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Quantum Meruit and Unjust Enrichment Causes of Action Should Not Have Been Dismissed

The First Department reversed Supreme Court and found plaintiff had sufficiently pled the causes of action for quantum meruit and unjust enrichment.  Plaintiff lived with and took care of an elderly woman for six years, an obligation undertaken by the defendant.  Although plaintiff was given room and board, as well as health insurance, by the defendant, she was never paid for her work.  The suit was based upon plaintiff’s allegation that defendant had promised to compensate her. The Supreme Court found the “compensation-promise” allegation incredible because plaintiff worked for six years without pay. The First Department noted that whether the “compensation-promise” allegation was credible was solely a matter for the jury.  The court explained the elements of quantum meruit and unjust enrichment:

Generally, under the doctrine of quantum meruit, “the performance and acceptance of services gives rise to the inference of an implied contract to pay for the reasonable value of such services” … . To state a cause of action for quantum meruit, plaintiff must allege “(l) the performance of the services in good faith, (2) the acceptance of the services by the person to whom they are rendered, (3) an expectation of compensation therefor, and (4) the reasonable value of the services” … .

Allegations that plaintiff provided personal services in good faith … on behalf of defendant … are sufficient. Similarly, plaintiff has sufficiently alleged the element of acceptance via allegations that defendant, inter alia, placed her on … group insurance, filed tax returns on her behalf, and submitted visa applications in which she represented that plaintiff was an employee … . * * *

Similarly, plaintiff has sufficiently alleged, at this juncture, that defendant … was unjustly enriched at her expense. To state a cause of action for unjust enrichment, a plaintiff must demonstrate “that (1) defendant was enriched, (2) at plaintiff’s expense, and (3) that it is against equity and good conscience to permit [] defendant to retain what is sought to be recovered” … . A person may be unjustly enriched not only where she receives money or property, but also where she otherwise receives a benefit … . Such a benefit may be conferred where the person’s debt is satisfied or where she is otherwise saved expense or loss … .

* * * The fact that plaintiff may have been compensated, in part, by room and board and health insurance, is not dispositive on the question of whether she received adequate compensation for her services, and does not bar the claim at the pleading stage … . Farina v Bastianich, 2014 NY Slip Op 02661, 1st Dept 4-17-14

 

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Age Discrimination and Retaliation Claims Survived Summary Judgment

The First Department, over a dissent, determined plaintiff had raised questions of fact about both her age-discrimination and her retaliation claims.  The findings were entirely fact-based and centered on evidence the non-discriminatory motives asserted were pretextual.  A sample follows:

Defendants failed to demonstrate that they did not discriminate against plaintiff on the basis of her age … . Plaintiff, who was 49 when she was hired by defendant Concentric Health Care LLC, was among the oldest of Concentric’s approximately 70 employees, was qualified for her position of billing manager, and was subjected to a disadvantageous employment action, i.e. termination. Defendant Ken Begasse, Jr. (Junior), a principal of Concentric, testified, in effect, that Concentric, an advertising agency serving the pharmaceutical industry, preferred to hire younger workers because they tended to be cheaper and advertising is generally a “young industry.”

Defendants contend that they terminated plaintiff because they were in financial trouble and their independent consultant recommended terminating plaintiff and replacing her with an employee whose annual salary would be $40,000 less than hers. However, the independent consultant made this recommendation, and others, in February 2009, and, although defendants terminated a number of people based on these recommendations, they did not terminate plaintiff until November 2009, some nine months later. Moreover, Junior and defendant Michael Sanzen, another of Concentric’s principals, testified that, in the months after the consultant made his report, new employees were hired and at least one existing employee was given a $20,000 raise. Thus, issues of fact exist as to whether defendants’ proffered explanation of financial distress is pretextual … .

Issues of fact also exist as to whether defendants’ proffered explanation of poor performance is pretextual. The only documentary evidence of poor performance is a negative review that plaintiff received in September 2009, and there is evidence that, by this time, defendants had already decided to terminate her. Indeed, the review prepared by plaintiff’s immediate superior, Concentric’s comptroller, was only mildly critical of plaintiff; defendant Ken Begasse, Sr. (another of Concentric’s principals) intervened and added extensive negative comments. In an earlier employee review (December 2007), plaintiff had been lauded as “an outstanding professional with vast experience and very high standards,” who “keeps the company’s interest foremost in her mind,” and “always seems to get the work done and done properly.”  McGuinness v Concentric Health Care LLC, 2014 NY Slip Op 02534, 1st Dept 4-15-14

 

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No Private Right of Action for Unequal Pay Under Civil Service Law Section 115

The Court of Appeals, over a dissent, determined Civil Service Law section 115 does not create a private right of action concerning unequal pay for the same work.  Rather, section 115 merely states a policy, unenforceable by the courts:

Civil Service Law Article VIII, “Classification and Compensation of Employees”, contains three titles, the first of which (Title A), entitled, “Classification and Allocation of Positions”, begins with section 115, “Policy of the state,” which provides:”In order to attract unusual merit and ability to the service of the state of New York, to stimulate higher efficiency among the personnel, to provide skilled leadership in administrative departments, to reward merit and to insure to the people and the taxpayers of the state of New York the highest return in services for the necessary costs of government, it is hereby declared to be the policy of the state to provide equal pay for equal work, and regular increases in pay in proper proportion to increase of ability, increase of output and increase of equality of work demonstrated in service.”

Courts of this State have routinely interpreted section 115 and its predecessor, the nearly identically-worded former Civil Service Law § 37, as merely enunciating a policy, conferring no jurisdiction on a court to enforce what is simply that – a statement of policy… .   * * *

It is clear that Section 115 is a preamble to Civil Service Law article VIII, and no private right of action flows from it. Article 14 of the Civil Service Law (the Taylor Law) provides the mechanism for represented employees to challenge alleged wage disparities between classifications. Matter of Subway Surface Supervisors Assn v New York City Tr Auth, 2014 NY Slip Op 02380, CtApp 4-8-14

 

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A Union Is Not an Entity Separate from Its Members—A Union, Therefore, Can Not Be Sued By a Member Unless Every Member Participated In the Action Which Gave Rise to the Suit

The Court of Appeals, in a full-fledged opinion by Judge Abdus-Salaam, over a dissent, upheld the so-called “Martin” rule (Martin v Curran, 303 NY 276 [1951]) which prohibits a suit against an unincorporated association, here a union, unless the suit can be maintained against every member of the association.  The executive board of the union decided against taking plaintiff’s grievance to arbitration. Because only the executive board participated in the decision, plaintiff’s suit against the union was prohibited by statute:

In a 4-3 decision authored by Judge Desmond, this Court held in Martin that a voluntary unincorporated association “is neither a partnership nor a corporation. It is not an artificial person, and has no existence independent of its members” (303 NY at 280). The Court determined that “for better or worse, wisely or otherwise, the Legislature has limited . . . suits against association officers, whether for breaches of agreements or for tortious wrongs, to cases where the individual liability of every single member can be alleged and proven” (id. at 282). Although there were policy considerations that might suggest a different result, the Martin Court was “under the command of a plainly stated, plainly applicable statute, uniformly held by this court, for many years, to require pleading and proof of authorization or ratification by all the members of the group” (id. at 280). That statute, General Associations Law § 13, is entitled “Action or proceeding against unincorporated association” and provides:”An action or special proceeding may be maintained, against the president or treasurer of such an association, to recover any property, or upon any cause of action, for or upon which the plaintiff may maintain such an action or special proceeding, against all the associates, by reason of their interest or ownership, or claim of ownership therein, either jointly or in common, or their liability therefor, either jointly or severally. Any partnership, or other company of persons, which has a president or treasurer, is deemed an association within the meaning of this section.”The Martin Court also noted that McCabe v Longfellow (133 NY 89 [1892]), the leading case on the right to maintain an action against an unincorporated association, held that a plaintiff could not maintain an action against the officer of an unincorporated association “unless the debt which he seeks to recover is one upon which he could maintain an action against all the associates by reason of their liability therefor” (303 NY at 281…), and that there had been a “line of consistent decisions to that effect” since McCabe. Ultimately, the Martin Court concluded that, because a labor union is a voluntary unincorporated association, the plaintiff was required to plead and prove that each member of the union authorized or ratified the alleged wrongful conduct.  Palladino v CNY Centro Inc, 2014 NY Slip Po 02378, CtApp 4-8-14

 

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Alleged Discriminatory Acts Did Not Have an “Impact” in New York—Therefore the Lawsuit Could Not Be Maintained Under the New York City and New York State Human Rights Law

The First Department determined a lawsuit based on alleged violations of  New York State and New York City Human Rights Law could not be maintained because the defendants were out-of-state residents and because the discriminatory actions complained of took place outside the United States, despite plaintiff’s being employed in New York:

The State and City Human Rights Laws do not apply to acts of discrimination against New York residents committed outside their respective boundaries by foreign defendants … . In analyzing where the discrimination occurred, “courts look to the location of the impact of the offensive conduct” … . A non-New York City resident cannot avail him or herself of the protections of the City Human Rights Law unless he or she can demonstrate that the alleged discriminatory act had an impact within the City’s boundaries … . Although plaintiff does not reside in New York City, she resides within the state and is employed by the NBA which is based in New York City. However, the order on appeal addresses plaintiff’s claims against [defendants], none of which are residents of this state. Thus, the focus is on whether the actions these defendants are alleged to have committed had an impact within the respective boundaries of the City and State of New York, in order for the court to exercise jurisdiction over them. Plaintiff contends that the decision to reassign her and later reduce her responsibilities took place within the City boundaries and, therefore, her place of employment is where the impact of the alleged discriminatory acts occurred. However, it is the place where the impact of the alleged discriminatory conduct is felt that controls whether the Human Rights Laws apply, not where the decision is made … . This standard applies whether the claim is made under the City or State Human Rights Laws … . Without more, plaintiff’s mere employment in New York does not satisfy the “impact” requirement. Hardwick v Auriemma, 2014 NY Slip Op 02383, 1st Dept 4-8-14

 

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Penalty Which Effectively Made It Impossible for an Architect to Practice His Profession Too Severe

The First Department found the punishment imposed by the Department of Buildings (DOB) on an architect for falsely representing he was licensed during a six-month suspension from practice was too severe:

…[W]e find that the penalty imposed is excessive upon considering the following factors: DOB did not place any temporal limitation on the prohibition of petitioner filing documents, nor did it explain why such a permanent penalty was imposed; petitioner is a solo practitioner for whom over ninety percent of his business is in New York City; the prohibition applies to the entire city, and would essentially end petitioner’s independent architectural business, thus depriving him of his livelihood; and respondent has never alleged, much less made any showing, that the falsehood at issue pertained to the substance or content of the building plans and thus presented potential safety risks which Administrative Code of City of NY § 28-211.1.2 was designed to address… . Matter of Benlevi v New York City Dept of Bldgs, 2014 NY Slip Op 02396, 1st Dept 4-8-14

 

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Statutory Attorney’s Fees Awarded in a Human Rights Law Action Should Not Be Added to the Jury Award to Determine the Amount of the Contingency Fee

The Court of Appeals, in a full-fledged opinion by Judge Lippman, explained how attorney’s fees should be calculated when there is a contingency fee agreement which does not make clear how the contingency fee is affected by the award of statutory attorney’s fees (in addition to the jury award) pursuant to the Human Rights Law.  The attorney claimed that the contingency should be calculated after adding the statutory fees to the jury award. The court disagreed:

…[B]oth federal precedent and instructive decisions from our sister states evince that,”absent a contractual provision to the contrary, the trend is to calculate the contingency fee based on the amount of the judgment exclusive of the fee award, and then credit the fee award to the client as an offset against the contingency fee owed. Under this approach, the attorney should be entitled to receive either the contingent fee calculated on the amount of the damage recovery exclusive of any court-awarded fees, or the amount of the court-awarded fee, whichever is greater”… .

In the context of the present case, concerning construction of retainer agreements in conjunction with attorneys’ fees awarded pursuant to the NYCHRL (New York city Human Rights Law), such an approach comports with our precedent holding that ambiguous fee agreements should be interpreted against the drafting attorney … .

In addition, permitting counsel to collect a statutory award that exceeds the amount due under a contingency fee agreement advances the “uniquely broad and remedial purpose” of the NYCHRL by incentivizing the private bar to represent civil rights plaintiffs even where any damage award is likely to be insubstantial … . In this regard, freedom of contract is also respected since, in the event that the statutory award is less than the contingency fee, deducting the court-awarded fees from the sum owed under the contract ensures that the attorney receives, and the client pays, no more or less than they bargained for … .

On the facts before us, we need not decide whether a retainer agreement entitling an attorney to court-ordered counsel fees in addition to the full contingency fee would be enforceable. We would note, however, that such an arrangement would be subject to requisite scrutiny under applicable laws and rules controlling the reasonableness of attorney compensation… .  Albunio v City of New York, 2014 NY Slip Op 02325, CtApp 4-3-14

 

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No Credit for Civilian Service Under Post December 19, 1990, Tier 3 CO-20 Retirement Plan (Re: 20 Year Early Service Retirement)

The Court of Appeals, in a full-fledged opinion by Judge Read, determined that a corrections officer, a post December 19, 1990, member of the Tier 3 CO-20 New York City Department of Corrections (DOC) retirement plan established by Retirement and Social Security Law 504-a, was not entitled to an additional pension benefit based upon his three years as a non-uniformed civilian employee of the NYC Department of Environmental Protection (DEP). Therefore, the New York City Employees’ Retirement System (NYCERS) properly did not consider the civilian service for the DEP in calculating the corrections officer’s pension benefit:

… [F]or post-December 19, 1990 Tier 3 CO-20 plan members, unlike the other participants in Tier 3 CO-20 plans established by chapter 936, only allowable correction service (i.e., uniformed service) counts towards eligibility for 20-year early service retirement … . Matter of Kaslow v City of New York, 2014 NY Slip Op 02324, 4-3-14

 

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In Disability Discrimination Suits Brought Under the NYS and NYC Human Rights Law, to Prevail on Summary Judgment, the Employer Must Demonstrate It Engaged in a Good Faith Interactive Process to Consider a Proposed Accommodation

In a full-fledged opinion by Judge Abdus-Salaam, the Court of Appeals determined that to prevail on a motion for summary judgment in a disability discrimination action brought under the New York State Human Rights Law and the New York City Human Rights Law, the employer must demonstrate it engaged in a good faith interactive process to consider the reasonableness of a proposed accommodation to the disability.  The failure to so demonstrate in this case precluded summary judgment.  The employee had developed a lung condition which required that he not be exposed to construction dust.  His job required that he visit construction sites.  With respect to the consideration of a proposed accommodation in the context of a summary judgment motion, the court wrote:

In light of the importance of the employer's consideration of the employee's proposed accommodation, the employer normally cannot obtain summary judgment on a State HRL claim unless the record demonstrates that there is no triable issue of fact as to whether the employer duly considered the requested accommodation. And, the employer cannot present such a record if the employer has not engaged in interactions with the employee revealing at least some deliberation upon the viability of the employee's request. Consequently, to prevail on a summary judgment motion with respect to a State HRL claim, the employer must show that it “engage[d] in a good faith interactive process that assesse[d] the needs of the disabled individual and the reasonableness of the accommodation requested” … . And, because the City HRL provides broader protections against disability discrimination than the State HRL, the City HRL unquestionably forecloses summary judgment where the employer has not engaged in a good faith interactive process regarding a specifically requested accommodation … .  Jacobsen v New York City Health and Hospitals Corporation, 34, CtApp 3-27-14

 

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Untimely Demand for Reinstatement Warranted Dismissal of Action to Compel Reinstatement

The Fourth Department determined petitioner’s action to compel reinstatement in his job as a policeman was untimely.  Petitioner should have made a demand for reinstatement within four months of learning he was not being held responsible criminally or civilly for the acts of misconduct alleged against him:

“Where, as here, a public employee is discharged without a hearing, the four-month limitations period set forth in CPLR 217 begins to run when the employee’s demand for reinstatement is refused” … . “[T]he demand must be made within a reasonable time after the right to make the demand occurs or . . . within a reasonable time after [petitioner] becomes aware of the facts which give rise to his [or her] right of relief” … , and we note that the four-month limitations period of CPLR article 78 proceedings has been “treat[ed] . . . as a measure of permissible delay in the making of the demand” … . Here, we conclude that petitioner’s right to demand reinstatement to his position arose, at the latest, on or about December 6, 2011, when he received a letter from the District Attorney stating that he bore no civil or criminal responsibility for the acts of misconduct alleged against him, and that the matter would not be presented to the grand jury … . Nevertheless, petitioner did not demand reinstatement to his position until approximately nine months later, on August 31, 2012, well over the four-month guideline applied in Devens … . Thus, “it was [well] within the court’s discretion to determine that petitioner unreasonably delayed in making the demand” … . Matter of Norton v City of Hornell…, 256, 4th Dept 3-21-14

 

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