A party filing a motion seeking a permanent stay of a demand for arbitration must satisfy a "two-part test" to prevail

A party filing a motion seeking a permanent stay of a demand for arbitration must satisfy a "two-part test" to prevail

Village of Garden City v Professional Firefighters Assn. of Nassau County, Local 1588, 2018 NY Slip Op 03688, Appellate Division, Second Department

This proceeding involved a dispute between Village of Garden City [Village],  and the Professional Firefighters Association of Nassau County, Local 1588 [PFA] concerning  Village's implementation of a staffing protocol that was formulated to ensure compliance with a prior arbitration award that was earlier confirmed by this court.* The arbitrator in the earlier arbitration had found that the Village violated the parties' collective bargaining agreement [CBA] by assigning the operation of first-line equipment to volunteer firefighters rather than to paid firefighters represented by PFA.  

PFA filed a grievance contending that the new protocol continued to improperly assign the operation of first-line equipment to volunteer firefighters and demanded arbitration. The Village objected to submitting this new grievance to arbitration and filed an Article 75 petition seeking a permanent stay of the arbitration. Supreme Court issued denied the Village's petition and granting PFA's motion to compel arbitration of the grievance. The Village appealed the Supreme Court's ruling.

The Appellate Division ruled that Supreme Court properly denied the Village's petition to permanently stay arbitration of the grievance and granted PFA's motion to compel the arbitration of the grievance noting that in the earlier proceeding it had ruled that  grievances challenging the operation of first-line equipment by volunteers were arbitrable.

Referring to the two-part test used by the courts to determine whether a dispute between a public sector employer and employee is arbitrable** the court explained that:

1. "Initially, the court must determine whether there is any statutory, constitutional, or public policy prohibition against arbitrating the grievance;

2. "If there is no prohibition against arbitrating, the court must examine the parties' collective bargaining agreement and determine if they in fact agreed to arbitrate the particular dispute;

3. "In examining the collective bargaining agreement, the court must merely determine whether there is a reasonable relationship between the subject matter of the dispute and the general subject matter of the [agreement];

4. "If there is, the court should rule the matter arbitrable, and the arbitrator will then make a more exacting interpretation of the precise scope of the substantive provisions of the CBA, and whether the subject matter of the dispute fits within them."

As the Village was unable to demonstrate that arbitration of PFA's instant grievance was prohibited by statutory or public policy or that PFA's instant grievance was not reasonably related to the general subject matter of the CBA, the court again ruled that the question of the scope of the substantive provisions of the CBA was a matter of contract interpretation and application reserved for the arbitrator.

* See Matter of Professional Firefighters Assn. of Nassau County, Local 1588, Intl. Assn. of Firefighters, AFL-CIO v Village of Garden City, 119 AD3d 803.

** See Locust Val. Cent. Sch. Dist. v Benstock, 144 AD3d 758.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_03688.htm

An adminsitrative tribunal may not rely on evidence not in the record in arriving at its decision

An adminsitrative tribunal may not rely on evidence not in the record in arriving at its decision

Kaplan v New York City Tr. Auth., 2018 NY Slip Op 04068, Appellate Division, Third Department

It is "black letter law" that all administrative agencies must render decisions based on the evidence contained in the record pertaining to the particular case before it.

In this case the Workers' Compensation Board [Board] ruled that the employee's death did not arise out of and in the course of his employment* and denied his survivor's [Claimant] application for workers' compensation death benefits.

The Appellate Division, noting that as required of every administrative agency, inistrative agency, the Board must render decisions based on the evidence contained in the record pertaining to the particular case before it said that here the Board relied on medical records "apparently contained in the case file for a separate claim" filed by decedent based on a 2014 fall at work and that one page is the only medical record from 2014 that was included in the current record.

The Board, said the court, relied heavily upon medical records contained in the case file for the 2014 claim although the employer did not request that the Board rely on those 2014 records. Further was the procedure for introducing additional evidence into the administrative appeal that was not before the Workers' Compensation Law Judge was not complied with and the Board's rule provides that, if that procedure is not followed, the Board "will not" consider such new evidence.

The Appellate Division said that Claimant was prejudiced because she was not on notice  until she received the Board decision that the Board would rely on documents from another case file.

The employer contended that 2014 medical reports cannot be objectionable because they accurately reflect the treatment rendered. The court said it could not verify that claim without reviewing those reports.

The Appellate Division also rejected the employer's argument "that no response to the medical records would change the strength of either side's argument"  as constituting "mere speculation" and had those records been properly introduced, either party "may have chosen to submit additional medical records reflecting on decedent's medical treatment from November 2014 until his death in July 2015 had the parties been on notice that this period of treatment would be at issue."

Finally, the court said it could not assume that the Board would have reached the same decision had it not considered the medical records from the earlier case file in view of the fact that "[t]he Board referred to more than one of those medical records, indicated that it considered at least 27 pages and quoted at length from one 2014 document that it found to be 'most telling with respect to the cause of the decedent's death,'" noting that "[i]n one specific finding, the Board stated that any presumption of compensability was rebutted by Brief's medical opinion and the medical evidence in the case file associated with the other claim."

Finding that the Board improperly relied upon documents outside the record, which were not before Court for its review, the Appellate Division reversed the Supreme Court's ruling dismissing Claimant's appeal and remitted the matter to the Board "for further proceedings not inconsistent with this Court's decision."

* To be compensable under the Workers' Compensation Law, an accidental injury must arise both out of and in the course of employment. In situations where there an unwitnessed or unexplained death occurs during the course of employment is involved, the claimant is relieved of the obligation to submit prima facie medical evidence of a causal relationship but that presumption "may be rebutted if substantial evidence demonstrates that the death was not work related."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_04068.htm

Status of a spouse named as the primary beneficiary of a life insurance policy or similar instrument in the event the marriage is terminated by divorce

Status of a spouse named as the primary beneficiary of a life insurance policy or similar instrument in the event the marriage is terminated by divorce

Sveen, et el v Melin, United State Supreme Court, 584 U.S. ___ (Decided June 11, 2018)

Mark Sveen purchased a life insurance policy, naming his then spouse, Kaye Melin, as the primary beneficiary and designating his two children from a prior marriage, Ashley and Antone Sveen, as contingent beneficiaries. The Sveen-Melin marriage ended in 2007, but the divorce decree made no mention of the insurance policy and Sveen took no action to revise his beneficiary designations.

After Sveen passed away in 2011, Melin and the Sveen children made competing claims for the insurance proceeds. The Sveen children argued that under Minnesota’s revocation-on-divorce law, their father’s divorce canceled Melin’s designation as the primary beneficiary, leaving them as the lawful beneficiaries. Melin, on the other hand, contended that because the law* did not exist when the policy was purchased and she was therein named as the primary beneficiary, applying the later-enacted law to the policy with respect to her rights as the beneficiary violates the Contracts Clause of the Constitution of the United States.**

The Supreme Court observed that the legal system in the United States has long used default rules to resolve estate litigation in a way that conforms to the decedents’ presumed intent. In terms of the instant action, the law would assume that Mark would want the "default result," but, if he did not, he could have rename Melin as the beneficiary after the divorce took effect.

The Supreme Court held that the retroactive application of Minnesota’s statute does not violate the Contracts Clause, which restricts the power of States to disrupt contractual arrangements, but it does not prohibit all laws affecting pre-existing contracts.

The court noted that two tests are applied in such situations:

1. Does the state law result in as a "substantial impairment of a contractual relationship” by undermining a party’s reasonable expectations, and prevents the party from safeguarding or reinstating his, her or its rights.

2. If such factors show a substantial impairment, the inquiry turns to whether the state law is drawn in an “appropriate” and “reasonable” way to advance “a significant and legitimate public purpose.”

The Legal Department [Legal] of the New York State Teachers' Retirement System [NYSTRS] noted that Chapter 173 of the Laws of 2008, codified in the State's Estates, Powers and Trusts Law §5-1.4, addressed the impact of a divorce on the status of a former spouse's designation as a beneficiary. Legal also noted that NYSTRS "Fact Sheet Chapter 173 of the Laws of 2008", posted on the Internet  at http://www.nystrs.org/NYSTRS/media/PDF/Library/Publications/Ch173FactSheet.pdf, provides an overview of the law and the revocatory effect of divorce on designations or nominations of former spouses.

Legal also noted a recent court decision involving Chapter 173, McCauley v New York State Local Employees' Retirement System, 37 Misc 3d 868. In McCauley the court sustained the revocation of a former spouse as the beneficiary of a death benefit on the authority of Chapter 173.

In McCauley the court noted that the Laws of 2008, Chapter 173, §2 provides that "This act shall take effect immediately and shall apply only where the marriage of a person executing a disposition, appointment, provision or nomination in a governing instrument, as defined in EPTL 5-1.4(f)(5), such section as added by section one of this act, to or for the benefit of a former spouse ends in a divorce or annulment, as defined in EPTL 5-1.4(f)(2), on or after such effective date or, where such a marriage ends prior to such effective date, only where such a disposition, appointment, provision or nomination takes effect only at the death of the person who executes it and such person dies on or after the effective date of this act." (Emphasis supplied by the court.)

Significantly, Supreme Court observed that "While the member designated petitioner as a beneficiary and was divorced from petitioner prior to the enactment of chapter 173, the member passed away following its creation. ('This act shall take effect immediately . . . or, where such a marriage ends prior to such effective date, only where such a disposition, appointment, provision or nomination takes effect only at the death of the person who executes it and such person dies on or after the effective date of this act' [citing the Laws of 2008, Chapter 173, §2].) As the law, by its own terms, applies to all deaths on or after July 7, 2008, petitioner's claim has no merit."

The court also agreed with NYSLERS' contention that it was not required to give notice mandated by the State Administrative Procedure Act and Article IV, §8 of the New York State Constitution, explaining that "In this case there was no need for a 'rule,' since EPTL 5-4.1 prescribes by law that the death benefit in question was revoked upon the dissolution of the member's marriage to petitioner. EPTL 5-4.1 is self-implementing."

Further McCauley's reliance on internal policies and procedures adopted by NYSLERS following the enactment of Chapter 173 was misplaced, as these were "internal memoranda meant to explain how [NYSLERS's] employees should proceed under the newly enacted law." The memoranda, said the court, relied on existing regulations and laws for their stated conclusions and thus are interpretive and fall within the exception provided in the State Administrative Procedure Act.

* Minn. Stat. §524.2–804, subdivision 1 provides that if one spouse has made the other the beneficiary of a life insurance policy or similar asset, their divorce automatically revokes that designation.

** United States Constitution, Article I, §10.

The Sveen decision is posted on the Internet at: 

https://www.supremecourt.gov/opinions/17pdf/16-1432_7j8b.pdf

The McCauley decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2012/2012_22283.htm