Students sue school district alleging school district administrators violated their civil rights

Students sue school district alleging school district administrators violated their civil rights

Graphic Arts Mut. Ins. Co. v Pine Bush Cent. Sch. Dist., 2018 NY Slip Op 01565, Appellate Division, Second Department

Commercial General Liability [CGL] issued School District and Educators Legal Liability policies well as CGL umbrella policies to the Pine Bush Central School District.

In lawsuit commenced in the United States District Court, Southern District of New York, captioned T.E. v Pine Bush Central School Dist., Docket #12-CV-2303), [the Federal Case] five students [T.E.] alleged that certain Pine Bush officers [the Defendants] and other school administrators violated their civil rights by being deliberately indifferent to anti-Semitic harassment and discrimination perpetrated by other students against them. The school district's superintendent, one of the named defendants, advised the Defendants that CGL had indicated that CGL would pay the costs of the defense in the action but reserved its right to disclaim coverage upon further investigation of the allegations.

CGL did pay the costs of defending the Defendants through the resolution of the Federal Case and during mediation, the parties to the Federal Case agreed to settle that action for a total of $3,000,000 in compensatory damages and $1,480,000 in attorneys' fees. A representative of CGL attended the mediation but did not contribute toward the settlement, disclaiming any duty to indemnify the Defendants with respect to the Federal Action.

CGL then commenced this action, Graphic Arts Mutual Insurance Co. v Pine Bush Central School District [State Case]. CGL, alleging five causes of action and sought a judgment declaring that CGL was not obligated to indemnify Defendants in the Federal Case under the various policies issued by it to the School District with respect to the allegations of "intentional discriminatory conduct related to disparate treatment."

CGL claimed that exclusions in the policies [1] "precluded coverage for claims seeking damages stemming from intentional discriminatory conduct," and [2] that those claims did not fall under the definition of either a covered "occurrence" or 'loss' as those terms were defined by the policies.*

The Defendants moved pursuant to CPLR §3211(a)(1) and (7) to dismiss CGL's  complaint. Supreme Court granted those branches of the Defendants' motion which were pursuant to CPLR 3211(a)(1) and (7) to dismiss the first, second, third, and fourth causes of action. The Appellate Division reversed the Supreme Courts order, on the law, with costs.

The Appellate Division noted that a motion to dismiss on the basis of CPLR §3211(a)(1) may be granted "only where the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law."

As to the motion to dismiss a claim pursuant to CPLR §3211(a)(7) for failure to state a cause of action, "the court must accept the facts alleged in the complaint as true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory."

According to the language employed in the CGL coverage part of CGL's primary policies, coverage was provided for bodily injury caused by an "occurrence," which was defined as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." The SDELL coverage part of the policies "afforded coverage for a 'loss,' which excluded matters that may be deemed uninsurable under the law."

However, said the court, the question of whether a loss is the result of an accident must be determined from the point of view of the insured and where the loss is unexpected, unusual, or unforeseen from the point of view of the insured, the loss constitutes an accident.

Significantly, the Appellate Division explained that an act that is intentionally committed or performed may still be considered an accident within the meaning of an insurance policy, as long as the insured did not expect or intend the harm caused. Accordingly, whether an event or series of events qualifies as an accident is a question of fact.

In the words of the Appellate Division, "[R]egardless of the initial intent or lack thereof as it relates to causation, or the period of time involved, if the resulting damage could be viewed as unintended by the fact finder the total situation could be found to constitute an accident" and "The duty to defend is measured against the allegations of pleadings but the duty to pay is determined by the actual basis for the insured's liability to a third person."

The relevant allegations set forth in the Federal Action "averred that the Defendants deliberately ignored complaints and their own observations of student-on-student anti-Semitic harassment and discrimination or responded in an unreasonable or inadequate manner to such complaints and observations."

T.E., in the Federal Action, further alleged that repeated and frequent incidents of anti-Semitic harassment and discrimination against them by other students, which were reported to school officials on numerous occasions and directly observed on other occasions by school personnel, gave rise to an inference that the Defendants "intended for the harassment to occur" based upon the Defendants' practices, policies, and customs in dealing with reports and observations of anti-Semitic harassment and discrimination; that the Defendants "intentionally discriminated" against the plaintiffs, that the defendants' conduct "aided and incited" unlawful discrimination; and that the Defendants' acts and omissions were "undertaken recklessly and with the intent to engage in wrongful conduct."

The Appellate Division explained that "it is not legally impossible to find accidental results flowing from intentional causes, i.e., that the resulting damage was unintended although the original act or acts leading to the damage were intentional," the insurance policies do not conclusively establish that CGL is obligated to indemnify the Defendants in the Federal Action, and "the other evidence submitted by the Defendants did not utterly refute the factual allegations set forth in T.E.'s complaint."

Accordingly, whether the incidents set forth in the Federal Action concerning "intentional causes" were accidents present questions of fact which cannot be determined on a motion to dismiss pursuant to CPLR 3211(a)(1) and (7) and  Supreme Court should have denied those branches of the Defendants' motion which were pursuant to CPLR 3211(a)(1) and (7) to dismiss the first, second, third, and fourth causes of action.

* CGL, in a fifth cause of action, sought a declaration that, in the event it was found the CGL had a duty to indemnify Defendants in the Federal Action, the duty to indemnify would be limited to that part of the settlement that was found to be reasonable, as CGL alleged that the settlement amount in the Federal Action was excessive. 

N.B. In the companion appeal to this action, Graphic Arts Mutual Insurance Company v Pine Bush Central School District, 2018 NY Slip Op 01566, the Appellate Division ruled that "it is premature to render a determination on the reasonableness of the settlement amount tendered by the defendants in the underlying action entitled T.E. v Pine Bush Central School Dist., commenced in the United States District Court for the Southern District of New York under case number 12-CV-2203, until the issue of indemnification has been decided."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_01565.htm

It is legally possible to find "accidental results" flowing from "intentional causes" for the purposes of indemnification pursuant to the terms of an insurance policy

It is legally possible to find "accidental results" flowing from "intentional causes"  for the purposes of indemnification pursuant to the terms of an insurance policy

Graphic Arts Mut. Ins. Co. v Pine Bush Cent. Sch. Dist., 2018 NY Slip Op 01565, Appellate Division, Second Department

Commercial General Liability [CGL] issued School District and Educators Legal Liability policies well as CGL umbrella policies to the Pine Bush Central School District.

In lawsuit commenced in the United States District Court, Southern District of New York, captioned T.E. v Pine Bush Central School Dist., Docket #12-CV-2303), [the Federal Case] five students [T.E.] alleged that certain Pine Bush officers [the Defendants] and other school administrators violated their civil rights by being deliberately indifferent to anti-Semitic harassment and discrimination perpetrated by other students against them. The school district's superintendent, one of the named defendants, advised the Defendants that CGL had indicated that CGL would pay the costs of the defense in the action but reserved its right to disclaim coverage upon further investigation of the allegations.

CGL did pay the costs of defending the Defendants through the resolution of the Federal Case and during mediation, the parties to the Federal Case agreed to settle that action for a total of $3,000,000 in compensatory damages and $1,480,000 in attorneys' fees. A representative of CGL attended the mediation but did not contribute toward the settlement, disclaiming any duty to indemnify the Defendants with respect to the Federal Action.

CGL then commenced this action, Graphic Arts Mutual Insurance Co. v Pine Bush Central School District [State Case]. CGL, alleging five causes of action and sought a judgment declaring that CGL was not obligated to indemnify Defendants in the Federal Case under the various policies issued by it to the School District with respect to the allegations of "intentional discriminatory conduct related to disparate treatment."

CGL claimed that exclusions in the policies [1] "precluded coverage for claims seeking damages stemming from intentional discriminatory conduct," and [2] that those claims did not fall under the definition of either a covered "occurrence" or 'loss' as those terms were defined by the policies.*

The Defendants moved pursuant to CPLR §3211(a)(1) and (7) to dismiss CGL's  complaint. Supreme Court granted those branches of the Defendants' motion which were pursuant to CPLR 3211(a)(1) and (7) to dismiss the first, second, third, and fourth causes of action. The Appellate Division reversed the Supreme Courts order, on the law, with costs.

The Appellate Division noted that a motion to dismiss on the basis of CPLR §3211(a)(1) may be granted "only where the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law."

As to the motion to dismiss a claim pursuant to CPLR §3211(a)(7) for failure to state a cause of action, "the court must accept the facts alleged in the complaint as true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory."

According to the language employed in the CGL coverage part of CGL's primary policies, coverage was provided for bodily injury caused by an "occurrence," which was defined as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." The SDELL coverage part of the policies "afforded coverage for a 'loss,' which excluded matters that may be deemed uninsurable under the law."

However, said the court, the question of whether a loss is the result of an accident must be determined from the point of view of the insured and where the loss is unexpected, unusual, or unforeseen from the point of view of the insured, the loss constitutes an accident.

Significantly, the Appellate Division explained that an act that is intentionally committed or performed may still be considered an accident within the meaning of an insurance policy, as long as the insured did not expect or intend the harm caused. Accordingly, whether an event or series of events qualifies as an accident is a question of fact.

In the words of the Appellate Division, "[R]egardless of the initial intent or lack thereof as it relates to causation, or the period of time involved, if the resulting damage could be viewed as unintended by the fact finder the total situation could be found to constitute an accident" and "The duty to defend is measured against the allegations of pleadings but the duty to pay is determined by the actual basis for the insured's liability to a third person."

The relevant allegations set forth in the Federal Action "averred that the Defendants deliberately ignored complaints and their own observations of student-on-student anti-Semitic harassment and discrimination or responded in an unreasonable or inadequate manner to such complaints and observations."

T.E., in the Federal Action, further alleged that repeated and frequent incidents of anti-Semitic harassment and discrimination against them by other students, which were reported to school officials on numerous occasions and directly observed on other occasions by school personnel, gave rise to an inference that the Defendants "intended for the harassment to occur" based upon the Defendants' practices, policies, and customs in dealing with reports and observations of anti-Semitic harassment and discrimination; that the Defendants "intentionally discriminated" against the plaintiffs, that the defendants' conduct "aided and incited" unlawful discrimination; and that the Defendants' acts and omissions were "undertaken recklessly and with the intent to engage in wrongful conduct."

The Appellate Division explained that "it is not legally impossible to find accidental results flowing from intentional causes, i.e., that the resulting damage was unintended although the original act or acts leading to the damage were intentional," the insurance policies do not conclusively establish that CGL is obligated to indemnify the Defendants in the Federal Action, and "the other evidence submitted by the Defendants did not utterly refute the factual allegations set forth in T.E.'s complaint."

Accordingly, whether the incidents set forth in the Federal Action concerning "intentional causes" were accidents present questions of fact which cannot be determined on a motion to dismiss pursuant to CPLR 3211(a)(1) and (7) and  Supreme Court should have denied those branches of the Defendants' motion which were pursuant to CPLR 3211(a)(1) and (7) to dismiss the first, second, third, and fourth causes of action.

* CGL, in a fifth cause of action, sought a declaration that, in the event it was found the CGL had a duty to indemnify Defendants in the Federal Action, the duty to indemnify would be limited to that part of the settlement that was found to be reasonable, as CGL alleged that the settlement amount in the Federal Action was excessive. 

N.B. In the companion appeal to this action, Graphic Arts Mutual Insurance Company v Pine Bush Central School District, 2018 NY Slip Op 01566, the Appellate Division ruled that "it is premature to render a determination on the reasonableness of the settlement amount tendered by the defendants in the underlying action entitled T.E. v Pine Bush Central School Dist., commenced in the United States District Court for the Southern District of New York under case number 12-CV-2203, until the issue of indemnification has been decided."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_01565.htm

Audits and examination reports issued during the week ending March 17, 2018 by NYS Comptroller Thomas P. DiNapoli

Audits and examination reports issued during the week ending March 17, 2018 by NYS Comptroller Thomas P. DiNapoli 

Click on text highlighted in color to access the full report.

Office of Children and Family Services (OCFS): Financial Oversight of the Advantage After School Program (2016-S-39)
OCFS has some appropriate controls to limit program contract spending, including a maximum cost per child of $1,375 and a maximum allowable contract budget, which is calculated by multiplying providers’ maximum average daily attendance (MADA) by the $1,375 maximum per child. OCFS reimbursements to program providers did not exceed the maximum contract budget. However, there is a risk that providers can exceed the maximum cost per child if they serve significantly fewer children than their MADA but do not reduce their expenditures proportionally.

City University of New York (CUNY): Borough of Manhattan Community College (BMCC): Controls Over Bank Accounts (Follow-Up) (2015-S-93)
CUNY Central officials provided auditors a list of 23 bank accounts that they were aware of at BMCC. Seven of BMCC’s accounts were opened after CUNY’s bank authorization policy was established in 2008. However, CUNY did not have the required notification forms for one of these accounts. Auditors also identified two accounts that were not on CUNY’s list. These findings point to weaknesses in the monitoring of bank accounts, which increase the risk that BMCC personnel could conduct transactions using unauthorized accounts.

Department of Environmental Conservation (DEC): Generic PINs (2017-BSE7-01)
Auditors found DEC’s use of fuel cards does not comply with the Office of General Services’ Fuel Card Services Contract Guidelines, the State Vehicle Use Policy and DEC’s Policies and Procedures. DEC does not have sufficient controls in place to ensure all fuel purchases are appropriate.  DEC officials have not implemented a previous comptroller’s recommendation to assign unique PINs to individual employees, consistent with the guidelines.

Department of Health (DOH): Nursing Home Surveillance (Follow-Up) (2017-F-12)
An initial audit issued in February 2016, found DOH generally met its obligations to conduct Standard Health and Complaint surveys of nursing homes in accordance with federal and state requirements, but its enforcement policies and procedures needed to be strengthened to better protect the health and well-being of nursing home residents. In a follow-up report, auditors found DOH officials addressed the problems identified in the initial audit, having implemented all four of the prior audit’s recommendations.

Department of Health: Medicaid Program: Managed Care Organizations (MCOs): Payments to Ineligible Providers (2016-S-59)
During the audit period, the DOH launched efforts to improve its ability to detect and prevent payments by MCOs to ineligible providers. Notwithstanding those efforts, however, auditors identified certain weaknesses that, if properly addressed, could help better detect and prevent improper payments to ineligible providers. Auditors determined MCOs improperly paid $50.3 million during the audit period.

State Education Department (SED): Universal Pre-Kindergarten Program (UPK): Monitoring of Health and Safety Requirements (Follow-Up) (2017-F-30)
An initial audit report issued in December 2016 found SED did not directly monitor UPK providers for health and safety. Instead, SED relied on the school district operating the UPK program, or the Office of Children and Family Services, to ensure that UPK providers were complying with health and safety requirements. In addition, auditors found a wide disparity in the way UPK providers were being monitored for health and safety. In a follow-up, auditors found SED officials have made some progress in addressing the issues identified in the initial audit.

Metropolitan Transportation Authority (MTA): New York City Transit: Operational Training and Medical Assessments of Train Crews (2016-S-26)
Auditors found MTA’s New York City Transit unit is not in compliance with the requirements of the Induction Training curriculum established for its train crews. This lack of compliance may be tied to poor outcomes. For instance, all four train operators in the audit sample who had five or more operating incidents during the audit period had a history of failing grades and/or tests and quizzes missing from their training files. Auditors also found: train operators and conductors are not always meeting or completing refresher training requirements; many of their required annual hearing tests were either done late or not at all; train crews not in compliance with medical assessment requirements; and there were  inconsistencies with test scoring and file maintenance, including missing test files, ungraded tests, and missing attendance records.

Metropolitan Transportation Authority: Staten Island Railway (SIR): Operational Training and Medical Assessments of Train Crews (2017-S-71)
Auditors found SIR’s records were insufficient to document that training was satisfactorily completed. For a randomly selected sample of conductors who underwent Induction Training during the audit period, 61 percent of test papers were either not graded or missing. In addition, for the randomly selected sample of engineers, 81.7 percent of test papers for those newly hired and 41.7 percent of test papers for those promoted were either not graded or missing. Five of the ten conductors randomly sampled were required to take Book of Rules Refresher Training during the audit period. However, only two of the five had records that supported satisfactory completion of all exams. Auditors found similar results for the Signals Refresher Training, with only two of eight conductors having records to support satisfactory completion. Train crews were also not in compliance with medical assessment requirements. 

Selected reports posted in Employment Law News by WK Workday

Selected reports posted in Employment Law News by WK Workday

Source: WK Workday - Week of March 16, 2018

Click on text highlighted in color to access the full report.

Top labor and employment developments in February 2018

In huge EEOC win, appeals court finds discrimination on basis of transgender/transitioning status violates Title VII

Hospital once linked to church and still giving pastoral care may invoke ministerial exception

Not currently diagnosed with sleep apnea, fired dispatcher can’t show FMLA or disability bias

Fear obesity could lead to other conditions supports rejected applicant’s regarded-as disabled claim

Using election observer who was just fired for brandishing life-like toy gun didn’t taint union election

Mayor who fired long-term employee for ‘unacceptable’ email should have been granted qualified immunity

Disabled receptionist sexually assaulted by coworker awarded over $95K against unsympathetic hotel employer

Administrative Law Judge finds correction officer exercised reasonable and prudent judgment under the circumstances

Administrative Law Judge finds correction officer exercised reasonable and prudent judgment under the circumstances

Office of Administrative Trials and Hearings, Index No. 0005/18

A New York City Correction Officer was served with disciplinary charges alleging that the officer [1] had abandoned his station to confront an inmate; [2] failed to anticipate a use of force; [3] used excessive force against an inmate and [4] filed a false report.

The officer testified that he had left his post because he was unable to communicate with the inmate through "the window slot;" he did not contact a supervisor because believed he could use interpersonal skills to obtain the information; and it was not until the inmate struck the officer did the situation quickly escalate.

OATH Administrative Law Judge Alessandra F. Zorgniotti held that the officer’s testimony, which was corroborated by the video tape of the event, was credible. 

Finding that the officer exercised reasonable and prudent judgment under the circumstances, Judge Zorgniotti recommended that the appointing authority dismiss the disciplinary charges filed against the correction officer.  

The decision is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/18_cases/18-005.pdf

Terminating a "long-time" provisional employee

Terminating a "long-time" provisional employee

Pena-Barrero v. City of New York, USCA Second Circuit, Docket #17-1286

Luis Pena-Barrero was employed in a variety of positions by the City of New York between 1994 and 2012. Although Pena-Barrero was eligible to take the appropriate required civil service exam on multiple occasions during his time as an employee of the City, he never did so and therefore remained a “pure provisional” employee.

§65(1) of the New York State Civil Service Law provides that "[n]o provisional appointment shall continue for a period in excess of nine months," and "in no case shall the employment of any such provisional appointee be continued longer than four months following the establishment of [an] eligible list" of candidates for the position."*

In 2008 Pena-Barrero's then employer, Department of Citywide Administrative Services [DCAS], implemented a plan to come into substantial compliance with §65 and issued a Notice of Examination in 2009 for the position provisionally held by Pena-Barrero, with the examination to take place in February 2010. Pena-Barrero did not apply to take the February 2010 examination. Subsequently an eligible list for the position in which Pena-Barrero was then serving was promulgated but, nevertheless, he remained provisionally employed by DCAS "long after the civil service list for his position was established"

On or about October 5, 2012 Pena-Barrero was informed that he would be terminated from his position, whereupon he initiated the CPLR Article 78 action contending that he was "impermissibly discriminated against, retaliated against, and subject to a hostile work environment, in violation of the federal Civil Rights Act and Family and Medical Leave Act [FMLA], the New York State Human Rights Law [NYSHRL], and the New York City Human Rights Law [NYCHRL]"

The Circuit Court of Appeals held that Pena-Barrero’s claims for race, national origin, and disability discrimination suffer from fundamental flaws in light of his failure to pass the civil service examination for his position. Accordingly, he could not demonstrate a prima facie case of discrimination because he was unable to show that he was qualified for appointment to the position. Further, opined the court, "Even assuming arguendo that Pena-Barrero could establish prima facie discrimination," his discrimination claims would nevertheless fail because he cannot establish that DCAS's proffered reason for his termination “is in fact pretext for unlawful discrimination.”

The court held that the record is clear that Pena-Barrero was terminated by action taken by DCAS’s Provisional Reduction Analysis Team and "there is simply no evidence" that his race, national origin, or disability played any role in his termination. In the words of the Circuit Court of Appeals, "As we have repeatedly explained ... there is no evidence that Pena-Barrero was terminated for any reason other than the fact that he was not qualified to remain employed by DCAS under the New York Civil Service Law.

* It is well settled that a provisional or temporary appointment cannot mature into a permanent one unless the incumbent satisfies the requirements set out in the Civil Service Law for permanent appointment to the position. See, for example, Matter of Gaiser, 15 AD2d 793; Russell v Hodges, CA2, 470 F2d 212. In contrast, decisions addressing the continuation in service of a provisional employee who becomes eligible for permanent appointment to the position include Matter of Roulette, 40 AD2d 611, Haynes v Chautauqua County, 55 NY2d 814, Becker v New York State Civil Service Commission, 61 NY2d 252 and La Sota v Green, 53 NY2d 491.

The decision is posted on the Internet at: 
http://www.ca2.uscourts.gov/decisions/isysquery/59b49e76-a052-42f7-b1b0-d7bac9c1165e/3/doc/17-1286_so.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/59b49e76-a052-42f7-b1b0-d7bac9c1165e/3/hilite/