a resignation to become operative is its delivery to the appointing authority prior to the receipt of an employee’s request to withdraw or rescind the resignation prior to its receipt by the appointing authority. Approval or acceptance of the resignation is not required for the resignation to take effect

Smith had sued the agency contending that [1] Kunkel's refusal to permit him to withdraw his resignation was arbitrary and capricious and [2] 4 NYCRR 5.3(c) was unconstitutional as it deprived him of his public employment without notice and hearing.

As to Smith's constitutional challenge to the rule, the Appellate Division rejected Smith's argument that the rule was Unconstitutional noting that the argument overlooked a crucial fact: Smith had not been terminated but had voluntarily resigned his position. The court said that the "voluntariness of [Smith's] resignation is not vitiated by the fact that Kunkel rejected his withdrawal request prior to the effective date of his resignation... Having relinquished his position, [Smith] did not retain any constitutionally protected property interest in it."

On another point, sometimes an individual's notice that he or she has decided to withdraw, cancel or rescind the resignation is received by the appropriate official or body before the resignation is actually "delivered" to such person or body. In such situations the courts usually rule that the receipt of a withdrawal of a resignation before the resignation itself is delivered effectively voids the resignation.

Another issue that is sometimes raised in connection with an attempt to withdraw a resignation is a claim that the resignation was coerced from an employee or obtained under duress. Frequently an appointing authority will indicate to an employee that unless the worker submits his or her resignation, disciplinary charges will be filed against the individual.

The courts have concluded that where an appointing authority has the right, if not the duty, to take disciplinary action against an individual, "it was not duress to threaten to do what one had the legal right to do" [Rychlick v Coughlin, 63 NY2d 643].

Finally, where an employee has submitted his or her resignation after being served with disciplinary charges or in expectation of being served with disciplinary charges, an appointing authority may elect to disregard an employee’s resignation and proceed with the disciplinary action [see 4 NYCRR 5.3(b)].

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_04408.htm

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Unit member claims her employee organization breached its duty of fair representation when it refused to provide her with legal representation

Unit member claims her employee organization breached its duty of fair representation when it refused to provide her with legal representation

2015 NY Slip Op 04234, Appellate Division, First Department

A member [Member] of the collective bargaining unit sued the Member’s collective bargaining  organization [CBO]  after receiving a letter from the CBO advising her that:

[1] Her grievance concerning a salary adjustment was denied;

[2] The CBO did not believe that her claim was meritorious; and

[3] The CBO would not pursue the matter at arbitration.

Supreme Court dismissed Member’s Article 78 petition challenging the CBO's decision not to pursue the matter as untimely. The Appellate Division affirmed the lower court’s decision and, in addition, addressed a number of substantive issues raised by Member in her Article 78 petition

Considering Member’s claim that the Doctrine of Equitable Estoppel precluded the CBO from invoking the statute of limitations as a defense, the Appellate Division said that it disagreed with Member's theory the Doctrine barred the CBO's from arguing that her Article 78 action was untimely.

The court said that although Member alleged that her delay in filing her Article 78 petition was caused by the CBO’s alleged failure to advise her that it had access to her personnel records, her “claim is not dependent on knowledge of this fact.” Further, the Appellate Division commented that “in any event, mere silence is insufficient to invoke the doctrine of equitable estoppel, citing Ross v Louise Wise Servs. Inc., 8 NY3d 478.

Member also contended that the CBO had breached its duty of fair representation when it refused to provide her with counsel to defend herself in an action brought by her former employer to recover an alleged salary overpayment. The Appellate Division explained that such refusal “does not state a claim for breach of the duty of fair representation” as Member could have presented her own defense in the action, and any alleged misconduct

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_04234.htm

Substantial evidence of guilt of “serious” offences supports imposing the penalty of dismissal from employment

Substantial evidence of guilt of “serious” offences supports imposing the penalty of dismissal from employment
2015 NY Slip Op 04252, Appellate Division, First Department

The New York City Police Commissioner dismissed a New York City police officer from his position following an administrative disciplinary hearing. The Appellate Division sustained the Commissioner’s determination and the penalty the Commissioner imposed.

The court said that there was substantial evidence supporting the findings that the police officer:

1. Committed larceny by withdrawing money from his girlfriend's bank account without consent;

2. Made false statements in an accident report; and

3. Had been absent on “an unapproved absence” and made false statements regarding a separate purported approval of an absence.

Characterizing the police officer’s offences as “serious” and noting that the Commissioner "is accountable to the public for the integrity of the Department," the Appellate Division said that the penalty of termination “does not shock our sense of fairness,” citing Kelly v Safir, 96 NY2d 32.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_04252.htm

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Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli during the week ending May 23, 2015

Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli during the week ending  May 23, 2015

Click on text highlighted in color  to access the full report

Embezzlement by Former Justice Court Clerk results in incarceration, repayment of $117,120

An audit investigation by State Comptroller Thomas P. DiNapoli results in the incarceration of a former town Justice Court clerk. The audit uncovered the embezzlement of $117,120 by Mary Jo Guyette, former Town of Potsdam Justice Court Clerk. The Comptroller’s audit report is posted on the Internet at: http://www.osc.state.ny.us/localgov/audits/towns/2014/potsdamjc.pdf.

Guyette, 44, was sentenced to six months in jail, five years probation and ordered to pay $117,120 in restitution following her January guilty plea to grand larceny in the third degree and falsifying business records in the first degree, both felonies. Guyette admitted to altering court records so she could pocket the public funds from 2009 to 2013. Since the thefts, town officials have taken several steps to improve the court’s financial oversight. 

 

DiNapoli thanked District Attorney Mary Rain and the New York State Police for their work on this case.

According to DiNapoli’s audit, Guyette recorded receipts for $115,045 in the Justice Court’s computerized database, but failed to send the money to the town, include the payments in monthly municipal reports or notify the state Justice Court Fund of the income.  Auditors also identified a cash shortage of more than $2,000.

Since taking office in 2007, DiNapoli has committed to fighting public corruption and fraud against the state’s retirement system and encourages the public to help fight fraud and abuse.

New Yorkers can report allegations of fraud involving taxpayer money by calling the toll-free Fraud Hotline at 1-888-672-4555, by filing a complaint online at investigations@osc.state.ny.us, or by mailing a complaint to: Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236.

 

Audits of political subdivisions of the State:

Town of Cohocton:

The town had a cash shortage of $38,136 in the clerk’s office: $29,322 from the tax collection account and $8,814 in clerk fees. Auditors identified numerous questionable deposits that were made into the tax account and may have been made by the clerk in an attempt to conceal the shortage in tax collections. The clerk was arrested in 2014, pled guilty to grand larceny and was sentenced to four months in jail and five years of probation and paid $36,000 restitution to the town. 

http://www.osc.state.ny.us/localgov/audits/towns/2015/cohocton.pdf

City of Yonkers:

The city’s proposed budget for the school district has a budget gap of $25.8 million. In addition, the city has appropriated $37.5 million, or approximately 52 percent of the available fund balance, in its general fund in the 2015-16 proposed budget. The city’s use of fund balance to close gaps in the budget decreases the fund balance that is available to cover unforeseen shortfalls in revenue or unexpected expenditures. The city will also have to increase rates for metered water and sewer rents by 31 percent and 50 percent, respectively, to realize additional amounts included in the proposed budget. The city’s proposed budget complies with the property tax levy limit.
http://www.osc.state.ny.us/localgov/audits/cities/2015/yonkers_br.pdf

Parkland Alienation

Auditors examined how municipalities complied with state laws when conveying parkland to a non-public entity or using public parkland for another purpose. Several municipalities did not comply with all of the statutory requirements, including one municipality that has not used the proceeds from its parkland alienation transaction to acquire new parkland or make capital improvements as required. Several others did not take steps to determine fair market value of the parklands alienated or replacement parcels.
http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/global.pdf

Mental health provider PSCH, Inc

Mental health provider PSCH, Inc. charged $152,680 in unsubstantiated or unallowable costs to the state Office of Mental Health (OMH) including alcohol and a sunset cruise at a conference at the Montauk Yacht Club Resort and Marina, and more than $22,000 for a staff picnic,

PSCH had a five-year, nearly $30 million contract with OMH to provide services and housing to persons with mental disabilities and substance abuse. The provider claimed $152,680 in costs that could not be substantiated or are not allowable under the contract, DiNapoli found. That included $31,908 for directors and executive staff to attend a two-day conference at the Montauk Yacht Club Resort and $22,901 for a staff picnic.  While at the resort, PSCH charged $10,723 for alcohol, $5,064 for extra guests, $13,378 for post-conference lodging and $2,743 for a sunset cruise, tips and gifts. PSCH also charged nearly $98,000 for other duplicate, unsubstantiated or inappropriate charges.  

In response to the Comptroller’s report and recommendations, OMH officials agreed to recover program overpayments where appropriate and ensure that PSCH staff receives training to recognize unallowable costs such as alcohol and entertainment.

http://www.osc.state.ny.us/audits/allaudits/bseaudits/bse20150519.pdf

Also released: eleven letter reports to the following municipalities:

Town of Amherst

http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/amhersttown.pdf

Town of Clifton Park

http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/cliftonparktown.pdf

Town of East Greenbush

http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/eastgreenbushtown.pdf

Town of East Hampton

http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/easthamptontown.pdf

Town of North Hempstead

http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/northhempsteadtown.pdf

Town of Orangetown

http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/orangetowntown.pdf

County of  Onondaga

 http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/onondagacounty.pdf

County of  Nassau

http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/nassaucounty.pdf

Village of Port Jefferson

http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/portjeffersonvillage.pdf

             

Village of Round Lake

http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/roundlakevillage.pdf

City of  Rensselaer

http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/rensselaercity.pdf

Designating an individual an “independent contractor” rather than an “employee” does not control the relationship of that individual to the employing entity

Designating an individual an “independent contractor” rather than an “employee” does not control the relationship of that individual to the employing entity

Viau (New York State Off. of Ct. Admin.—Commissioner of Labor), 125 AD3d 1223

The Unemployment Insurance Appeal Board, ruled, among other things, that the New York State Office of Court Administration [OCA] is liable for unemployment insurance contributions on remuneration paid to a claimant [Worker] for unemployment insurance benefits.

While awaiting notification that her name was reachable on the eligible list for appointment to the position of “interpreter,” Worker was told she could submit an application to be put on OCA's registry of voucher paid interpreters from which interpreters are selected on an "as-needed basis."*

According to the decision, for years Worker received only sporadic assignments until in December 2009, she commenced working in the Bronx Family Court where she continued to work every day until March 2012. When Worker applied for unemployment insurance benefits, the Department of Labor found her to be an employee of OCA and, as such, found OCA liable for contributions on remuneration paid to Worker and others “similarly situated.” OCA objected on the ground that claimant was an independent contractor.

After a hearing, an Administrative Law Judge upheld the Department's initial determination. The Unemployment Insurance Appeal Board affirmed the Administrative Law Judge's decision.

OCA appealed the Board’s determination contending that the Board had:

1. Ignored the essential independence of per diem interpreters:

2. Relied on minor factors to find the existence of an employer-employee relationship; and

3. By its decision, the Board interfered with OCA's “constitutional mission to deliver services in a responsible and cost-effective manner and failed to defer to the judgment of the Chief Administrative Judge in assessing the operational needs of the Unified Court System.”

The Appellate Division said the existence of an employer-employee relationship "is a factual issue for the Board to resolve and its decision will be upheld if supported by substantial evidence." The court said that it found that substantial evidence supported the Board's decision that OCA exercised sufficient supervision, direction and control over Worker to establish an employer-employee relationship. However the court decline to extend this holding to others "similarly situated."

Further, the court found that the Board's decision “did not improperly interfere with the powers or duties of the Chief Administrative Judge in assessing the operational needs of the Unified Court System.” The Appellate Division explained that although the powers of the Chief Administrative Judge may be extraordinarily broad, his or her authority "does not exempt compliance with the Unemployment Insurance Law" and contrary to OCA's contention, the Board's decision does not impinge on any aspect of the functional or structural independence of the Judiciary.

Another argument advanced by OCA was that the Board had ignored its prior precedent in determining that Worker was an employee rather than an independent contractor. The Appellate Division said that the "prior determination" relied on by OCA was not made by the Board but by a reviewing examiner for the Department of Labor and, as such, the Board is not bound by it.

The Appellate Division modified the Supreme Court’s decision by reversing so much of the ruling that found that all persons “similarly situated” to Worker to be OCA employees and, as so modified, affirmed the lower court’s decision.

This suggests that where an employer contends that an applicant for unemployment insurance benefits is an independent contractor and not an employee, the Board must make a "case by case" evaluation of the applicant's eligibility for benefits and, further, make an assessment of any liability for employer unemployment insurance contributions on a case by case basis as well.

As to distinguishing between an employee and an independent contractor, the 20 factors being used by the IRS for this purpose are:

1. Instructions. An employee must comply with instructions about when, where, and how to work. Even if no instructions are given, the control factor is present if the employer has the right to control how the work results are achieved.

2. Training. An employee may be trained to perform services in a particular manner. Independent contractors ordinarily use their own methods and receive no training from the purchasers of their services.

3. Integration. An employee's services are usually integrated into the business operations because the services are important to the success or continuation of the business. This shows that the employee is subject to direction and control.

4. Services rendered personally. An employee renders services personally. This shows that the employer is interested in the methods as well as the results.

5. Hiring assistants. An employee works for an employer who hires, supervises, and pays workers. An independent contractor can hire, supervise, and pay assistants under a contract that requires him or her to provide materials and labor and to be responsible only for the result.

6. Continuing relationship. An employee generally has a continuing relationship with an employer. A continuing relationship may exist even if work is performed at recurring although irregular intervals.

7. Set hours of work. An employee usually has set hours of work established by an employer. An independent contractor generally can set his or her own work hours.

8. Full-time required. An employee may be required to work or be available full-time. This indicates control by the employer. An independent contractor can work when and for whom he or she chooses.

9. Work done on premises. An employee usually works on the premises of an employer, or works on a route or at a location designated by an employer.

10. Order or sequence set. An employee may be required to perform services in the order or sequence set by an employer. This shows that the employee is subject to direction and control.

11. Reports. An employee may be required to submit reports to an employer. This shows that the employer maintains a degree of control.

12. Payments. An employee is generally paid by the hour, week, or month. An independent contractor is usually paid by the job or on straight commission.

13. Expenses. An employee's business and travel expenses are generally paid by an employer. This shows that the employee is subject to regulation and control.

14. Tools and materials. An employee is normally furnished significant tools, materials, and other equipment by an employer.

15. Investment. An independent contractor has a significant investment in the facilities he or she uses in performing services for someone else.

16. Profit or loss. An independent contractor can make a profit or suffer a loss.

17. Works for more than one person or firm. An independent contractor is generally free to provide his or her services to two or more unrelated persons or firms at the same time.

18. Offers services to general public. An independent contractor makes his or her services available to the general public.

19. Right to fire. An employee can be fired by an employer. An independent contractor cannot be fire so long as he or she produces a result that meets the specifications of the contract.

20. Right to quit. An employee can quit his or her job at any time without incurring liability. An independent contractor usually agrees to complete a specific job and is responsible for its satisfactory completion, or is legally obligated to make good for failure to complete it.

Additional information concerning the status of an individual as an employee or as an independent contractor is posted on the Internet at: 

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee

* The decision notes that in 2012 OCA employed approximately 300 staff interpreters and maintained a registry of 700 per diem interpreters.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_01691.htm