Selected Reports issued by the Office of the State Comptroller during the week ending December 19, 2015

Selected Reports issued by the Office of the State Comptroller during the week ending December 19, 2015

Click on text highlighted in color to access the full report

Bombay Clerk Charged in Theft of Justice Court Fees

A North Country court clerk is accused of pocketing more than $5,400 from the Bombay Justice Court while the other court clerk was absent, according to State Comptroller Thomas P. DiNapoli.

Eric Fleury, of Constable, was charged with grand larceny in the third degree, a D felony, in Dickinson Town Court. The alleged thefts were uncovered in an audit and investigation by DiNapoli’s office to review the court’s financial operations.

“The public relies on our justice court fines to support vital services including highway safety, not to line the pockets of a dishonest clerk,” DiNapoli said. “My office will continue to root out corruption at all levels. I thank the State Police for their work on this case.”

Fleury was in charge of collecting fine money and depositing it into the court bank account. Auditors and investigators found that Fleury logged the cash receipts, but failed to deposit more than $5,400. The alleged larceny occurred from April 2014 to May 2015. Most of the funds were taken when the other court clerk, Fleury’s mother, was on sick leave, investigators found.

Since taking office in 2007, DiNapoli has committed to fighting public corruption 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.

The Bombay Justice Court report is posted on the Internet at:

http://www.osc.state.ny.us/press/releases/dec15/121815.htm

Review prior cases at http://www.osc.state.ny.us/investigations/index.htm

Municipal Audits reported

Town of Covet - Financial Management and Justice Court

The board needs to adopt long-term financial plans to effectively manage the town’s finances. The board has adopted budgets that have relied heavily on appropriated fund balance that cannot be maintained in the future. In addition, town officials are unable ensure that all the court justice’s moneys received were deposited and recorded completely and accurately.

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

Town of Horseheads - Financial Management

The board has not developed multiyear financial plans to address the use of fund balance to finance operations, the continued reduction of sales tax revenues, establishing reserve funds, or purchasing and financing future capital assets.

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

Town of Niagara - Justice Court

Town justices did not ensure that all fines and fees were properly collected. Court reports indicate that unpaid fines and fees may total nearly $400,000 on tickets ranging from 1989 through 2015 and that more than 11,000 tickets dating as far back as 1985 appear to be pending.

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

Orange County Soil and Water Conservation District - Financial Operations

The board did not ensure that certain contract agreements were approved in a timely manner. In addition, board meeting minutes were not transparent, as motions were not always clearly stated or titled.

http://www.osc.state.ny.us/localgov/audits/specialdists/2015/orangecosoilwater.pdf

Yates County - County Clerk Cash Receipts

The clerk maintains accurate accounting records and deposits moneys intact and in a timely manner. However, the clerk has not established written policies and procedures for cash receipts and cash receipt duties are not adequately segregated.

http://www.osc.state.ny.us/localgov/audits/counties/2015/yates.pdf

School DistrictAudits Reported

Brookhaven-Comsewogue UFSD - Professional Services

District officials have established a comprehensive purchasing policy. As a result, the district procured professional services in an economical manner.

http://www.osc.state.ny.us/localgov/audits/schools/2015/brookhavencomsewogue.pdf

New Lebanon CSD - Financial Condition

District officials have overstated liabilities and accumulated excessive reserve funds. In addition, the board has repeatedly appropriated fund balance, which has gone unused. The effective percentage of the district’s unrestricted fund balance is 16 percent of appropriations, which exceeds the 4 percent statutory limit.

http://www.osc.state.ny.us/localgov/audits/schools/2015/newlebanon.pdf

Southern Cayuga CSD - Financial Management

District officials have generally taken appropriate action to manage the district’s financial condition. However, the district’s multiyear financial plan does not address its debt share or declining enrollment.

http://www.osc.state.ny.us/localgov/audits/schools/2015/southerncayuga.pdf

Yonkers City School District - Fixed Assets

District officials and taxpayers have no assurance that all district property can be accounted for. Auditors found that 10 assets valued at $225,307 could not be located and 10 assets valued at $91,704 were either not tagged or the asset tag information on the tag did not agree with the accounting records.  

http://www.osc.state.ny.us/localgov/audits/schools/2015/yonkers.pdf

The aggrieved employee has the burden of proving that his or her employee organization’s action, or inaction, breached its “Duty of Fair Representation”

The aggrieved employee has the burden of proving that his or her employee organization’s action, or inaction, breached its “Duty of Fair Representation”

DeOliveira v New York State Pub. Empl. Relations Bd., 2015 NY Slip Op 08228, Appellate Division, Third Department

Donna Scarpinati DeOliveira filed an improper employee organization practice charge with the Public Employment Relations Board [PERB] alleging that the Cairo-Durham Teachers Association [Association], the employee organization representing her purposes of collective bargaining, violated its duty of fair representation.

The Cairo-Durham Central School District [District] had appointed DeOliveira a position in the elementary education tenure area subject to her satisfactory completion of a three-year probationary period. She subsequently absented herself for a “period of unpaid maternity leave.”

After DeOliveira returned to teaching full time the District abolished four positions in the elementary education tenure area and she was notified that she would be terminated at the end of the school year because her period of unpaid maternity leave that she took had the affected her seniority status. As a result she became one of the four least senior teachers in her tenure area.

DeOliveira asked the Association to file grievances on her behalf challenging the District's calculation of her seniority for the purposes of layoff but the Association decided that she had no viable claims and declined to file the grievance. DeOliveira later learned that, prior to the layoffs, the Association had agreed with the District's decision to exclude at least two sixth grade teachers from the elementary education tenure area — Peter Goodwin and Erin Murphy, both of whom were appointed by District after DeOliveira’s effective date of appointment.

In her improper practice charge filed with PERB, DeOliveira alleged, among other things, that the Association did not fairly represent her interests because it:

1. willfully failed to investigate her concerns regarding the impact of her unpaid maternity leave on her seniority status;

2. falsely represented to her that it had consulted with an attorney concerning the matter on her behalf; and

3. intentionally withheld from her the so-called "clandestine agreement" it made with the District to protect Goodwin and Murphy from being laid off.

Following a hearing, a PERB Administrative Law Judge [ALJ] dismissed the charge. PERB affirmed the ALJ’s ruling and ultimately DeOliveira commenced a CPLR Article 78 proceeding seeking review of PERB's decision. Supreme Court transferred the matter to the Appellate Division.

Citing Chenango Forks Central School District v PERB, 21 NY3d 255, the Appellate Division said that its review of a PERB determination is limited to whether it is supported by substantial evidence, that is, whether there is a basis in the record allowing for the conclusion that "PERB's decision was legally permissible, rational and thus not arbitrary and capricious.” The court said that in its view there was substantial evidence in the record supporting PERB's determination that the Association did not breach its duty of fair representation it owed to DeOliveira.

To establish a claim that the employee organization breached its duty of fair representation the Appellate Division explained that "there must be a showing that the activity, or lack thereof, which formed the basis of the charges … was deliberately invidious, arbitrary or founded in bad faith." DeOliveira, said the court, failed to made this showing regarding any of her specific allegations.

As to DeOliveira’s claim that the Association willfully failed to adequately investigate the District's exclusion of the time that she was on unpaid maternity leave from its calculation of her seniority, she had admitted that she met with Association representatives on multiple occasions regarding her concerns and the Association's president testified that a substantial investigation followed. Further, said the Association, DeOliveira was also advised in writing of its rationale and ultimate decision not to process her grievance.

As to DeOliveira’s allegation that the Association’s president told her that he would consult with a New York State United Teachers [NYSUT] attorney regarding her grievance, the Association president admitted that he did not consult with an attorney but said that he did consult with a NYSUT  Labor Relations Specialist. DeOliveira, said the court, did not offer any proof that the president’s misrepresentation was intentional or that he relied on the Labor Relations Specialist’s advice in bad faith.*

Turning to DeOliveira’s argument that the Association represented her in bad faith by making a "clandestine agreement" with the District to wrongly exclude Goodwin and Murphy from the elementary education tenure area at her expense, the court said there was nothing in the record to support such a claim.

Noting that the Commissioner of Education, in his ruling in an appeal** filed with Commissioner by DeOliveira, determined that Goodwin and Murphy should have been included in the elementary education tenure area for the purpose of layoffs, the Appellate Division said that “there is no evidence that the decision not to do so was motivated by animus toward petitioner or favoritism toward Goodwin and Murphy.” At worst, said the court, the Association's agreement with the District regarding the treatment of Goodwin and Murphy, and its attendant failure to pursue DeOliveira 's grievance about it, was an honest mistake, and "the fact that a union is guilty of mistake, negligence or lack of competence does not suffice [to prove] a[n unfair representation] claim."

The Appellate Division confirmed PERB’s determination and dismissed DeOliveira’s Article 78 petition.

* The president testified that he considered the Labor Relations Specialist to be the Association's "counsel" when it came to assessing teacher grievances.

** Appeal of Donna Scarpinati De Oliveira, from action of the Cairo-Durham Central School District, Decisions of the Commissioner of Education, Decision 16,411. The Commissioner ruled that even had Goodwin and Murphy been in retained in the elementary tenure area and DeOliveira seniority determined in consideration of their “seniority” in such tenure area, DeOliveira was still the least senior teacher in the elementary tenure area.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_08228.htm

_______________________

 

The Layoff, Preferred List and Reinstatement Manual - a 645 page e-book reviewing the relevant New York State laws, rules and regulations, and selected court and administrative decisions involving layoff and related matters. For more information click on http://booklocker.com/5216.html

_______________________

Governor Cuomo signs Executive Order 8-149 providing for expediting the Freedom of Information Law appeals process

Governor Cuomo signs Executive Order 8-149 providing for expediting the Freedom of Information Law appeals process

Source: Office of the Governor

Executive Order 8-149 “fast-tracks” the Freedom of Information Law [FOIL] appeals process by requiring that all state agencies and departments to “file notice of an appeal, settle the record on appeal, and file a brief within 60 days, absent extraordinary circumstances outside agency control.”

In addition, the Governor said that legislation will be introduced in the upcoming session that encompasses the order, “while also correcting the serious flaws of Assembly Bill 114 and Assembly Bill 1438-B.”

The Executive Order is set out below:

Executive Order 8-149,

EXPEDITING THE FOIL PROCESS

WHEREAS, we seek to further transparency and openness in New York State government; and

WHEREAS, the purpose of the Freedom of Information Law (FOIL) is, and has always been, to foster an open and transparent government that all New Yorkers can hold proud; and

WHEREAS, I received two bills pertaining to FOIL from the Legislature; and

WHEREAS, while their goals were well-intended, these bills are seriously flawed and would radically transform the litigation process, are myopic in their scope and focus only on one branch of government, and would only serve to perpetuate a fractured system of transparency and data production by intentionally excluding other branches of government; and

WHEREAS, Assembly Bill 114 has significant technical issues in that it: would substantially alter the balance of appellate rights between state agencies and non-state agency requestors, in that the condensed timeframe would only apply when a state agency appeals an adverse decision, which is necessarily an inequitable outcome, conversely, a non-state agency party would continue to have the longer time periods for appeal that are currently allowed by law; would eliminate judicial discretion regarding the time available to perfect an appeal as permitted by Civil Procedure Law and Rules § 5530(c), which allows each department of the appellate divisions to set their own rules governing the time to perfect an appeal, and/or when an appeal is subject to dismissal for failure to prosecute and/or deemed abandoned; fails to provide for an extension of the 60-day timeframe, even on consent; puts a substantial burden on state agencies to perfect their appeals and may make it difficult for agencies to serve and file appellate records and briefs, possibly compromising a state agency’s due process rights; and

WHEREAS, Assembly Bill 1438-B also has significant technical issues in that it: would allow for attorney’s fees to be assessed solely against a state agency, rather than uniformly against both parties; would also allow for attorney’s fees to be assessed against a state agency, even if the state agency ultimately prevails; would require a trial court to assess attorney’s fees against an agency when an agency denies access to FOIL requests in “material violation” of FOIL and with no reasonable basis for denying such access; fails to define what a “material violation” is, allowing each court to define the scope of the term, and leaving litigants without any clarity; and

WHEREAS, these bills fail to include the legislature in any meaningful FOIL reform; and

WHEREAS, I vetoed Assembly Bill 114 and Assembly Bill 1438-B for the reasons set forth above; and

WHEREAS, the Executive has and will continue to lead by example in advancing transparency and efficiency in government and, consistent with that principle, will immediately direct state agencies to fast track FOIL appeals, and will introduce legislation that will encompass these issues, address the described flaws, and execute more comprehensive FOIL reform that will cover all branches of state government.

NOW, THEREFORE, I, ANDREW M. CUOMO, Governor of the State of New York, by virtue of the authority vested in me by the Constitution and the Laws of the State of New York, do hereby find that, in light of recent events, we must do more to immediately advance transparency in government. Therefore, pursuant to the authority vested in me by the Constitution of the State of New York and Section 28 of Article 2-B of the Executive Law, I hereby direct all state agencies to adhere to the spirit of Assembly Bill 114, and move post-haste in filing a notice of appeal, settling the record on appeal, and filing a brief, within 60 days, absent extremely complex matters or extraordinary circumstances outside agency control; and

FURTHER, this Order shall take effect immediately and shall remain in effect until further notice.

G I V E N under my hand and the Privy Seal of the State in the City of Albany this twelfth day of December in the year two thousand fifteen.

BY THE GOVERNOR

Secretary to the Governor

s/

Although a contract may provide for the resolution of disputes by arbitration, litigation-related conduct by a party may constitute a waiver of its right to demand arbitration

Although a contract may provide for the resolution of disputes by arbitration, litigation-related conduct by a party may constitute a waiver of its right to demand arbitration

Cusimano v Schnurr, 2015 NY Slip Op 09232, Court of Appeals

The issues presented by this appeal are whether the Federal Arbitration Act [FAA] is applicable to disputes arising under the several agreements at issue in this action and, if so, whether the plaintiffs, Rita and Dominic Cusimano waived their right to arbitrate the dispute by pursuit of this litigation in court. The Court of Appeals held that although the FAA does apply in this instance, the Cusimanos, by their actions in initiating litigation concerning the matter in Supreme Court, waived their right to arbitrate their complaint.

Citing 9 USC §2, the Court of Appeals said that the FAA provides that "[a] written provision in . . . a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."

In this instance the court found that the ultimate purpose of the agreements was to authorize participation in the business of commercial real estate and that was, in fact, what the entities did. In determining whether the FAA applies, the emphasis is meant to be on whether the particular economic activity at issue affects interstate commerce — and, concluded the Court of Appeals, here it does.

In Stark v Molod Spitz DiSantis & Stark, PC, 9 NY3d 59, it was held that “like contract rights generally, a right to arbitration may be modified, waived or abandoned.”  Thus, said the court, a litigant may not compel arbitration when its use of the courts is “clearly inconsistent with [its] later claim that the parties were obligated to settle their differences by arbitration.”

Although not every attempt to litigate an issue in court “effects a waiver of the right to arbitrate," in this instance the Court of Appeals was satisfied that the totality of the Cusimanos' conduct here establishes its waiver of its right to arbitrate the matter, explaining that although federal policy expresses a preference in favor of arbitration, when addressing waiver, courts should consider the amount of litigation that has occurred, the length of time between the start of the litigation and the arbitration request, and whether prejudice has been established.

In the words of the Court of Appeals, “[a]fter vigorously pursuing their litigation strategy for approximately one year, the Cusimanos moved to compel arbitration. Even more telling, said the court, the Cusimanos' desire for arbitration only arose after Supreme Court made plain its view that the Cusimanos' claims were vexatious and largely time-barred. Indeed, in the court of its litigation before the Supreme Court, the Cusimanos had expressly represented to the court that they did not want to go to arbitration.”

Deeming the Cusimanos' behavior in this regard suggests “forum-shopping,” the Court of Appeals concluded that under these circumstances, prejudice against Schnurr has clearly been established. Finding that the Cusimanos actions had constituted a waiver their right to arbitration, the Court of Appeals said that the issue of timeliness should be determined by the court. Further, the court noted that although in previous cases it had, in dicta,* indicated that waiver is generally one of the issues that should be decided by the arbitrator, courts have held that whether a party has waived arbitration by litigation-related conduct is an issue for the courts,

* Dicta – a statement or observation in a judicial ruling or interpretation that was not part of the legal basis for judgment.

The decision has been posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_09232.htm

Removing a public officer holding an office for specific term pursuant to a “municipal cooperative agreement” before his or her term of office expires for other than cause

Removing a public officer holding an office for specific term pursuant to a “municipal cooperative agreement” before his or her term of office expires for other than cause

Rubeor v Town of Wright, 2015 NY Slip Op 08895, Appellate Division, Third Department

Steven Rubeor was appointed to fill the unexpired term of his predecessor as Assessor of the Town of Wright [Wright], the Town of Esperance and the Town of Schoharie, each town having entered into a municipal cooperative agreement establishing a coordinated assessment program [CAP]. Under a CAP, "a single assessor [is] appointed to hold the office of assessor in all the participating assessing units."

In December 2012, prior to the expiration of Rubeor 's term, Wright’s Town Board [Board] resolved to withdraw from the CAP and appointed Susan Crosby as the Town's interim Assessor. Rubeor initiated a combined CPLR Article 78 proceeding and action pursuant to 42 USC §1983, a federal civil rights law,* asserting that the Board improperly removed him from office, depriving him of a vested property right. Supreme Court granted Rubeor’s petition to the extent of annulling the Board's determination to remove him as Wright’s assessor, concluding that he was entitled to complete his term, which ended on September 30, 2013. Wright appealed.

The Appellate Division affirmed the Supreme Court’s ruling.

Noting that “This dispute raises an issue of first impression as to whether a town's withdrawal from a CAP truncates an assessor's term of office,” the court said that: 

[1] there is no dispute here that Wright is required to appoint an assessor, whose term of office shall be six years; and 

[2] an assessor is a public officer who ordinarily may only be removed from office for cause under Public Officers Law §36. 

The question presented here, said the Appellate Division “is whether a CAP changes this structure.”

While the statute provides that an assessor's term shall be for six years, it further provides that a member of a CAP may withdraw from a CAP at any time, provided that it does so at least 45 days before the next taxable status date. However, the said the court, “The statute is otherwise silent as to what happens to an assessor's term when, as here, a CAP member opts to withdraw prior to the expiration of the [assessor’s] term.”

In construing a statute the Appellate Division said the court must:

1. Determine the Legislature's intention, giving due effect to the plain meaning of unambiguous statutory language; and

2. Where the statute has “competing provisions,” the statute must be construed “as a whole and that its various sections must be considered with reference to one another."

Noting that an amendment to the Real Property Tax Law §579 in 2009, among other things, clarified that an assessor appointed in a CAP receives a six-year term and shortened the notice period for a CAP member to withdraw from the CAP, the Appellate Division concluded that the adoption of these companion provisions demonstrated that the Legislature intended to keep an assessor's six-year term intact even where a CAP member elects to withdraw from the CAP. Accordingly, insofar as the assessor is concerned, the effect of withdrawal from the CAP “is merely delayed until the assessor's term expires, at which time the assessing unit is free to choose a new assessor, without approval from any other assessing unit” in the CAP.**

Although in an 1997 the Department of Taxation and Finance's counsel  opined that the adoption of a CAP "may truncate the term of office of an incumbent appointed assessor,"*** the Appellate Division observed “that is not the situation presented here,” and, more significantly, commented “nor is that letter opinion binding, particularly in view of the 2009 amendment to RPTL 579.”

The bottom line: the court held that Rubeor’s term of office did not end when the Town Board adopted a resolution to withdraw from the CAP and that Rubeor held a right to continued employment until the expiration of his term of office.

* Wright removed the action to the United States District Court for the Northern District of New York but that court abstained from exercising jurisdiction pending the resolution of the underlying statutory dispute in state court, staying Rubeor's claims pursuant to 42 USC §1983.

**As Rubeor's term of office had since ended, Supreme Court had declined to reinstate him to the position as Town Assessor for Wright. The Appellate Division said that “Given that [Rubeor] did not appeal from the determination and expressly seeks to affirm the judgment in his brief, we do not address the corollary issue of back pay.”

*** 10 Opinions of Counsel SBRPS 35 - Posted on the Internet at:

https://www.tax.ny.gov/pubs_and_bulls/orpts/legal_opinions/v10/35.htm

The Rujbeor decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_08895.htm

Employee terminated as the result of disciplinary action not entitled to his or her unused vacation credit accruals

Employee terminated as the result of disciplinary action not entitled to his or her unused vacation credit accruals

Kozlow v City of New York, 2015 NY Slip Op 08960, Appellate Division, First Department

The Appellate Division affirmed the City of New York’s dismissal police officer David R. Kozlow holding that substantial evidence supported the City’s finding that Kozlow had engaged in numerous acts of misconduct, including failing to follow “proper procedure in presenting a prisoner at the station house; delaying his return to the station house in order to earn overtime; abandoning a fixed post; failing to follow directions to proceed immediately to a post; writing improper comments on his monthly report; and being discourteous to supervisors.”

As to the penalty imposed, termination, the court said that Kozlow’s prior disciplinary record, which included prior dismissal probations, and in light of the number and persistency of his infractions, termination from employment does not shock its sense of fairness.

The Appellate Division also ruled that the Police Commissioner was authorized to impose the penalty of a 30-day suspension without pay and to dismiss petitioner Kozlow City of NY § 14-115[a] and that Kozlow was not entitled to his “unused accrued vacation and sick leave” upon separation from service since he was terminated from employment.

Similarly with respect to employees of the State as the employer, 4 NYCRR 23.1, provides, in pertinent part that “No employee who is removed from State service as a result of disciplinary action or who resigns after charges of incompetency or misconduct have been served upon him shall be entitled to compensation for vacation credits under the provisions of this Part.” §23.1 also provides that the appointing authority may require, as a condition for payment for unused vacation credit that the employee submit written notice of his or her resignation at least two weeks prior to his or her last day of work.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_08960.htm

The statute of limitations for an Article 78 action begins to run once the administrative agency's final position concerning the issue becomes “readily ascertainable”

The statute of limitations for an Article 78 action begins to run once the administrative agency's final position concerning the issue becomes “readily ascertainable”

Plainview-Old Bethpage Congress of Teachers v New York State Health Ins. Plan, 2015 NY Slip Op 08676, Appellate Division, Third Department

[See, also, Roslyn Teachers Assn. v New York State Health Ins. Plan, 2015 NY Slip Op 08677, Appellate Division, Third Department, decided with Plainview-Old Bethpage Congress of Teachers.]

Plainview-Old Bethpage Central School District [District] is a participating agency in the New York State Health Insurance Program [NYSHIP]. During collective bargaining negotiations between the District and the Plainview-Old Bethpage Congress of Teachers and its Clerical Unit and Teachers Unit [Congress], the Department of Civil Service issued its Policy Memorandum No. 122r3 [122r3]* setting out limited the circumstances under which an employee of a participating agency may choose to decline NYSHIP coverage in exchange for a cash payment. 

Although earlier collective bargaining agreements had included such a buyout program without the new limitations, the District took the position that it was required to conform its buyout program to the new NYSHIP restrictions set out in 122r3. In response, the Congress initiated a combined CPLR Article 78 proceeding and Action for Declaratory Judgment seeking, among other things, a declaration that 122r3 was null and void.

Supreme Court agreed with the Association's position and granted its petition and, declared 122r3 null and void, whereupon the District appealed.

The Appellate Division vacated the Supreme Court’s ruling, holding that the Congress’ petition must be dismissed on the procedural ground that it was untimely, not having been filed before Article 78’s four-month statute of limitations had expired. The Appellate Division explained that in determining the date upon which the limitations period began to run, in this instance the four-month statute of limitations began to run on May 15, 2012, the date that NYSHIP issued the memorandum as NYSHIP’s decision on the new policy was deemed final and binding on that date and was "readily ascertainable"  by the Congress on that date.

The CPLR and case law make clear that the statute of limitations period for a CPLR Article 78 proceeding begins to run when the determination to be reviewed becomes final and binding upon the entity or person bring the action. Courts have ruled that such a challenged determination becomes final and binding when two requirements are met: [1] completeness or finality of the determination and [2] the exhaustion of administrative remedies available to the complaining party.

In the context of a quasi-legislative determination such as a policy memorandum, here 122r3, actual notice of the challenged determination is not required in order to trigger the running of the statute of limitations. Rather the statute of limitations begins to run once the administrative agency's definitive position on the issue becomes readily ascertainable to the affected party. In such instances courts apply what is termed constructive notice, i.e., the court deems a person or entity to have knowledge of the law, rule, regulation or policy at issue even if they have no actual knowledge of it.

As the Congress did not commence its Article 78 proceeding until December 21, 2012, the Appellate Division ruled it to be time-barred and granted NYSHIP’s motion for summary judgment, dismissing the Congress’ petition.

* The Department of Civil Service’s “PA/PE Health Insurance Buyouts” policy memorandum is posted on the Internet at: http://www.pobschools.org/cms/lib/NY01001456/Centricity/Domain/9/NYSHIP%20Buyout%20Policy%20Memo.pdf

The Plainview-Old Bethpage Congress of Teachers decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_08676.htm

The Roslyn Teachers Assn. decision, decided on the same day, is posted on the Internet at: http://www.nycourts.gov/reporter/3dseries/2015/2015_08677.htm

Another ruling concerning Policy Memorandum No. 122r3, School Adm'rs Assn. of N.Y. State v New York State Dept. of Civ. Serv., 124 AD3d 1174, is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_00676.htm

A school administrator's transfer to another position within his or her tenure area at a lower salary as the result of a reorganization held not a disciplinary action

A school administrator's transfer to another position within his or her tenure area at a lower salary as the result of a reorganization held not a disciplinary action

Appeal of Charles R. Soriano Decisions of the Commissioner of Education, Decision #16,849

Charles R. Soriano, a tenured administrator was employed in the district as an assistant superintendent of schools until he was transferred, within his tenure area of “Administrator,” to the position of middle school principal.

Soriano had initially entered into an Employment Agreement [Agreement] with the school board in 2003 as assistant superintendent. The Agreement fixed his salary and benefits for a four-year period. 

This Agreement was subsequently amended by addenda in 2006, 2007, and 2010, with the 2010 Agreement including an extension of its term through July 1, 2012.  Together with the addenda, the Agreement included a salary schedule with annual increases as well as several other benefits tied to Soriano’s salary such as a deferred tax annuity contribution by the district, life insurance in the amount of three and one half times Soriano’s annual salary, and "sell-back options" for unused vacation and sick time at a pro-rata share of Soriano’s annual salary. 

At its June 19, 2012 meeting, the school board approved a reorganization of the administrative staff within the district, including the appointment of Soriano to the position of middle school principal, effective July 1, 2012 at a lower annual salary.

Soriano wrote the school board demanding that the then-current annual rate of compensation he received as an Assistant Superintendent be continued in accordance with the “board’s legal obligations” and contended that the decrease in his compensation approved by the school board was “unreasonable and constituted discipline”  In response, a letter signed by the school board president dated June 29, 2012, advised Soriano that the school board “declined to reinstate [Soriano’s] previous salary," stating that the new salary was an adjustment which was appropriate under the circumstances, not a disciplinary action.  

Soriano appealed the school board’s decision to the Commissioner of Education. As a remedy, he asked for the restoration of his salary and benefits retroactive to July 1, 2012, “as well as salary increases at increments prescribed in the [relevant collective bargaining agreement] and any benefits exceeding those provided to him in the 2011-2012 school year.”

In its defense, the school board contended that Soriano’s salary reduction [1] was not arbitrary or capricious, rather it was reasonable under the circumstances; [2] the  Agreement relied upon by Soriano was not binding as it had expired on June 30, 2012; [3] “even if the Employment Agreement had not expired, it would be considered void as against public policy as one board cannot bind a successor board by a contract extending beyond the term of the contracting board;” and [4] the tenure statutes and broad administrative tenure area of the district do not require an administrator to retain  his or her prior salary when transferred to a new position within his or her tenure area. 

The Commissioner initially addressed two procedural issues:

1. In its memorandum of law the school board argued that Soriano failed to file a grievance as required by the relevant collective bargaining agreement and thus had failed to exhaust his administrative remedies prior to filing his appeal to the Commissioner.  The Commissioner said that the school board had failed to raise the exhaustion of administrative remedies argument in its answer as an affirmative defense and ruled that such a defense has been waived by the school district.

2. Soriano had cited Stokes v. City of Mount Vernon in a letter to the Commissioner submitted by him after filing of his memorandum of law. The Commissioner declined to consider the decision as it had been available before Soriano had submitted his memorandum of law.

Turning to the merits of Soriano’s appeal, the Commissioner said Soriano salary was not decreased as a result of dissatisfaction with his performance or as the result of a disciplinary action and the minutes of school board’s July 3, 2012 board meeting reflect board approval of Soriano’s salary without noting any disciplinary reason.

The Commissioner also noted that in Appeal of Cadicamo* the then Commissioner of Education ruled that a salary decrease such as the one Soriano experienced cannot fall below an individual’s starting salary. Cadicamo explains that “[w]hile the salary of an employee may be reduced, it may not be reduced to a point below that at which the employee was induced to join the system.” Finding that Soriano’s starting salary in 2003 was less than his current salary as middle school principal and was neither below that starting salary nor below the minimum level for a middle school principal position within the district, the Commissioner said that absent some showing that the school board’s actions were disciplinary in nature, she “cannot find that the salary reduction was contrary to law.”

Soriano also argued that in “a parallel situation under the Civil Service Law, a lateral transfer of a tenured civil service employee that results in a reduction of salary constitutes disciplinary action that may only be imposed after a hearing under Civil Service Law §75, citing Bailey v. Susquehanna Valley Cent. School Dist. Board of Educ., 276 AD2d 963 and Borrell v. County of Genesee, 73 AD2d 386. Soriano contended that “the principle of those Civil Service Law cases” should be extended to tenured teachers under the Education Law.

The Commissioner said she did not agree that the principle articulated in the cases decided under the Civil Service Law should be applied “on these facts to confer upon [Soriano] a right to retain his salary and benefits as assistant superintendent upon transfer within his tenure area,” explaining that although CSL §75 prohibits imposition of a disciplinary penalty without a hearing and Civil Service Law §75(3) specifically provides that a “reduction in grade or title” is a disciplinary penalty that can be imposed, “there is no comparable language in Education Law §§3020 or 3020-a and thus no explicit statutory requirement that a demotion with reduction in pay be considered a disciplinary action.”

Turning to Soriano’s argument that the Agreement remained in effect absent an extension or new agreement, the Commissioner said that “juxtaposed with the expiration date plainly set forth therein, [such an argument] is unpersuasive,” and the Agreement cannot bind the school board beyond its stated expiration date of June 30, 2012. 

As the Agreement was not binding on the school board, the Commissioner ruled that Soriano “was not entitled to the salary contained therein beyond the expiration of his employment contract” nor, on these facts, found that the setting of Soriano’s salary constituted discipline or was arbitrary or capricious.

Based on the record before her, the Commissioner held that Soriano failed to meet his burden of establishing that the salary and benefits designated by school board upon his appointment to the position of middle school principal was arbitrary and capricious or that such action was disciplinary in nature.

* Appeal of Cadicamo, 15 Ed Dept Rep 274, Decision #9,167; aff’d as Bd. of Ed., Mt. Sinai UFSD v. Nyquist, Supreme Court, Albany Co., [Cobb, J.], June 23, 1976, [Not selected for publication in the Official Reports].

The decision is posted on the Internet at:

http://www.counsel.nysed.gov/Decisions/volume55/d16849

Comptroller Dinapoli and A.G. Schneiderman announce sentencing of former Halfmoon Town Supervisor for stealing campaign funds

Comptroller Dinapoli and A.G. Schneiderman announce sentencing of former Halfmoon Town Supervisor for stealing campaign funds
Source: Office of the State Comptroller

 
Comptroller Thomas P. DiNapoli and Attorney General Eric T. Schneiderman today announced the sentencing of Melinda “Mindy” Wormuth, the former town of Halfmoon Supervisor, on state charges for stealing several campaign contributions donated to her campaign fund. The public corruption case arose out of a cooperative federal-state partnership between the State Comptroller, the Attorney General, the Federal Bureau of Investigation and the United States Attorney's Office for the Northern District of New York.
 
Wormuth previously pleaded guilty to Grand Larceny in the Fourth Degree in Saratoga County Court. The Honorable Matthew J. Sypniewski sentenced Wormuth to 10 months of incarceration in the county jail with said term to run concurrent with a term of incarceration in a federal penitentiary stemming from related charges in federal court.

As part of the plea agreement, Wormuth must also pay $1,250 in restitution to the Friends of Mindy Wormuth campaign committee and terminate the committee in accordance with the New York State Election Law. Wormuth also agreed to contribute any remaining funds of that campaign committee to a charity that is recognized by the Internal Revenue Service, but is not one over which she or a member of her family holds controls or decision making powers.

 
The charges against Wormuth claimed that between July 2009 and July 2013, Wormuth cashed seven contribution checks, totaling $6,250, intended for Friends of Mindy Wormuth. She then pocketed the proceeds without reporting the contributions to the committee’s treasurer, or on the Financial Disclosure Reports that were filed with the State Board of Elections.

 
The felony complaint relied, in part, on statements that Wormuth made to the FBI, including an admission that she cashed and spent certain checks made payable to her campaign. In one FBI interview, Wormuth attributed some of her actions to her bitterness at not receiving her political party’s endorsement for reelection in November 2013.  
 
From 2007 to January, 2013, Wormuth served as the Supervisor of the town of Halfmoonin Saratoga County. In that capacity, she headed the Halfmoon Town Board and served as the town’s representative on the Saratoga County Board of Supervisors.  

The case was investigated by the Comptroller’s Division of Investigations. The Attorney General and State Comptroller thank the Federal Bureau of Investigation and the U.S. Attorney’s Office for the Northern District of New York for their partnership.

 
The case was handled by former Senior Assistant Attorney General Darren Miller and Assistant Attorney General Bridget Holohan Scally of the Public Integrity Bureau. The Public Integrity Bureau is led by Bureau Chief Daniel Cort and Deputy Bureau Chief Stacy Aronowitz. The investigation was conducted by Investigator Mitch Paurowski of the Investigations Bureau with assistance from Associate Forensic Auditor Jason W. Blair of the Forensic Audit Unit. The Forensic Audit Unit is led by Edward Keegan. The Investigations Bureau is led by Bureau Chief Dominick Zarrella and Deputy Bureau Chief Antoine Karam. The Criminal Division is led by Executive Deputy Attorney General for Criminal Justice Kelly Donovan.

Individual whose name was on a preferred list challenged the appointing authority's failure to use the preferred list to fill a vacancy alleged to be a similar position

Individual whose name was on a preferred list challenged the appointing authority's failure to use the preferred list to fill a vacancy alleged to be a similar position

Matter of Renee Eschmann and the Board of Education of the Tuckahoe Union Free School District, Decisions of the Commissioner of Education, Decision #16,853

In this decision Commissioner of Education MaryEllen Elia addresses a number of significant procedural issues concerning the filing an appeal to the Commissioner and substantive issues with respect to layoff and the use of preferred lists to fill a vacancy.

The genesis of Commissioner Elia’s ruling was the appeal to the Commissioner submitted by Renee Eschmann challenging the action of the Tuckahoe Union Free School District's Board of Education appointing Sabrina Peduto to the position of school psychologist. 

Eschmann, a licensed psychologist and holding a permanent certification in school psychology, was granted tenure in the school psychologist special subject tenure area by Tuckahoe in 2002.  Effective June 30, 2006, Tuckahoe abolished her position and Eschmann’s name was placed on the preferred eligibility list [PEL] for the school psychologist special subject tenure area.

According to the record, in July 2013 Eschmann learned that Tuckahoe had posted a vacancy for a full-time school psychologist position for the 2012-2013 school year and had then appointed  Peduto to the vacancy in February 2013. Eschmann then wrote to Tuckahoe claiming “entitlement to the school psychologist position and requested reinstatement to her former position.” Tuckahoe responded, advising Eschmann that she was not entitled to the position[1]  as it was not more than 50 percent similar to her former position and [2] that, in any event, the position was filled in August 2013, at which time Eschmann’s name was no longer on the PEL.* 

In her appeal to the Commissioner Eschmann contended that the duties of her former position are substantially similar to the duties of the school psychologist position and, therefore, pursuant to Education Law §2510, she was entitled to be appointed to that position from the PEL. She asked that the Commissioner issue an order directing Tuckahoe to appoint her to the school psychologist position as of the time it was filled in February 2013, "with back pay and benefits as well as seniority credit, retirement service credit and any other emoluments of employment" retroactive to February 2013.

In rebuttal, Tuckahoe generally denied that Eschmann was entitled the appointment to the position of school psychologist from the PEL, contending that the position was not similar to Eschmann’s former position because it contained duties relating to the committee on special education (“CSE”) and the committee on preschool special education (“CPSE”).  Tuckahoe also asserted three affirmative defenses: improper service, failure to state a claim upon which relief may be granted, and that the petition is untimely, arguing that for “all of the above reasons” Eschmann’s appeal must be dismissed.

The Commissioner initially addressed the following procedural issues:

Timeliness of Eschmann appeal to the Commissioner.

An appeal to the Commissioner must be commenced within 30 days from the making of the decision or the performance of the act complained of, unless any delay is excused by the Commissioner for good cause shown. Where, however, a petitioner has first commenced an action in the courts which has been dismissed on some basis not involving the merits, the date of dismissal is generally regarded as the equivalent of the date of the "making of the decision or the performance of the act complained of" and in earlier decisions Commissioners have allowed an appeal to the Commissioner within 30 days after such dismissal.**Noting that Eschmann’s appeal to the Commissioner was commenced within 30 days after the Supreme Court’s dismissal of the Article 78 proceeding, Commissioner Elia ruled that Eschmann’s appeal to the Commissioner was timely commenced.

Submitting additional affidavits, exhibits and other supporting papers to the Commissioner. 

Commissioner Elia said that although the submission of additional evidence is permitted, a party may not add new claims against a respondent for which notice has not been provided. Further, the Commissioner said that she would “not accept materials that raise new issues and introduce new exhibits that are not relevant to the claims originally raised in the appeal.”

Submission of additional pleading.

Parties cannot agree among themselves to the submission of additional pleadings that do not meet the requirements of §275.3(b) of the Commissioner's regulations. Further, the regulations allow parties to submit additional pleadings only with the prior permission of the Commissioner.

Service of an appeal upon the parties.

Section 275.8(a) of the Commissioner’s regulations requires that the petition be personally served upon each named respondent.  If a school district is named as a respondent, service upon the school district shall be made personally by delivering a copy of the petition to the district clerk, to any trustee or any member of the board of education, to the superintendent of schools, or to a person in the office of the superintendent who has been designated by the board of education to accept service.

Eschmann's petition was served on Victor Karlsson, a school business official, who was not authorized to accept service on behalf of Tuckahoe. However an affidavit from the process server indicating that he believed Karlsson to be an authorized agent and that Karlsson indicated he was authorized to accept service. In contrast, Karlsson’s affidavit does not indicate whether or not he stated that he was not authorized to accept service, while the affidavit of petitioner’s process server states that Karlsson affirmatively indicated he was authorized to accept service. As the burden was on Tuckahoe to establish its affirmative defense, the Commissioner concluded that “on this record” Tuckahoe failed to meet its burden and declined to dismiss Eschmann’s appeal for failure to properly serve Tuckahoe under these circumstances.

Joining a necessary party

Commissioner Elia also decline to dismiss Eschmann’s appeal “for failure to join a necessary party,” Dr. Randi Newman, noting that her Office of Counsel had advised the all the parties that Eschmann’s earlier request to join Dr. Newman as a necessary party was granted. Consequently, said the Commissioner, “in this instance, I find the failure to include Dr. Newman in the original petition is not a basis for dismissal of this appeal.

Turning to the merits of Eschmann’s appeal, the Commissioner ruled that:

Reinstatement rights from a preferred list.

With respect to reinstatement rights from a preferred list, an individual whose position is abolished has reinstatement rights, but only if the new position is "similar" to the former position.  The test to determine whether the two positions are "similar" is whether more than 50 percent of the duties of the new position are those which were performed by the Eschmann in her former position and she has the burden of proving that a majority of the duties of the new position are similar to those of her former position. Noting that the standard of what is similar is flexible and is not to be applied mechanically, Commissioner Elia said that “On this record, I find that [Eschmann] has met her burden of proving that the two positions are similar.” 

Similarity of positions.

Explaining that in assessing the similarity of positions the law does not require a comparison of job titles, but rather an analysis of job responsibilities, the Commissioner said that Tuckahoe  offered no evidence of the duties performed by Peduto in the 2013-2014 school year beyond those of a CSE or CPSE member. As the record shows that Eschmann served as a member of the CSE and that she performed duties similar to the duties of members of the CPSE and the Section 504 committee, the Commissioner said that absent any other evidence, she found the duties Peduto performed following her appointment were indistinguishable from those of a CSE member and, as such, are similar to those performed by Eschmann in her former position. 

The bottom line: Commissioner Elia sustained Eschmann’s appeal, presumably with back pay and benefits effective February, 2013.

* Both §§2510.3(a) and 3013.3(a) provide that the name of  an individual shall remain on the relevant preferred list for seven years from the date on which his or her position was abolished. Eschmann’s position was abolished June 30, 2006; Peduto was appointed to the contested vacancy in February 2013.

** Prior to filling her appeal to the Commissioner Eschmann had commenced a timely Article 78 proceeding in Westchester County Supreme Court seeking an order and judgment for reinstatement to her former position. Her petition was dismissed under the doctrine of primary jurisdiction, i.e., the deferral by a court of its power to hear a case pending administrative review of the matter by the appropriate administrative tribunal having jurisdiction, whereupon Eschmann submitted her appeal to the Commissioner of Education.

The decision is posted on the Internet at:

http://www.counsel.nysed.gov/Decisions/volume55/d168530

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The Layoff, Preferred List and Reinstatement Manual - a 645 page e-book reviewing the relevant New York State laws, rules and regulations, and selected court and administrative decisions involving layoff and related matters. For more information click on http://booklocker.com/5216.html

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